<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 28, 1997
REGISTRATION NO. 333-
REGISTRATION NO. 333- -01
REGISTRATION NO. 333- -02
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------------
1ST SOURCE 1ST SOURCE 1ST SOURCE
CORPORATION CAPITAL TRUST I CAPITAL TRUST II
(EXACT NAME OF REGISTRANT AND CO-REGISTRANTS AS SPECIFIED IN CHARTERS)
<TABLE>
<S> <C> <C> <C> <C> <C>
INDIANA 35-1068133 DELAWARE 35-2007326 DELAWARE 35-664042
(STATE OR OTHER (I.R.S. EMPLOYER (STATE OR OTHER (I.R.S. EMPLOYER (STATE OR OTHER (I.R.S. EMPLOYER
JURISDICTION OF IDENTIFICATION NO.) JURISDICTION OF IDENTIFICATION NO.) JURISDICTION OF IDENTIFICATION NO.)
INCORPORATION OR INCORPORATION OR INCORPORATION OR
ORGANIZATION) ORGANIZATION) ORGANIZATION)
</TABLE>
100 NORTH MICHIGAN STREET, SOUTH BEND, INDIANA 46601 (219) 235-2000
(ADDRESS(ES), INCLUDING ZIP CODE(S), AND TELEPHONE NUMBER(S), INCLUDING AREA
CODE(S), OF REGISTRANT'S AND CO-REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
----------------------------
LARRY E. LENTYCH, SENIOR VICE PRESIDENT
100 NORTH MICHIGAN STREET, SOUTH BEND, INDIANA 46601 (219) 235-2000
(NAME(S), ADDRESS(ES), INCLUDING ZIP CODE(S), AND TELEPHONE NUMBER(S),
INCLUDING AREA CODE(S), OF AGENT(S) FOR SERVICE)
----------------------------
COPIES TO:
<TABLE>
<S> <C>
THOMAS C. ERB, ESQ., LEWIS, RICE & FINGERSH, L.C. FREDERICK W. SCHERRER, ESQ., BRYAN CAVE LLP
500 NORTH BROADWAY, SUITE 2000, ST. LOUIS, MISSOURI 63102 ONE METROPOLITAN SQUARE, SUITE 3600, 211 NORTH BROADWAY
(314) 444-7600 ST. LOUIS, MISSOURI 63102 (314) 259-2000
</TABLE>
----------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effectiveness of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvest plans, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
<TABLE>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT PRICE REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fixed Rate Preferred Securities of 1st Source Capital
Trust I............................................. 1,100,000<F1> $25.00 $27,500,000<F1> $8,333.33<F2>
- ------------------------------------------------------------------------------------------------------------------------------------
Fixed Rate Subordinated Debentures<F3> of 1st Source
Corporation......................................... <F3> -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Guarantees of Fixed Rate Preferred Securities<F4>..... <F4> -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Floating Rate Preferred Securities of 1st Source
Capital Trust II.................................... 1,100,000<F5> $25.00 $27,500,000<F5> $8,333.33<F2>
- ------------------------------------------------------------------------------------------------------------------------------------
Floating Rate Subordinated Debentures<F6> of 1st Source
Corporation......................................... <F6> -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Guarantees of Floating Rate Preferred Securities<F7>... <F7> -- -- --
====================================================================================================================================
<FN>
<F1>Includes 100,000 Fixed Rate Preferred Securities which may be sold by 1st
Source Capital Trust I to cover over-allotments.
<F2>The registration fee is calculated in accordance with Rule 457(i) and (n).
<F3>The Fixed Rate Subordinated Debentures will be purchased by 1st Source
Capital Trust I with the proceeds of the sale of its Fixed Rate Preferred
Securities. Such securities may later be distributed for no additional
consideration to the holders of the Fixed Rate Preferred Securities of 1st
Source Capital Trust I upon its dissolution and the distribution of its
assets.
<F4>This Registration Statement is deemed to cover the Fixed Rate Subordinated
Debentures of 1st Source Corporation, the rights of holders of Fixed Rate
Subordinated Debentures of 1st Source Corporation under the Indenture, and
the rights of holders of the Fixed Rate Preferred Securities of 1st Capital
Trust I under the Trust Agreement, the Guarantee and the Expense Agreement
entered into by 1st Source Corporation. No separate consideration will be
received for the Guarantee.
<F5>Includes 100,000 Floating Rate Preferred Securities which may be sold by
1st Source Capital Trust II to cover over-allotments.
<F6>The Floating Rate Subordinated Debentures will be purchased by 1st Source
Capital Trust II with the proceeds of the sale of its Floating Rate
Preferred Securities. Such securities may later be distributed for no
additional consideration to the holders of the Floating Rate Preferred
Securities of 1st Source Capital Trust II upon its dissolution and the
distribution of its assets.
<F7>This Registration Statement is deemed to cover the Floating Rate
Subordinated Debentures of 1st Source Corporation, the rights of holders of
Floating Rate Subordinated Debentures of 1st Source Corporation under the
Indenture, and the rights of holders of the Floating Rate Preferred
Securities of 1st Capital Trust II under the Trust Agreement, the Guarantee
and the Expense Agreement entered into by 1st Source Corporation. No
separate consideration will be received for the Guarantee.
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
===============================================================================
<PAGE> 2
*******************************************************************************
* INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A *
* REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE *
* SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR *
* MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT *
* BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL *
* OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE *
* SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE *
* UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS *
* OF ANY SUCH STATE. *
*******************************************************************************
SUBJECT TO COMPLETION, DATED FEBRUARY 28, 1997
PROSPECTUS
1st Source(R)
Corporation
<TABLE>
<C> <C>
1,000,000 PREFERRED SECURITIES 1,000,000 PREFERRED SECURITIES
1ST SOURCE CAPITAL TRUST I 1ST SOURCE CAPITAL TRUST II
% CUMULATIVE TRUST PREFERRED SECURITIES FLOATING RATE CUMULATIVE TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY) (LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
GUARANTEED, AS DESCRIBED HEREIN, BY GUARANTEED, AS DESCRIBED HEREIN, BY
1ST SOURCE CORPORATION 1ST SOURCE CORPORATION
---------------------------- ----------------------------
$25,000,000 % SUBORDINATED DEBENTURES OF $25,000,000 FLOATING RATE SUBORDINATED DEBENTURES OF
1ST SOURCE CORPORATION 1ST SOURCE CORPORATION
---------------------------- ----------------------------
The % Cumulative Trust Preferred Securities (the The Floating Rate Cumulative Trust Preferred Securities (the
"Fixed Rate Preferred Securities") offered hereby represent "Floating Rate Preferred Securities") offered hereby repre-
preferred undivided beneficial interests in the assets of 1st sent preferred undivided beneficial interests in the assets of
Source Capital Trust I, a statutory business trust created 1st Source Capital Trust II, a statutory business trust
under the laws of the State of Delaware ("1st Capital I"). created under the laws of the State of Delaware ("1st Capital
1st Source II"). 1st Source
(continued on next page) (continued on next page)
</TABLE>
The Fixed Rate Preferred Securities and the Floating Rate Preferred
Securities are being offered hereby separately and not as units. Neither the
sale of the Fixed Rate Preferred Securities nor the sale of the Floating Rate
Preferred Securities is contingent upon completion of the sale of the other
security.
Application has been made to have the Preferred Securities approved for
quotation on The Nasdaq Stock Market's National Market under the symbols
"SRCEP," for the Fixed Rate Preferred Securities, and "SRCEO," for the
Floating Rate Preferred Securities.
--------------------------------
SEE "RISK FACTORS" COMMENCING ON PAGE 11 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
--------------------------------
THE SECURITIES OFFERED BY THIS PROSPECTUS ARE NOT SAVINGS OR DEPOSIT
ACCOUNTS, ARE NOT OBLIGATIONS OF OR GUARANTEED BY ANY BANKING OR NON-
BANKING AFFILIATE OF THE COMPANY (EXCEPT TO THE EXTENT THAT PREFERRED
SECURITIES ARE GUARANTEED BY THE COMPANY AS DESCRIBED HEREIN), ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENT AGENCY AND INVOLVE INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL.
--------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
============================================================================================================================
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC COMMISSION<F1> 1ST CAPITAL<F2>
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Fixed Rate Preferred Security............... $25.00 $ <F2> $25.00
- ----------------------------------------------------------------------------------------------------------------------------
Total<F3>....................................... $25,000,000 <F2> $25,000,000
- ----------------------------------------------------------------------------------------------------------------------------
Per Floating Rate Preferred Security............ $25.00 $ <F2> $25.00
- ----------------------------------------------------------------------------------------------------------------------------
Total<F3>....................................... $25,000,000 <F2> $25,000,000
============================================================================================================================
<FN>
<F1>1st Capital I, 1st Capital II and the Company have each agreed to indemnify
the Underwriters against certain liabilities, including liabilities under
the Securities Act of 1933, as amended. See "Underwriting."
<F2>In view of the fact that the proceeds of the sale of the Preferred
Securities will be invested in the Subordinated Debentures, the Company has
agreed to pay the Underwriters as compensation for their arranging the
investment therein of such proceeds, $ per Preferred Security, or
$ in the aggregate, ($ if the over-allotment option is
exercised in full). See "Underwriting." The Company has also agreed to
pay the expenses of the offering estimated to be $ .
<F3>1st Capital I and 1st Capital II each have granted the Underwriters an
option exercisable within 30 days from the date of this Prospectus to
purchase, in the case of 1st Capital I, up to 100,000 additional Fixed Rate
Preferred Securities and, in the case of 1st Capital II, up to 100,000
additional Floating Rate Preferred Securities, each such option on the same
terms and conditions set forth above to cover over-allotments, if any. If
all such additional Preferred Securities are purchased, the total Price to
Public and Proceeds to each of 1st Capital I and 1st Capital II will be
$27,500,000. See "Underwriting."
</TABLE>
-----------------------------------------
The Preferred Securities are offered by the Underwriters subject to receipt
and acceptance by them, prior sale and the Underwriters' right to reject any
order in whole or in part and to withdraw, cancel or modify the offer without
notice. It is expected that delivery of certificates for the Preferred
Securities will be made on or about , 1997.
STIFEL, NICOLAUS & COMPANY
INCORPORATED
, 1997
<PAGE> 3
<TABLE>
<C> <C>
(FIXED RATE PREFERRED SECURITIES--continued from previous (FLOATING RATE PREFERRED SECURITIES--continued from previous
page) page)
Corporation, an Indiana corporation (the "Company"), will Corporation, an Indiana corporation (the "Company"), will
own all the common securities (the "Fixed Rate Common own all the common securities (the "Floating Rate Common
Securities" and, together with the Fixed Rate Preferred Securities" and, together with the Floating Rate Preferred
Securities, the "Fixed Rate Trust Securities") representing Securities, the "Floating Rate Trust Securities")
undivided beneficial interests in the assets of 1st Capital I. representing undivided beneficial interests in the assets of
1st Capital II.
State Street Bank and Trust Company is the Fixed Rate State Street Bank and Trust Company is the Floating Rate
Property Trustee (as defined herein) of 1st Capital I. 1st Property Trustee (as defined herein) of 1st Capital II. 1st
Capital I exists for the purpose of issuing the Fixed Rate Capital II exists for the purpose of issuing the Floating Rate
Preferred Securities and investing the proceeds thereof in an Preferred Securities and investing the proceeds thereof in an
equivalent amount of % Subordinated Debentures (the equivalent amount of Floating Rate Subordinated Debentures
"Fixed Rate Subordinated Debentures") of the Company. The (the "Floating Rate Subordinated Debentures") of the
Fixed Rate Subordinated Debentures will mature on March 31, Company. The Floating Rate Subordinated Debentures will mature
2027, which date may be (i) shortened to a date not earlier on March 31, 2027, which date may be (i) shortened to a date
than March 31, 2002 (subject to certain exceptions regarding not earlier than March 31, 2002 (subject to certain
earlier redemption described herein), or (ii) extended to a exceptions regarding earlier redemption described herein),
date not later than March 31, 2046, in each case if certain or (ii) extended to a date not later than March 31, 2046,
conditions are met (including, in the case of shorterning the in each case if certain condition are met (including, in the
Stated Maturity (as defined herein) of the Fixed Rate case of shortening the Stated Maturity (as defined herein)
Subordinated Debentures, the Company having received prior of the Floating Rate Subordinated Debentures, the Company
approval of the Board of Governors of the Federal Reserve having received prior approval of the Board of Governors
System ("Federal Reserve") to do so if then required under of the Federal Reserve System ("Federal Reserve") to do so
applicable capital guidelines or policies of the Federal if then required under applicable capital guidelines or
Reserve). The Fixed Rate Preferred Securities will have a policies of the Federal Reserve). The Floating Rate
preference under certain circumstances with respect to cash Preferred Securities will have a preference under certain
distributions and amounts payable on liquidation, circumstances with respect to cash distributions and
redemption or otherwise over the Fixed Rate amounts payable on liquidation, redemption or otherwise
Common Securities. See "Description of the Preferred over the Floating Rate Common Securities. See
Securities--Subordination of Common Securities." "Description of the Preferred Securities--Subordination of
Common Securities."
Holders of Fixed Rate Preferred Securities are entitled to Holders of Floating Rate Preferred Securities are entitled
receive preferential cumulative cash distributions (the to receive preferential cumulative cash distributions (the
"Fixed Rate Distributions") from 1st Capital I, at the "Floating Rate Distributions") from 1st Capital II, at the
annual rate of % of the liquidation amount of $25 per annual rate equal to the sum of the 3- Month Treasury (as
Preferred Security (the "Fixed Rate Liquidation Amount"), defined herein) plus % (the "Floating Distribution
accruing from the date of original issuance and payable Rate") of the liquidation amount of $25 per Floating Rate
quarterly in arrears on the last day of March, June, September Preferred Security (the "Floating Rate Liquidation Amount"),
and December of each year, commencing June 30, 1997. The accruing from the date of original issuance and payable
Company has the right, so long as no Debenture Event of quarterly in arrears on the last day of March, June, September
Default (as defined herein) with respect to the Fixed Rate and December of each year, with the first Floating Rate
Subordinated Debentures has occurred and is continuing, to Distribution payable on June 30, 1997; provided,
defer payment of interest on the Fixed Rate Subordinated however, that the Floating Distribution Rate for the first
Debentures at any time or from time to time for a period not Floating Rate Distribution Period (as defined herein) will be
to exceed 20 consecutive quarters with respect to each %. The Company has the right, so long as no Debenture
deferral period (each, an "Extended Interest Payment Event of Default (as defined herein) with respect to the
Period"); provided that no Extended Interest Payment Floating Rate Debentures has occurred and is continuing, to
Period may extend beyond the Stated Maturity of the Fixed defer payment of interest on the Floating Rate Subordinated
Rate Subordinated Debentures. Upon the termination of any Debentures at any time or from time to time for a period not
such Extended Interest Payment Period and the payment of all to exceed 20 consecutive quarters with respect to each
amounts then due, the Company may elect to begin a new deferral period (each, an "Extended Interest Payment
Extended Interest Payment Period subject to the requirements Period"); provided that no Extended Interest Payment Period
set forth herein. If interest payments on the Fixed Rate may extend beyond the Stated Maturity of the Floating Rate
Subordinated Debentures are so deferred, Fixed Rate Subordinated Debentures. Upon the termination of any such
Distributions on the Fixed Rate Preferred Securities Extended Interest Payment Period and the payment of all
amounts
(FIXED RATE PREFERRED SECURITIES--continued on next page) (FLOATING RATE PREFERRED SECURITIES--continued on next page)
ii
<PAGE> 4
(FIXED RATE PREFERRED SECURITIES--continued from previous (FLOATING RATE PREFERRED SECURITIES--continued from previous
page) page)
will also be deferred, and the Company will not be permitted, then due, the Company may elect to begin a new Extended
subject to certain exceptions described herein, to declare or Interest Payment Period subject to the requirements set forth
pay any cash distributions with respect to its capital stock herein. If interest payments on the Floating Rate Subordinated
or debt securities that rank pari passu with or junior to the Debentures are so deferred, Floating Rate Distributions on the
Fixed Rate Subordinated Debentures (including the Floating Floating Rate Preferred Securities will also be deferred, and
Rate Subordinated Debentures (as defined herein)). DURING AN the Company will not be permitted, subject to certain ex-
EXTENDED INTEREST PAYMENT PERIOD, INTEREST ON THE FIXED RATE ceptions described herein, to declare or pay any cash
SUBORDINATED DEBENTURES WILL CONTINUE TO ACCRUE (AND THE distributions with respect to its capital stock or debt
AMOUNT OF FIXED RATE DISTRIBUTIONS TO WHICH HOLDERS OF THE securities that rank pari passu with or junior to the Floating
FIXED RATE PREFERRED SECURITIES ARE ENTITLED WILL ACCUMULATE) Rate Subordinated Debentures (including the Fixed Rate
AT THE RATE OF %, COMPOUNDED QUARTERLY, AND HOLDERS OF Subordinated Debentures (as defined herein)). DURING AN
THE FIXED RATE PREFERRED SECURITIES WILL BE REQUIRED TO EXTENDED INTEREST PAYMENT PERIOD, INTEREST ON THE FLOATING
INCLUDE INTEREST INCOME IN THEIR GROSS INCOME FOR UNITED RATE SUBORDINATED DEBENTURES WILL CONTINUE TO ACCRUE (AND THE
STATES FEDERAL INCOME TAX PURPOSES IN ADVANCE OF RECEIPT OF AMOUNT OF FLOATING RATE DISTRIBUTIONS TO WHICH HOLDERS OF THE
THE CASH DISTRIBUTIONS WITH RESPECT TO SUCH DEFERRED INTEREST FLOATING RATE PREFERRED SECURITIES ARE ENTITLED WILL
PAYMENTS. A HOLDER OF FIXED RATE PREFERRED SECURITIES THAT ACCUMULATE) AT THE FLOATING DISTRIBUTION RATE, COMPOUNDED
DISPOSES OF ITS FIXED RATE PREFERRED SECURITIES BETWEEN RECORD QUARTERLY, AND HOLDERS OF THE FLOATING RATE PREFERRED SECUR-
DATES FOR PAYMENTS OF FIXED RATE DISTRIBUTIONS (AND ITIES WILL BE REQUIRED TO INCLUDE INTEREST INCOME IN THEIR
CONSEQUENTLY DOES NOT RECEIVE A FIXED RATE DISTRIBUTION FROM GROSS INCOME FOR UNITED STATES FEDERAL INCOME TAX PURPOSES IN
1ST CAPITAL I FOR THE PERIOD PRIOR TO SUCH DISPOSITION) WILL ADVANCE OF RECEIPT OF THE CASH DISTRIBUTIONS WITH RESPECT TO
NEVERTHELESS BE REQUIRED TO INCLUDE ACCRUED BUT UNPAID SUCH DEFERRED INTEREST PAYMENTS. A HOLDER OF FLOATING RATE
INTEREST ON THE FIXED RATE SUBORDINATED DEBENTURES THROUGH THE PREFERRED SECURITIES THAT DISPOSES OF ITS FLOATING RATE
DATE OF DISPOSITION IN INCOME AS ORDINARY INCOME AND TO ADD PREFERRED SECURITIES BETWEEN RECORD DATES FOR PAYMENTS OF
SUCH AMOUNT TO ITS ADJUSTED TAX BASIS IN ITS PRO RATA SHARE OF FLOATING RATE DISTRIBUTIONS (AND CONSEQUENTLY DOES NOT RECEIVE
THE UNDERLYING FIXED RATE SUBORDINATED DEBENTURES DEEMED DIS- A FLOATING RATE DISTRIBUTION FROM 1ST CAPITAL II FOR THE
POSED OF. See "Description of the Subordinated PERIOD PRIOR TO SUCH DISPOSITION) WILL NEVERTHELESS BE
Debentures--Option to Extend Interest Payment Period," REQUIRED TO INCLUDE ACCRUED BUT UNPAID INTEREST ON THE
"Certain Federal Income Tax Consequences--Potential Extension FLOATING RATE SUBORDINATED DEBENTURES THROUGH THE DATE OF
of Interest Payment Period and Original Issue Discount" and DISPOSITION IN INCOME AS ORDINARY INCOME AND TO ADD SUCH
"--Disposition of Preferred Securities." AMOUNT TO ITS ADJUSTED TAX BASIS IN ITS PRO RATA SHARE OF THE
UNDERLYING FLOATING RATE SUBORDINATED DEBENTURES DEEMED
DISPOSED OF. See "Description of the Subordinated
Debentures--Option to Extend Interest Payment Period,"
"Certain Federal Income Tax Consequences--Potential Extension
of Interest Payment Period and Original Issue Discount" and
"--Disposition of Preferred Securities."
The Company and 1st Capital I believe that, taken The Company and 1st Capital II believe that, taken together,
together, the obligations of the Company under the Fixed Rate the obligations of the Company under the Floating Rate
Guarantee, the Fixed Rate Trust Agreement, the Fixed Rate Guarantee, the Floating Rate Trust Agreement, the Floating
Subordinated Debentures, the Fixed Rate Indenture and the Rate Subordinated Debentures, the Floating Rate Indenture and
Expense Agreement (each as defined herein) provide, in the the Expense Agreement (each as defined herein) provide, in the
aggregate, a full, irrevocable and unconditional guaranty, on aggregate, a full, irrevocable and unconditional guaranty, on
a subordinated basis, of all of the obligations of 1st Capital a subordinated basis, of all of the obligations of 1st Capital
I under the Fixed Rate Preferred Securities. See "Rela- II under the Floating Rate Preferred Securities. See
tionship Among the Preferred Securities, the Subordinated "Relationship Among the Preferred Securities, the
Debentures and the Guarantee--Full and Unconditional Subordinated Debentures and the Guarantee--Full and
Guarantee." The Fixed Rate Guarantee of the Company Unconditional Guarantee." The Floating Rate Guarantee of the
guarantees the payment of Fixed Rate Distributions and Company guarantees the payment of Floating Rate Distributions
payments on liquidation or redemption of the Fixed Rate and payments on liquidation or redemption of the Floating Rate
Preferred Securities, but only in each case to the extent of Preferred Securities, but only in each case to the extent of
funds held by 1st Capital I, as funds held
(FIXED RATE PREFERRED SECURITIES--continued on next page) (FLOATING RATE PREFERRED SECURITIES--continued on next page)
iii
<PAGE> 5
(FIXED RATE PREFERRED SECURITIES--continued from previous (FLOATING RATE PREFERRED SECURITIES--continued from previous
page) page)
described herein. See "Description of the Guaran- by 1st Capital II, as described herein. See "Description of
tee--General." If the Company does not make interest payments the Guarantees--General." If the Company does not make
on the Fixed Rate Subordinated Debentures held by 1st Capital interest payments on the Floating Rate Subordinated Debentures
I , 1st Capital I will have insufficient funds to pay Fixed held by 1st Capital II, 1st Capital II will have insufficient
Rate Distributions on the Fixed Rate Preferred Securities. The funds to pay Floating Rate Distributions on the Floating Rate
Fixed Rate Guaranteedoes not cover payments of Fixed Rate Dis- Preferred Securities. The Floating Rate Guarantee does not
tributions when 1st Capital I does not have sufficient funds cover payments of Floating Rate Distributions when 1st Capital
to pay such Fixed Rate Distributions. In such event, a holder II does not have sufficient funds to pay such Floating Rate
of Fixed Rate Preferred Securities may institute a legal Distributions. In such event, a holder of Floating Rate
proceeding directly against the Company pursuant to the terms Preferred Securities may institute a legal proceeding directly
of the Fixed Rate Indenture to enforce payments of amounts against the Company pursuant to the terms of the Floating Rate
equal to such Fixed Rate Distributions to such holder. See Indenture to enforce payments of amounts equal to such
"Description of the Subordinated Debentures--Enforcement of Floating Rate Distributions to such holder. See "Description
Certain Rights by Holders of the Preferred Securities." The of the Subordinated Debentures--Enforcement of Certain Rights
obligations of the Company under the Fixed Rate Guarantee and by Holders of the Preferred Securities." The obligations of
the Fixed Rate Preferred Securities are subordinate and junior the Company under the Floating Rate Guarantee and the Floating
in right of payment to all Senior Debt, Subordinated Debt and Rate Preferred Securities are subordinate and junior in right
Additional Senior Obligations (each as defined herein) of the of payment to all Senior Debt, Subordinated Debt and
Company. The Fixed Rate Subordinated Debentures are unsecured Additional Senior Obligations (each as defined herein) of the
obligations of the Company and are subordinated to all Senior Company. The Floating Rate Subordinated Debentures are
Debt, Subordinated Debt and Additional Senior Obligations of unsecured obligations of the Company and are subordinated to
the Company. all Senior Debt, Subordinated Debt and Additional Senior
Obligations of the Company.
The Fixed Rate Preferred Securities are subject to The Floating Rate Preferred Securities are subject to
mandatory redemption, in whole or in part, upon repayment of mandatory redemption, in whole or in part, upon repayment of
the Fixed Rate Subordinated Debentures at maturity or their the Floating Rate Subordinated Debentures at maturity or their
earlier redemption. Subject to Federal Reserve approval, if earlier redemption. Subject to Federal Reserve approval, if
then required under applicable capital guidelines or policies then required under applicable capital guidelines or policies
of the Federal Reserve, the Fixed Rate Subordinated Debentures of the Federal Reserve, the Floating Rate Subordinated
are redeemable prior to maturity at the option of the Company Debentures are redeemable prior to maturity at the option of
(i) on or after March 31, 2002, in whole at any time or in the Company (i) on or after March 31, 2002, in whole at any
part from time to time, or (ii) at any time, in whole (but not time or in part from time to time, or (ii) at any time, in
in part), within 180 days following the occurrence of a Tax whole (but not in part), within 180 days following the occur-
Event, a Capital Treatment Event or an Investment Company rence of a Tax Event, a Capital Treatment Event or an
Event (each as defined herein), in each case at a redemption Investment Company Event (each as defined herein), in each
price equal to the accrued and unpaid interest on the Fixed case at a redemption price equal to the accrued and unpaid
Rate Subordinated Debentures so redeemed to the date fixed for interest on the Floating Rate Subordinated Debentures so
redemption, plus 100% of the principal amount thereof. See redeemed to the date fixed for redemption, plus 100% of the
"Description of the Preferred Securities--Redemption or principal amount thereof. See "Description of the Preferred
Exchange." Securities--Redemption or Exchange."
The Company has the right at any time to dissolve, wind-up The Company has the right at any time to dissolve, wind-up
or terminate 1st Capital I subject to the Company having or terminate 1st Capital II subject to the Company having
received prior approval of the Federal Reserve to do so if received prior approval of the Federal Reserve to do so if
then required under applicable capital guidelines or policies then required under applicable capital guidelines or policies
of the Federal Reserve. In the event of the voluntary or of the Federal Reserve. In the event of the voluntary or
involuntary dissolution, winding up or termination of 1st involuntary dissolution, winding up or termination of 1st
Capital I, after satisfaction of liabilities to creditors of Capital II, after satisfaction of liabilities to creditors of
1st Capital I as required by applicable law, the holders of 1st Capital II as required by applicable law, the holders of
Fixed Rate Preferred Securities will be entitled to receive a Floating Rate Preferred Securities will be entitled to receive
Fixed Rate Liquidation Amount of $25 per Fixed Rate Preferred a Floating Rate Liquidation Amount of $25 per Floating Rate
(FIXED RATE PREFERRED SECURITIES--continued on next page) (FLOATING RATE PREFERRED SECURITIES--continued on next page)
iv
<PAGE> 6
(FIXED RATE PREFERRED SECURITIES--continued from previous (FLOATING RATE PREFERRED SECURITIES--continued from previous
page) page)
Security, plus accumulated and unpaid Fixed Rate Dis- Preferred Security, plus accumulated and unpaid Floating Rate
tributions thereon to the date of payment, which may be in the Distributions thereon to the date of payment, which may be in
form of a Fixed Rate Subordinated Debenture having an the form of a Floating Rate Subordinated Debenture having an
aggregate principal amount equal to the Fixed Rate Liquidation aggregate principal amount equal to the Floating Rate
Amount of such Fixed Rate Preferred Securities (and carrying Liquidation Amount of such Floating Rate Preferred Securities
with it accumulated interest in an amount equal to the (and carrying with it accumulated interest in an amount equal
accumulated and unpaid Fixed Rate Distributions then due on to the accumulated and unpaid Floating Rate Distributions then
such Fixed Rate Preferred Securities), subject to certain ex- due on such Floating Rate Preferred Securities), subject to
ceptions. See "Description of the Preferred Securi- certain exceptions. See "Description of the Preferred
ties--Redemption or Exchange" and "--Liquidation Securities--Redemption or Exchange" and "--Liquidation
Distribution Upon Termination." Distribution Upon Termination."
</TABLE>
--------------------------------
The Company will provide to the holders of the Preferred Securities
quarterly reports containing unaudited financial statements, if such reports
are furnished to the holders of the Company's common stock, and annual reports
containing financial statements audited by the Company's independent auditors.
The Company will also furnish annual reports on Form 10-K and quarterly reports
on Form 10-Q free of charge to holders of the Preferred Securities who so
request in writing addressed to the Treasurer of the Company.
--------------------------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE PREFERRED
SECURITIES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL
IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ STOCK
MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME.
v
<PAGE> 7
[MAP]
<PAGE> 8
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere (or incorporated by reference) in this
Prospectus. Unless otherwise indicated, the information in this Prospectus
assumes that the Underwriters' over-allotment options will not be exercised.
Prospective investors should carefully consider the information set forth under
the heading "Risk Factors."
All textual information contained in a left-hand column of this Prospectus
is applicable only to the Fixed Rate Preferred Securities and all textual
information contained in a right-hand column of this Prospectus is applicable
only to the Floating Rate Preferred Securities. All information contained in a
full-width text portion of this Prospectus, which is not otherwise identified
as applicable to a specific type of security, should be read as applicable to
either or both of the Fixed Rate Preferred Securities and the Floating Rate
Preferred Securities. Defined terms used in the full-width text portion of this
Prospectus are not, therefore, preceded by the words "Fixed Rate" or
"Floating Rate" and the term 1st Capital is not followed by the designation
"I" or "II."
THE COMPANY
GENERAL
1st Source Corporation (the "Company") is an Indiana corporation and
registered bank holding company headquartered in South Bend, Indiana. At
December 31, 1996, the Company had assets of $2.08 billion, deposits of $1.63
billion and total shareholders' equity of $171.8 million. The Company, through
its principal subsidiary 1st Source Bank (the "Bank"), delivers a
comprehensive range of consumer and commercial banking services to individual
and business customers through 42 banking locations in the northern
Indiana/southwestern Michigan market area. The Bank also competes for business
nationwide by offering specialized financing services for used private
aircraft, automobiles for leasing and rental agencies, heavy duty trucks and
construction equipment.
The Company's other subsidiaries include 1st Source Leasing, Inc., an
originator and servicer of personal property leases to businesses nationwide,
1st Source Insurance, Inc., a general property and casualty insurance agency in
South Bend, 1st Source Capital Corporation, a licensed small business
investment company, and Trustcorp Mortgage Company, a mortgage banking company
with three offices in Indiana and one each in Ohio, Illinois and Missouri.
The principal executive office of the Company is located at 100 North
Michigan Street, South Bend, Indiana 46601 and its telephone number is (219)
235-2000.
Over the past five years, the Company has experienced strong, consistent
growth in its shareholders' equity, net income and earnings per share. Since
December 31, 1992, total shareholders' equity has increased by 59.4%. During
the same time frame net income and earnings per share have grown by a
compounded annual rate of 13.6% and 13.3% to $23.2 million and $1.45,
respectively. Over the past five years, the Company's return on average assets
has averaged 1.17% and its return on average equity has averaged 14.38%.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Net Income................................... $ 23,203 $ 21,042 $ 18,465 $ 16,722 $ 13,918
Net Income per share......................... 1.45 1.31 1.16 1.05 .88
Shareholders' equity......................... 171,833 152,601 129,082 125,539 107,797
Return on average equity..................... 14.38% 14.75% 14.49% 14.52% 13.76%
Return on average assets..................... 1.22% 1.25% 1.19% 1.16% 1.05%
</TABLE>
BUSINESS STRATEGY AND OBJECTIVES
The Company has identified several business objectives and strategies which
focus on growth and customer service. The principal objectives of the Company
have been to (i) increase financial performance and market share, (ii) provide
exceptional customer service, (iii) enhance credit quality, and (iv) maintain
cost controls. The Company has employed the following strategies in furtherance
of its business objectives:
2
<PAGE> 9
* INCREASE MARKET SHARE IN EACH MARKET SERVED AND AS A PERCENTAGE OF EACH
CUSTOMER'S RELATIONSHIP. The Company opened ten new banking locations in
1996 as part of its banking center expansion program designed to maintain
its position as one of the dominant financial institutions in the South
Bend/Elkhart market area -- which includes eight counties in northern
Indiana and two counties in southwestern lower Michigan. Management
believes that such a strategy allows the most effective and efficient use
of the Company's marketing resources and assures that the Company's
banking offices are accessible to a majority of the people residing in the
markets served. The Company's goal is to deliver highly personal and
superior customer services through each of its banking facilities and to
meet a higher percentage of each customer's financial needs through
personal relationship management.
* EXPAND FEE-BASED BUSINESSES. The Company currently provides a number of
fee-based services to its clients, the major services being trust,
mortgage banking, equipment leasing, property and casualty insurance, and
securitized loan servicing. The Company believes that additional sources
of fee income are available from existing relationships and that the
existing fee-based product line can be used effectively in developing new
relationships with customers. The Company also believes that customers are
more loyal and responsive to its products and services when a large
percentage of a customer's financial services are provided directly by the
Company. The Company's fee-based businesses are designed to deepen the
strength of the relationship between the Company and its customers. Fee
income (excluding securities and other non-recurring gains and losses) has
increased from $13 million for the year ended December 31, 1992 (or 18.0%
of total revenue) to $25 million for the year ended December 31, 1996 (or
24.2% of total revenue).
* EXPAND THE NATIONAL NICHE BUSINESSES ACROSS THE UNITED STATES TAKING
ADVANTAGE OF SPECIALIZED OPPORTUNITIES. The Company caters to specialized
national market niches that management believes are not being well served
by either the credit subsidiaries of manufacturers or by other financial
institutions. Asset-based lending and personal relationship management of
the customer base, together with an efficient method of operation, is the
focus of the Bank's Transportation and Equipment Financing Group, which
provides such services. Additional experienced sales people have been and
will be added to ensure better geographic coverage in areas of
opportunity. The Company has also pursued a strategy of securitizing loan
receivables so that business growth is not totally dependent on deposit
funding. Loans of approximately $552 million, or 37.9% of the Company's
consolidated total loans, were attributable to the Group at December 31,
1996, compared to loans of approximately $340 million, or 35.6% of the
Company's consolidated total loans, which were attributable to the Group
at December 31, 1992.
* ACTIVELY MANAGING CREDIT QUALITY. The Company has adopted a proactive
credit management process with loan officers maintaining responsibility
for the quality of the credits they originate and manage. The credit
management process is supported by a collective and collaborative review
and approval process and is balanced by a review, evaluation and grading
process undertaken by the Company's independent loan review department.
Senior management is actively involved in the management of the process
and incentive compensation is impacted by the Company's overall credit
experience.
BANKING AND FINANCIAL SERVICES
The organization provides financial services through the following groups:
Personal and Small Business Banking Group. The Bank's Personal and Small
Business Banking Group serves individuals and small businesses with direct
lending, credit cards, auto leasing, personal trust, brokerage services, and a
wide range of deposit products. Besides traditional branch locations,
alternative delivery systems are in place to enhance customer service.
Certificates of deposit are offered on the Internet and customers also can use
their telephone to check their account balances and transfer funds 24 hours a
day. A centralized "loan by phone" system provides customers with immediate
loan decisions while they are on the phone and coordinates product delivery
through the local banking offices. The organization's goal is to continue to
improve the match between a customer's individual needs and the Bank's products
and services.
Commercial Banking Group. The Bank's Commercial Banking Group provides a
wide range of services to business customers, including loans and leases,
investments, international services, corporate cash management and employee
benefit trust services. Customers can initiate deposit and loan transactions,
check balances and account
3
<PAGE> 10
clearings, and transfer funds among accounts on a daily basis using a
direct-access PC to communicate with the Bank. The Group's primary focus is
privately-held or closely-controlled firms, which have annual sales between $2
million and $100 million and are doing business or are located within an
80-mile radius of South Bend.
Transportation and Equipment Financing Group. The Bank's Transportation and
Equipment Financing Group offers specialized financing services nationwide. The
Group serves a limited number of high-quality automobile leasing and rental
companies, truck leasing companies and manufacturers of specialized truck
bodies, finances used aircraft nationwide, and provides lending services to
dealers, contractors and other end users of construction equipment. The Group
has employees located in Georgia, Indiana, Kansas, Michigan, Pennsylvania,
Texas, Washington and Wisconsin.
Mortgage Banking Group. Trustcorp Mortgage Company, a subsidiary of the
Company, is a mortgage banking company operating on a regional basis. Locations
include three offices in Indiana, one in Columbus, Ohio and newly opened
offices in suburban St. Louis and Chicago.
The following table sets forth the distribution of net loans among each of
the Company's operating Groups as of December 31, 1996:
<TABLE>
<CAPTION>
DECEMBER 31, 1996
------------------------
% OF
OPERATING GROUP NET LOANS NET LOANS
--------------- --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Transportation and Equipment Financing............ $551,876 38%
Commercial Banking................................ 472,730 33%
Personal and Small Business Banking............... 366,786 25%
Trustcorp Mortgage Company........................ 64,171 4%
</TABLE>
OWNERSHIP
As of February 14, 1997, the directors and executive officers of the
Company and their immediate families owned approximately 43.5% of the Company's
common stock and, as a result, exercise substantial control over the Company.
<TABLE>
<C> <C>
1ST CAPITAL I 1ST CAPITAL II
(FIXED RATE PREFERRED SECURITIES) (FLOATING RATE PREFERRED SECURITIES)
1st Capital I is a statutory business trust 1st Capital II is a statutory business trust formed
formed under Delaware law pursuant to (i) a trust under Delaware law pursuant to (i) a trust agreement,
agreement, dated as of February 20, 1997, executed dated as of February 27, 1997, executed by the Com-
by the Company, as depositor, and the trustees of pany, as depositor, and the trustees of 1st Capital II
1st Capital I (together with the Fixed Rate (together with the Floating Rate Property Trustee, the
Property Trustee, the "Fixed Rate Trustees") and "Floating Rate Trustees"), and (ii) a certificate of trust
amended and restated as of February 27, 1997, and filed with the Secretary of State of the State of Dela-
(ii) a certificate of trust filed with the ware on February 27, 1997. The initial trust agreement
Secretary of State of the State of Delaware on will be amended and restated in its entirety (as so
February 20, 1997 and amended and restated as of amended and restated, the "Floating Rate Trust Agree-
February 27, 1997. The initial trust agreement ment") substantially in the form filed as an exhibit to
will be amended and restated in its entirety (as the Registration Statement (as defined herein) of which
so amended and restated, the "Fixed Rate Trust this Prospectus forms a part. The Floating Rate Trust
Agreement") substantially in the form filed as an Agreement will be qualified as an indenture under the
exhibit to the Registration Statement (as defined Trust Indenture Act of 1939, as amended (the "Trust
herein) of which this Prospectus forms a part. The Indenture Act"). Upon issuance of the Floating Rate
Fixed Rate Trust Agreement will be qualified as an Preferred Securities, the purchasers thereof will own all
indenture under the Trust Indenture Act of 1939, of the Floating Rate Preferred Securities. The Com-
as amended (the "Trust Indenture Act"). Upon pany will acquire all of the Floating Rate Common
issuance of the Fixed Rate Preferred Securities, Securities which will represent an aggregate liquidation
the purchasers thereof will own all of the Fixed amount equal to at least 3% of the total capital of 1st
Rate Preferred Securities. The Company will ac-
quire all of the Fixed Rate Common Securities which
(FIXED RATE PREFERRED SECURITIES--continued on next page) (FLOATING RATE PREFERRED SECURITIES--continued on next page)
4
<PAGE> 11
(FIXED RATE PREFERRED SECURITIES--continued from previous (FLOATING RATE PREFERRED SECURITIES--continued from previous
page) page)
will represent an aggregate liquidation amount equal to at Capital II. The Floating Rate Common Securities will rank pari
least 3% of the total capital of 1st Capital I. The Fixed Rate passu, and payments will be made thereon pro rata, with the
Common Securities will rank pari passu, and payments will be Floating Rate Preferred Securities, except that upon the
made thereon pro rata, with the Fixed Rate Preferred occurrence and during the continuance of an Event of Default
Securities, except that upon the occurrence and during the (as defined herein) under the Floating Rate Trust Agreement
continuance of an Event of Default (as defined herein) under resulting from a Debenture Event of Default, the rights of the
the Fixed Rate Trust Agreement resulting from a Debenture Company as holder of the Floating Rate Common Securities to
Event of Default, the rights of the Company as holder of the payment in respect of Floating Rate Distributions and pay-
Fixed Rate Common Securities to payment in respect of Fixed ments upon liquidation, redemption or otherwise will be
Rate Distributions and payments upon liquidation, redemption subordinated to the rights of the holders of the Floating Rate
or otherwise will be subordinated to the rights of the holders Preferred Securities. See "Description of the Preferred
of the Fixed Rate Preferred Securities. See "Description of Securities--Subordination of Common Securities." 1st Capital
the Preferred Securities--Subordination of Common II exists for the exclusive purposes of (i) issuing the
Securities." 1st Capital I exists for the exclusive purposes Floating Rate Trust Securities representing undivided
of (i) issuing the Fixed Rate Trust Securities representing beneficial interests in the assets of 1st Capital II, (ii)
undivided beneficial interests in the assets of 1st Capital I, investing the gross proceeds of the Floating Rate Trust
(ii) investing the gross proceeds of the Fixed Rate Trust Securities in the Floating Rate Subordinated Debentures issued
Securities in the Fixed Rate Subordinated Debentures issued by by the Company, and (iii) engaging in only those other
the Company, and (iii) engaging in only those other activities activities necessary, advisable, or incidental thereto. The
necessary, advisable, or incidental thereto. The Fixed Rate Floating Rate Subordinated Debentures and payments thereunder
Subordinated Debentures and payments thereunder will be the will be the only assets of 1st Capital II and payments under
only assets of 1st Capital I and payments under the Fixed Rate the Floating Rate Subordinated Debentures will be the only
Subordinated Debentures will be the only revenue of 1st revenue of 1st Capital II. 1st Capital II has a term of 55
Capital I. 1st Capital I has a term of 55 years, but may years, but may terminate earlier as provided in the Floating
terminate earlier as provided in the Fixed Rate Trust Rate Trust Agreement. The principal executive office of 1st
Agreement. The principal executive office of 1st Capital I is Capital II is 100 North Michigan Street, South Bend, Indiana
100 North Michigan Street, South Bend, Indiana 46601, and its 46601, and its telephone number is (219) 235-2000.
telephone number is (219) 235-2000.
The number of Fixed Rate Trustees will, pursuant to the The number of Floating Rate Trustees will, pursuant to the
Fixed Rate Trust Agreement, initially be five. Three of the Floating Rate Trust Agreement, initially be five. Three of the
Fixed Rate Trustees (the "Fixed Rate Administrative Floating Rate Trustees (the "Floating Rate Administrative
Trustees") will be persons who are employees or officers of, Trustees") will be persons who are employees or officers of,
or who are affiliated with, the Company. The fourth trustee or who are affiliated with, the Company. The fourth trustee
will be a financial institution that is unaffiliated with the will be a financial institution that is unaffiliated with the
Company, which trustee will serve as institutional trustee Company, which trustee will serve as institutional trustee
under the Fixed Rate Trust Agreement and as indenture trustee under the Floating Rate Trust Agreement and as indenture
for the purposes of compliance with the provisions of the trustee for the purposes of compliance with the provisions of
Trust Indenture Act (the "Fixed Rate Property Trustee"). the Trust Indenture Act (the "Floating Rate Property
State Street Bank and Trust Company, a state chartered trust Trustee"). State Street Bank and Trust Company, a state
company organized under the laws of the Commonwealth of chartered trust company organized under the laws of the Com-
Massachusetts, will be the Fixed Rate Property Trustee until monwealth of Massachusetts, will be the Floating Rate Property
removed or replaced by the holder of the Fixed Rate Common Trustee until removed or replaced by the holder of the
Securities. For purposes of compliance with the provisions of Floating Rate Common Securities. For purposes of compliance
the Trust Indenture Act, State Street Bank and Trust Company with the provisions of the Trust Indenture Act, State Street
will also act as trustee (the "Fixed Rate Guarantee Bank and Trust Company will also act as trustee (the
Trustee") under the Fixed Rate Guarantee and as "Floating Rate Guarantee Trustee") under the Floating Rate
Guarantee and as
(FIXED RATE PREFERRED SECURITIES--continued on next page) (FLOATING RATE PREFERRED SECURITIES--continued on next page)
5
<PAGE> 12
(FIXED RATE PREFERRED SECURITIES--continued from previous (FLOATING RATE PREFERRED SECURITIES--continued from previous
page) page)
Fixed Rate Debenture Trustee (as defined herein) under the Floating Rate Debenture Trustee (as defined herein) under the
Fixed Rate Indenture. The fifth trustee will be an entity that Floating Rate Indenture. The fifth trustee will be an entity
maintains its principal place of business in the State of that maintains its principal place of business in the State of
Delaware (the "Fixed Rate Delaware Trustee"). Wilmington Delaware (the "Floating Rate Delaware Trustee"). Wilmington
Trust Company, a Delaware chartered trust company, will act as Trust Company, a Delaware chartered trust company, will act as
Fixed Rate Delaware Trustee. Floating Rate Delaware Trustee.
The Fixed Rate Property Trustee will hold title to the The Floating Rate Property Trustee will hold title to the
Fixed Rate Subordinated Debentures for the benefit of the Floating Rate Subordinated Debentures for the benefit of the
holders of the Fixed Rate Trust Securities and holders of the Floating Rate Trust Securities and in such
in such capacity will have the power to exercise all rights, capacity will have the power to exercise all rights, powers
powers and privileges under the Fixed Rate Indenture. The and privileges under the Floating Rate Indenture. The Floating
Fixed Rate Property Trustee will also maintain exclusive Rate Property Trustee will also maintain exclusive control of
control of a segregated non-interest-bearing bank account (the a segregated non-interest-bearing bank account (the
"Fixed Rate Property Account") to hold all payments made in "Floating Rate Property Account") to hold all payments made
respect of the Fixed Rate Subordinated Debentures for the in respect of the Floating Rate Subordinated Debentures for
benefit of the holders of the Fixed Rate Trust Securities. The the benefit of the holders of the Floating Rate Trust
Fixed Rate Property Trustee will make payments of Fixed Rate Securities. The Floating Rate Property Trustee will make
Distributions and payments on liquidation, redemption and payments of Floating Rate Distributions and payments on
otherwise to the holders of the Fixed Rate Trust Securities liquidation, redemption and otherwise to the holders of the
out of funds from the Fixed Rate Property Account. The Fixed Floating Rate Trust Securities out of funds from the Floating
Rate Guarantee Trustee will hold the Fixed Rate Guarantee for Rate Property Account. The Floating Rate Guarantee Trustee
the benefit of the holders of the Fixed Rate Preferred will hold the Floating Rate Guarantee for the benefit of the
Securities. The Company, as the holder of all the Fixed Rate holders of the Floating Rate Preferred Securities. The
Common Securities, will have the right to appoint, remove or Company, as the holder of all the Floating Rate Common
replace any Fixed Rate Trustee and to increase or decrease the Securities, will have the right to appoint, remove or replace
number of Fixed Rate Trustees. The Company will pay all fees any Floating Rate Trustee and to increase or decrease the
and expenses related to 1st Capital I and the offering of the number of Floating Rate Trustees. The Company will pay all
Fixed Rate Trust Securities. fees and expenses related to 1st Capital II and the offering
of the Floating Rate Trust Securities.
The rights of the holders of the Fixed Rate Preferred The rights of the holders of the Floating Rate Preferred
Securities, including economic rights, rights to information Securities, including economic rights, rights to information
and voting rights, are set forth in the Fixed Rate Trust and voting rights, are set forth in the Floating Rate Trust
Agreement, the Delaware Business Trust Act (the "Trust Act") Agreement, the Delaware Business Trust Act (the "Trust Act")
and the Trust Indenture Act. See "Description of the and the Trust Indenture Act. See "Description of the
Preferred Securities." Preferred Securities."
</TABLE>
6
<PAGE> 13
<TABLE>
THE OFFERING
<CAPTION>
APPLICABLE ONLY TO FIXED RATE PREFERRED SECURITIES
<S> <C>
Fixed Rate Securities
Offered..................... 1,000,000 Fixed Rate Preferred Securities having a Fixed Rate Liquidation
Amount of $25 per Fixed Rate Preferred Security. The Fixed Rate Preferred
Securities represent preferred undivided beneficial interests in the assets
of 1st Capital I, which will consist solely of the Fixed Rate Subordinated
Debentures and payments thereunder. 1st Capital I has granted the
Underwriters an option, exercisable within 30 days after the date of this
Prospectus, to purchase up to an additional 100,000 Fixed Rate Preferred
Securities at the initial offering price, solely to cover over-allotments,
if any.
Fixed Rate Distributions...... The Fixed Rate Distributions payable on each Fixed Rate Preferred Security
will be fixed at a rate per annum of % of the Fixed Rate Liquidation
Amount of $25 per Fixed Rate Preferred Security, will be cumulative, will
accrue from , 1997, the date of issuance of the Fixed Rate
Preferred Securities, and will be payable quarterly in arrears, on March
31, June 30, September 30 and December 31 of each year, commencing June 30,
1997. See "Description of the Preferred Securities--Distributions--Payment
of Distributions."
Nasdaq National Market
Symbol...................... Application has been made to have the Fixed Rate Preferred Securities
approved for quotation on The Nasdaq Stock Market's National Market under
the symbol "SRCEP."
<CAPTION>
APPLICABLE ONLY TO FLOATING RATE PREFERRED SECURITIES
<S> <C>
Floating Rate Securities
Offered..................... 1,000,000 Floating Rate Preferred Securities having a Floating Rate
Liquidation Amount of $25 per Floating Rate Preferred Security. The
Floating Rate Preferred Securities represent preferred undivided beneficial
interests in the assets of 1st Capital II, which will consist solely of the
Floating Rate Subordinated Debentures and payments thereunder. 1st Capital
II has granted the Underwriters an option, exercisable within 30 days after
the date of this Prospectus, to purchase up to an additional 100,000
Floating Rate Preferred Securities at the initial offering price, solely to
cover over-allotments, if any.
Floating Rate Distributions... The Floating Rate Distributions payable on each Floating Rate Preferred
Security will float at the Floating Distribution Rate applied to the
Liquidation Amount of $25 per Floating Rate Preferred Security, will be
cumulative, will accrue from , 1997, the date of issuance of the
Floating Rate Preferred Securities, and will be payable quarterly in
arrears, on March 31, June 30, September 30 and December 31 of each year,
with the first Floating Rate Distribution payable on
June 30, 1997. The Floating Distribution Rate is equal to the
sum of the 3-month Treasury (determined as provided herein) plus %,
provided, however, that the Floating Distribution Rate for the first
Floating Rate Distribution Period will be %. See
"Description of the Preferred Securities--Distributions--Payment of
Distributions."
Nasdaq National Market
Symbol...................... Application has been made to have the Floating Rate Preferred Securities
approved for quotation on The Nasdaq Stock Market's National Market under
the symbol "SRCEO."
7
<PAGE> 14
<CAPTION>
APPLICABLE TO FIXED RATE PREFERRED SECURITIES AND FLOATING RATE PREFERRED SECURITIES
<S> <C>
Option to Extend Interest
Payment Period.............. The Company has the right, at any time, so long as no Debenture Event of
Default has occurred and is continuing, to defer payments of interest on
the Subordinated Debentures for a period not exceeding 20 consecutive
quarters; provided, that no Extended Interest Payment Period may extend
beyond the Stated Maturity of the Subordinated Debentures. As a consequence
of the extension by the Company of the interest payment period, quarterly
Distributions on the Preferred Securities will be deferred (though such
Distributions would continue to accrue with interest thereon compounded
quarterly, since interest will continue to accrue and compound on the
Subordinated Debentures) during any such Extended Interest Payment Period.
During an Extended Interest Payment Period, the Company will be prohibited,
subject to certain exceptions described herein, from declaring or paying
any cash distributions with respect to its capital stock or debt securities
that rank pari passu with or junior to the Subordinated Debentures. The
Fixed Rate Subordinated Debentures and the Floating Rate Subordinated
Debentures will rank pari passu and, therefore, if the Company elects to
defer the payment of interest on one, it would not be permitted to make
interest payments with respect to the other. Upon the termination of any
Extended Interest Payment Period and the payment of all amounts then due,
the Company may commence a new Extended Interest Payment Period, subject to
the foregoing requirements. See "Description of the Preferred
Securities--Distributions--Extension Period" and "Description of the
Subordinated Debentures--Option to Extend Interest Payment Period."
Should an Extended Interest Payment Period occur, holders of Preferred
Securities will be required to include deferred interest income in their
gross income for United States federal income tax purposes in advance of
receipt of the cash distributions with respect to such deferred interest
payments. See "Certain Federal Income Tax Consequences--Potential
Extension of Interest Payment Period and Original Issue Discount."
Optional Redemption........... The Preferred Securities are subject to mandatory redemption, in whole or
in part, upon repayment of the Subordinated Debentures at maturity or their
earlier redemption. Subject to Federal Reserve approval, if then required
under applicable capital guidelines or policies of the Federal Reserve, the
Subordinated Debentures are redeemable prior to maturity at the option of
the Company (i) on or after March 31, 2002, in whole at any time or in part
from time to time, or (ii) at any time, in whole (but not in part), within
180 days following the occurrence of a Tax Event, a Capital Treatment Event
or an Investment Company Event, in each case at the redemption price equal
to 100% of the principal amount of the Subordinated Debenture, together with
any accrued but unpaid interest to the date fixed for redemption. The
Company may exercise its rights with regard to the Fixed Rate Subordinated
Debentures independent of its rights with regard to the Floating Rate
Subordinated Debentures, and vice versa. See "Description of the
Subordinated Debentures--Redemption or Exchange."
8
<PAGE> 15
<S> <C>
Distribution of Subordinated
Debentures.................. The Company has the right at any time to terminate the Preferred Securities
and cause the Subordinated Debentures to be distributed to holders of
Preferred Securities in liquidation of 1st Capital, subject to the Company
having received prior approval of the Federal Reserve to do so if then
required under applicable capital guidelines or policies of the Federal
Reserve. The Company may exercise its rights with regard to the Fixed Rate
Subordinated Debentures independent of its rights with regard to the
Floating Rate Subordinated Debentures, and vice versa. See "Description of
the Preferred Securities--Redemption or Exchange" and "Description of the
Preferred Securities--Liquidation Distribution Upon Termination."
Guarantee..................... The Company has guaranteed the payment of Distributions and payments on
liquidation or redemption of the Preferred Securities, but only in each
case to the extent of funds held by 1st Capital, as described herein. The
Company and 1st Capital believe that, taken together, the obligations of
the Company under the Guarantee, the Trust Agreement, the Subordinated
Debentures, the Indenture and the Expense Agreement provide, in the
aggregate, a full, irrevocable and unconditional guaranty, on a
subordinated basis, of all of the obligations of 1st Capital under the
Preferred Securities. The obligations of the Company under the Guarantee
and the Preferred Securities are subordinate and junior in right of payment
to all Senior Debt, Subordinated Debt and Additional Senior Obligations of
the Company. If the Company does not make principal or interest payments on
the Subordinated Debentures, 1st Capital will not have sufficient funds to
make distributions on the Preferred Securities; in which event, the
Guarantee will not apply to such Distributions until 1st Capital has
sufficient funds available therefor. See "Description of the Guarantee."
Voting Rights................. The holders of the Preferred Securities generally will have no voting
rights except in limited circumstances. See "Description of the Preferred
Securities--Voting Rights; Amendment of Trust Agreement."
Use of Proceeds............... The proceeds from the sale of the Preferred Securities offered hereby will
be used by 1st Capital to purchase the Subordinated Debentures issued by
the Company. The Company intends to use the net proceeds from the sale of
the Subordinated Debentures for general corporate purposes. These may
include, without limitation, the repurchase of common stock, the repayment
of long term debt, the funding of investments in or extensions of credit to
the Company's subsidiaries and the making of investments in or possibly
acquiring businesses which enhance the Company's long-term growth or
improve or expand the Company's products, services or markets. Pending
their application for any or all of such purposes, the net proceeds may be
invested in investment grade financial instruments. See "Use of
Proceeds."
</TABLE>
9
<PAGE> 16
<TABLE>
SELECTED CONSOLIDATED FINANCIAL DATA
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
SELECTED RESULTS OF
OPERATIONS:
Interest income.......... $ 148,820 $ 135,115 $ 112,942 $ 104,104 $ 106,319
Interest expense......... 73,429 64,946 47,709 44,578 50,227
---------- ---------- ---------- ---------- ----------
Net interest income...... 75,391 70,169 65,233 59,526 56,092
Provision for loan
losses................. 4,649 2,757 4,197 3,533 3,724
---------- ---------- ---------- ---------- ----------
Net interest income after
provision for loan
losses................. 70,742 67,412 61,036 55,993 52,368
Other noninterest
income................. 25,479 19,492 14,874 14,301 12,216
Noninterest expense...... 60,622 54,861 49,577 46,428 43,674
---------- ---------- ---------- ---------- ----------
Income before income
tax expense.......... 35,599 32,043 26,333 23,866 20,910
Income tax expense....... 12,396 11,001 7,868 7,144 6,296
---------- ---------- ---------- ---------- ----------
Net income before
cumulative effect of
accounting change.... 23,203 21,042 18,465 16,722 14,614
Cumulative effect of
accounting change...... -- -- -- -- (696)
---------- ---------- ---------- ---------- ----------
Net income............. $ 23,203 $ 21,042 $ 18,465 $ 16,722 $ 13,918
========== ========== ========== ========== ==========
PER SHARE DATA:<F1>
Net income (primary and
fully diluted)......... $ 1.45 $ 1.31 $ 1.16 $ 1.05 $ 0.88
Cash dividends
declared............... 0.264 0.229 0.203 0.175 0.148
Book value............... 11.02 9.80 8.22 7.96 6.90
Dividend payout ratio.... 18.21% 17.48% 17.50% 16.67% 16.82%
SELECTED BALANCE SHEET
DATA:
Assets................... $2,079,767 $1,799,257 $1,583,027 $1,488,123 $1,400,249
Securities<F2>........... 423,096 396,375 349,885 360,154 343,956
Loans and leases......... 1,455,563 1,259,415 1,100,713 1,019,813 956,416
Allowance for loan and
lease losses........... 29,516 27,470 23,868 22,350 19,141
Deposits................. 1,633,978 1,441,749 1,301,337 1,179,363 1,154,887
Long term debt........... 18,596 21,819 28,084 25,473 16,368
Shareholders' equity..... 171,833 152,601 129,082 125,539 107,797
PERFORMANCE RATIOS:
Return on average
equity................. 14.38% 14.75% 14.49% 14.52% 13.76%
Return on average
assets................. 1.22% 1.25% 1.19% 1.16% 1.05%
Net interest margin
(fully taxable
equivalent)............ 4.48% 4.71% 4.80% 4.71% 4.79%
ASSET QUALITY RATIOS:
Allowance for loan losses
to loans............... 2.03% 2.18% 2.17% 2.19% 2.00%
Nonperforming assets to
loans.................. 0.53% 0.52% 0.43% 0.52% 1.00%
Net loan losses to
average loans.......... 0.13% (0.07)% 0.12% 0.03% 0.20%
CAPITAL RATIOS:
Average equity to average
assets................. 8.51% 8.46% 8.24% 8.00% 7.60%
Tier 1 capital ratio..... 10.93% 11.43% 11.69% 11.30% 10.48%
Total risk based capital
ratio.................. 12.45% 13.03% 14.07% 14.00% 13.38%
Leverage ratio........... 8.48% 8.44% 8.33% 8.09% 7.43%
RATIO OF EARNINGS TO
FIXED CHARGES:<F3>
Including interest on
deposits............... 1.48x 1.49x 1.55x 1.54x 1.42x
Excluding interest on
deposits............... 4.86x 4.66x 5.62x 5.95x 5.26x
<FN>
- ---------
<F1>Per share data has been restated to reflect a five-for-four stock split
declared on January 21, 1997.
<F2>Includes market value adjustment on Available for Sale securities.
<F3>Earnings consist of income before income tax plus interest expense. Fixed
charges consist of interest expense. The Company does not currently have
any preferred stock outstanding.
</TABLE>
10
<PAGE> 17
All textual information contained in a left-hand column of this Prospectus
is applicable only to the Fixed Rate Preferred Securities and all textual
information contained in a right-hand column of this Prospectus is applicable
only to the Floating Rate Preferred Securities. All information contained in a
full-width text portion of this Prospectus, which is not otherwise identified
as applicable to a specific type of security, should be read as applicable to
either or both of the Fixed Rate Preferred Securities and the Floating Rate
Preferred Securities. Defined terms used in the full-width text portion of this
Prospectus are not, therefore, preceded by the words "Fixed Rate" or
"Floating Rate" and the term 1st Capital is not followed by the designation
"I" or "II."
RISK FACTORS
Prospective investors should carefully consider, together with the other
information contained and incorporated by reference in this Prospectus, the
following risk factors before purchasing the Preferred Securities offered
hereby. Prospective investors should note, in particular, that this Prospectus
contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of
the Securities Act of 1934, as amended (the "Exchange Act"), and that actual
results could differ materially from those contemplated by such statements.
Prospective investors should also refer to the factors discussed under
"Business -- Forward-Looking Statements" set forth in the Company's annual
report on Form 10-K for the year ended December 31, 1996, which is incorporated
herein by reference. See "Incorporation of Certain Documents by Reference."
These considerations are not intended to represent a complete list of the
general or specific risks that may affect the Preferred Securities, the
Subordinated Debentures or the Company and 1st Capital. It should be recognized
that other risks may be significant, presently or in the future, and the risks
set forth below may affect the Preferred Securities, the Subordinated
Debentures or the Company and 1st Capital to a greater extent than indicated.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE GUARANTEE AND THE SUBORDINATED
DEBENTURES
The obligations of the Company under the Guarantee issued for the benefit
of the holders of Preferred Securities and under the Subordinated Debentures
are unsecured and rank subordinate and junior in right of payment to all Senior
Debt, Subordinated Debt and Additional Senior Obligations of the Company. At
December 31, 1996, the aggregate outstanding Senior Debt, Subordinated Debt and
Additional Senior Obligations of the Company was approximately $18.6 million.
Because the Company is a holding company, the right of the Company to
participate in any distribution of assets of the Bank upon the Bank's
liquidation or reorganization or otherwise (and thus the ability of holders of
the Preferred Securities to benefit indirectly from such distribution) is
subject to the prior claims of creditors of the Bank, except to the extent that
the Company may itself be recognized as a creditor of the Bank. The
Subordinated Debentures, therefore, will be effectively subordinated to all
existing and future liabilities of the Bank and holders of Subordinated
Debentures and Preferred Securities should look only to the assets of the
Company for payments on the Subordinated Debentures. Neither the Indenture, the
Guarantee nor the Trust Agreement places any limitation on the amount of
secured or unsecured debt, including Senior Debt, Subordinated Debt and
Additional Senior Obligations, that may be incurred by the Company. See
"Description of the Guarantee--Status of the Guarantee" and "Description of
the Subordinated Debentures--Subordination."
The ability of 1st Capital to pay amounts due on the Preferred Securities
is solely dependent upon the Company making payments on the Subordinated
Debentures as and when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES; MARKET PRICE
CONSEQUENCES
The Company has the right under the Indenture, so long as no Debenture
Event of Default has occurred and is continuing, to defer the payment of
interest on the Subordinated Debentures at any time or from time to time for a
period not exceeding 20 consecutive quarters with respect to each Extended
Interest Payment Period; provided that no Extended Interest Payment Period may
extend beyond the Stated Maturity of the Subordinated Debentures. As a
consequence of any such deferral, quarterly Distributions on the Preferred
Securities by 1st Capital will be deferred (and the amount of Distributions to
which holders of the Preferred Securities are entitled will accumulate
additional Distributions thereon at the rate of % per annum (in the case of
the Fixed Rate Preferred Securities) or at the Floating Distribution Rate (in
the case of the Floating Rate Preferred Securities), compounded quarterly from
the relevant payment date for such Distributions) during any such Extended
Interest Payment Period. During any such Extended Interest Payment Period, the
Company may not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any
of the Company's capital stock (other
11
<PAGE> 18
than (a) dividends or distributions in common stock of the Company, any
declaration of a non-cash dividend in connection with the implementation of a
shareholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto,
and (b) purchases of common stock of the Company related to the rights under
any of the Company's benefit plans for its directors, officers or employees),
(ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu
with or junior in interest to the Subordinated Debentures or make any guarantee
payments with respect to any guarantee by the Company of the debt securities of
any subsidiary of the Company if such guarantee ranks pari passu with or junior
in interest to the Subordinated Debentures (other than payments under the
Guarantee), or (iii) redeem, purchase or acquire less than all of the
Subordinated Debentures or any of the Preferred Securities. Prior to the
termination of any such Extended Interest Payment Period, the Company may
further defer the payment of interest; provided that no Extended Interest
Payment Period may exceed 20 consecutive quarters or extend beyond the Stated
Maturity of the Subordinated Debentures. Upon the termination of any Extended
Interest Payment Period and the payment of all interest then accrued and unpaid
(together with interest thereon at the rate of % per annum (in the case of
the Fixed Rate Preferred Securities) or at the Floating Distribution Rate (in
the case of the Floating Rate Preferred Securities) compounded quarterly, to
the extent permitted by applicable law), the Company may elect to begin a new
Extended Interest Payment Period, subject to the above requirements. Subject to
the foregoing, there is no limitation on the number of times that the Company
may elect to begin an Extended Interest Payment Period. See "Description of
the Preferred Securities--Distributions--Extension Period" and "Description
of the Subordinated Debentures--Option to Extend Interest Payment Period."
Should an Extended Interest Payment Period occur, each holder of Preferred
Securities will be required to accrue and recognize income (in the form of
original issue discount ("OID")) in respect of its pro rata share of the
interest accruing on the Subordinated Debentures held by 1st Capital for United
States federal income tax purposes. A holder of Preferred Securities must, as a
result, include such income in gross income for United States federal income
tax purposes in advance of the receipt of cash, and will not receive the cash
related to such income from 1st Capital if the holder disposes of the Preferred
Securities prior to the record date for the payment of the related
Distributions. See "Certain Federal Income Tax Consequences--Potential
Extension of Interest Payment Period and Original Issue Discount."
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Subordinated Debentures. Should the Company elect, however, to exercise such
right in the future, the market price of the Preferred Securities is likely to
be adversely affected. A holder that disposes of its Preferred Securities
during an Extended Interest Payment Period, therefore, might not receive the
same return on its investment as a holder that continues to hold its Preferred
Securities. As a result of the existence of the Company's right to defer
interest payments, the market price of the Preferred Securities may be more
volatile than the market prices of other securities on which original issue
discount accrues that are not subject to such optional deferrals.
TAX EVENT, CAPITAL TREATMENT EVENT OR INVESTMENT COMPANY EVENT; REDEMPTION
The Company has the right to redeem the Subordinated Debentures in whole
(but not in part) within 180 days following the occurrence of a Tax Event,
Capital Treatment Event or Investment Company Event (whether occurring before
or after March 31, 2002), and, therefore, cause a mandatory redemption of the
Preferred Securities. The exercise of such right is subject to the Company
having received prior approval of the Federal Reserve to do so if then required
under applicable capital guidelines or policies of the Federal Reserve.
"Tax Event" means the receipt by 1st Capital of an opinion of counsel
experienced in such matters to the effect that, as a result of any amendment
to, or change (including any announced prospective change) in the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or such
pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities under the Trust Agreement, there is more than an
insubstantial risk that (i) 1st Capital is, or will be within 90 days of the
date of such opinion, subject to United States federal income tax with respect
to income received or accrued on the Subordinated Debentures, (ii) interest
payable by the Company on the Subordinated Debentures is not, or, within 90
days of such opinion, will not be, deductible by the Company, in whole or in
part, for United States federal income tax purposes, or (iii) 1st Capital is,
or will be within 90 days of the date of
12
<PAGE> 19
the opinion, subject to more than a de minimis amount of other taxes, duties or
other governmental charges. The Company must request and receive an opinion
with regard to such matters within a reasonable period of time after it becomes
aware of the possible occurrence of any of the events described in clauses (i)
through (iii) above.
A "Capital Treatment Event" means the receipt by 1st Capital of an
opinion of counsel experienced in such matters to the effect that, as a result
of any amendment to, or change (including any announced prospective change) in,
the laws (or any regulations thereunder) of the United States or any political
subdivision thereof or therein, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or such proposed change,
pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities under the Trust Agreement, there is more than an
insubstantial risk of impairment of the Company's ability to treat the
aggregate Liquidation Amount of the Preferred Securities (or any substantial
portion thereof) as "Tier 1 Capital" (or the then equivalent thereof) for
purposes of the capital adequacy guidelines of the Federal Reserve, as then in
effect and applicable to the Company.
"Investment Company Event" means the receipt by 1st Capital of an opinion
of counsel experienced in such matters to the effect that, as a result of the
occurrence of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, 1st Capital is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), which change
becomes effective on or after the date of original issuance of the Preferred
Securities.
See "--Proposed Tax Legislation" for a discussion of certain potential
legislative developments that, if adopted, could give rise to a Tax Event,
which may permit the Company to cause a redemption of the Preferred Securities
prior to March 31, 2002.
SHORTENING OR EXTENSION OF STATED MATURITY OF SUBORDINATED DEBENTURES
The Company has the right, at any time, to shorten the maturity of the
Subordinated Debentures to a date not earlier than March 31, 2002. The exercise
of such right is subject to the Company having received prior approval of the
Federal Reserve if then required under applicable capital guidelines or
policies of the Federal Reserve. The Company also has the right to extend the
maturity of the Subordinated Debentures (whether or not 1st Capital is
terminated and the Subordinated Debentures are distributed to holders of the
Preferred Securities) to a date no later than March 31, 2046, a date
approximately 49 years after the initial issuance of the Preferred Securities.
Such right may only be exercised, however, if at the time such election is made
and at the time of such extension (i) the Company is not in bankruptcy,
otherwise insolvent or in liquidation, (ii) the Company is not in default in
the payment of any interest or principal on the Subordinated Debentures, and
(iii) 1st Capital is not in arrears on payments of Distributions on the
Preferred Securities and no deferred Distributions are accumulated. See
"Description of the Subordinated Debentures--General."
RIGHTS UNDER THE GUARANTEE
The Guarantee guarantees to the holders of the Preferred Securities, to the
extent not paid by 1st Capital, (i) any accrued and unpaid Distributions
required to be paid on the Preferred Securities, to the extent that 1st Capital
has funds available therefor at such time, (ii) the Redemption Price (as
defined herein) with respect to any Preferred Securities called for redemption,
to the extent that 1st Capital has funds available therefor at such time, and
(iii) upon a voluntary or involuntary dissolution, winding-up or liquidation of
1st Capital (other than in connection with the distribution of Subordinated
Debentures to the holders of Preferred Securities or a redemption of all of the
Preferred Securities), the lesser of (a) the amount of the Liquidation
Distribution (as defined herein), to the extent 1st Capital has funds available
therefor at such time, and (b) the amount of assets of 1st Capital remaining
available for distribution to holders of the Preferred Securities in
liquidation of 1st Capital. The holders of not less than a majority in
Liquidation Amount of the Preferred 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 the Guarantee or to direct the exercise of
any trust power conferred upon the Guarantee Trustee under the Guarantee. Any
holder of the Preferred Securities may institute a legal proceeding directly
against the Company to enforce its rights under the Guarantee without first
instituting a legal proceeding against 1st Capital, the Guarantee Trustee or
any other Person (as defined in the Guarantee). If the Company were to default
on its obligation to pay amounts payable under the Subordinated
13
<PAGE> 20
Debentures, 1st Capital would lack funds for the payment of Distributions or
amounts payable on redemption of the Preferred Securities or otherwise, and, in
such event, holders of Preferred Securities would not be able to rely upon the
Guarantee for such amounts. In the event, however, that a Debenture Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Company to pay interest on or principal of the Subordinated
Debentures on the payment date on which such payment is due and payable, then a
holder of Preferred Securities may institute a legal proceeding directly
against the Company for enforcement of payment to such holder of the principal
of or interest on such Subordinated Debentures having a principal amount equal
to the aggregate Liquidation Amount of the Preferred Securities of such holder
(a "Direct Action"). The exercise by the Company of its right, as described
herein, to defer the payment of interest on the Subordinated Debentures does
not constitute a Debenture Event of Default. In connection with such Direct
Action, the Company will have a right of set-off under the Indenture to the
extent of any payment made by the Company to such holder of Preferred
Securities in the Direct Action. Except as described herein, holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Subordinated Debentures or assert directly any
other rights in respect of the Subordinated Debentures. See "Description of
the Subordinated Debentures--Enforcement of Certain Rights by Holders of the
Preferred Securities," "Description of the Subordinated Debentures--Debenture
Events of Default" and "Description of the Guarantee." The Trust Agreement
provides that each holder of Preferred Securities by acceptance thereof agrees
to the provisions of the Guarantee and the Indenture.
NO VOTING RIGHTS EXCEPT IN LIMITED CIRCUMSTANCES
Holders of Preferred Securities will have no voting rights except in
limited circumstances relating only to the modification of the Preferred
Securities and the exercise of the rights of 1st Capital as holder of the
Subordinated Debentures and the Guarantee. Holders of Preferred Securities will
not be entitled to vote to appoint, remove or replace the Property Trustee or
the Delaware Trustee, as such voting rights are vested exclusively in the
holder of the Common Securities (except upon the occurrence of certain events
described herein). The Property Trustee, the Administrative Trustees and the
Company may amend the Trust Agreement without the consent of holders of
Preferred Securities to ensure that 1st Capital will be classified for United
States federal income tax purposes as a grantor trust even if such action
adversely affects the interests of such holders. See "Description of the
Preferred Securities--Voting Rights; Amendment of Trust Agreement" and
"Description of the Preferred Securities--Removal of 1st Capital Trustees."
PROPOSED TAX LEGISLATION
On March 19, 1996, President Clinton proposed certain tax law changes that
would, among other things, generally deny corporate issuers a deduction for
interest in respect of certain debt obligations issued on or after December 7,
1995 (the "1996 Proposed Legislation") if such debt obligations have a
maximum term in excess of 20 years and are not shown as indebtedness on the
issuer's applicable consolidated balance sheet. On March 29, 1996, Senate
Finance Committee Chairman William V. Roth, Jr. and House Ways and Means
Committee Chairman Bill Archer issued a joint statement (the "Joint
Statement") indicating their intent that certain legislative proposals
initiated by the Clinton administration, including the 1996 Proposed
Legislation, that may be adopted by either of the tax-writing committees of
Congress would have an effective date that is no earlier than the date of
"appropriate Congressional action." In addition, subsequent to the
publication of the Joint Statement, Senator Daniel Patrick Moynihan and
Representatives Sam M. Gibbons and Charles B. Rangel wrote letters to Treasury
Department officials concurring with the views expressed in the Joint
Statement. Neither the 1996 Proposed Legislation nor similar legislation was
enacted during the 104th Congress. On February 6, 1997, President Clinton
proposed in the administration's fiscal year 1998 budget certain tax law
changes (the "1997 Proposed Legislation") that would, among other things,
generally deny corporate issuers a deduction for interest or OID in respect of
certain debt obligations if such debt obligations have a maximum term in excess
of 15 years and are not shown as indebtedness on the issuer's applicable
consolidated balance sheet. The 1997 Proposed Legislation also contains a
provision that would deny a deduction to corporate issuers for interest or OID
with respect to debt instruments that have a maximum term of more than 40 years
(including rights to extend, renew or relend), or are payable in stock of the
issuer or a related party. The U.S. Treasury Department's summary of the 1997
Proposed Legislation states that the above provisions regarding the deduction
of interest would generally be effective for instruments issued on or after the
date of first Congressional committee action with respect to the 1997 Proposed
Legislation. The Ways and Means Committee began a full committee hearing on the
President's fiscal 1998 budget on February 11, 1997. There can be no assurance
14
<PAGE> 21
that the effective date guidance in the 1997 Proposed Legislation will be
adopted if the proposed change to the tax law is enacted, or that other
legislation enacted after the date hereof will not otherwise adversely affect
the ability of the Company to deduct the interest payable on the Subordinated
Debentures. Consequently, there can be no assurance that a Tax Event will not
occur. A Tax Event would permit the Company, upon approval of the Federal
Reserve if then required under applicable capital guidelines or policies of the
Federal Reserve, to cause a redemption of the Preferred Securities before, as
well as after, March 31, 2002. See "Description of the Subordinated
Debentures--Redemption or Exchange" and "Description of the Preferred
Securities--Redemption or Exchange--Tax Event Redemption, Capital Treatment
Event Redemption or Investment Company Event Redemption" and "Certain Federal
Income Tax Consequences--Effect of Proposed Changes in Tax Laws."
REDEMPTION; EXCHANGE OF PREFERRED SECURITIES FOR SUBORDINATED DEBENTURES
The Company has the right at any time to dissolve, wind-up or terminate 1st
Capital and cause the Subordinated Debentures to be distributed to the holders
of the Preferred Securities in exchange therefor in liquidation of 1st Capital.
The exercise of such right is subject to the Company having received prior
approval of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve. The Company will have the right,
in certain circumstances, to redeem the Subordinated Debentures in whole or in
part, in lieu of a distribution of the Subordinated Debentures by 1st Capital,
in which event 1st Capital will redeem the Trust Securities on a pro rata basis
to the same extent as the Subordinated Debentures are redeemed by the Company.
Any such distribution or redemption prior to the Stated Maturity will be
subject to prior approval of the Federal Reserve if then required under
applicable capital guidelines or policies of the Federal Reserve. See
"Description of the Preferred Securities--Redemption or Exchange--Tax Event
Redemption, Capital Treatment Event Redemption or Investment Company Event
Redemption."
Under current United States federal income tax law, a distribution of
Subordinated Debentures upon the dissolution of 1st Capital would not be a
taxable event to holders of the Preferred Securities. If, however, 1st Capital
is characterized as an association taxable as a corporation at the time of the
dissolution of 1st Capital, the distribution of the Subordinated Debentures may
constitute a taxable event to holders of Preferred Securities. Moreover, upon
occurrence of a Tax Event, a dissolution of 1st Capital in which holders of the
Preferred Securities receive cash may be a taxable event to such holders. See
"Certain Federal Income Tax Consequences--Receipt of Subordinated Debentures
or Cash Upon Liquidation of 1st Capital."
There can be no assurance as to the market prices for the Preferred
Securities or the Subordinated Debentures that may be distributed in exchange
for Preferred Securities upon a dissolution or liquidation of 1st Capital. The
Preferred Securities or the Subordinated Debentures, may, therefore, trade at a
discount to the price that the investor paid to purchase the Preferred
Securities offered hereby. Because holders of Preferred Securities may receive
Subordinated Debentures, prospective purchasers of Preferred Securities are
also making an investment decision with regard to the Subordinated Debentures
and should carefully review all the information regarding the Subordinated
Debentures contained herein.
If the Subordinated Debentures are distributed to the holders of Preferred
Securities upon the liquidation of 1st Capital, the Company will use its best
efforts to list the Subordinated Debentures on The Nasdaq Stock Market's
National Market or such stock exchanges, if any, on which the Preferred
Securities are then listed.
COMPANY MAY EXERCISE REDEMPTION RIGHTS AND RIGHTS TO SHORTEN OR EXTEND MATURITY
DATE INDEPENDENTLY
Although the Fixed Rate Subordinated Debentures and the Floating Rate
Subordinated Debentures will rank pari passu, the Company may exercise certain
of its rights with regard to the Fixed Rate Subordinated Debentures independent
of its exercise of such rights with regard to the Floating Rate Subordinated
Debentures, and vice versa. For example, in the event the Company has satisfied
any related conditions precedent, the Company may elect to redeem, shorten or
extend the maturity of, or effect the distribution of, the Fixed Rate
Subordinated Debentures without taking any corresponding or similar action with
regard to the Floating Rate Subordinated Debentures. Accordingly, there can be
no assurance that the aggregate Liquidation Amount of Floating Rate Preferred
Securities outstanding at any one time will be the same as the aggregate
Liquidation Amount of Fixed Rate Preferred Securities outstanding at such time,
or that the maturity dates for the floating rate and fixed rate securities
offered hereby will be comparable.
15
<PAGE> 22
TRADING PRICE; ABSENCE OF PRIOR PUBLIC MARKET FOR THE PREFERRED SECURITIES
The Preferred Securities may trade at prices that do not fully reflect the
value of accrued but unpaid interest with respect to the underlying
Subordinated Debentures. A holder of Preferred Securities that disposes of its
Preferred Securities between record dates for payments of Distributions (and
consequently does not receive a Distribution from 1st Capital for the period
prior to such disposition) will nevertheless be required to include accrued but
unpaid interest on the Subordinated Debentures through the date of disposition
in income as ordinary income and to add such amount to its adjusted tax basis
in its pro rata share of the underlying Subordinated Debentures deemed disposed
of. Such holder will recognize a capital loss to the extent the selling price
(which may not fully reflect the value of accrued but unpaid interest) is less
than its adjusted tax basis (which will include all accrued but unpaid
interest). Subject to certain limited exceptions, capital losses cannot be
applied to offset ordinary income for United States federal income tax
purposes. See "Certain Federal Income Tax Consequences--Disposition of
Preferred Securities."
There is no current public market for the Preferred Securities. Although
application has been made to have the Preferred Securities approved for
quotation on The Nasdaq Stock Market's National Market, there can be no
assurance that an active public market will develop for the Preferred
Securities or that, if such market develops, the market price will equal or
exceed the public offering price set forth on the cover page of this
Prospectus. The public offering price for the Preferred Securities has been
determined through negotiations between the Company and the Underwriters.
Prices for the Preferred Securities will be determined in the marketplace and
may be influenced by many factors, including prevailing interest rates, the
liquidity of the market for the Preferred Securities, investor perceptions of
the Company and general industry and economic conditions.
PREFERRED SECURITIES ARE NOT INSURED
The Preferred Securities are not insured by the Bank Insurance Fund or the
Savings Association Insurance Fund of the Federal Deposit Insurance Corporation
or by any other governmental agency.
16
<PAGE> 23
USE OF PROCEEDS
1st Capital will use the gross proceeds received from the sale of the
Preferred Securities to purchase Subordinated Debentures from the Company. The
Company intends to use the net proceeds from the sale of the Subordinated
Debentures for general corporate purposes. These may include, without
limitation, the repurchase of common stock, the repayment of long term debt,
the funding of investments in or extensions of credit to the Company's
subsidiaries and the making of investments in or possibly acquiring businesses
which enhance the Company's long-term growth or improve or expand the Company's
products, services or markets. Pending their application for any or all of such
purposes, the net proceeds may be invested in investment grade financial
instruments.
MARKET FOR THE PREFERRED SECURITIES
<TABLE>
<C> <C>
(FIXED RATE PREFERRED SECURITIES) (FLOATING RATE PREFERRED SECURITIES)
Application has been made to have the Fixed Rate Preferred Application has been made to have the Floating Rate Preferred
Securities approved for quotation on The Nasdaq Stock Market's Securities approved for quotation on The Nasdaq Stock Market's
National Market under the symbol "SRCEP." Although Stifel, National Market under the symbol "SRCEO." Although Stifel,
Nicolaus & Company, Incorporated has informed the Company that Nicolaus & Company, Incorporated has informed the Company that
it presently intends to make a market in the Fixed Rate it presently intends to make a market in the Floating Rate
Preferred Securities, there can be no assurance that an active Preferred Securities, there can be no assurance that an active
and liquid trading market will develop or, if developed, that and liquid trading market will develop or, if developed, that
such a market will continue. The offering price and such a market will continue. The offering price and
distribution rate have been determined by negotiations among distribution rate have been determined by negotiations among
representatives of the Company and the Underwriters, and the representatives of the Company and the Underwriters, and the
offering price of the Fixed Rate Preferred Securities may not offering price of the Floating Rate Preferred Securities may
be indicative of the market price following the offering. See not be indicative of the market price following the offering.
"Underwriting." See "Underwriting."
</TABLE>
ACCOUNTING TREATMENT
1st Capital will be treated, for financial reporting purposes, as a
subsidiary of the Company and, accordingly, the accounts of 1st Capital will be
included in the consolidated financial statements of the Company. The Preferred
Securities will be presented as a separate line item in the consolidated
balance sheet of the Company under the caption "Guaranteed Preferred
Beneficial Interests in Company's Subordinated Debentures," and appropriate
disclosures about the Preferred Securities, the Guarantee and the Subordinated
Debentures will be included in the notes to consolidated financial statements.
The Company will record Distributions payable on the Preferred Securities as an
expense in the consolidated statements of operations for financial reporting
purposes.
All future reports of the Company filed under the Exchange Act will (a)
present the Trust Securities issued by 1st Capital on the balance sheet as a
separate line-item entitled "Guaranteed preferred beneficial interests in the
Company's subordinated debentures," (b) include in a footnote to the financial
statements disclosure that the sole assets of 1st Capital are the Subordinated
Debentures (including the outstanding principal amount, interest rate and
maturity date of such Subordinated Debentures), and (c) include in an audited
footnote to the financial statements disclosure that the Company owns all of
the Common Securities of 1st Capital, the sole assets of 1st Capital are the
Subordinated Debentures, and the back-up obligations, in the aggregate,
constitute a full and unconditional guarantee by the Company of the obligations
of 1st Capital under the Preferred Securities.
17
<PAGE> 24
CAPITALIZATION
The following table sets forth (i) the consolidated capitalization of the
Company at December 31, 1996 and (ii) the consolidated capitalization of the
Company giving effect to the issuance of the Fixed Rate Preferred Securities
and the Floating Rate Preferred Securities hereby offered by 1st Capital I and
1st Capital II, respectively, and receipt by the Company of the proceeds from
the corresponding sale of the Fixed Rate Subordinated Debentures and the
Floating Rate Subordinated Debentures to 1st Capital I and 1st Capital II,
respectively, as if such sale had been consummated on December 31, 1996, and
assuming the Underwriters' over-allotment options were not exercised.
<TABLE>
<CAPTION>
DECEMBER 31, 1996
------------------------
ACTUAL AS ADJUSTED
------ -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
LONG-TERM DEBT:
Notes payable......................................................................... $ 18,596 $ 18,596
-------- ---------
GUARANTEED PREFERRED BENEFICIAL INTERESTS IN THE COMPANY'S
SUBORDINATED DEBENTURES:
Guaranteed preferred beneficial interests in the Company's subordinated debentures.... 0 50,000
-------- ---------
SHAREHOLDERS' EQUITY:
Preferred stock, 10,000,000 shares authorized; no shares issued....................... 0 0
Common stock, no par value; 40,000,000 shares authorized; 12,936,120 shares issued and
outstanding<F1>...................................................................... 5,700 5,700
Capital surplus....................................................................... 69,947 69,947
Retained earnings..................................................................... 102,399 102,399
Cost of common stock in treasury; 345,622 shares<F1>.................................. (6,670) (6,670)
Unrealized gain (loss) on available for sale securities............................... 457 457
-------- ---------
Total shareholders' equity.................................................... 171,833 171,833
-------- ---------
Total capitalization.......................................................... $190,429 $ 240,429
======== =========
CAPITAL RATIOS:
Shareholders' equity to total assets.................................................. 8.26% 8.26%
Leverage ratio<F2><F3><F4><F5>........................................................ 8.48 11.01
Risk-based capital ratios:<F3><F4>
Tier 1 capital to risk-weighted assets<F5>........................................ 10.93 14.19
Total risk-based capital to risk-weighted assets<F5>.............................. 12.45 15.70
<FN>
- --------
<F1>Shares not restated for five-for-four stock split declared January 21,
1997.
<F2>The leverage ratio is Tier 1 capital divided by average quarterly assets,
after deducting intangible assets and net deferred tax assets in excess of
regulatory maximum limits.
<F3>The capital ratios, as adjusted, are computed including the total estimated
proceeds from the sale of the Preferred Securities, in a manner
consistent with Federal Reserve guidelines.
<F4>Federal Reserve guidelines for calculation of Tier 1 capital to
risk-weighted assets limits the amount of cumulative preferred stock which
can be included in Tier 1 capital to 25% of total Tier 1 capital.
<F5>The Fixed Rate Preferred Securities ($25 million) and the Floating Rate
Preferred Securities ($25 million) are being offered hereby separately
and not as units. Neither the sale of the Fixed Rate Preferred Securities
nor the sale of the Floating Rate Preferred Securities is contingent upon
completion of the sale of the other security. In the event only one of the
Preferred Securities offered hereby is sold, the leverage ratio, as
adjusted, would be 9.75%, the Tier 1 capital to risk-weighted assets
ratio, as adjusted, would be 12.56%, and the total risk-based capital
to risk-weighted assets ratio, as adjusted, would be 14.07%.
</TABLE>
18
<PAGE> 25
DESCRIPTION OF THE PREFERRED SECURITIES
<TABLE>
<C> <C>
(FIXED RATE PREFERRED SECURITIES) (FLOATING RATE PREFERRED SECURITIES)
The Fixed Rate Preferred Securities will The Floating Rate Preferred Securities will be issued pursuant
be issued pursuant to the terms of the Fixed Rate to the terms of the Floating Rate Trust Agreement. The Floating
Trust Agreement. The Fixed Rate Trust Agreement will Rate Trust Agreement will be qualified as an indenture under
be qualified as an indenture under the Trust the Trust Indenture Act. The Floating Rate Property Trustee,
Indenture Act. The Fixed Rate Property State Street Bank and Trust Company, will act as indenture
Trustee, State Street Bank and trustee for the Floating Rate Preferred Securities under
and Trust Company, will act as the Floating Rate Trust Agreement for purposes
indenture trustee for the Fixed Rate Preferred Securities of complying with the provisions of the Trust
under the Fixed Rate Trust Agreement for purposes of complying Indenture Act. The terms of the Floating Rate Preferred
with the provisions of the Trust Indenture Act. The terms of Securities will include those stated in the Floating Rate
the Fixed Rate Preferred Securities will include those stated Trust Agreement and those made part of the Floating Rate Trust
in the Fixed Rate Trust Agreement and those made part of the Agreement by the Trust Indenture Act. The following summary of
Fixed Rate Trust Agreement by the Trust Indenture Act. The the material terms and provisions of the Floating Rate
following summary of the material terms and provisions of the Preferred Securities and the Floating Rate Trust Agreement
Fixed Rate Preferred Securities and the Fixed Rate Trust does not purport to be complete and is subject to, and is
Agreement does not purport to be complete and is subject to, qualified in its entirety by reference to, the Floating Rate
and is qualified in its entirety by reference to, the Fixed Trust Agreement, the Trust Act, and the Trust Indenture Act.
Rate Trust Agreement, the Trust Act, and the Trust Indenture Wherever particular defined terms of the Floating Rate Trust
Act. Wherever particular defined terms of the Fixed Rate Trust Agreement are referred to, but not defined herein, such
Agreement are referred to, but not defined herein, such defined defined terms are incorporated herein by reference. The form
terms are incorporated herein by reference. The form of the of the Floating Rate Trust Agreement has been filed as an
Fixed Rate Trust Agreement has been filed as an exhibit to the exhibit to the Registration Statement of which this Prospectus
Registration Statement of which this Prospectus forms a part. forms a part.
GENERAL GENERAL
Pursuant to the terms of the Fixed Rate Pursuant to the terms of the Floating Rate Trust Agreement,
Trust Agreement, the Fixed Rate Trustees, on the Floating Rate Trustees, on behalf of 1st Capital II, will
behalf of 1st Capital I, will issue the issue the Floating Rate Trust Securities. All of the Floating
Fixed Rate Trust Securities. All of Rate Common Securities will be owned by the Company. The
the Fixed Rate Common Securities will Floating Rate Preferred Securities will represent preferred
be owned by the Company. The Fixed Rate undivided beneficial interests in the assets of 1st Capital II
Preferred Securities will represent preferred undivided and the holders thereof will be entitled to a preference in
beneficial interests in the assets of 1st Capital I and the certain circumstances with respect to Floating Rate
holders thereof will be entitled to a preference in certain Distributions and amounts payable on redemption or liquidation
circumstances with respect to Fixed Rate Distributions and over the Floating Rate Common Securities, as well as other
amounts payable on redemption or liquidation over the Fixed benefits as described in the Floating Rate Trust Agreement.
Rate Common Securities, as well as other benefits as de- Holders of Floating Rate Preferred Securities will have no
scribed in the Fixed Rate Trust Agreement. Holders of Fixed interest in the assets of 1st Capital I. The Floating Rate
Rate Preferred Securities will have no interest in the assets Trust Agreement does not permit issuance by 1st Capital II of
of 1st Capital II. The Fixed Rate Trust Agreement does not any securities other than the Floating Rate Trust Securities
permit the issuance by 1st Capital I of any securities other or the incurrence of any indebtedness by 1st Capital II.
than the Fixed Rate Trust Securities or the incurrence of any
indebtedness by 1st Capital I.
The Fixed Rate Preferred Securities will rank pari passu, The Floating Rate Preferred Securities will rank pari passu,
and payments will be made thereon pro rata, with the Fixed Rate and payments will be made thereon pro rata, with the Floating
Common Securities, except as described under "--Subordination Rate Common Securities, except as described under
of Common Securi- "--Subordination of Common Securi-
(FIXED RATE PREFERRED SECURITIES--continued on next page) (FLOATING RATE PREFERRED SECURITIES--continued on next page)
19
<PAGE> 26
(FIXED RATE PREFERRED SECURITIES--continued from previous page) (FLOATING RATE PREFERRED SECURITIES--continued from previous
page)
ties." Legal title to the Fixed Rate Subordinated Debentures ties." Legal title to the Floating Rate Subordinated
will be held by the Fixed Rate Property Trustee in trust for Debentures will be held by the Floating Rate Property Trustee
the benefit of the holders of the Fixed Rate Trust Securities. in trust for the benefit of the holders of the Floating Rate
The Fixed Rate Guarantee executed by the Company for the Trust Securities. The Floating Rate Guarantee executed by the
benefit of the holders of the Fixed Rate Preferred Securities Company for the benefit of the holders of the Floating Rate
will be a guarantee on a subordinated basis with respect to Preferred Securities will be a guarantee on a subordinated
the Fixed Rate Preferred Securities, but will not guarantee basis with respect to the Floating Rate Preferred Securities,
payment of Fixed Rate Distributions or amounts payable on re- but will not guarantee payment of Floating Rate Distributions
demption or liquidation of such Fixed Rate Preferred or amounts payable on redemption or liquidation of such
Securities when 1st Capital I does not have funds on hand Floating Rate Preferred Securities when 1st Capital II does
available to make such payments. State Street Bank and Trust not have funds on hand available to make such payments. State
Company, as Fixed Rate Guarantee Trustee, will hold the Fixed Street Bank and Trust Company, as Floating Rate Guarantee
Rate Guarantee for the benefit of the holders of the Fixed Trustee, will hold the Floating Rate Guarantee for the benefit
Rate Preferred Securities. See "Description of the of the holders of the Floating Rate Preferred Securities. See
Guarantee." "Description of the Guarantee."
DISTRIBUTIONS DISTRIBUTIONS
PAYMENT OF DISTRIBUTIONS. Distributions PAYMENT OF DISTRIBUTIONS. Floating Rate Distributions on each
on each Fixed Rate Preferred Security will by Floating Rate Preferred Security will be payable at the
payable at the annual rate of % of the stated Floating Distribution Rate applied to the stated Floating Rate
Fixed Rate Liquidation Amount of $25, payable quarterly Liquidation Amount of $25, payable quarterly in arrears on
in arrears on March 31, June 30, September 30 and March 31, June 30, September 30 and December 31 of each year,
December 31 of each year, to the holders of the Fixed Rate to the holders of the Floating Rate Preferred Securities on
Preferred Securities on the relevant record dates (each date the relevant record dates (each date on which Floating Rate
on which Fixed Rate Distributions are payable in accordance Distributions are payable in accordance with the foregoing, a
with the foregoing, a "Fixed Rate Distribution Date"). The "Floating Rate Distribution Date"). The record date will be
record date will be the 15th day of the month in which the the 15th day of the month in which the relevant Floating Rate
relevant Fixed Rate Distribution Date occurs. Fixed Rate Distribution Date occurs. Floating Rate Distributions will
Distributions will accumulate from the date of original accumulate from the date of original issuance. The first payment
issuance. The first Fixed Rate Distribution Date for the Fixed of Floating Rate Distributions for the Floating Rate
Rate Preferred Securities will be June 30, 1997. The amount of Preferred Securities will be June 30, 1997. The amount of
Fixed Rate Distributions payable for any period will be Floating Rate Distributions payable for any period will be
computed on the basis of a 360-day year of twelve 30-day computed on the basis of a 360-day year of twelve 30-day
months. In the event that any date on which Fixed Rate Distri- months. In the event that any date on which Floating Rate
butions are payable on the Fixed Rate Preferred Securities is Distributions are payable on the Floating Rate Preferred
not a Business Day, then payment of the Fixed Rate Securities is not a Business Day, then payment of the Floating
Distributions payable on such date will be made on the next Rate Distributions payable on such date will be made on the
succeeding day that is a Business Day (and without any next succeeding day that is a Business Day (and without any
additional Fixed Rate Distributions, interest or other payment additional Floating Rate Distributions, interest or other
in respect of any such delay) with the same force and effect payment in respect of any such delay) with the same force and
as if made on the date such payment was originally due and effect as if made on the date such payment was originally due
payable. "Business Day" means any day other than a Saturday and payable. "Business Day" means any day other than a
or a Sunday, a day on which banking institutions in The City Saturday or a Sunday, a day on which banking institutions in
of New York are authorized or required by law or executive The City of New York are authorized or required by law or
order to remain closed or a day on which the corporate trust executive order to remain closed or a day on which the
office of the Fixed Rate Property Trustee or the Fixed Rate corporate trust office of the Floating Rate Property Trustee
Debenture Trustee is closed for business. or the Floating Rate Debenture Trustee is closed for business.
(FIXED RATE PREFERRED SECURITIES--continued on next page) (FLOATING RATE PREFERRED SECURITIES--continued on next page)
20
<PAGE> 27
(FIXED RATE PREFERRED SECURITIES--continued from previous (FLOATING RATE PREFERRED SECURITIES--continued from previous
page) page)
[This Column Intentionally Blank] DETERMINATION OF 3-MONTH TREASURY. The Floating Distribution
Rate during any period beginning on, and including, the date of
original issuance, and ending on, but excluding, March 31,
1997, and each successive period beginning on, and including,
March 31, 1997 and each succeeding Floating Rate Distribution
Date, and ending on, but excluding, the next succeeding
Floating Rate Distribution Date (each, a "Floating Rate
Distribution Period") in respect of the Floating Rate
Preferred Securities will be a rate per annum determined by
reference to the sum of 3-Month Treasury, determined as
described below, plus %; provided however, that the
Floating Distribution Rate for the first Floating Rate
Distribution Period will be %. "3-Month Treasury" means
the yield on United States of America Treasury constant
maturities, adjusted to a constant maturity of three (3)
months, reported by the Federal Reserve. 3-Month Treasury,
with respect to any Floating Rate Distribution Period, will be
determined by the Floating Rate Debenture Trustee as follows:
(a) On the second Business Day preceding the commencement of
such Floating Rate Distribution Period (each, a "Floating
Rate Determination Date"), 3-Month Treasury will be the
current yield for United States of America Treasury
constant maturities, adjusted to a constant maturity of
three (3) months, which appears on the applicable Federal
Reserve Statistical Release Series H.15 (519) which
includes data for such Floating Rate Determination Date,
or as then currently furnished or made available by the
Federal Reserve if such Series is no longer published.
(b) If, with respect to any Floating Rate Determination Date,
the Floating Rate Debenture Trustee is required but unable
to determine 3-Month Treasury in the manner provided in
paragraph (a) above, 3-Month Treasury for such Floating
Rate Distribution Period will be 3-Month Treasury as
determined on the previous Floating Rate Determination
Date.
The Floating Distribution Rate for any Floating Rate
Distribution Period will at no time be higher than the maximum
rate then permitted by Missouri law as the same may be
modified by United States law.
All percentages resulting from any calculations referred to
above will be rounded, if necessary, to the nearest multiple
of 1/100 of 1% and all dollar amounts used in or resulting
from such calculations will be
(FIXED RATE PREFERRED SECURITIES--continued on next page) (FLOATING RATE PREFERRED SECURITIES--continued on next page)
21
<PAGE> 28
(FIXED RATE PREFERRED SECURITIES--continued from previous (FLOATING RATE PREFERRED SECURITIES--continued from previous
page) page)
rounded to the nearest cent (with one-half cent or more being
[This Column Intentionally Blank] rounded upwards).
DETERMINATION OF DISTRIBUTION RATE AND CALCULATION OF
DISTRIBUTION AMOUNT. The Floating Rate Debenture Trustee will,
on each Floating Rate Determination Date, determine the
Floating Distribution Rate and calculate the amount of
Floating Rate Distributions payable in respect of the
following Floating Rate Distribution Period (the "Floating
Rate Distribution Amount"). The Floating Rate Distribution
Amount will be calculated by applying the Floating Rate
Distribution Rate to the Floating Rate Liquidation Amount of
each Floating Rate Preferred Security outstanding at the
commencement of the Floating Rate Distribution Period,
multiplying each such amount by the actual number of days in
the Floating Rate Distribution Period concerned (which actual
number of days will include the first day but exclude the last
day of such Floating Rate Distribution Period) divided by 360
and rounding the resultant figure to the nearest cent (with
one-half cent or more being rounded upwards). The
determination of the Floating Distribution Rate and the
Floating Rate Distribution Amount by the Floating Rate
Debenture Trustee will (in the absence of willful default, bad
faith or manifest error) be final, conclusive and binding on
all concerned.
Upon the request of a holder of a Floating Rate Preferred
Security, the Floating Rate Debenture Trustee will provide the
Floating Distribution Rate then in effect and, if determined,
the Floating Rate Distribution Rate for the next Floating Rate
Distribution Period with respect to the Floating Rate
Preferred Securities. Each such Floating Distribution Rate may
be obtained by telephoning the Floating Rate Debenture Trustee
at (617) 664-5500.
NOTIFICATION OF DISTRIBUTION RATE AND DISTRIBUTION DATE. The
Floating Rate Debenture Trustee will notify the Floating Rate
Property Trustee and any securities exchange or interdealer
quotation system on which the Floating Rate Preferred
Securities are listed, of the Floating Distribution Rate and
the Floating Rate Distribution Date for each Floating Rate
Distribution Period, in each case as soon as practicable after
the determination thereof but in no event later than the
seventh Business Day of the relevant Floating Rate
Distribution Period. Failure to notify the Floating Rate
Property Trustee or any applicable securities exchange or
interdealer quotation system, or any defect in said notice,
shall not affect the obligation of the Company to
(FIXED RATE PREFERRED SECURITIES--continued on next page) (FLOATING RATE PREFERRED SECURITIES--continued on next page)
22
<PAGE> 29
(FIXED RATE PREFERRED SECURITIES--continued from previous (FLOATING RATE PREFERRED SECURITIES--continued from previous
page) page)
make payment on the Floating Rate Debentures at the applicable
[This Column Intentionally Blank] Floating Distribution Rate. Any error in the calculation of
the Floating Distribution Rate by the Floating Rate Debenture
Trustee may be corrected at any time by notice delivered as
above provided.
CERTIFICATES TO BE FINAL. All certificates, communications,
opinions, determinations, calculations, quotations and
decisions given, expressed, made or obtained for the purposes
of the provisions relating to the payment and calculation of
Floating Rate Distributions on the Floating Rate Preferred
Securities by the Floating Rate Debenture Trustee will (in the
absence of willful default, bad faith or manifest error) be
binding on 1st Capital II, the Company, and all of the holders
of the Floating Rate Preferred Securities, and no liability
will (in the absence of willful default, bad faith or manifest
error) attach to the Floating Rate Debenture Trustee or the
Floating Rate Property Trustee in connection with the exercise
or non-exercise by either of them of their respective powers,
duties and discretion.
</TABLE>
EXTENSION PERIOD. The Company has the right under the Indenture, so long as
no Debenture Event of Default has occurred and is continuing, to defer the
payment of interest on the Subordinated Debentures at any time, or from time to
time (each, an "Extended Interest Payment Period"), which, if exercised,
would defer quarterly Distributions on the Preferred Securities during any such
Extended Interest Payment Period. Distributions to which holders of the
Preferred Securities are entitled will accumulate additional Distributions
thereon at the rate per annum of % thereof (in the case of the Fixed Rate
Preferred Securities) or at the Floating Distribution Rate (in the case of the
Floating Rate Preferred Securities), compounded quarterly from the relevant
Distribution Date. "Distributions," as used herein, includes any such
additional Distributions. The right to defer the payment of interest on the
Subordinated Debentures is limited, however, to a period, in each instance, not
exceeding 20 consecutive quarters and no Extended Interest Payment Period may
extend beyond the Stated Maturity of the Subordinated Debentures. During any
such Extended Interest Payment Period, the Company, may not (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock (other
than (a) dividends or distributions in common stock of the Company, any
declaration of a non-cash dividend in connection with the implementation of a
shareholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto,
and (b) purchases of common stock of the Company related to the rights under
any of the Company's benefit plans for its directors, officers or employees),
(ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu
with or junior in interest to the Subordinated Debentures or make any guarantee
payments with respect to any guarantee by the Company of the debt securities of
any subsidiary of the Company if such guarantee ranks pari passu with or junior
in interest to the Subordinated Debentures (other than payments under the
Guarantee), or (iii) redeem, purchase or acquire less than all of the
Subordinated Debentures or any of the Preferred Securities. Prior to the
termination of any such Extended Interest Payment Period, the Company may
further defer the payment of interest; provided that such Extended Interest
Payment Period may not exceed 20 consecutive quarters or extend beyond the
Stated Maturity of the Subordinated Debentures. Upon the termination of any
such Extended Interest Payment Period and the payment of all amounts then due,
the Company may elect to begin a new Extended Interest Payment Period, subject
to the above requirements. Subject to the foregoing, there is no limitation on
the number of times that the Company may elect to begin an Extended Interest
Payment Period.
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Subordinated Debentures.
23
<PAGE> 30
SOURCE OF DISTRIBUTIONS. The funds of 1st Capital available for
distribution to holders of its Preferred Securities will be limited to payments
under the Subordinated Debentures in which 1st Capital will invest the proceeds
from the issuance and sale of its Trust Securities. See "Description of the
Subordinated Debentures." Distributions will be paid through the Property
Trustee who will hold amounts received in respect of the Subordinated
Debentures in the Property Account for the benefit of the holders of the Trust
Securities. Holders of Floating Rate Preferred Securities have no claim or
right to amounts received in respect of the Fixed Rate Subordinated Debentures
in the Fixed Rate Property Account, and holders of Fixed Rate Preferred
Securities have no claim or right to amounts received in respect of the
Floating Rate Subordinated Debentures in the Floating Rate Property Account. If
the Company does not make interest payments on the Subordinated Debentures, the
Property Trustee will not have funds available to pay Distributions on the
Preferred Securities. The payment of Distributions (if and to the extent 1st
Capital has funds legally available for the payment of such Distributions and
cash sufficient to make such payments) is guaranteed by the Company. See
"Description of the Guarantee." Distributions on the Preferred Securities
will be payable to the holders thereof as they appear on the register of
holders of the Preferred Securities on the relevant record dates, which will be
the 15th day of the month in which the relevant Distribution Date occurs.
REDEMPTION OR EXCHANGE
GENERAL. The Subordinated Debentures will mature on March 31, 2027. The
Company will have the right to redeem the Subordinated Debentures (i) on or
after March 31, 2002, in whole at any time or in part from time to time, or
(ii) at any time, in whole (but not in part), within 180 days following the
occurrence of a Tax Event, Capital Treatment Event or an Investment Company
Event, in each case subject to receipt of prior approval by the Federal Reserve
if then required under applicable capital guidelines or policies of the Federal
Reserve. The Company will not have the right to purchase the Subordinated
Debentures, in whole or in part, from 1st Capital until after March 31, 2002.
See "Description of the Subordinated Debentures--General."
MANDATORY REDEMPTION. Upon the repayment or redemption, in whole or in
part, of any Subordinated Debentures, whether at Stated Maturity or upon
earlier redemption as provided in the Indenture, the proceeds from such
repayment or redemption will be applied by the Property Trustee to redeem a
Like Amount (as defined herein) of the Trust Securities, upon not less than 30
nor more than 60 days notice, at a redemption price (the "Redemption Price")
equal to the aggregate Liquidation Amount of such Trust Securities plus
accumulated but unpaid Distributions thereon to the date of redemption (the
"Redemption Date"). See "Description of the Subordinated
Debentures--Redemption or Exchange." If less than all of the Subordinated
Debentures are to be repaid or redeemed on a Redemption Date, then the proceeds
from such repayment or redemption will be allocated to the redemption of the
Trust Securities pro rata.
DISTRIBUTION OF SUBORDINATED DEBENTURES. Subject to the Company having
received prior approval of the Federal Reserve if so required under applicable
capital guidelines or policies of the Federal Reserve, the Company will have
the right at any time to dissolve, wind-up or terminate 1st Capital and, after
satisfaction of the liabilities of creditors of 1st Capital as provided by
applicable law, cause the Subordinated Debentures to be distributed to the
holders of Trust Securities in liquidation of 1st Capital. See "--Liquidation
Distribution Upon Termination."
TAX EVENT REDEMPTION, CAPITAL TREATMENT EVENT REDEMPTION OR INVESTMENT
COMPANY EVENT REDEMPTION. If a Tax Event, Capital Treatment Event or an
Investment Company Event in respect of the Trust Securities occurs and is
continuing, the Company has the right to redeem the Subordinated Debentures in
whole (but not in part) and thereby cause a mandatory redemption of such Trust
Securities in whole (but not in part) at the Redemption Price within 180 days
following the occurrence of such Tax Event, Capital Treatment Event or
Investment Company Event. In the event a Tax Event, Capital Treatment Event or
an Investment Company Event in respect of the Trust Securities has occurred and
the Company does not elect to redeem the Subordinated Debentures and thereby
cause a mandatory redemption of such Trust Securities or to liquidate 1st
Capital and cause the Subordinated Debentures to be distributed to holders of
such Trust Securities in liquidation of 1st Capital as described below under
"--Liquidation Distribution Upon Termination," such Preferred Securities will
remain outstanding and Additional Interest (as defined herein) may be payable
on the Subordinated Debentures.
"Additional Interest" means the additional amounts as may be necessary in
order that the amount of Distributions then due and payable by 1st Capital on
the outstanding Trust Securities will not be reduced as a result of any
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<PAGE> 31
additional taxes, duties and other governmental charges to which 1st Capital
has become subject as a result of a Tax Event.
"Like Amount" means (i) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount equal to that portion of the
principal amount of Subordinated Debentures to be contemporaneously redeemed in
accordance with the Indenture, which will be used to pay the Redemption Price
of such Trust Securities, and (ii) with respect to a distribution of
Subordinated Debentures to holders of Trust Securities in connection with a
dissolution or liquidation of 1st Capital, Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Trust Securities of the
holder to whom such Subordinated Debentures are distributed. Each Subordinated
Debenture distributed pursuant to clause (ii) above will carry with it
accumulated interest in an amount equal to the accumulated and unpaid interest
then due on such Subordinated Debentures.
"Liquidation Amount" means the stated amount of $25 per Trust Security.
After the liquidation date fixed for any distribution of Subordinated
Debentures for Preferred Securities (i) such Preferred Securities will no
longer be deemed to be outstanding, and (ii) any certificates representing
Preferred Securities will be deemed to represent the Subordinated Debentures
having a principal amount equal to the Liquidation Amount of such Preferred
Securities, and bearing accrued and unpaid interest in an amount equal to the
accrued and unpaid Distributions on the Preferred Securities, until such
certificates are presented to the Administrative Trustees or their agent for
transfer or reissuance.
There can be no assurance as to the market prices for the Preferred
Securities or the Subordinated Debentures that may be distributed in exchange
for Preferred Securities if a dissolution and liquidation of 1st Capital were
to occur. The Preferred Securities that an investor may purchase, or the
Subordinated Debentures that an investor may receive on dissolution and
liquidation of 1st Capital, may, therefore, trade at a discount to the price
that the investor paid to purchase the Preferred Securities offered hereby.
REDEMPTION PROCEDURES
Preferred Securities redeemed on each Redemption Date will be redeemed at
the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Subordinated Debentures. Redemptions of the Preferred
Securities will be made and the Redemption Price will be payable on each
Redemption Date only to the extent that 1st Capital has funds on hand available
for the payment of such Redemption Price. See "--Subordination of Common
Securities."
If 1st Capital gives a notice of redemption in respect of its Preferred
Securities, then, by 12:00 noon, eastern standard time, on the Redemption Date,
to the extent funds are available, the Property Trustee will irrevocably
deposit with the paying agent for the Preferred Securities funds sufficient to
pay the aggregate Redemption Price and will give the paying agent for the
Preferred Securities irrevocable instructions and authority to pay the
Redemption Price to the holders thereof upon surrender of their certificates
evidencing such Preferred Securities. Notwithstanding the foregoing,
Distributions payable on or prior to the Redemption Date for any Preferred
Securities called for redemption will be payable to the holders of such
Preferred Securities on the relevant record dates for the related Distribution
Dates. If notice of redemption will have been given and funds deposited as
required, then upon the date of such deposit, all rights of the holders of such
Preferred Securities so called for redemption will cease, except the right of
the holders of such Preferred Securities to receive the Redemption Price, but
without interest on such Redemption Price, and such Preferred Securities will
cease to be outstanding. In the event that any date fixed for redemption of
Preferred Securities is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day which is a
Business Day (and without any additional Distribution, interest or other
payment in respect of any such delay) with the same force and effect as if made
on such date. In the event that payment of the Redemption Price in respect of
Preferred Securities called for redemption is improperly withheld or refused
and not paid either by 1st Capital, or by the Company pursuant to the
Guarantee, Distributions on such Preferred Securities will continue to accrue
at the then applicable rate, from the Redemption Date originally established by
1st Capital for such Preferred Securities to the date such Redemption Price is
actually paid, in which case the actual payment date will be considered the
date fixed for redemption for purposes of calculating the Redemption Price. See
"Description of the Guarantee."
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<PAGE> 32
Subject to applicable law (including, without limitation, United States
federal securities law) and, further provided, that the Company has not and is
not continuing to exercise its right to defer interest payments, the Company or
its subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private agreement.
Payment of the Redemption Price on the Preferred Securities and any
distribution of Subordinated Debentures to holders of Preferred Securities will
be made to the applicable recordholders thereof as they appear on the register
for the Preferred Securities on the relevant record date, which date will be
the date 15 days prior to the Redemption Date or liquidation date, as
applicable.
If less than all of the Trust Securities are to be redeemed on a Redemption
Date, then the aggregate Liquidation Amount of such Trust Securities to be
redeemed will be allocated pro rata to the Trust Securities based upon the
relative Liquidation Amounts of such classes. The particular Preferred
Securities to be redeemed will be selected by the Property Trustee from the
outstanding Preferred Securities not previously called for redemption, by such
method as the Property Trustee deems fair and appropriate and which may provide
for the selection for redemption of portions (equal to $25 or an integral
multiple of $25 in excess thereof) of the Liquidation Amount of Preferred
Securities of a denomination larger than $25. The Property Trustee will
promptly notify the registrar for the Preferred Securities in writing of the
Preferred Securities selected for redemption and, in the case of any Preferred
Securities selected for partial redemption, the Liquidation Amount thereof to
be redeemed. For all purposes of the Trust Agreement, unless the context
otherwise requires, all provisions relating to the redemption of Preferred
Securities will relate to the portion of the aggregate Liquidation Amount of
Preferred Securities which has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each holder of Trust Securities to be
redeemed at its registered address. Unless the Company defaults in payment of
the redemption price on the Subordinated Debentures, on and after the
Redemption Date interest will cease to accrue on such Subordinated Debentures
or portions thereof (and Distributions will cease to accrue on the related
Preferred Securities or portions thereof) called for redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Preferred
Securities and Common Securities, as applicable, will be made pro rata based on
the Liquidation Amount of the Preferred Securities and Common Securities;
provided, however, that if on any Distribution Date or Redemption Date a
Debenture Event of Default has occurred and is continuing, no payment of any
Distribution on, or Redemption Price of, any of the Common Securities, and no
other payment on account of the redemption, liquidation or other acquisition of
such Common Securities, will be made unless payment in full in cash of all
accumulated and unpaid Distributions on all of the outstanding Preferred
Securities for all Distribution periods terminating on or prior thereto, or in
the case of payment of the Redemption Price the full amount of such Redemption
Price on all of the outstanding Preferred Securities then called for
redemption, will have been made or provided for, and all funds available to the
Property Trustee will first be applied to the payment in full in cash of all
Distributions on, or Redemption Price of, the Preferred Securities then due and
payable.
In the case of any Event of Default resulting from a Debenture Event of
Default, the Company as holder of the Common Securities will be deemed to have
waived any right to act with respect to any such Event of Default under the
Trust Agreement until the effect of all such Events of Default with respect to
the Preferred Securities have been cured, waived or otherwise eliminated. Until
any such Events of Default under the Trust Agreement with respect to the
Preferred Securities has been so cured, waived or otherwise eliminated, the
Property Trustee will act solely on behalf of the holders of the Preferred
Securities and not on behalf of the Company, as holder of the Common
Securities, and only the holders of the Preferred Securities will have the
right to direct the Property Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON TERMINATION
The Company will have the right at any time to dissolve, wind-up or
terminate 1st Capital and cause the Subordinated Debentures to be distributed
to the holders of the Preferred Securities. Such right is subject, however,
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<PAGE> 33
to the Company having received prior approval of the Federal Reserve if then
required under applicable capital guidelines or policies of the Federal
Reserve.
Pursuant to the Trust Agreement, 1st Capital will automatically terminate
upon expiration of its term and will terminate earlier on the first to occur of
(i) certain events of bankruptcy, dissolution or liquidation of the Company,
(ii) the distribution of a Like Amount of the Subordinated Debentures to the
holders of its Trust Securities, if the Company, as depositor, has given
written direction to the Property Trustee to terminate 1st Capital (which
direction is optional and wholly within the discretion of the Company, as
depositor), (iii) redemption of all of the Preferred Securities as described
under "--Redemption or Exchange--Mandatory Redemption," or (iv) the entry of
an order for the dissolution of 1st Capital by a court of competent
jurisdiction.
If an early termination occurs as described in clause (i), (ii) or (iv) of
the preceding paragraph, 1st Capital will be liquidated by the Trustees as
expeditiously as the Trustees determine to be possible by distributing, after
satisfaction of liabilities to creditors of 1st Capital as provided by
applicable law, to the holders of such Trust Securities a Like Amount of the
Subordinated Debentures, unless such distribution is determined by the Property
Trustee not to be practical, in which event such holders will be entitled to
receive out of the assets of 1st Capital available for distribution to holders,
after satisfaction of liabilities to creditors of 1st Capital as provided by
applicable law, an amount equal to, in the case of holders of Preferred
Securities, the aggregate of the Liquidation Amount plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If such Liquidation Distribution can be paid
only in part because 1st Capital has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by 1st Capital on the Preferred Securities will be paid on a pro rata basis.
The Company, as the holder of the Common Securities, will be entitled to
receive distributions upon any such liquidation pro rata with the holders of
the Preferred Securities, except that, if a Debenture Event of Default has
occurred and is continuing, the Preferred Securities will have a priority over
the Common Securities. See "--Subordination of Common Securities."
Under current United States federal income tax law and interpretations and
assuming, as expected, that 1st Capital is treated as a grantor trust, a
distribution of the Subordinated Debentures should not be a taxable event to
holders of the Preferred Securities. Should there be a change in law, a change
in legal interpretation, a Tax Event or other circumstances, however, the
distribution could be a taxable event to holders of the Preferred Securities.
See "Certain Federal Income Tax Consequences--Receipt of Subordinated
Debentures or Cash Upon Liquidation of 1st Capital." If the Company elects
neither to redeem the Subordinated Debentures prior to maturity nor to
liquidate 1st Capital and distribute the Subordinated Debentures to holders of
the Preferred Securities, the Preferred Securities will remain outstanding
until the repayment of the Subordinated Debentures.
If the Company elects to liquidate 1st Capital and thereby causes the
Subordinated Debentures to be distributed to holders of the Preferred
Securities in liquidation of 1st Capital, the Company will continue to have the
right to shorten or extend the maturity of such Subordinated Debentures,
subject to certain conditions. See "Description of the Subordinated
Debentures--General."
LIQUIDATION VALUE
The amount of the Liquidation Distribution payable on the Preferred
Securities in the event of any liquidation of 1st Capital is $25 per Preferred
Security plus accrued and unpaid Distributions thereon to the date of payment,
which may be in the form of a distribution of such amount in Subordinated
Debentures, subject to certain exceptions. See "--Liquidation Distribution
Upon Termination."
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an event of default under the
Trust Agreement (an "Event of Default") with respect to the Preferred
Securities (whatever the reason for such Event of Default and whether voluntary
or involuntary or effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the occurrence of a Debenture Event of Default (see "Description
of the Subordinated Debentures--Debenture Events of Default"); or
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<PAGE> 34
(ii) default by 1st Capital in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of
30 days; or
(iii) default by 1st Capital in the payment of any Redemption Price of
any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Trustees in the Trust Agreement (other than
a covenant or warranty a default in the performance of which or the breach
of which is dealt with in clauses (ii) or (iii) above), and continuation of
such default or breach for a period of 60 days after there has been given,
by registered or certified mail, to the Trustee(s) by the holders of at
least 25% in aggregate Liquidation Amount of the outstanding Preferred
Securities, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" under the Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by the Company to appoint a
successor Property Trustee within 60 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee will transmit
notice of such Event of Default to the holders of the Preferred Securities, the
Administrative Trustees and the Company, as depositor, unless such Event of
Default has been cured or waived. The Company, as depositor, and the
Administrative Trustees are required to file annually with the Property Trustee
a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under the Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the
Preferred Securities will have a preference over the Common Securities upon
termination of 1st Capital. See "--Liquidation Distribution Upon
Termination." The existence of an Event of Default does not entitle the
holders of Preferred Securities to accelerate the maturity thereof.
The Fixed Rate Preferred Securities and the Floating Rate Preferred
Securities are not cross-defaulted. An Event of Default under the Fixed Rate
Trust Agreement will not constitute an Event of Default under the Floating Rate
Trust Agreement, and vice versa.
REMOVAL OF 1ST CAPITAL TRUSTEES
Unless a Debenture Event of Default has occurred and is continuing, any
Trustee may be removed at any time by the holder of the Common Securities. If a
Debenture Event of Default has occurred and is continuing, the Property Trustee
and the Delaware Trustee may be removed at such time by the holders of a
majority in Liquidation Amount of the outstanding Preferred Securities. In no
event, however, will the holders of the Preferred Securities have the right to
vote to appoint, remove or replace the Administrative Trustees, which voting
rights are vested exclusively in the Company as the holder of the Common
Securities. No resignation or removal of a Trustee and no appointment of a
successor trustee will be effective until the acceptance of appointment by the
successor trustee in accordance with the provisions of the Trust Agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default has occurred and is continuing, at any time or
times, for the purpose of meeting the legal requirements of the Trust Indenture
Act or of any jurisdiction in which any part of the Trust Property (as defined
in the Trust Agreement) may at the time be located, the Company, as the holder
of the Common Securities, will have power to appoint one or more Persons (as
defined in the Trust Agreement) either to act as a co-trustee, jointly with the
Property Trustee, of all or any part of such Trust Property, or to act as
separate trustee of any such Trust Property, in either case with such powers as
may be provided in the instrument of appointment, and to vest in such Person or
Persons in such capacity any property, title, right or power deemed necessary
or desirable, subject to the provisions of the Trust Agreement. In case a
Debenture Event of Default has occurred and is continuing, the Property Trustee
alone will have power to make such appointment.
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MERGER OR CONSOLIDATION OF TRUSTEES
Any Person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which such Trustee is a party, or any Person
succeeding to all or substantially all the corporate trust business of such
Trustee, will be the successor of such Trustee under the Trust Agreement,
provided such Person is otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF 1ST CAPITAL
1st Capital may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, except as described below. 1st
Capital may, at the request of the Company, with the consent of the
Administrative Trustees and without the consent of the holders of the Preferred
Securities, the Property Trustee or the Delaware Trustee, merge with or into,
consolidate, amalgamate, or be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust organized as such
under the laws of any State; provided, that (i) such successor entity either
(a) expressly assumes all of the obligations of 1st Capital with respect to the
Preferred Securities, or (b) substitutes for the Preferred Securities other
securities having substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the same as
the Preferred Securities rank in priority with respect to distributions and
payments upon liquidation, redemption and otherwise, (ii) the Company expressly
appoints a trustee of such successor entity possessing the same powers and
duties as the Property Trustee in its capacity as the holder of the
Subordinated Debentures, (iii) the Successor Securities are listed, or any
Successor Securities will be listed upon notification of issuance, on any
national securities exchange or other organization on which the Preferred
Securities are then listed (including, if applicable, The Nasdaq Stock Market's
National Market), if any, (iv) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the
rights, preferences and privileges of the holders of the Preferred Securities
(including any Successor Securities) in any material respect, (v) prior to such
merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, the Company has received an opinion from independent counsel to the
effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Preferred Securities (including any
Successor Securities) in any material respect, and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease,
neither 1st Capital nor such successor entity will be required to register as
an "investment company" under the Investment Company Act, and (vi) the
Company owns all of the common securities of such successor entity and
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee. Notwithstanding
the foregoing, 1st Capital will not, except with the consent of holders of 100%
in Liquidation Amount of the Preferred Securities, consolidate, amalgamate,
merge with or into, or be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to any other Person or
permit any other Person to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause 1st Capital or the successor entity
to be classified as other than a grantor trust for United States federal income
tax purposes.
VOTING RIGHTS; AMENDMENT OF TRUST AGREEMENT
Except as provided below and under "Description of the
Guarantee--Amendments and Assignment" and as otherwise required by the Trust
Act and the Trust Agreement, the holders of the Preferred Securities will have
no voting rights.
The Trust Agreement may be amended from time to time by the Company, the
Property Trustee and the Administrative Trustees, without the consent of the
holders of the Preferred Securities (i) with respect to acceptance of
appointment by a successor trustee, (ii) to cure any ambiguity, correct or
supplement any provisions in such Trust Agreement that may be inconsistent with
any other provision, or to make any other provisions with respect to matters or
questions arising under the Trust Agreement (provided such amendment is not
inconsistent with the other provisions of the Trust Agreement), or (iii) to
modify, eliminate or add to any provisions of the Trust Agreement to such
extent as is necessary to ensure that 1st Capital will be classified for United
States federal income tax purposes as a grantor trust at all times that any
Trust Securities are outstanding or to ensure that 1st Capital will not be
required to register as an "investment company" under the Investment Company
Act; provided, however, that in the case of
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<PAGE> 36
clause (ii), such action may not adversely affect in any material respect the
interests of any holder of Trust Securities, and any amendments of such Trust
Agreement will become effective when notice thereof is given to the holders of
Trust Securities. The Trust Agreement may be amended by the Trustees and the
Company with (i) the consent of holders representing not less than a majority
in the aggregate Liquidation Amount of the outstanding Trust Securities, and
(ii) receipt by the Trustees of an opinion of counsel to the effect that such
amendment or the exercise of any power granted to the Trustees in accordance
with such amendment will not affect 1st Capital's status as a grantor trust for
United States federal income tax purposes or 1st Capital's exemption from
status as an "investment company" under the Investment Company Act.
Notwithstanding anything in this paragraph to the contrary, without the consent
of each holder of Trust Securities, the Trust Agreement may not be amended to
(a) change the amount or timing of any Distribution on the Trust Securities or
otherwise adversely affect the amount of any Distribution required to be made
in respect of the Trust Securities as of a specified date, or (b) restrict the
right of a holder of Trust Securities to institute suit for the enforcement of
any such payment on or after such date.
The Trustees will not, so long as any Subordinated Debentures are held by
the Property Trustee, (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on the Property Trustee with respect to the
Subordinated Debentures, (ii) waive any past default that is waivable under the
Indenture, (iii) exercise any right to rescind or annul a declaration that the
principal of all the Subordinated Debentures will be due and payable, or (iv)
consent to any amendment, modification or termination of the Indenture or the
Subordinated Debentures, where such consent is required, without, in each case,
obtaining the prior approval of the holders of a majority in aggregate
Liquidation Amount of all outstanding Preferred Securities; provided, however,
that where a consent under the Indenture requires the consent of each holder of
Subordinated Debentures affected thereby, no such consent will be given by the
Property Trustee without the prior consent of each holder of the Preferred
Securities. The Trustees may not revoke any action previously authorized or
approved by a vote of the holders of the Preferred Securities except by
subsequent vote of the holders of the Preferred Securities. The Property
Trustee will notify each holder of Preferred Securities of any notice of
default with respect to the Subordinated Debentures. In addition to obtaining
the foregoing approvals of the holders of the Preferred Securities, prior to
taking any of the foregoing actions, the Trustees must obtain an opinion of
counsel experienced in such matters to the effect that 1st Capital will not be
classified as an association taxable as a corporation for United States federal
income tax purposes on account of such action.
Any required approval of holders of Preferred Securities may be given at a
meeting of holders of Preferred Securities convened for such purpose or
pursuant to written consent. The Property Trustee will cause a notice of any
meeting at which holders of Preferred Securities are entitled to vote, or of
any matter upon which action by written consent of such holders is to be taken,
to be given to each holder of record of Preferred Securities in the manner set
forth in the Trust Agreement.
No vote or consent of the holders of Preferred Securities will be required
for 1st Capital to redeem and cancel its Preferred Securities in accordance
with the Trust Agreement.
Notwithstanding the fact that holders of Preferred Securities are entitled
to vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Company, the Trustees or any
affiliate of the Company or any Trustee, will, for purposes of such vote or
consent, be treated as if they were not outstanding.
PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities will be made by check
mailed to the address of the holder entitled thereto as such address will
appear on the register of holders of the Preferred Securities. The paying agent
for the Preferred Securities will initially be the Property Trustee and any
co-paying agent chosen by the Property Trustee and acceptable to the
Administrative Trustees and the Company. The paying agent for the Preferred
Securities may resign as paying agent upon 30 days' written notice to the
Property Trustee and the Company. In the event that the Property Trustee no
longer is the paying agent for the Preferred Securities, the Administrative
Trustees will appoint a successor (which must be a bank or trust company
acceptable to the Administrative Trustees and the Company) to act as paying
agent.
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REGISTRAR AND TRANSFER AGENT
The Property Trustee will act as the registrar and the transfer agent for
the Preferred Securities. Registration of transfers of Preferred Securities
will be effected without charge by or on behalf of 1st Capital, but upon
payment of any tax or other governmental charges that may be imposed in
connection with any transfer or exchange. 1st Capital will not be required to
register or cause to be registered the transfer of Preferred Securities after
such Preferred Securities have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than upon the occurrence and during the
continuance of an Event of Default, undertakes to perform only such duties as
are specifically set forth in the Trust Agreement and, after such Event of
Default, must exercise the same degree of care and skill as a prudent person
would exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the Trust Agreement at the request of any holder of
Preferred Securities unless it is offered reasonable indemnity against the
costs, expenses and liabilities that might be incurred thereby. If no Event of
Default has occurred and is continuing and the Property Trustee is required to
decide between alternative causes of action, construe ambiguous provisions in
the Trust Agreement or is unsure of the application of any provision of the
Trust Agreement, and the matter is not one on which holders of Preferred
Securities are entitled under the Trust Agreement to vote, then the Property
Trustee will take such action as is directed by the Company and if not so
directed, will take such action as it deems advisable and in the best interests
of the holders of the Trust Securities and will have no liability except for
its own bad faith, negligence or willful misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate 1st Capital in such a way that 1st Capital will not
be deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association taxable as a corporation
for United States federal income tax purposes and so that the Subordinated
Debentures will be treated as indebtedness of the Company for United States
federal income tax purposes. The Company and the Administrative Trustees are
authorized, in this connection, to take any action, not inconsistent with
applicable law, the certificate of trust of 1st Capital or the Trust Agreement,
that the Company and the Administrative Trustees determine in their discretion
to be necessary or desirable for such purposes.
Holders of the Preferred Securities have no preemptive or similar rights.
The Trust Agreement and the Preferred Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
DESCRIPTION OF THE SUBORDINATED DEBENTURES
<TABLE>
<C> <C>
(FIXED RATE PREFERRED SECURITIES) (FLOATING RATE PREFERRED SECURITIES)
Concurrently with the issuance of the Fixed Rate Preferred Concurrently with the issuance of the Floating Rate Preferred
Securities, 1st Capital I will invest the proceeds thereof, Securities, 1st Capital II will invest the proceeds thereof,
together with the consideration paid by the Company for the together with the consideration paid by the Company for the
Fixed Rate Common Securities, in the Fixed Rate Subordinated Floating Rate Common Securities, in the Floating Rate
Debentures issued by the Company. The Fixed Rate Subordinated Subordinated Debentures issued by the Company. The Floating
Debentures will be issued as unsecured debt under the Rate Subordinated Debentures will be issued as unsecured debt
Indenture, to be dated as of , 1997 (the under the Indenture, to be dated as of , 1997
"Fixed Rate Indenture"), between the Company and State (the "Floating Rate Indenture"), between the Company and
Street Bank and Trust Company, as trustee (the "Fixed Rate State Street Bank and Trust Company, as trustee (the
Debenture Trustee"). The Fixed Rate Indenture will be "Floating Rate Debenture Trustee"). The Floating Rate
qualified as an indenture under the Trust Inden- Indenture will be qualified as an in-
(FIXED RATE PREFERRED SECURITIES--continued on next page) (FLOATING RATE PREFERRED SECURITIES--continued on next page)
31
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(FIXED RATE PREFERRED SECURITIES--continued from previous (FLOATING RATE PREFERRED SECURITIES--continued from previous
page) page)
ture Act. The following summary of the material terms and denture under the Trust Indenture Act. The following summary
provisions of the Fixed Rate Subordinated Debentures and the of the material terms and provisions of the Floating Rate
Fixed Rate Indenture does not purport to be complete and is Subordinated Debentures and the Floating Rate Indenture does
subject to, and is qualified in its entirety by reference to, not purport to be complete and is subject to, and is qualified
the Fixed Rate Indenture and to the Trust Indenture Act. in its entirety by reference to, the Floating Rate Indenture
Wherever particular defined terms of the Fixed Rate Indenture and to the Trust Indenture Act. Wherever particular defined
are referred to, but not defined herein, such defined terms terms of the Floating Rate Indenture are referred to, but not
are incorporated herein by reference. The form of the Fixed defined herein, such defined terms are incorporated herein by
Rate Indenture has been filed as an exhibit to the reference. The form of the Floating Rate Indenture has been
Registration Statement of which this Prospectus forms a part. filed as an exhibit to the Registration Statement of which
this Prospectus forms a part.
GENERAL GENERAL
The Fixed Rate Subordinated Debentures will be limited in The Floating Rate Subordinated Debentures will be limited in
aggregate principal amount to approximately $25,775,000 (or aggregate principal amount to approximately $25,775,000 (or
$28,362,500 if the option described under the heading $28,362,500 if the option described under the heading
"Underwriting" is exercised by the Underwriters), such "Underwriting" is exercised by the Underwriters), such
amount being the sum of the aggregate stated Fixed Rate amount being the sum of the aggregate stated Floating Rate
Liquidation Amount of the Fixed Rate Trust Securities. The Liquidation Amount of the Floating Rate Trust Securities. The
Fixed Rate Subordinated Debentures will bear interest at the Floating Rate Subordinated Debentures will bear interest at
annual rate of % of the principal amount thereof, payable the annual rate equal to the sum of 3-Month Treasury
quarterly in arrears on March 31, June 30, September 30, and (determined in the same manner as the Floating Distribution
December 31 of each year (each, a "Fixed Rate Interest Rate, as described under "Description of the Preferred Secur-
Payment Date") beginning June 30, 1997, to the Person (as ities--Distributions--Determination of 3-Month Treasury")
defined in the Fixed Rate Indenture) in whose name each Fixed plus % (the "Floating Interest Rate") the principal
Rate Subordinated Debenture is registered, subject to certain amount thereof, payable quarterly in arrears on March 31, June
exceptions, at the close of business on the fifteenth day of 30, September 30, and December 31 of each year (each, a
the last month of the calendar quarter. It is anticipated "Floating Rate Interest Payment Date") beginning June 30,
that, until the liquidation of 1st Capital I, the Fixed Rate 1997, to the Person (as defined in the Floating Rate
Subordinated Debentures will be held in the name of the Fixed Indenture) in whose name each Floating Rate Subordinated
Rate Property Trustee in trust for the benefit of the holders Debenture is registered, subject to certain exceptions, at the
of the Fixed Rate Preferred Securities. The amount of interest close of business on the fifteenth day of the last month of
payable for any period will be computed on the basis of a the calendar quarter. The Floating Interest Rate for the
360-day year of twelve 30-day months. In the event that any period from the date of issuance through March 31, 1997 will
date on which interest is payable on the Fixed Rate notwithstanding the foregoing, be %. It is anticipated that,
Subordinated Debentures is not a Business Day, then payment of until the liquidation of 1st Capital II, the Floaitn Rate
the interest payable on such date will be made on the next Subordinated Debentures will be held in the name of the
succeeding day that is a Business Day (and without any Floating Rate Property Trustee in trust for the benefit of the
interest or other payment in respect of any such delay) with holders of the Floating Rate Preferred Securities. The amount
the same force and effect as if made on the date such payment of interest payable for any period will be computed on the
was originally due and payable. Accrued interest that is not basis of a 360-day year of twelve 30-day months. In the event
paid on the applicable Fixed Rate Interest Payment Date will that any date on which interest is payable on the Floating Rate
bear additional interest on the amount thereof (to the extent Subordinated Debentures is not a Business Day, then payment of
permitted by law) at the rate per annum of %, thereof, the interest payable on such date will be made on the next
compounded quarterly. The term "interest," as used herein,] succeeding day that is a Business Day (and without any
includes quarterly in- interest or other payment in respect of any such
(FIXED RATE PREFERRED SECURITIES--continued on next page) (FLOATING RATE PREFERRED SECURITIES--continued on next page)
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(FIXED RATE PREFERRED SECURITIES--continued from previous (FLOATING RATE PREFERRED SECURITIES--continued from previous
page) page)
terest payments, interest on quarterly interest payments not delay) with the same force and effect as if made on the date
paid on the applicable Fixed Rate Interest Payment Date and such payment was originally due and payable. Accrued interest
Additional Interest, as applicable. that is not paid on the applicable Floating Rate Interest
Payment Date will bear additional interest on the amount
thereof (to the extent permitted by law) at the Floating
Interest Rate compounded quarterly. The term "interest," as
used herein, includes quarterly interest payments, interest on
quarterly interest payments not paid on the applicable
Floating Rate Interest Payment Date and Additional Interest,
as applicable.
</TABLE>
The Subordinated Debentures will mature on March 31, 2027 (such date, as it
may be shortened or extended as hereinafter described, the "Stated
Maturity"). Such date may be shortened at any time by the Company to any date
not earlier than March 31, 2002, subject to the Company having received prior
approval of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve. Such date may also be extended
at any time at the election of the Company but in no event to a date later than
March 31, 2046, provided that at the time such election is made and at the time
of extension (i) the Company is not in bankruptcy, otherwise insolvent or in
liquidation, (ii) the Company is not in default in the payment of any interest
or principal on the Subordinated Debentures, and (iii) 1st Capital is not in
arrears on payments of Distributions on the Preferred Securities and no
deferred Distributions are accumulated. In the event that the Company elects to
shorten or extend the Stated Maturity of the Subordinated Debentures, it will
give notice thereof to the Debenture Trustee, 1st Capital and to the holders of
the Subordinated Debentures no more than 180 days and no less than 90 days
prior to the effectiveness thereof. The Company will not have the right to
purchase the Subordinated Debentures, in whole or in part, from 1st Capital
until after March 31, 2002, except if a Tax Event, a Capital Treatment Event or
an Investment Company Event has occurred and is continuing.
The Subordinated Debentures will be unsecured and will rank junior and be
subordinate in right of payment to all Senior Debt, Subordinated Debt and
Additional Senior Obligations of the Company. Because the Company is a holding
company, the right of the Company to participate in any distribution of assets
of the Bank, upon the Bank's liquidation or reorganization or otherwise (and
thus the ability of holders of the Subordinated Debentures to benefit
indirectly from such distribution), is subject to the prior claim of creditors
of the Bank, except to the extent that the Company may itself be recognized as
a creditor of the Bank. The Subordinated Debentures will, therefore, be
effectively subordinated to all existing and future liabilities of the Bank,
and holders of Subordinated Debentures should look only to the assets of the
Company for payments on the Subordinated Debentures. The Indenture does not
limit the incurrence or issuance of other secured or unsecured debt of the
Company, including Senior Debt, Subordinated Debt and Additional Senior
Obligations, whether under the Indenture or any existing indenture or other
indenture that the Company may enter into in the future or otherwise. See
"--Subordination."
The Indenture does not contain provisions that afford holders of the
Subordinated Debentures protection in the event of a highly leveraged
transaction or other similar transaction involving the Company that may
adversely affect such holders.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
The Company has the right under the Indenture at any time during the term
of the Subordinated Debentures, so long as no Debenture Event of Default has
occurred and is continuing, to defer the payment of interest at any time, or
from time to time (each, an "Extended Interest Payment Period"). The right to
defer the payment of interest on the Subordinated Debentures is limited,
however, to a period, in each instance, not exceeding 20 consecutive quarters
and no Extended Interest Payment Period may extend beyond the Stated Maturity
of the Subordinated Debentures. At the end of each Extended Interest Payment
Period, the Company must pay all interest then accrued and unpaid (together
with interest thereon at the Interest Rate, compounded quarterly, to the extent
permitted by applicable law). During an Extended Interest Payment Period,
interest will continue to accrue and holders of Subordinated Debentures (or the
holders of Preferred Securities if such securities are then outstanding) will
be required to accrue
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and recognize income for United States federal income tax purposes. See
"Certain Federal Income Tax Consequences--Potential Extension of Interest
Payment Period and Original Issue Discount."
During any such Extended Interest Payment Period, the Company may not (i)
declare or pay any dividends or distributions on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of the Company's capital
stock (other than (a) dividends or distributions in common stock of the
Company, any declaration of a non-cash dividend in connection with the
implementation of a shareholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, and (b) purchases of common stock of the Company related to
the rights under any of the Company's benefit plans for its directors, officers
or employees), (ii) make any payment of principal, interest or premium, if any,
on or repay, repurchase or redeem any debt securities of the Company that rank
pari passu with or junior in interest to the Subordinated Debentures or make
any guarantee payments with respect to any guarantee by the Company of the debt
securities of any subsidiary of the Company if such guarantee ranks pari passu
or junior in interest to the Subordinated Debentures (other than payments under
the Guarantee), or (iii) redeem, purchase or acquire less than all of the
Subordinated Debentures or any of the Preferred Securities. The Fixed Rate
Subordinated Debentures and the Floating Rate Subordinated Debentures will rank
pari passu and, therefore, if the Company elects to defer the payment of
interest on one, it would not be permitted to make interest payments with
respect to the other. Prior to the termination of any such Extended Interest
Payment Period, the Company may further defer the payment of interest; provided
that no Extended Interest Payment Period may exceed 20 consecutive quarters or
extend beyond the Stated Maturity of the Subordinated Debentures. Upon the
termination of any such Extended Interest Payment Period and the payment of all
amounts then due on any Interest Payment Date, the Company may elect to begin a
new Extended Interest Payment Period subject to the above requirements. No
interest will be due and payable during an Extended Interest Payment Period,
except at the end thereof. The Company has no present intention of exercising
its rights to defer payments of interest on the Subordinated Debentures. The
Company must give the Property Trustee, the Administrative Trustees and the
Debenture Trustee notice of its election of such Extended Interest Payment
Period at least two Business Days prior to the earlier of (i) the next
succeeding date on which Distributions on the Trust Securities would have been
payable except for the election to begin such Extended Interest Payment Period,
or (ii) the date 1st Capital is required to give notice of the record date, or
the date such Distributions are payable, to The Nasdaq Stock Market's National
Market (or other applicable self-regulatory organization) or to holders of the
Preferred Securities, but in any event at least one Business Day before such
record date. Subject to the foregoing, there is no limitation on the number of
times that the Company may elect to begin an Extended Interest Payment Period.
ADDITIONAL SUMS
If 1st Capital or the Property Trustee is required to pay any additional
taxes, duties or other governmental charges as a result of the occurrence of a
Tax Event, the Company will pay as additional amounts (referred to herein as
"Additional Interest") on the Subordinated Debentures such additional amounts
as may be required so that the net amounts received and retained by 1st Capital
after paying any such additional taxes, duties or other governmental charges
will not be less than the amounts 1st Capital would have received had such
additional taxes, duties or other governmental charges not been imposed.
REDEMPTION OR EXCHANGE
The Company will have the right to redeem the Subordinated Debentures prior
to maturity (i) on or after March 31, 2002, in whole at any time or in part
from time to time, or (ii) at any time in whole (but not in part), within 180
days following the occurrence of a Tax Event, a Capital Treatment Event or an
Investment Company Event, in each case at a redemption price equal to the
accrued and unpaid interest on the Subordinated Debentures so redeemed to the
date fixed for redemption, plus 100% of the principal amount thereof. Any such
redemption prior to the Stated Maturity will be subject to prior approval of
the Federal Reserve if then required under applicable capital guidelines or
policies of the Federal Reserve.
"Tax Event" means the receipt by 1st Capital of an opinion of counsel
experienced in such matters to the effect that, as a result of any amendment
to, or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after
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<PAGE> 41
the date of issuance of the Preferred Securities under the Trust Agreement,
there is more than an insubstantial risk that (i) interest payable by the
Company on the Subordinated Debentures is not, or within 90 days of the date of
such opinion will not be, deductible by the Company, in whole or in part, for
United States federal income tax purposes, (ii) 1st Capital is, or will be
within 90 days after the date of such opinion of counsel, subject to United
States federal income tax with respect to income received or accrued on the
Subordinated Debentures, or (iii) 1st Capital is, or will be within 90 days
after the date of such opinion of counsel, subject to more than a de minimis
amount of other taxes, duties, assessments or other governmental charges. The
Company must request and receive an opinion with regard to such matters within
a reasonable period of time after it becomes aware of the possible occurrence
of any of the events described in clauses (i) through (iii) above.
A "Capital Treatment Event" means the receipt by 1st Capital of an
opinion of counsel experienced in such matters to the effect that, as a result
of any amendment to, or change (including any announced prospective change) in,
the laws (or any regulations thereunder) of the United States or any political
subdivision thereof or therein, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or such proposed change,
pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities under the Trust Agreement, there is more than an
insubstantial risk of impairment of the Company's ability to treat the
aggregate Liquidation Amount of the Preferred Securities (or any substantial
portion thereof) as "Tier 1 Capital" (or the then equivalent thereof) for
purposes of the capital adequacy guidelines of the Federal Reserve, as then in
effect and applicable to the Company.
"Investment Company Event" means the receipt by 1st Capital of an opinion
of counsel experienced in such matters to the effect that, as a result of the
occurrence of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, 1st Capital is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act, which change becomes effective on or after the date of original
issuance of the Preferred Securities.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Subordinated Debentures to
be redeemed at its registered address. Unless the Company defaults in payment
of the redemption price for the Subordinated Debentures, on and after the
redemption date interest ceases to accrue on such Subordinated Debentures or
portions thereof called for redemption.
The Subordinated Debentures will not be subject to any sinking fund.
DISTRIBUTION UPON LIQUIDATION
As described under "Description of the Preferred Securities--Liquidation
Distribution Upon Termination," under certain circumstances involving the
termination of 1st Capital, the Subordinated Debentures may be distributed to
the holders of the Preferred Securities in liquidation of 1st Capital after
satisfaction of liabilities to creditors of 1st Capital as provided by
applicable law. Any such distribution will be subject to receipt of prior
approval by the Federal Reserve if then required under applicable policies or
guidelines of the Federal Reserve. If the Subordinated Debentures are
distributed to the holders of Preferred Securities upon the liquidation of 1st
Capital, the Company will use its best efforts to list the Subordinated
Debentures on The Nasdaq Stock Market's National Market or such stock
exchanges, if any, on which the Preferred Securities are then listed. There can
be no assurance as to the market price of any Subordinated Debentures that may
be distributed to the holders of Preferred Securities.
RESTRICTIONS ON CERTAIN PAYMENTS
If at any time (i) there has occurred a Debenture Event of Default, (ii)
the Company is in default with respect to its obligations under the Guarantee,
or (iii) the Company has given notice of its election of an Extended Interest
Payment Period as provided in the Indenture with respect to the Subordinated
Debentures and has not rescinded such notice, or such Extended Interest Payment
Period, or any extension thereof, is continuing, the Company will not (1)
declare or pay any dividends or distributions on, or redeem, purchase, acquire,
or make a liquidation payment with respect to, any of the Company's capital
stock (other than (a) dividends or distributions in common stock of the
Company, any declaration of a non-cash dividend in connection with the
implementation of a shareholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, and (b) purchases of common stock of the Company related to
the rights under any of the Company's benefit plans for its directors, officers
or employees), (2) make any payment of principal, interest or
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<PAGE> 42
premium, if any, on or repay or repurchase or redeem any debt securities of the
Company that rank pari passu with or junior in interest to the Subordinated
Debentures or make any guarantee payments with respect to any guarantee by the
Company of the debt securities of any subsidiary of the Company if such
guarantee ranks pari passu or junior in interest to the Subordinated Debentures
(other than payments under the Guarantee), or (3) redeem, purchase or acquire
less than all of the Subordinated Debentures or any of the Preferred
Securities.
SUBORDINATION
The Indenture provides that the Subordinated Debentures issued thereunder
are subordinated and junior in right of payment to all Senior Debt,
Subordinated Debt and Additional Senior Obligations of the Company. Upon any
payment or distribution of assets to creditors upon any liquidation,
dissolution, winding up, reorganization, assignment for the benefit of
creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceedings of the Company, the holders of Senior Debt, Subordinated
Debt and Additional Senior Obligations of the Company will first be entitled to
receive payment in full of principal of (and premium, if any) and interest, if
any, on such Senior Debt, Subordinated Debt and Additional Senior Obligations
of the Company before the holders of Subordinated Debentures will be entitled
to receive or retain any payment in respect of the principal of or interest on
the Subordinated Debentures.
In the event of the acceleration of the maturity of any Subordinated
Debentures, the holders of all Senior Debt, Subordinated Debt and Additional
Senior Obligations of the Company outstanding at the time of such acceleration
will first be entitled to receive payment in full of all amounts due thereon
(including any amounts due upon acceleration) before the holders of the
Subordinated Debentures will be entitled to receive or retain any payment in
respect of the principal of or interest on the Subordinated Debentures.
No payments on account of principal or interest in respect of the
Subordinated Debentures may be made if there has occurred and is continuing a
default in any payment with respect to Senior Debt, Subordinated Debt or
Additional Senior Obligations of the Company or an event of default with
respect to any Senior Debt, Subordinated Debt or Additional Senior Obligations
of the Company resulting in the acceleration of the maturity thereof, or if any
judicial proceeding is pending with respect to any such default.
"Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed, (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses, (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person, (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business), (v) every capital lease obligation of such Person, and (vi) and
every obligation of the type referred to in clauses (i) through (v) of another
Person and all dividends of another Person the payment of which, in either
case, such Person has guaranteed or is responsible or liable, directly or
indirectly, as obligor or otherwise.
"Senior Debt" means, with respect to the Company, the principal of (and
premium, if any) and interest, if any (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization relating to the
Company whether or not such claim for post-petition interest is allowed in such
proceeding), on Debt, whether incurred on or prior to the date of the Indenture
or thereafter incurred, unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Subordinated Debentures
or to other Debt which is pari passu with, or subordinated to, the Subordinated
Debentures; provided, however, that Senior Debt will not be deemed to include
(i) any Debt of the Company which when incurred and without respect to any
election under section 1111(b) of the United States Bankruptcy Code of 1978, as
amended, was without recourse to the Company, (ii) any Debt of the Company to
any of its subsidiaries, (iii) any Debt to any employee of the Company, (iv)
any Debt which by its terms is subordinated to trade accounts payable or
accrued liabilities arising in the ordinary course of business to the extent
that payments made to the holders of such Debt by the holders of the
Subordinated Debentures as a result of the subordination provisions of the
Indenture would be greater than they otherwise would have been as a result of
any obligation of such holders to pay amounts over to the obligees on such
trade accounts payable or accrued liabilities arising in the
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ordinary course of business as a result of subordination provisions to which
such Debt is subject, and (v) Debt which constitutes Subordinated Debt.
"Subordinated Debt" means, with respect to the Company, the principal of
(and premium, if any) and interest, if any (including interest accruing on or
after the filing of any petition in bankruptcy or for reorganization relating
to the Company whether or not such claim for post-petition interest is allowed
in such proceeding), on Debt, whether incurred on or prior to the date of the
Indenture or thereafter incurred, which is by its terms expressly provided to
be junior and subordinate to other Debt of the Company (other than the
Subordinated Debentures).
"Additional Senior Obligations" means, with respect to the Company, all
indebtedness, whether incurred on or prior to the date of the Indenture or
thereafter incurred, for claims in respect of derivative products such as
interest and foreign exchange rate contracts, commodity contracts and similar
arrangements; provided, however, that Additional Senior Obligations do not
include claims in respect of Senior Debt or Subordinated Debt or obligations
which, by their terms, are expressly stated to be not superior in right of
payment to the Subordinated Debentures or to rank pari passu in right of
payment with the Subordinated Debentures. "Claim," as used herein, has the
meaning assigned thereto in Section 101(4) of the United States Bankruptcy Code
of 1978, as amended.
The Indenture places no limitation on the amount of additional Senior Debt,
Subordinated Debt or Additional Senior Obligations that may be incurred by the
Company. The Company expects from time to time to incur additional indebtedness
constituting Senior Debt, Subordinated Debt and Additional Senior Obligations.
As of December 31, 1996, the Company had aggregate Senior Debt, Subordinated
Debt and Additional Senior Obligations of approximately $18.6 million. Because
the Company is a holding company, the Subordinated Debentures are effectively
subordinated to all existing and future liabilities of the Company's
subsidiaries, including obligations to depositors of the Bank.
PAYMENT AND PAYING AGENTS
Payment of principal of and any interest on the Subordinated Debentures
will be made at the office of the Debenture Trustee in Boston, Massachusetts,
except that, at the option of the Company, payment of any interest may be made
(i) by check mailed to the address of the Person entitled thereto as such
address appears in the register of holders of the Subordinated Debentures, or
(ii) by transfer to an account maintained by the Person entitled thereto as
specified in the register of holders of the Subordinated Debentures, provided
that proper transfer instructions have been received by the regular record
date. Payment of any interest on Subordinated Debentures will be made to the
Person in whose name such Subordinated Debenture is registered at the close of
business on the regular record date for such interest, except in the case of
defaulted interest. The Company may at any time designate additional paying
agents for the Subordinated Debentures or rescind the designation of any paying
agent for the Subordinated Debentures; however, the Company will at all times
be required to maintain a paying agent in each place of payment for the
Subordinated Debentures.
Any moneys deposited with the Debenture Trustee or any paying agent for the
Subordinated Debentures, or then held by the Company in trust, for the payment
of the principal of or interest on the Subordinated Debentures and remaining
unclaimed for two years after such principal or interest has become due and
payable will be repaid to the Company on May 31 of each year or (if then held
in trust by the Company) will be discharged from such trust and the holder of
such Subordinated Debenture will thereafter look, as a general unsecured
creditor, only to the Company for payment thereof.
REGISTRAR AND TRANSFER AGENT
The Debenture Trustee will act as the registrar and the transfer agent for
the Subordinated Debentures. Subordinated Debentures may be presented for
registration of transfer (with the form of transfer endorsed thereon, or a
satisfactory written instrument of transfer, duly executed) at the office of
the registrar in Boston, Massachusetts. The Company may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts. The Company may at any time
designate additional transfer agents with respect to the Subordinated
Debentures. In the event of any redemption, neither the Company nor the
Debenture Trustee will be required to (i) issue, register the transfer of or
exchange Subordinated Debentures during a period beginning at the opening of
business 15 days before the day of selection for redemption of Subordinated
Debentures and ending at the close of business on the day of mailing of the
relevant notice of redemption, or (ii) transfer or
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<PAGE> 44
exchange any Subordinated Debentures so selected for redemption, except, in the
case of any Subordinated Debentures being redeemed in part, any portion thereof
not to be redeemed.
MODIFICATION OF INDENTURE
The Company and the Debenture Trustee may, from time to time without the
consent of the holders of the Subordinated Debentures, amend, waive or
supplement the Indenture for specified purposes, including, among other things,
curing ambiguities, defects or inconsistencies and qualifying, or maintaining
the qualification of, the Indenture under the Trust Indenture Act. The
Indenture contains provisions permitting the Company and the Debenture Trustee,
with the consent of the holders of not less than a majority in principal amount
of the outstanding Subordinated Debentures, to modify the Indenture; provided,
that no such modification may, without the consent of the holder of each
outstanding Subordinated Debenture affected by such proposed modification, (i)
extend the fixed maturity of the Subordinated Debentures, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or (ii) reduce the percentage of principal amount of
Subordinated Debentures, the holders of which are required to consent to any
such modification of the Indenture; provided that so long as any of the
Preferred Securities remain outstanding, no such modification may be made that
requires the consent of the holders of the Subordinated Debentures, and no
termination of the Indenture may occur, and no waiver of any Debenture Event of
Default may be effective, without the prior consent of the holders of at least
a majority of the aggregate Liquidation Amount of the Preferred Securities and
that if the consent of the holder of each Subordinated Debenture is required,
such modification will not be effective until each holder of Trust Securities
has consented thereto.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to the Subordinated Debentures that has occurred and is
continuing constitutes an event of default (each, a "Debenture Event of
Default") with respect to the Subordinated Debentures:
(i) failure for 30 days to pay any interest on the Subordinated
Debentures, when due (subject to the deferral of any due date in the case
of an Extended Interest Payment Period); or
(ii) failure to pay any principal on the Subordinated Debentures when
due whether at maturity, upon redemption by declaration or otherwise; or
(iii) failure to observe or perform in any material respect certain
other covenants contained in the Indenture for 90 days after written notice
to the Company from the Debenture Trustee or the holders of at least 25% in
aggregate outstanding principal amount of the Subordinated Debentures; or
(iv) certain events in bankruptcy, insolvency or reorganization of the
Company.
The holders of a majority in aggregate outstanding principal amount of the
Subordinated Debentures have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee.
The Debenture Trustee, or the holders of not less than 25% in aggregate
outstanding principal amount of the Subordinated Debentures, may declare the
principal due and payable immediately upon a Debenture Event of Default. The
holders of a majority in aggregate outstanding principal amount of the
Subordinated Debentures may annul such declaration and waive the default if the
default (other than the non-payment of the principal of the Subordinated
Debentures which has become due solely by such acceleration) has been cured and
a sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee.
Should the holders of the Subordinated Debentures fail to annul such
declaration and waive such default, the holders of a majority in aggregate
Liquidation Amount of the Preferred Securities will have such right.
The Company is required to file annually with the Debenture Trustee a
certificate as to whether or not the Company is in compliance with all the
conditions and covenants applicable to it under the Indenture.
If a Debenture Event of Default has occurred and is continuing, the
Property Trustee will have the right to declare the principal of and the
interest on such Subordinated Debentures, and any other amounts payable under
the Indenture, to be forthwith due and payable and to enforce its other rights
as a creditor with respect to such Subordinated Debentures.
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The Fixed Rate Subordinated Debentures and the Floating Rate Subordinated
Debentures are not cross-defaulted. A Debenture Event of Default under the
Fixed Rate Indenture will not constitute a Debenture Event of Default under the
Floating Rate Indenture, and Vice Versa.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF THE PREFERRED SECURITIES
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay interest on or
principal of the Subordinated Debentures on the payment date on which such
payment is due and payable, then a holder of Preferred Securities may institute
a legal proceeding directly against the Company for enforcement of payment to
such holder of the principal of or interest on such Subordinated Debentures
having a principal amount equal to the aggregate Liquidation Amount of the
Preferred Securities of such holder (a "Direct Action"). In connection with
such Direct Action, the Company will have a right of set-off under the
Indenture to the extent of any payment made by the Company to such holder of
Preferred Securities in the Direct Action. The Company may not amend the
Indenture to remove the foregoing right to bring a Direct Action without the
prior written consent of the holders of all of the Preferred Securities. If the
right to bring a Direct Action is removed, 1st Capital may become subject to
the reporting obligations under the Exchange Act. The Company has the right
under the Indenture to set-off any payment made to such holder of Preferred
Securities by the Company in connection with a Direct Action.
The holders of the Preferred Securities will not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the Subordinated Debentures unless there has been
an Event of Default under the Trust Agreement. See "Description of the
Preferred Securities--Events of Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Company may not consolidate with or merge into any other Person or
convey or transfer its properties and assets substantially as an entirety to
any Person, and any Person may not consolidate with or merge into the Company
or sell, convey, transfer or otherwise dispose of its properties and assets
substantially as an entirety to the Company, unless (i) in the event the
Company consolidates with or merges into another Person or conveys or transfers
its properties and assets substantially as an entirety to any Person, the
successor Person is organized under the laws of the United States or any State
or the District of Columbia, and such successor Person expressly assumes by
supplemental indenture the Company's obligations on the Subordinated Debentures
issued under the Indenture, (ii) immediately after giving effect thereto, no
Debenture Event of Default, and no event which, after notice or lapse of time
or both, would become a Debenture Event of Default, has occurred and is
continuing, and (iii) certain other conditions as prescribed in the Indenture
are met.
SATISFACTION AND DISCHARGE
The Indenture will cease to be of further effect (except as to the
Company's obligations to pay certain sums due pursuant to the Indenture and to
provide certain officers' certificates and opinions of counsel described
therein) and the Company will be deemed to have satisfied and discharged the
Indenture when, among other things, all Subordinated Debentures not previously
delivered to the Debenture Trustee for cancellation (i) have become due and
payable, or (ii) will become due and payable at their Stated Maturity within
one year or are to be called for redemption within one year, and the Company
deposits or causes to be deposited with the Debenture Trustee funds, in trust,
for the purpose and in an amount sufficient to pay and discharge the entire
indebtedness on the Subordinated Debentures not previously delivered to the
Debenture Trustee for cancellation, for the principal and interest to the date
of the deposit or to the Stated Maturity or redemption date, as the case may
be.
GOVERNING LAW
The Indenture and the Subordinated Debentures will be governed by and
construed in accordance with the laws of the State of Indiana.
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INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee has and is subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of Subordinated Debentures, unless offered reasonable
indemnity by such holder against the costs, expenses and liabilities which
might be incurred thereby. The Debenture Trustee is not required to expend or
risk its own funds or otherwise incur personal financial liability in the
performance of its duties if the Debenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
MISCELLANEOUS
The Company has agreed, pursuant to the Indenture, for so long as Trust
Securities remain outstanding, (i) to maintain directly or indirectly 100%
ownership of the Common Securities of 1st Capital (provided that certain
successors which are permitted pursuant to the Indenture may succeed to the
Company's ownership of the Common Securities), (ii) not to voluntarily
terminate, wind up or liquidate 1st Capital, except upon prior approval of the
Federal Reserve if then so required under applicable capital guidelines or
policies of the Federal Reserve, and (a) in connection with a distribution of
Subordinated Debentures to the holders of the Preferred Securities in
liquidation of 1st Capital, or (b) in connection with certain mergers,
consolidations or amalgamations permitted by the Trust Agreement, and (iii) to
use its reasonable efforts, consistent with the terms and provisions of the
Trust Agreement, to cause 1st Capital to remain classified as a grantor trust
and not as an association taxable as a corporation for United States federal
income tax purposes.
DESCRIPTION OF THE GUARANTEE
<TABLE>
<C> <C>
(FIXED RATE PREFERRED SECURITIES) (FLOATING RATE PREFERRED SECURITIES)
The Preferred Securities Guarantee Agreement with respect The Preferred Securities Guarantee Agreement with respect to
to the Fixed Rate Preferred Securities (the "Fixed Rate the Floating Rate Preferred Securities (the "Floating Rate
Guarantee") will be executed and delivered by the Company Guarantee") will be executed and delivered by the Company
concurrently with the issuance of the Fixed Rate Preferred concurrently with the issuance of the Floating Rate Preferred
Securities for the benefit of the holders of the Fixed Rate Securities for the benefit of the holders of the Floating Rate
Preferred Securities. The Fixed Rate Guarantee will be Preferred Securities. The Floating Rate Guarantee will be
qualified as an indenture under the Trust Indenture Act. The qualified as an indenture under the Trust Indenture Act. The
Fixed Rate Guarantee Trustee, State Street Bank and Trust Floating Rate Guarantee Trustee, State Street Bank and Trust
Company, will act as indenture trustee under the Fixed Rate Company, will act as indenture trustee under the Floating Rate
Guarantee for purposes of complying with the provisions of the Guarantee for purposes of complying with the provisions of the
Trust Indenture Act and will hold the Fixed Rate Guarantee for Trust Indenture Act and will hold the Floating Rate Guarantee
the benefit of the holders of the Fixed Rate Preferred for the benefit of the holders of the Floating Rate Preferred
Securities. The following summary of the material terms and Securities. The following summary of the material terms and
provisions of the Fixed Rate Guarantee does not purport to be provisions of the Floating Rate Guarantee does not purport to
complete and is subject to, and qualified in its entirety by be complete and is subject to, and qualified in its entirety
reference to, all of the provisions of the Fixed Rate by reference to, all of the provisions of the Floating Rate
Guarantee and the Trust Indenture Act. Wherever particular Guarantee and the Trust Indenture Act. Wherever particular
defined terms of the Fixed Rate Guarantee are referred to, but defined terms of the Floating Rate Guarantee are referred to,
not defined herein, such defined terms are incorporated herein but not defined herein, such defined terms are incorporated
by reference. The form of the Fixed Rate Guarantee has been herein by reference. The form of the Floating Rate Guarantee
filed as an exhibit to the Registration Statement of which has been filed as an exhibit to the Registration Statement of
this Prospectus forms a part. which this Prospectus forms a part.
</TABLE>
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GENERAL
The Company will, pursuant to the Guarantee, irrevocably agree to pay in
full on a subordinated basis, to the extent set forth therein, the Guarantee
Payments (as defined herein) to the holders of the Preferred Securities, as and
when due, regardless of any defense, right of set-off or counterclaim that 1st
Capital may have or assert other than the defense of payment. The following
payments with respect to the Preferred Securities, to the extent not paid by or
on behalf of 1st Capital (the "Guarantee Payments"), will be subject to the
Guarantee: (i) any accrued and unpaid Distributions required to be paid on the
Preferred Securities, to the extent that 1st Capital has funds available
therefor at such time, (ii) the Redemption Price with respect to any Preferred
Securities called for redemption to the extent that 1st Capital has funds
available therefor at such time, and (iii) upon a voluntary or involuntary
dissolution, winding up or liquidation of 1st Capital (other than in connection
with the distribution of Subordinated Debentures to the holders of Preferred
Securities or a redemption of all of the Preferred Securities), the lesser of
(a) the amount of the Liquidation Distribution, to the extent 1st Capital has
funds available therefor at such time, and (b) the amount of assets of 1st
Capital remaining available for distribution to holders of Preferred Securities
in liquidation of 1st Capital. The obligation of the Company to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Company to the holders of the Preferred Securities or by causing 1st
Capital to pay such amounts to such holders.
The Guarantee will not apply to any payment of Distributions except to the
extent 1st Capital has funds available therefor. If the Company does not make
interest payments on the Subordinated Debentures held by 1st Capital, 1st
Capital will not pay Distributions on the Preferred Securities and will not
have funds legally available therefor.
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of the Company and
will rank subordinate and junior in right of payment to all Senior Debt,
Subordinated Debt and Additional Senior Obligations of the Company in the same
manner as the Subordinated Debentures. The Guarantee does not place a
limitation on the amount of additional Senior Debt, Subordinated Debt or
Additional Senior Obligations that may be incurred by the Company. The Company
expects from time to time to incur additional indebtedness constituting Senior
Debt, Subordinated Debt and Additional Senior Obligations.
The Guarantee will constitute a guarantee of payment and not of collection
(that is, the guaranteed party may institute a legal proceeding directly
against the Company to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other Person). The Guarantee will
not be discharged except by payment of the Guarantee Payments in full to the
extent not paid by 1st Capital or upon distribution of the Subordinated
Debentures to the holders of the Preferred Securities. Because the Company is a
holding company, the right of the Company to participate in any distribution of
assets of the Bank upon the Bank's liquidation or reorganization or otherwise
is subject to the prior claims of creditors of the Bank, except to the extent
the Company may itself be recognized as a creditor of the Bank. The Company's
obligations under the Guarantee, therefore, will be effectively subordinated to
all existing and future liabilities of the Company's subsidiaries, and
claimants should look only to the assets of the Company for payments
thereunder.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of the Preferred Securities (in which case no vote will
be required), the Guarantee may not be amended without the prior approval of
the holders of not less than a majority of the aggregate Liquidation Amount of
the outstanding Preferred Securities. See "Description of the Preferred
Securities--Voting Rights; Amendment of Trust Agreement." All guarantees and
agreements contained in the Guarantee will bind the successors, assigns,
receivers, trustees and representatives of the Company and will inure to the
benefit of the holders of the Preferred Securities then outstanding.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder. The
holders of not less than a majority in aggregate Liquidation Amount of the
Preferred 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 the Guarantee or to direct the exercise of any trust or power
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<PAGE> 48
conferred upon the Guarantee Trustee under the Guarantee. The Fixed Rate
Guarantee and the Floating Rate Guarantee are not cross-defaulted. A default
under the Fixed Rate Guarantee will not constitute a default under the Floating
Rate Guarantee, and vice versa.
Any holder of Preferred Securities may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against 1st Capital, the Guarantee Trustee
or any other Person.
The Company, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Company is in compliance with
all the conditions and covenants applicable to it under the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Company in performance of the Guarantee, undertakes to perform
only such duties as are specifically set forth in the Guarantee and, after
default with respect to the Guarantee, must exercise the same degree of care
and skill as a prudent person would exercise or use in the conduct of his or
her own affairs. Subject to such provisions, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by the Guarantee at the
request of any holder of any Preferred Securities, unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon (a)
full payment of the Redemption Price of the Preferred Securities, (b) full
payment of the amounts payable upon liquidation of 1st Capital, or (c)
distribution of the Subordinated Debentures to the holders of the Preferred
Securities. The Guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any holder of the Preferred Securities must
restore payment of any sums paid under such Preferred Securities or the
Guarantee.
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the laws
of the State of Indiana.
EXPENSE AGREEMENT
The Company will, pursuant to the Agreement as to Expenses and Liabilities
entered into by it under the Trust Agreement (the "Expense Agreement"),
irrevocably and unconditionally guarantee to each person or entity to whom 1st
Capital becomes indebted or liable, the full payment of any costs, expenses or
liabilities of 1st Capital, other than obligations of 1st Capital to pay to the
holders of the Preferred Securities or other similar interests in 1st Capital
of the amounts due such holders pursuant to the terms of the Preferred
Securities or such other similar interests, as the case may be. Third party
creditors of 1st Capital may proceed directly against the Company under the
Expense Agreement, regardless of whether such creditors had notice of the
Expense Agreement.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE SUBORDINATED DEBENTURES AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Preferred Securities
(to the extent 1st Capital has funds available for the payment of such
Distributions) are irrevocably guaranteed by the Company as and to the extent
set forth under "Description of the Guarantee." The Company and 1st Capital
believe that, taken together, the obligations of the Company under the
Subordinated Debentures, the Indenture, the Trust Agreement, the Expense
Agreement, and the Guarantee provide, in the aggregate, a full, irrevocable and
unconditional guarantee, on a subordinated basis, of payment of Distributions
and other amounts due on the Preferred Securities. No single document standing
alone or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these
documents that has the effect of providing a full, irrevocable and
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<PAGE> 49
unconditional guarantee of the obligations of 1st Capital under the Preferred
Securities. If and to the extent that the Company does not make payments on the
Subordinated Debentures, 1st Capital will not pay Distributions or other
amounts due on the Preferred Securities. The Guarantee does not cover payment
of Distributions when 1st Capital does not have sufficient funds to pay such
Distributions. In such event, the remedy of a holder of Preferred Securities is
to institute a legal proceeding directly against the Company for enforcement of
payment of such Distributions to such holder. The obligations of the Company
under the Guarantee are subordinate and junior in right of payment to all
Senior Debt, Subordinated Debt and Additional Senior Obligations of the
Company.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on the
Subordinated Debentures, such payments will be sufficient to cover
Distributions and other payments due on the Preferred Securities, primarily
because (i) the aggregate principal amount of the Subordinated Debentures will
be equal to the sum of the aggregate stated Liquidation Amount of the Trust
Securities, (ii) the interest rate and interest and other payment dates on the
Subordinated Debentures will match the Distribution rate and Distribution and
other payment dates for the Preferred Securities, (iii) the Company will pay
for all and any costs, expenses and liabilities of 1st Capital (except the
obligations of 1st Capital to holders of the Preferred Securities), and (iv)
the Trust Agreement further provides that 1st Capital will not engage in any
activity that is not consistent with the limited purposes of 1st Capital.
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
A holder of any Preferred Security may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Guarantee Trustee, 1st Capital
or any other Person. A default or event of default under any Senior Debt,
Subordinated Debt or Additional Senior Obligations of the Company would not
constitute a default or Event of Default. In the event, however, of payment
defaults under, or acceleration of, Senior Debt, Subordinated Debt or
Additional Senior Obligations of the Company, the subordination provisions of
the Indenture provide that no payments may be made in respect of the
Subordinated Debentures until such Senior Debt, Subordinated Debt or Additional
Senior Obligations has been paid in full or any payment default thereunder has
been cured or waived. Failure to make required payments on the Subordinated
Debentures would constitute an Event of Default.
LIMITED PURPOSE OF 1ST CAPITAL
The Preferred Securities evidence a preferred undivided beneficial interest
in the assets of 1st Capital. 1st Capital exists for the sole purpose of
issuing the Trust Securities and investing the proceeds thereof in Subordinated
Debentures. A principal difference between the rights of a holder of a
Preferred Security and the rights of a holder of a Subordinated Debenture is
that a holder of a Subordinated Debenture is entitled to receive from the
Company the principal amount of and interest accrued on Subordinated Debentures
held, while a holder of Preferred Securities is entitled to receive
Distributions from 1st Capital (or from the Company under the Guarantee) if and
to the extent 1st Capital has funds available for the payment of such
Distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding-up or liquidation of
1st Capital involving the liquidation of the Subordinated Debentures, the
holders of the Preferred Securities will be entitled to receive, out of assets
held by 1st Capital, the Liquidation Distribution in cash. See "Description of
the Preferred Securities--Liquidation Distribution Upon Termination." Upon any
voluntary or involuntary liquidation or bankruptcy of the Company, the Property
Trustee, as holder of the Subordinated Debentures, would be a subordinated
creditor of the Company, subordinated in right of payment to all Senior Debt,
Subordinated Debt and Additional Senior Obligations of the Company (as set
forth in the Indenture), but entitled to receive payment in full of principal
and interest before any shareholders of the Company receive payments or
distributions. Since the Company is the guarantor under the Guarantee and has
agreed to pay for all costs, expenses and liabilities of 1st Capital (other
than the obligations of 1st Capital to the holders of its Preferred
Securities), the positions of a holder of the Preferred Securities and a holder
of the Subordinated Debentures relative to other creditors and to shareholders
of the Company in the event of liquidation or bankruptcy of the Company are
expected to be substantially the same.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following is a summary of the material United States federal income tax
considerations that may be relevant to the purchasers of Preferred Securities
which has been passed upon by Lewis, Rice & Fingersh, L.C., counsel to the
Company and 1st Capital insofar as it relates to matters of law and legal
conclusions. The conclusions expressed herein are based upon current provisions
of the Internal Revenue Code of 1986, as amended (the "Code"), regulations
thereunder and current administrative rulings and court decisions, all of which
are subject to change at any time, with possible retroactive effect. Subsequent
changes may cause tax consequences to vary substantially from the consequences
described below. Furthermore, the authorities on which the following summary is
based are subject to various interpretations, and it is therefore possible that
the United States federal income tax treatment of the purchase, ownership, and
disposition of Preferred Securities may differ from the treatment described
below.
No attempt has been made in the following discussion to comment on all
United States federal income tax matters affecting purchasers of Preferred
Securities. Moreover, the discussion generally focuses on holders of Preferred
Securities who are individual citizens or residents of the United States and
who acquire Preferred Securities on their original issue at their offering
price and hold Preferred Securities as capital assets. The discussion has only
limited application to dealers in securities, corporations, estates, trusts or
nonresident aliens and does not address all the tax consequences that may be
relevant to holders who may be subject to special tax treatment, such as, for
example, banks, thrifts, real estate investment trusts, regulated investment
companies, insurance companies, dealers in securities or currencies, tax-exempt
investors, or persons that will hold the Preferred Securities as a position in
a "straddle," as part of a "synthetic security" or "hedge," as part of a
"conversion transaction" or other integrated investment, or as other than a
capital asset. The following summary also does not address the tax consequences
to persons that have a functional currency other than the U.S. dollar or the
tax consequences to shareholders, partners or beneficiaries of a holder of
Preferred Securities. Further, it does not include any description of any
alternative minimum tax consequences or the tax laws of any state or local
government or of any foreign government that may be applicable to the Preferred
Securities. Accordingly, each prospective investor should consult, and should
rely exclusively on, such investor's own tax advisors in analyzing the federal,
state, local and foreign tax consequences of the purchase, ownership or
disposition of Preferred Securities.
CLASSIFICATION OF THE SUBORDINATED DEBENTURES
The Company intends to take the position that the Subordinated Debentures
will be classified for United States federal income tax purposes as
indebtedness of the Company under current law, and, by acceptance of a
Preferred Security, each holder covenants to treat the Subordinated Debentures
as indebtedness and the Preferred Securities as evidence of an indirect
beneficial ownership interest in the Subordinated Debentures. No assurance can
be given, however, that such position of the Company will not be challenged by
the Internal Revenue Service or, if challenged, that such a challenge will not
be successful. The remainder of this discussion assumes that the Subordinated
Debentures will be classified for United States federal income tax purposes as
indebtedness of the Company.
CLASSIFICATION OF 1ST CAPITAL
Under current law and assuming full compliance with the terms of the Trust
Agreement and Indenture (and certain other documents described herein), 1st
Capital will be classified for United States federal income tax purposes as a
grantor trust and not as an association taxable as a corporation. Accordingly,
for United States federal income tax purposes, each holder of Preferred
Securities generally will be treated as owning an undivided beneficial interest
in the Subordinated Debentures, and each holder will be required to include in
its gross income any OID accrued with respect to its allocable share of the
Subordinated Debentures whether or not cash is actually distributed to such
holder.
POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD AND ORIGINAL ISSUE DISCOUNT
Because the Company has the option, under the terms of the Subordinated
Debentures, to defer (so long as no Debenture Event of Default has occurred and
is continuing) payments of interest by extending interest payment periods for
up to 20 consecutive quarters, all of the stated interest payments on the
Subordinated Debentures will be treated as OID. Holders of debt instruments
issued with OID must include that discount in income on an economic
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accrual basis before the receipt of cash attributable to the interest,
regardless of their method of tax accounting. Generally, all of a holder's
taxable interest income with respect to the Subordinated Debentures will be
accounted for as OID. Actual payments and distributions of stated interest will
not, however, be separately reported as taxable income. The amount of OID that
accrues in any quarter will approximately equal the amount of the interest that
accrues on the Subordinated Debentures in that quarter at the stated interest
rate. In the event that the interest payment period is extended, holders will
continue to accrue OID approximately equal to the amount of the interest
payment due at the end of the extended interest payment period on an economic
accrual basis over the length of the extended interest payment period.
Because income on the Preferred Securities will constitute interest income
generally and OID specifically, corporate holders of Preferred Securities will
not be entitled to a dividends-received deduction with respect to any income
recognized with respect to the Preferred Securities.
MARKET DISCOUNT AND ACQUISITION PREMIUM
Holders of Preferred Securities other than a holder who purchased the
Preferred Securities upon original issuance may be considered to have acquired
their undivided interests in the Subordinated Debentures with "market
discount" or "acquisition premium" as such phrases are defined for United
States federal income tax purposes. Such holders are advised to consult their
tax advisors as to the income tax consequences of the acquisition, ownership
and disposition of the Preferred Securities.
RECEIPT OF SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF 1ST CAPITAL
Under certain circumstances, as described under "Description of the
Preferred Securities--Redemption or Exchange" and "--Liquidation Distribution
Upon Termination," the Subordinated Debentures may be distributed to holders
of Preferred Securities upon a liquidation of 1st Capital. Under current United
States federal income tax law, such a distribution would be treated as a
nontaxable event to each such holder and would result in such holder having an
aggregate tax basis in the Subordinated Debentures received in the liquidation
equal to such holder's aggregate tax basis in the Preferred Securities
immediately before the distribution. A holder's holding period in the
Subordinated Debentures so received in liquidation of 1st Capital would include
the period for which such holder held the Preferred Securities.
If, however, a Tax Event occurs which results in 1st Capital being treated
as an association taxable as a corporation, the distribution would likely
constitute a taxable event to holders of the Preferred Securities. Under
certain circumstances described herein, the Subordinated Debentures may be
redeemed for cash and the proceeds of such redemption distributed to holders in
redemption of their Preferred Securities. Under current law, such a redemption
would, for United States federal income tax purposes, constitute a taxable
disposition of the redeemed Preferred Securities, and a holder would recognize
gain or loss as if the holder sold such Preferred Securities for cash. See
"Description of the Preferred Securities--Redemption or Exchange" and
"--Liquidation Distribution Upon Termination."
DISPOSITION OF PREFERRED SECURITIES
A holder that sells Preferred Securities will recognize gain or loss equal
to the difference between the amount realized on the sale of the Preferred
Securities and the holder's adjusted tax basis in such Preferred Securities. A
holder's adjusted tax basis in the Preferred Securities generally will be its
initial purchase price increased by OID previously includible in such holder's
gross income to the date of disposition and decreased by payments received on
the Preferred Securities to the date of disposition. Such gain or loss will
generally be a capital gain or loss and will be a long-term capital gain or
loss if the Preferred Securities have been held for more than one year at the
time of sale.
The Preferred Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
Subordinated Debentures. A holder that disposes of its Preferred Securities
between record dates for payments of distributions thereon will be required to
include accrued but unpaid interest on the Subordinated Debentures through the
date of disposition in income as ordinary income, and to add such amount to its
adjusted tax basis in its pro rata share of the underlying Subordinated
Debentures deemed disposed of. To the extent the selling price is less than the
holder's adjusted tax basis (which basis will include, in the form of OID, all
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accrued but unpaid interest), a holder will recognize a capital loss. Subject
to certain limited exceptions, capital losses cannot be applied to offset
ordinary income for United States federal income tax purposes.
EFFECT OF PROPOSED CHANGES IN TAX LAWS
On March 19, 1996, President Clinton proposed certain tax law changes that
would, among other things, generally deny corporate issuers a deduction for
interest in respect of certain debt obligations issued on or after December 7,
1995 (the "1996 Proposed Legislation") if such debt obligations have a
maximum term in excess of 20 years and are not shown as indebtedness on the
issuer's applicable consolidated balance sheet. On March 29, 1996, Senate
Finance Committee Chairman William V. Roth, Jr. and House Ways and Means
Committee Chairman Bill Archer issued a joint statement (the "Joint
Statement") indicating their intent that certain legislative proposals
initiated by the Clinton administration, including the 1996 Proposed
Legislation, that may be adopted by either of the tax-writing committees of
Congress would have an effective date that is no earlier than the date of
"appropriate Congressional action." In addition, subsequent to the
publication of the Joint Statement, Senator Daniel Patrick Moynihan and
Representatives Sam M. Gibbons and Charles B. Rangel wrote letters to Treasury
Department officials concurring with the views expressed in the Joint
Statement. Neither the 1996 Proposed Legislation nor similar legislation was
enacted during the 104th Congress. On February 6, 1997, President Clinton
proposed in the administration's fiscal year 1998 budget certain tax law
changes (the "1997 Proposed Legislation") that would, among other things,
generally deny corporate issuers a deduction for interest or OID in respect of
certain debt obligations if such debt obligations have a maximum term in excess
of 15 years and are not shown as indebtedness on the issuer's applicable
consolidated balance sheet. The 1997 Proposed Legislation also contains a
provision that would deny a deduction to corporate issuers for interest or OID
with respect to debt instruments that have a maximum term of more than 40 years
(including rights to extend, renew or relend), or are payable in stock of the
issuer or a related party. The U.S. Treasury Department's summary of the 1997
Proposed Legislation states that the above provisions regarding the deduction
of interest would generally be effective for instruments issued on or after the
date of first Congressional committee action with respect to the 1997 Proposed
Legislation. The Ways and Means Committee began a full committee hearing on the
President's fiscal 1998 budget on February 11, 1997. There can be no assurance
that the effective date guidance in the 1997 Proposed Legislation will be
adopted if the proposed change to the tax law is enacted, or that other
legislation enacted after the date hereof will not otherwise adversely affect
the ability of the Company to deduct the interest payable on the Subordinated
Debentures. Consequently, there can be no assurance that a Tax Event will not
occur. A Tax Event would permit the Company, upon approval of the Federal
Reserve if then required under applicable capital guidelines or policies of the
Federal Reserve, to cause a redemption of the Preferred Securities before, as
well as after, March 31, 2002. See "Description of the Subordinated
Debentures--Redemption or Exchange" and "Description of the Preferred
Securities--Redemption or Exchange--Tax Event Redemption, Capital Treatment
Event Redemption or Investment Company Event Redemption."
BACKUP WITHHOLDING AND INFORMATION REPORTING
The amount of OID accrued on the Preferred Securities held of record by
individual citizens or residents of the United States, or certain trusts,
estates, and partnerships, will be reported to the Internal Revenue Service on
Forms 1099, which forms should be mailed to such holders of Preferred
Securities by January 31 following each calendar year. Payments made on, and
proceeds from the sale of, the Preferred Securities may be subject to a
"backup" withholding tax (currently at 31%) unless the holder complies with
certain identification and other requirements. Any amounts withheld under the
backup withholding rules will be allowed as a credit against the holder's
United States federal income tax liability, provided the required information
is provided to the Internal Revenue Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON THE
PARTICULAR SITUATION OF A HOLDER OF PREFERRED SECURITIES. HOLDERS OF PREFERRED
SECURITIES SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES
FEDERAL OR OTHER TAX LAWS.
46
<PAGE> 53
ERISA CONSIDERATIONS
Employee benefit plans that are subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Code
("Plans"), generally may purchase Preferred Securities, subject to the
investing fiduciary's determination that the investment in Preferred Securities
satisfies ERISA's fiduciary standards and other requirements applicable to
investments by the Plan.
In any case, the Company and/or any of its affiliates may be considered a
"party in interest" (within the meaning of ERISA) or a "disqualified
person" (within the meaning of Section 4975 of the Code) with respect to
certain plans (generally, Plans maintained or sponsored by, or contributed to
by, any such persons with respect to which the Company or an affiliate is a
fiduciary or Plans for which the Company or an affiliate provides services).
The acquisition and ownership of Preferred Securities by a Plan (or by an
individual retirement arrangement or other Plans described in Section
4975(e)(1) of the Code) with respect to which the Company or any of its
affiliates is considered a party in interest or a disqualified person may
constitute or result in a prohibited transaction under ERISA or Section 4975 of
the Code, unless such Preferred Securities are acquired pursuant to and in
accordance with an applicable exemption.
As a result, Plans with respect to which the Company or any of its
affiliates is a party in interest or a disqualified person should not acquire
Preferred Securities unless such Preferred Securities are acquired pursuant to
and in accordance with an applicable exemption. Any other Plans or other
entities whose assets include Plan assets subject to ERISA or Section 4975 of
the Code proposing to acquire Preferred Securities should consult with their
own counsel.
UNDERWRITING
The Underwriters named below, represented by Stifel, Nicolaus & Company,
Incorporated (the "Representative"), have severally agreed, subject to the
terms and conditions set forth in the Underwriting Agreements, the forms of
which are filed as exhibits to the Registration Statement of which this
Prospectus forms a part, to purchase from 1st Capital the number of Preferred
Securities set forth opposite their respective names below. The several
Underwriters have agreed in the Underwriting Agreements, subject to the terms
and conditions set forth therein, to purchase all the Preferred Securities
offered hereby if any of the Preferred Securities are purchased. In the event
of default by an Underwriter, the Underwriting Agreements provide that, in
certain circumstances, purchase commitments of the nondefaulting Underwriters
may be increased or the Underwriting Agreement may be terminated.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
FIXED RATE FLOATING RATE
UNDERWRITER PREFERRED SECURITIES PREFERRED SECURITIES
----------- -------------------- --------------------
<S> <C> <C>
Stifel, Nicolaus & Company, Incorporated..........
--------- ---------
Total......................................... 1,000,000 1,000,000
========= =========
</TABLE>
The Representative has advised 1st Capital that it proposes initially to
offer the Preferred Securities to the public at the public offering price set
forth on the cover page of this Prospectus, and to certain dealers at such
price less a concession not in excess of $ per Preferred Security. The
Underwriters may allow, and such dealers may reallow, a discount not in excess
of $ per Preferred Security to certain other dealers. After the initial
public offering, the public offering price, concession and discount may be
changed.
In view of the fact that the proceeds of the sale of the Preferred
Securities will be used to purchase the Subordinated Debentures of the Company,
the Underwriting Agreements provide that the Company will pay as compensation
to the Underwriters arranging the investment therein of such proceeds, an
amount in immediately available funds of $ per Preferred Security (or
$ in the aggregate) for the accounts of the several Underwriters.
Each of 1st Capital I and 1st Capital II has granted the Underwriters an
option to purchase up to an additional 100,000 of its Preferred Securities, for
a total of 200,000 Preferred Securities, at the initial public offering price.
Such options, which expire 30 days from the date of this Prospectus, may be
exercised solely to cover over-allotments. To
47
<PAGE> 54
the extent that the Underwriters exercise either or both of such options, each
of the Underwriters will have a firm commitment, subject to certain conditions,
to purchase approximately the same percentage of the additional Preferred
Securities that the number of Preferred Securities to be purchased initially by
the Underwriter is of the 2,000,000 Preferred Securities initially purchased by
the Underwriters.
To the extent that the Underwriters exercise either or both of their
options to purchase additional Preferred Securities, either or both of 1st
Capital I and 1st Capital II, as the case may be, will issue and sell to the
Company additional Common Securities in such aggregate Liquidation Amount as is
required for the Company to continue to hold Common Securities in an Aggregate
Liquidation amount equal to at least 3% of the total capital of such entity and
the Company will issue and sell to either or both of 1st Capital I and 1st
Capital II, as the case may be, Subordinated Debentures in an aggregate
principal amount equal to the total aggregate Liquidation Amount of the
additional Preferred Securities being purchased pursuant to the option and the
additional Common Securities.
During a period of 30 days from the date of this Prospectus, neither 1st
Capital nor the Company will, subject to certain exceptions, without the prior
written consent of the Representative, directly or indirectly, sell, offer to
sell, grant any option for sale of, or otherwise dispose of, any Preferred
Securities, any security convertible into or exchangeable into or exercisable
for Preferred Securities or Subordinated Debentures or any debt securities
substantially similar to the Subordinated Debentures or equity securities
substantially similar to the Preferred Securities (except for Subordinated
Debentures and the Preferred Securities offered hereby).
Applicaton has been made to have the Preferred Securities approved for
quotation on The Nasdaq Stock Market's National Market. The Representative has
advised 1st Capital that it presently intends to make a market in the Preferred
Securities after the commencement of trading on The Nasdaq Stock Market's
National Market, but no assurances can be made as to the liquidity of such
Preferred Securities or that an active and liquid trading market will develop
or, if developed, that it will continue. The offering price and distribution
rate have been determined by negotiations among representatives of the Company
and the Underwriters, and the offering price of the Preferred Securities may
not be indicative of the market price following the offering. The
Representative will have no obligation to make a market in the Preferred
Securities, however, and may cease market-making activities, if commenced, at
any time.
1st Capital and the Company have agreed to indemnify the Underwriters
against, or contribute to payments that the Underwriters may be required to
make in respect of, certain liabilities, including liabilities under the
Securities Act.
VALIDITY OF SECURITIES
Certain matters of Delaware law relating to the validity of the Preferred
Securities, the enforceability of the Trust Agreement and the formation of 1st
Capital will be passed upon by Richards, Layton & Finger, special Delaware
counsel to the Company and 1st Capital. Certain legal matters for the Company
and 1st Capital, including the validity of the Guarantee and the Subordinated
Debentures will be passed upon for the Company and 1st Capital by Lewis, Rice &
Fingersh, L.C., St. Louis, Missouri, counsel to the Company and 1st Capital.
Certain legal matters will be passed upon for the Underwriters by Bryan Cave
LLP, St. Louis, Missouri. Lewis, Rice & Fingersh, L.C. and Bryan Cave LLP will
rely on the opinion of Richards, Layton & Finger as to matters of Delaware law.
Certain matters relating to United States federal income tax considerations
will be passed upon for the Company by Lewis, Rice & Fingersh, L.C.
EXPERTS
The consolidated financial statements of the Company and its subsidiaries
incorporated herein by reference to the Company's annual Report on Form 10-K
for the year ended December 31, 1996 have been audited by Coopers & Lybrand
LLP, independent certified public accountants, as stated in their report, which
report is incorporated herein by reference and has been so incorporated in
reliance upon the authority of said firm as experts in accounting and auditing.
48
<PAGE> 55
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following document, previously filed by the Company with the Securities
and Exchange Commission (the "Commission") pursuant to Section 13 of the
Exchange Act, is incorporated herein by reference:
The Company's Annual Report on Form 10-K for the year ended December
31, 1996.
All reports and any definitive proxy or information statements filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Preferred Securities offered hereby shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A
COPY OF ANY OR ALL OF THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE (OTHER
THAN EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED BY
REFERENCE IN SUCH DOCUMENTS). WRITTEN REQUESTS FOR SUCH COPIES SHOULD BE
DIRECTED TO LARRY E. LENTYCH, SENIOR VICE PRESIDENT, TREASURER AND CHIEF
FINANCIAL OFFICER, 1ST SOURCE CORPORATION, 100 NORTH MICHIGAN STREET, SOUTH
BEND, INDIANA 46601. TELEPHONE REQUESTS MAY BE DIRECTED TO (219) 235-2000.
AVAILABLE INFORMATION
This Prospectus constitutes a part of a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Company and 1st Capital with the Commission under the
Securities Act, with respect to the Preferred Securities and the Subordinated
Debentures. This Prospectus does not contain all of the information set forth
in such Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission, although it does
include a summary of the material terms of the Indenture and the Trust
Agreement. Reference is made to such Registration Statement and to the exhibits
relating thereto for further information with respect to the Company, 1st
Capital, the Preferred Securities and the Subordinated Debentures. Any
statements contained herein concerning the provisions of any document filed as
an exhibit to the Registration Statement or otherwise filed with the Commission
or incorporated by reference herein are not necessarily complete, and, in each
instance, reference is made to the copy of such document so filed for a more
complete description of the matter involved. Each such statement is qualified
in its entirety by such reference.
The Company is subject to the informational requirements of the Exchange
Act and, in accordance therewith, files reports, proxy statements and other
information with the Commission. 1st Capital is not currently subject to the
information reporting requirements of the Exchange Act and although 1st Capital
will become subject to such requirements upon the effectiveness of the
Registration Statement, it is not expected that 1st Capital will be filing
separate reports under the Exchange Act. The Company's reports, proxy
statements and other information can be inspected and copied at the following
public reference facilities maintained by the Commission: 450 Fifth Street,
N.W., Washington, D.C. 20549; 7 World Trade Center, Suite 1300, New York, New
York 10048; and the Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of such material may also be obtained by
mail from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, upon payment of prescribed rates. The
Commission maintains an Internet web site that contains reports, proxy and
information statements and other information regarding issuers who file
electronically with the Commission. The address of that site is
http://www.sec.gov. In addition, reports, proxy statements and other
information concerning the Company may be inspected at the offices of the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.
No separate financial statements of 1st Capital have been included herein.
The Company does not consider that such financial statements would be material
to holders of Preferred Securities because (i) all of the voting securities of
1st Capital will be owned by the Company, a reporting company under the
Exchange Act, (ii) 1st Capital has no independent operations but exists for the
exclusive purposes of issuing the Trust Securities representing undivided
49
<PAGE> 56
beneficial interests in the assets of 1st Capital, investing the gross proceeds
of the Trust Securities in Subordinated Debentures issued by the Company and
engaging in only those other activities necessary, advisable, or incidental
thereto, and (iii) the obligations of the Company described herein to provide
certain indemnities in respect of and be responsible for certain costs,
expenses, debts and liabilities of 1st Capital under the Indenture and pursuant
to the Trust Agreement, the Guarantee issued by the Company with respect to the
Preferred Securities, the Subordinated Debentures purchased by 1st Capital and
the related Indenture, taken together, constitute, in the belief of the Company
and 1st Capital, a full and unconditional guarantee of payments due on the
Preferred Securities. See "Description of the Subordinated Debentures" and
"Description of the Guarantee."
50
<PAGE> 57
- -------------------------------------------------------------------------------
<TABLE>
TABLE OF CONTENTS
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................... 2
Selected Consolidated Financial Data......................... 10
Risk Factors................................................. 11
Use of Proceeds.............................................. 17
Market for the Preferred Securities.......................... 17
Accounting Treatment......................................... 17
Capitalization............................................... 18
Description of the Preferred Securities...................... 19
Description of the Subordinated Debentures................... 31
Description of the Guarantee................................. 40
Relationship Among the Preferred Securities, the Subordinated
Debentures and the Guarantee............................... 42
Certain Federal Income Tax Consequences...................... 44
ERISA Considerations......................................... 47
Underwriting................................................. 47
Validity of Securities....................................... 48
Experts...................................................... 48
Incorporation of Certain Documents by Reference.............. 49
Available Information........................................ 49
</TABLE>
------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY 1ST SOURCE
CORPORATION, 1ST SOURCE CAPITAL TRUST I, 1ST SOURCE CAPITAL TRUST II OR THE
UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF 1ST SOURCE CORPORATION SINCE THE DATE HEREOF OR THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY ANY SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1st SOURCE(R)
CORPORATION
1,000,000 PREFERRED SECURITIES
1ST SOURCE
CAPITAL TRUST I
% CUMULATIVE TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
GUARANTEED, AS DESCRIBED HEREIN, BY
1ST SOURCE
CORPORATION
AND
$25,000,000
% SUBORDINATED DEBENTURES
OF
1ST SOURCE
CORPORATION
-------------------
1,000,000 PREFERRED SECURITIES
1ST SOURCE
CAPITAL TRUST II
FLOATING RATE CUMULATIVE TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
GUARANTEED, AS DESCRIBED HEREIN, BY
1ST SOURCE
CORPORATION
AND
$25,000,000
FLOATING RATE SUBORDINATED DEBENTURES
OF
1ST SOURCE
CORPORATION
-------------------
Prospectus
, 1997
-------------------
STIFEL, NICOLAUS & COMPANY
INCORPORATED
- -------------------------------------------------------------------------------
<PAGE> 58
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with this offering are as set forth in
the following table:
<TABLE>
<S> <C>
SEC Registration Fee.................................................. $ 16,667
NASD Filing Fee....................................................... 6,500
Nasdaq Listing Fee.................................................... 11,000
Blue Sky Qualification Fees and Expenses.............................. 3,000
Accounting Fees and Expenses.......................................... 40,000
Legal Fees and Expenses............................................... 100,000
Trustees' Fees and Expenses........................................... 22,000
Printing and Engraving Expenses....................................... 33,000
Transfer and Registrar Fees........................................... 4,000
Miscellaneous......................................................... 13,833
--------
Total......................................................... $250,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 23-1-37-9 of the Indiana Business Corporation Law (the "Indiana
Law") provides for "mandatory indemnification," unless limited by the
articles of incorporation, by a corporation against reasonable expenses
incurred by a director who is wholly successful, on the merits or otherwise, in
the defense of any proceeding to which the director was a party by reason of
the director being or having been a director of the corporation. Section
23-1-37-10 of the Indiana Law states that a corporation may, in advance of the
final disposition of a proceeding, reimburse reasonable expenses incurred by a
director who is a party to a proceeding if the director furnishes the
corporation with a written affirmation of the director's good faith belief that
the director has met the standard of conduct required by Section 23-1-37-8 of
the Indiana Law, that the director will repay the advance if it is ultimately
determined that he did not meet the standard of conduct required by Section
23-1-37-8 of the Indiana Law, and that those making the decision to reimburse
the director determine that the facts then known would not preclude
indemnification under the Indiana Law.
The Company's Articles of Incorporation (the "Articles") provide that the
Company shall, to the fullest extent provided under the Indiana Law, indemnify
every person who is or was a director of the Company, to advance expenses to
every person who is or was a director of the Company to the fullest extent
provided under Indiana Law and to indemnify and advances expenses to every
person who is or was an officer of the Company to the same extent as if he or
she was a director to the Company. The Articles further provide that the
foregoing indemnification and advance of expenses provisions apply when
directors or officers of the Company are serving in their official capacity
with the Company, when serving at the Company's request while a director or
officer of the Company as a director, officer, partner, trustee, employee or
agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, whether for profit or not, and when serving
as a director or officer of any corporation at least 80% of the voting stock of
which is owned by the Company.
The Bylaws of the Company provide that the Company shall indemnify every
person who is or was a director or officer of the Company against all liability
and reasonable expenses actually incurred by such person in his or her
"Official Capacity" (as defined below), provided that such person is
determined to have met the standard of conduct specified in the Bylaws and
described below. The Bylaws further provide that every person who is or was a
director or officer of the Company shall be indemnified by the Company against
reasonable expenses actually incurred by such person in connection with any
"Proceeding" (as defined below) to which such person was a party because of
such person serving in his or her Official Capacity if such person was wholly
successful, on the merits or otherwise, in the defense of such Proceeding.
Finally, the Bylaws provide that the Company may also pay for or reimburse the
reasonable expenses incurred by any person who was or is a director or officer
of the Company in connection with any
II-1
<PAGE> 59
Proceeding to which such person is a party because of such person serving in
his or her Official Capacity in advance of final disposition of the Proceeding
if the person (1) affirms in writing his or her good faith belief that he or
she has met the standard of conduct specified in the Bylaws, (2) undertakes to
repay the advance if it is ultimately determined that the person did not meet
such standard of conduct and (3) the Company determines, based upon the facts
then known to it, that such person would ultimately be entitled to
indemnification upon conclusion of the Proceeding in question.
The Bylaws provide that the standard of conduct for any act or omission is
as follows: (1) in the case of any criminal Proceeding, the person either has
reasonable cause to believe that his or her conduct was lawful or had no
reasonable cause to believe that his or her conduct was unlawful, and (2) in
all other cases, either (a)(i) the person's conduct was in good faith and (ii)
the person reasonably believed that his or her conduct was in the Company's
best interest or, under circumstances specified in clause (c) of the definition
of "Official Capacity" below, not opposed to the Company's best interests or
(b) the person's breach of or failure to act in accordance with the standard
set forth in clause (2)(a) above did not constitute willful misconduct or
recklessness. The Bylaws further provide that a person's conduct with respect
to an employee benefit plan for a purpose which the person reasonably believed
to be in the interests of the participants in and beneficiaries of the plan is
conduct that satisfies the requirements of clause (2)(b) above, and that the
termination of a Proceeding by judgment, order, agreement, or settlement, or
upon conviction or a plea of nolo contendere, or the equivalent of any of the
foregoing, is not, of itself, determinative that the person did not meet the
standard of conduct.
As used in the Bylaws, the term "Official Capacity" means: (a) when used
with respect to a director, the position of director of the Company, (b) when
used with respect to an officer, the office in the Company held by an officer,
and (c) when used by a person while a director or officer, any service by a
person while a director or officer of the Company at the Company's specific
request, as a director, officer, partner, trustee, employee or agent of a
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, whether for profit or not. The Bylaws further provide that, for the
purposes described herein, a person is considered to be serving an employee
benefit plan at the Company's specific request if the person's duties to the
Company also impose duties on, or otherwise involve services by, such person to
the plan or to participants in or beneficiaries of the plan.
As used in the Bylaws, the term "Proceeding" means any threatened,
pending or completed action, suit, proceeding or appeal therefrom, whether
civil, criminal, administrative, regulatory or investigative, and whether
formal or informal.
In the Bylaws, the Company reserves the right to purchase and maintain
insurance for the matters covered by the foregoing provisions and to the extent
of such insurance payments, such Bylaw provision shall not be effective.
Pursuant to a policy of directors' and officers' liability insurance with total
annual limits of $12,500,000, the Company's directors and officers are insured,
subject to the limits, retention, exceptions and other terms and conditions of
such policy, against liability for any actual or alleged breach of duty,
neglect, error, misstatement, misleading statement, omission or other act done
or wrongfully attempted while acting in their capacities as directors or
officers of the Company.
II-2
<PAGE> 60
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
1.1 Form of Underwriting Agreement for Fixed Rate Preferred Securities of 1st
Capital I.
1.2 Form of Underwriting Agreement for Floating Rate Preferred Securities of
1st Capital II.
4.1 Form of Indenture for Fixed Rate Subordinated Debentures of 1st Source
Corporation.
4.2 Form of Fixed Rate Subordinated Debenture of 1st Source Corporation
(included as an exhibit to Exhibit 4.1).
4.3 Restated Certificate of Trust of 1st Capital I dated as of February 27,
1997.
4.4 Amended and Restated Trust Agreement of 1st Capital I dated as of February
27, 1997.
4.5 Form of Amended and Restated Trust Agreement of 1st Capital I.
4.6 Form of Fixed Rate Preferred Security Certificate of 1st Capital I
(included as an exhibit to Exhibit 4.5).
4.7 Form of Fixed Rate Preferred Securities Guarantee Agreement for 1st
Capital I.
4.8 Form of Agreement as to Expenses and Liabilities pertaining to 1st
Capital I (included as an exhibit to Exhibit 4.5).
4.9 Form of Indenture for Floating Rate Subordinated Debentures of 1st Source
Corporation.
4.10 Form of Floating Rate Subordinated Debenture of 1st Source Corporation
(included as an exhibit to Exhibit 4.9).
4.11 Certificate of Trust of 1st Capital II dated as of February 27, 1997.
4.12 Trust Agreement of 1st Capital II dated as of February 27, 1997.
4.13 Form of Amended and Restated Trust Agreement of 1st Capital II.
4.14 Form of Floating Rate Preferred Security Certificate of 1st Capital II
(included as an exhibit to Exhibit 4.13).
4.15 Form of Floating Rate Preferred Securities Guarantee Agreement for 1st
Capital II.
4.16 Form of Agreement as to Expenses and Liabilities pertaining to 1st
Capital II (included as an exhibit to Exhibit 4.13).
5.1 Opinion of Lewis, Rice & Fingersh, L.C. as to the validity of the
issuance of the Fixed Rate Subordinated Debentures and the Floating Rate
Subordinated Debentures.
5.2 Opinion of Richards, Layton & Finger, special Delaware counsel, as to the
legality of the Fixed Rate Preferred Securities to be issued by 1st
Capital I and the Floating Rate Preferred Securities to be issued by 1st
Capital II.
8.1 Opinion of Lewis, Rice & Fingersh, L.C. as to certain federal income tax
matters.
12.1 Statement Regarding Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Coopers & Lybrand LLP, Independent Auditors.
23.2 Consent of Lewis, Rice & Fingersh, L.C. (included in their opinions filed
herewith as Exhibits 5.1 and 8.1).
23.3 Consent of Richards, Layton & Finger (included in their opinion filed
herewith as Exhibit 5.2).
24.1 Power of Attorney (included on the signature page).
25.1 Form T-1 Statement of Eligibility of State Street Bank and Trust Company
to act as trustee under the Indenture for Fixed Rate Subordinated
Debentures of 1st Source Corporation.
25.2 Form T-1 Statement of Eligibility of State Street Bank and Trust Company
to act as trustee under Amended and Restated Trust Agreement of 1st
Capital I.
25.3 Form T-1 Statement of Eligibility of State Street Bank and Trust Company
to act as trustee under the Preferred Securities Guarantee Agreement for
1st Capital I.
25.4 Form T-1 Statement of Eligibility of State Street Bank and Trust Company
to act as trustee under the Indenture for Floating Rate Subordinated
Debentures of 1st Source Corporation.
25.5 Form T-1 Statement of Eligibility of State Street Bank and Trust Company
to act as trustee under Amended and Restated Trust Agreement of 1st
Capital II.
25.6 Form T-1 Statement of Eligibility of State Street Bank and Trust Company
to act as trustee under the Preferred Securities Guarantee Agreement
for 1st Capital II.
II-3
<PAGE> 61
(b) Financial Statement Schedules--Not applicable as all required
information is contained in the financial statements and the notes thereto or
in the selected financial data.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, (the "Act") may be permitted to directors, officers and
controlling persons of the Company pursuant to the provisions described under
"Item 15--Indemnification of Directors and Officers" above, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of
the Company in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The Company hereby undertakes that: (1) For purposes of determining any
liability under the Act, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Company pursuant to Rule
424(b)(1) or (4) or 497(h) under the Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective; and (2) For
the purpose of determining any liability under the Act, each post-effective
amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-4
<PAGE> 62
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in South Bend, Indiana on February , 1997.
--
1ST SOURCE CORPORATION
By: CHRISTOPHER J. MURPHY III
-------------------------------------
Christopher J. Murphy III
President and Chief Executive Officer
Pursuant to the requirements of Securities Act of 1933, the undersigned
registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in South Bend, Indiana on February , 1997.
1ST SOURCE CAPITAL TRUST I
By: CHRISTOPHER J. MURPHY III
-------------------------------------
Christopher J. Murphy III, Trustee
By: LARRY E. LENTYCH
-------------------------------------
Larry E. Lentych, Trustee
By: WELLINGTON D. JONES III
-------------------------------------
Wellington D. Jones III, Trustee
Pursuant to the requirements of Securities Act of 1933, the undersigned
registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in South Bend, Indiana on February , 1997.
1ST SOURCE CAPITAL TRUST II
By: CHRISTOPHER J. MURPHY III
-------------------------------------
Christopher J. Murphy III, Trustee
By: LARRY E. LENTYCH
-------------------------------------
Larry E. Lentych, Trustee
By: WELLINGTON D. JONES III
-------------------------------------
Wellington D. Jones III, Trustee
II-5
<PAGE> 63
SIGNATURES
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Christopher J. Murphy III and Larry E. Lentych
and each of them (with full power to each of them to act alone), his true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective amendments)
to this Registration Statement including any Registration Statement for the
same offering that is to be effective upon filing pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<PAGE> 64
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
ERNESTINE M. RACLIN Chairman of the Board February 19, 1997
-----------------------------------
Ernestine M. Raclin
CHRISTOPHER J. MURPHY III President, Chief Executive February 19, 1997
----------------------------------- Officer and DIrector
Christopher J. Murphy III
LARRY E. LENTYCH Senior Vice President February 19, 1997
----------------------------------- (Principal Financial and
Larry E. Lentych Accounting Officer)
REV. E. WILLIAM BEAUCHAMP Director February 19, 1997
-----------------------------------
Rev. E. William Beauchamp
PAUL R. BOWLES Director February 19, 1997
-----------------------------------
Paul R. Bowles Director February 19, 1997
PHILIP J. FACCENDA Director February 19, 1997
-----------------------------------
Philip J. Faccenda
DANIEL B. FITZPATRICK Director February 19, 1997
-----------------------------------
Daniel B. Fitzpatrick
LAWRENCE E. HILER Director February 19, 1997
-----------------------------------
Lawrence E. Hiler
WILLIAM P. JOHNSON Director February 19, 1997
-----------------------------------
William P. Johnson
REX MARTIN Director February 19, 1997
-----------------------------------
Rex Martin
<S> <C> <C>
LEO J. MCKERNAN Director February 20, 1997
-----------------------------------
Leo J. McKernan
JOANN R. MEEHAN Director February 18, 1997
-----------------------------------
JoAnn R. Meehan
DANE A. MILLER, PH.D. Director February 18, 1997
-----------------------------------
Dane A. Miller, Ph.D.
RICHARD J. PFEIL Director February 19, 1997
-----------------------------------
Richard J. Pfeil
</TABLE>
II-7
<PAGE> 65
<TABLE>
EXHIBIT INDEX
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
-------- -----------
<S> <C>
1.1 Form of Underwriting Agreement for Fixed Rate Preferred Securities of 1st Capital I.
1.2 Form of Underwriting Agreement for Floating Rate Preferred Securities of 1st Capital II.
4.1 Form of Indenture for Fixed Rate Subordinated Debentures of 1st Source Corporation.
4.2 Form of Fixed Rate Subordinated Debenture of 1st Source Corporation (included as an exhibit to Exhibit 4.1).
4.3 Restated Certificate of Trust of 1st Capital I dated as of February 27, 1997.
4.4 Amended and Restated Trust Agreement of 1st Capital I dated as of February 27, 1997.
4.5 Form of Amended and Restated Trust Agreement of 1st Capital I.
4.6 Form of Fixed Rate Preferred Security Certificate of 1st Capital I (included as an exhibit to Exhibit 4.5).
4.7 Form of Fixed Rate Preferred Securities Guarantee Agreement for 1st Capital I.
4.8 Form of Agreement as to Expenses and Liabilities pertaining to 1st Capital I (included as an exhibit to Exhibit
4.5).
4.9 Form of Indenture for Floating Rate Subordinated Debentures of 1st Source Corporation.
4.10 Form of Floating Rate Subordinated Debenture of 1st Source Corporation (included as an exhibit to Exhibit 4.9).
4.11 Certificate of Trust of 1st Capital II dated as of February 27, 1997.
4.12 Trust Agreement of 1st Capital II dated as of February 27, 1997.
4.13 Form of Amended and Restated Trust Agreement of 1st Capital II.
4.14 Form of Floating Rate Preferred Security Certificate of 1st Capital II (included as an exhibit to Exhibit 4.13).
4.15 Form of Floating Rate Preferred Securities Guarantee Agreement for 1st Capital II.
4.16 Form of Agreement as to Expenses and Liabilities pertaining to 1st Capital II (included as an exhibit to Exhibit
4.13).
5.1 Opinion of Lewis, Rice & Fingersh, L.C. as to the validity of the issuance of the Fixed Rate Subordinated
Debentures and the Floating Rate Subordinated Debentures.
5.2 Opinion of Richards, Layton & Finger, special Delaware counsel, as to the legality of the Fixed Rate Preferred
Securities to be issued by 1st Capital I and the Floating Rate Preferred Securities to be issued by 1st Capital
II.
8.1 Opinion of Lewis, Rice & Fingersh, L.C. as to certain federal income tax matters.
12.1 Statement Regarding Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Coopers & Lybrand LLP, Independent Auditors.
23.2 Consent of Lewis, Rice & Fingersh, L.C. (included in their opinions filed herewith as Exhibits 5.1 and 8.1).
23.3 Consent of Richards, Layton & Finger (included in their opinion filed herewith as Exhibit 5.2).
24.1 Power of Attorney (included on the signature page).
25.1 Form T-1 Statement of Eligibility of State Street Bank and Trust Company to act as trustee under the Indenture for
Fixed Rate Subordinated Debentures of 1st Source Corporation.
25.2 Form T-1 Statement of Eligibility of State Street Bank and Trust Company to act as trustee under Amended and
Restated Trust Agreement of 1st Capital I.
25.3 Form T-1 Statement of Eligibility of State Street Bank and Trust Company to act as trustee under the Preferred
Securities Guarantee Agreement for 1st Capital I.
25.4 Form T-1 Statement of Eligibility of State Street Bank and Trust Company to act as trustee under the Indenture for
Floating Rate Subordinated Debentures of 1st Source Corporation.
25.5 Form T-1 Statement of Eligibility of State Street Bank and Trust Company to act as trustee under Amended and
Restated Trust Agreement of 1st Capital II.
25.6 Form T-1 Statement of Eligibility of State Street Bank and Trust Company to act as trustee under the Preferred
Securities Guarantee Agreement for 1st Capital II.
</TABLE>
II-8
<PAGE> 1
1,000,000 Preferred Securities
1st Source Capital Trust I
____% Cumulative Trust Preferred Securities
(Liquidation Amount of $25 per Preferred Security)
UNDERWRITING AGREEMENT
----------------------
March ___, 1997
STIFEL, NICOLAUS & COMPANY, INCORPORATED
As Representative of the Several Underwriters
named in Schedule I hereto
500 North Broadway
St. Louis, Missouri 63102
Dear Sirs:
1st Source Corporation, an Indiana corporation (the "Company"), and
its financing subsidiary, 1st Source Capital Trust I, a Delaware business trust
(the "Trust", and hereinafter together with the Company, the "Offerors"),
propose that the Trust issue and sell to the several underwriters listed on
Schedule I hereto (the "Underwriters"), pursuant to the terms of this
Agreement, 1,000,000 of the Trust's _____% Cumulative Trust Preferred
Securities, with a liquidation amount of $25.00 per preferred security (the
"Preferred Securities"), to be issued under the Trust Agreement (as
hereinafter defined), the terms of which are more fully described in the
Prospectus (as hereinafter defined). The aforementioned 1,000,000 Preferred
Securities to be sold to the Underwriter are herein called the "Firm
Preferred Securities". Solely for the purpose of covering over-allotments in
the sale of the Firm Preferred Securities, the Offerors further propose that
the Trust issue and sell to the Underwriters, at their option, up to an
additional 100,000 Preferred Securities (the "Option Preferred Securities")
upon exercise of the over-allotment option granted in Section 1 hereof. The
Firm Preferred Securities and any Option Preferred Securities are herein
collectively referred to as the "Designated Preferred Securities". You are
acting as representative of the Underwriters and in such capacity are
sometimes herein referred to as the "Representative."
The Offerors hereby confirm as follows their agreement with each of
the Underwriters in connection with the proposed purchase of the Designated
Preferred Securities.
1. SALE, PURCHASE AND DELIVERY OF DESIGNATED PREFERRED SECURITIES;
---------------------------------------------------------------
DESCRIPTION OF DESIGNATED PREFERRED SECURITIES.
- -----------------------------------------------
(a) On the basis of the representations, warranties and agreements
herein contained, and subject to the terms and conditions herein set forth,
the Offerors hereby agree that the Trust shall issue and sell to each of the
Underwriters and each of the Underwriters agrees,
<PAGE> 2
severally and not jointly, to purchase from the Trust, at a purchase price of
$25.00 per share (the "Purchase Price"), the respective number of Firm
Preferred Securities set forth opposite the name of such Underwriter in
Schedule I hereto. Because the proceeds from the sale of the Firm Preferred
Securities will be used to purchase from the Company its Debentures (as
hereinafter defined and as described in the Prospectus), the Company shall pay
to each Underwriter a commission of $_____ per Firm Preferred Security
purchased (the "Firm Preferred Securities Commission"). The Representative
may by notice to the Company amend Schedule I to add, eliminate or substitute
names set forth therein (other than to eliminate the name of the
Representative) and to amend the number of firm Preferred Securities to be
purchased by any firm or corporation listed thereon, provided that the total
number of Firm Preferred Securities listed on Schedule I shall equal
1,000,000.
In addition, on the basis of the representations, warranties and
agreements herein contained and subject to the terms and conditions herein
set forth, the Trust hereby grants to the Underwriters, severally and not
jointly, an option to purchase all or any portion of the 100,000 Option
Preferred Securities, and upon the exercise of such option in accordance with
this Section 1, the Offerors hereby agree that the Trust shall issue and sell
to the Underwriters, severally and not jointly, all or any portion of the
Option Preferred Securities at the same Purchase Price per share paid for the
Firm Preferred Securities. If any Option Preferred Securities are to be
purchased, each Underwriter, severally and not jointly, agrees to purchase
from the Trust that proportion (subject to adjustment as you may determine to
avoid fractional shares) of the number of Option Preferred Securities to be
purchased that the number of Firm Preferred Securities set forth opposite the
name of such Underwriter in Schedule I hereto (or such number increased as
set forth in Section 9 hereof) bears to 1,000,000. Because the proceeds from
the sale of the Option Preferred Securities will be used to purchase from the
Company its Debentures, the Company shall pay to the Underwriters a
commission of $_____ per Option Preferred Security for each Option Preferred
Security purchased (the "Option Preferred Securities Commission"). The
option hereby granted (the "Option") shall expire 30 days after the date upon
which the Registration Statement (as hereinafter defined) becomes effective
and may be exercised only for the purpose of covering over-allotments which
may be made in connection with the offering and distribution of the Firm
Preferred Securities. The Option may be exercised in whole or in part at any
time (but not more than once) by you giving notice (confirmed in writing) to
the Trust setting forth the number of Option Preferred Securities as to which
the Underwriters are exercising the Option and the time, date and place for
payment and delivery of certificates for such Option Preferred Securities.
Such time and date of payment and delivery for the Option Preferred
Securities (the "Option Closing Date") shall be determined by you, but shall
not be earlier than two nor later than five full business days after the
exercise of such Option, nor in any event prior to the Closing Date (as
hereinafter defined). The Option Closing Date may be the same as the Closing
Date.
Payment of the Purchase Price and the Firm Preferred Securities
Commission and delivery of certificates for the Firm Preferred Securities
shall be made at the offices of Stifel, Nicolaus & Company, Incorporated, 500
North Broadway, St. Louis, Missouri 63102, or such other place as shall be
agreed to by you and the Offerors, at 10:00 a.m., St. Louis time, on March
_____, 1997, or at such other time not more than five full business days
thereafter as the Offerors and you shall determine (the "Closing Date"). If
the Underwriters exercise the option to
2
<PAGE> 3
purchase any or all of the Option Preferred Securities, payment of the
Purchase Price and Option Preferred Securities Commission and delivery of
certificates for such Option Preferred Securities shall be made on the Option
Closing Date at the Underwriters' offices, or at such other place as the
Offerors and you shall determine. Such payments shall be made to an account
designated by the Trust by wire transfer or certified or bank cashier's check,
in same day funds, in the amount of the Purchase Price therefor, against
delivery by or on behalf of the Trust to you for the respective accounts of
the several Underwriters of certificates for the Designated Preferred
Securities to be purchased by the Underwriters.
The Agreement contained herein with respect to the timing of the
Closing Date and Option Closing Date is intended to, and does, constitute an
express agreement, as described in Rule 15c6-1(c) and (d) promulgated under
the 1934 Act (as defined herein), for a settlement date other than four
business days after the date of the contract.
Certificates for Designated Preferred Securities to be purchased by
the Underwriters shall be delivered by the Offerors in fully registered form
in such authorized denominations and registered in such names as you shall
request in writing not later than 12:00 noon, St. Louis time, two business
days prior to the Closing Date and, if applicable, the Option Closing Date.
Certificates for Designated Preferred Securities to be purchased by the
Underwriters shall be made available by the Offerors to you for inspection,
checking and packaging at such office as you may designate in writing not
later than 1:00 p.m., St. Louis time, on the last business day prior to the
Closing Date and, if applicable, on the last business day prior to the Option
Closing Date.
Time shall be of the essence, and delivery of the certificates for
the Designated Preferred Securities at the time and place specified pursuant
to this Agreement is a further condition of the obligations of each
Underwriter hereunder.
(b) The Offerors propose that the Trust issue the Designated
Preferred Securities pursuant to an Amended and Restated Trust Agreement
among State Street Bank and Trust Company, as Property Trustee, Wilmington
Trust Company, as Delaware Trustee, the Administrative Trustees named
therein, (collectively, the "Trustees"), and the Company, in substantially
the form heretofore delivered to the Underwriters, said Agreement being
hereinafter referred to as the "Trust Agreement". In connection with the
issuance of the Designated Preferred Securities, the Company proposes (i) to
issue its Subordinated Debentures ( the "Debentures") pursuant to an
Indenture, to be dated as of March _____, 1997, between the Company and State
Street Bank and Trust Company, as Trustee (the "Indenture") and (ii) to
guarantee certain payments on the Designated Preferred Securities pursuant to
a Guarantee Agreement between the Company and State Street Bank and Trust
Company, as guarantee trustee (the "Guarantee"), to the extent described
therein.
2. REPRESENTATIONS AND WARRANTIES.
------------------------------
(a) The Offerors jointly and severally represent and warrant to,
and agree with, each of the Underwriters that:
3
<PAGE> 4
(i) The reports filed with the Securities and Exchange
Commission (the "Commission") by the Company under the Securities
Exchange Act of 1934, as amended (the "1934 Act") and the rules and
regulations thereunder (the "1934 Act Regulations") at the time they
were filed with the Commission, complied as to form in all material
respects with the requirements of the 1934 Act and the 1934 Act
Regulations and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading.
(ii) The Offerors have prepared and filed with the Commission
a registration statement on Form S-3 (File Numbers 333-_______,
333-________-01 and 333-________-02) for the registration of the
Designated Preferred Securities, the Guarantee and $27,500,000
aggregate principal amount of Debentures under the Securities Act of
1933, as amended (the "1933 Act"), including the related prospectus
subject to completion, and one or more amendments to such
registration statement may have been so filed, in each case in
conformity in all material respects with the requirements of the 1933
Act, the rules and regulations promulgated thereunder (the "1933 Act
Regulations") and the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act") and the rules and regulations thereunder.
Copies of such registration statement, including any amendments
thereto, each Preliminary Prospectus (as defined herein) contained
therein and the exhibits, financial statements and schedules to such
registration statement, as finally amended and revised, have
heretofore been delivered by the Offerors to the Representative.
After the execution of this Agreement, the Offerors will file with
the Commission (A) if such registration statement, as it may have
been amended, has been declared by the Commission to be effective
under the 1933 Act, a prospectus in the form most recently included
in an amendment to such registration statement (or, if no such
amendment shall have been filed, in such registration statement),
with such changes or insertions as are required by Rule 430A of the
1933 Act Regulations ("Rule 430A") or permitted by Rule 424(b) of the
1933 Act Regulations ("Rule 424(b)") and as have been provided to and
not objected to by the Representative prior to (or as are agreed to
by the Representative subsequent to) the execution of this Agreement,
or (B) if such registration statement, as it may have been amended,
has not been declared by the Commission to be effective under the
1933 Act, an amendment to such registration statement, including a
form of final prospectus, necessary to permit such registration
statement to become effective, a copy of which amendment has been
furnished to and not objected to by the Representative prior to (or
is agreed to by the Representative subsequent to) the execution of
this Agreement. As used in this Agreement, the term "Registration
Statement" means such registration statement, as amended at the time
when it was or is declared effective under the 1933 Act, including
(1) all financial schedules and exhibits thereto, (2) all documents
(or portions thereof) incorporated by reference therein filed under
the 1934 Act, and (3) any information omitted therefrom pursuant to
Rule 430A and included in the Prospectus (as hereinafter defined);
the term "Preliminary Prospectus" means each prospectus subject to
completion filed with such registration statement or any amendment
thereto including all documents (or portions thereof) incorporated by
reference therein under the 1934 Act (including the prospectus
subject to completion, if any, included in the Registration Statement
and each prospectus filed pursuant to Rule 424(a) under the 1933
Act); and the
4
<PAGE> 5
term "Prospectus" means the prospectus first filed with
the Commission pursuant to Rule 424(b)(1) or (4) or, if no prospectus
is required to be filed pursuant to Rule 424(b)(1) or (4), the
prospectus included in the Registration Statement, in each case
including the financial schedules and all documents (or portions
thereof) incorporated by reference therein under the 1934 Act. The
date on which the Registration Statement becomes effective is
hereinafter referred to as the "Effective Date."
(iii) The documents incorporated by reference in the
Preliminary Prospectus or Prospectus or from which information is so
incorporated by reference, when they became effective or were filed
with the Commission, as the case may be, complied in all material
respects with the requirements of the 1934 Act and the 1934 Act
Regulations, and when read together and with the other information in
the Preliminary Prospectus or Prospectus, as the case may be, at the
time the Registration Statement became or becomes effective and at
the Closing Date and any Option Closing Date, did not or will not, as
the case may be, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(iv) No order preventing or suspending the use of any
Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) has been issued by the Commission, nor
has the Commission, to the knowledge of the Offerors, threatened to
issue such an order or instituted proceedings for that purpose. Each
Preliminary Prospectus, at the time of filing thereof, (A) complied
in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and (B) did not contain an untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty does not
-------- -------
apply to statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Offerors by
any of the Underwriters expressly for inclusion in the Prospectus
beneath the heading "Underwriting" and the last sentence on the cover
page of the Prospectus (such information referred to herein as the
"Underwriters' Information").
(v) At the Effective Date and at all times subsequent
thereto, up to and including the Closing Date and, if applicable, the
Option Closing Date, the Registration Statement and any
post-effective amendment thereto (A) complied and will comply in all
material respects with the requirements of the 1933 Act, the 1933 Act
Regulations and the Trust Indenture Act (and the rules and
regulations thereunder) and (B) did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, not misleading. At the Effective Date and at all times when
the Prospectus is required to be delivered in connection with offers
and sales of Designated Preferred Securities, including, without
limitation, the Closing Date and, if applicable, the Option Closing
Date, the Prospectus, as amended or supplemented, (A) complied and
will comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations and the Trust Indenture Act
(and the rules and regulations thereunder) and (B) did not contain
and will not
5
<PAGE> 6
contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that this
-------- -------
representation and warranty does not apply to Underwriters'
Information.
(vi) (A) The Company is duly organized, validly existing
and in good standing under the laws of the State of Indiana, with
full corporate and other power and authority to own, lease and
operate its properties and conduct its business as described in and
contemplated by the Registration Statement and the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus) and as currently being conducted and is duly registered
as a bank holding company under the Bank Holding Company Act of 1956,
as amended (the "BHC Act").
(B) The Trust has been duly created and is validly
existing as a statutory business trust in good standing under the
Delaware Business Trust Act with the power and authority (trust and
other) to own its property and conduct its business as described in
the Registration Statement and Prospectus, to issue and sell its
common securities (the "Common Securities") to the Company pursuant
to the Trust Agreement, to issue and sell the Designated Preferred
Securities, to enter into and perform its obligations under this
Agreement and to consummate the transactions herein contemplated; the
Trust has no subsidiaries and is duly qualified to transact business
and is in good standing in each jurisdiction in which the conduct of
its business or the ownership of its property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Trust; the Trust has conducted and will conduct no
business other than the transactions contemplated by this Agreement
and described in the Prospectus; the Trust is not a party to or bound
by any agreement or instrument other than this Agreement, the Trust
Agreement and the agreements and instruments contemplated by the
Trust Agreement and described in the Prospectus; the Trust has no
liabilities or obligations other than those arising out of the
transactions contemplated by this Agreement and the Trust Agreement
and described in the Prospectus; the Trust is not a party to or
subject to any action, suit or proceeding of any nature; the Trust is
not, and at the Closing Date or any Option Closing Date will not be,
to the knowledge of the Offerors, classified as an association
taxable as a corporation for United States federal income tax
purposes; and the Trust is, and as of the Closing Date or any Option
Closing Date will be, treated as a consolidated subsidiary of the
Company pursuant to generally accepted accounting principles.
(vii) The Company has 10 subsidiaries. They are listed on
Exhibit A attached hereto and incorporated herein (the
---------
"Subsidiaries"). The Company does not own or control, directly or
indirectly, more than 5% of any class of equity security of any
corporation, association or other entity other than the Subsidiaries.
1st Source Bank is referred to as the "Bank". Each Subsidiary is a
bank, corporation or business trust duly organized, validly existing
and in good standing under the laws of its respective jurisdiction of
incorporation. Each such Subsidiary has full corporate and other
power and authority to own, lease and operate its properties and to
conduct its business as described in and contemplated by the
Registration Statement and the Prospectus (or, if
6
<PAGE> 7
the Prospectus is not in existence, the most recent Preliminary
Prospectus) and as currently being conducted. The deposit accounts
of the Bank are insured by the Bank Insurance Fund administered by
the Federal Deposit Insurance Corporation (the "FDIC") up to the
maximum amount provided by law, except to the extent the Prospectus
discloses such deposit accounts are insured by the Savings
Association Insurance Fund administered by the FDIC ("SAIF") and to
such extent the deposit accounts are so insured up to the maximum
amount provided by law; and no proceedings for the modification,
termination or revocation of any such insurance are pending or, to
the knowledge of the Offerors, threatened.
(viii) The Company and each of the Subsidiaries is duly
qualified to transact business as a foreign corporation and is in
good standing in each other jurisdiction in which it owns or leases
property or conducts its business so as to require such qualification
and in which the failure to so qualify would, individually or in the
aggregate, have a material adverse effect on the condition (financial
or otherwise), earnings, business, prospects or results of operations
of the Company and the Subsidiaries on a consolidated basis. All of
the issued and outstanding shares of capital stock of the
Subsidiaries (A) have been duly authorized and are validly issued,
(B) are fully paid and nonassessable except to the extent such shares
may be deemed assessable under 12 U.S.C. Section 55 or 12 U.S.C.
Section 1831o, and (C) except as disclosed in the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus), are directly owned by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance, restriction
upon voting or transfer, preemptive rights, claim or equity. Except
as disclosed in the Prospectus, there are no outstanding rights,
warrants or options to acquire or instruments convertible into or
exchangeable for any capital stock or equity securities of the
Offerors or the Subsidiaries.
(ix) The capital stock of the Company and the equity
securities of the Trust conform to the description thereof contained
in the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus). The outstanding shares of
capital stock and equity securities of each Offeror have been duly
authorized and validly issued and are fully paid and nonassessable,
and no such shares were issued in violation of the preemptive or
similar rights of any security holder of an Offeror; no person has
any preemptive or similar right to purchase any shares of capital
stock or equity securities of the Offerors. Except as disclosed in
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), there are no outstanding rights,
options or warrants to acquire any securities of the Offerors, and
there are no outstanding securities convertible into or exchangeable
for any such securities and no restrictions upon the voting or
transfer of any capital stock of the Company or equity securities of
the Trust pursuant to the Company's corporate charter or bylaws, the
Trust Agreement or any agreement or other instrument to which an
Offeror is a party or by which an Offeror is bound.
(x) (A) The Trust has all requisite power and authority to
issue, sell and deliver the Designated Preferred Securities in
accordance with and upon the terms and conditions set forth in this
Agreement, the Trust Agreement, the Registration
7
<PAGE> 8
Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus). All corporate
and trust action required to be taken by the Offerors for the
authorization, issuance, sale and delivery of the Designated
Preferred Securities in accordance with such terms and conditions has
been validly and sufficiently taken. The Designated Preferred
Securities, when delivered in accordance with this Agreement, will be
duly and validly issued and outstanding, will be fully paid and
nonassessable undivided beneficial interests in the assets of the
Trust, will be entitled to the benefits of the Trust Agreement, will
not be issued in violation of or subject to any preemptive or similar
rights, and will conform to the description thereof in the
Registration Statement and the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) and the
Trust Agreement. None of the Designated Preferred Securities,
immediately prior to delivery, will be subject to any security
interest, lien, mortgage, pledge, encumbrance, restriction upon
voting or transfer, preemptive rights, claim, equity or other defect.
(B) The Debentures have been duly and validly
authorized, and, when duly and validly executed, authenticated and
issued as provided in the Indenture and delivered to the Trust
pursuant to the Trust Agreement, will constitute valid and legally
binding obligations of the Company entitled to the benefits of the
Indenture and will conform to the description thereof contained in
the Prospectus.
(C) The Guarantee has been duly and validly
authorized, and, when duly and validly executed and delivered to the
guarantee trustee for the benefit of the Trust, will constitute a
valid and legally binding obligation of the Company and will conform
to the description thereof contained in the Prospectus.
(D) The Agreement as to Expenses and Liabilities (the
"Expense Agreement") has been duly and validly authorized, and, when
duly and validly executed and delivered by the Company, will
constitute a valid and legally binding obligation of the Company and
will conform to the description thereof contained in the Prospectus.
(xi) The Offerors and the Subsidiaries have complied in all
material respects with all federal, state and local statutes,
regulations, ordinances and rules applicable to the ownership and
operation of their properties or the conduct of their businesses as
described in and contemplated by the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) and as currently being conducted.
(xii) The Offerors and the Subsidiaries have all material
permits, easements, consents, licenses, franchises and other
governmental and regulatory authorizations from all appropriate
federal, state, local or other public authorities ("Permits") as are
necessary to own and lease their properties and conduct their
businesses in the manner described in and contemplated by the
Registration Statement and the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) and as
currently being conducted in all material respects. All such Permits
are in full force and effect and each of the Offerors and the
Subsidiaries are in all material
8
<PAGE> 9
respects complying therewith, and no event has occurred that allows,
or after notice or lapse of time would allow, revocation or
termination thereof or will result in any other material impairment
of the rights of the holder of any such Permit, subject in each case
to such qualification as may be adequately disclosed in the
Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus). Such Permits contain no restrictions
that would materially impair the ability of the Company or the
Subsidiaries to conduct their businesses in the manner consistent
with their past practices. Neither the Offerors nor any of the
Subsidiaries have received notice or otherwise has knowledge of any
proceeding or action relating to the revocation or modification of
any such Permit.
(xiii) Neither of the Offerors nor any of the
Subsidiaries is in breach or violation of their corporate charter,
by-laws or other governing documents (including without limitation,
the Trust Agreement) in any material respect. Neither of the
Offerors nor any of the Subsidiaries are, and to the knowledge of
the Offerors no other party is, in violation, breach or default (with
or without notice or lapse of time or both) in the performance or
observance of any term, covenant, agreement, obligation,
representation, warranty or condition contained in (A) any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease, franchise, license, Permit or any other agreement or
instrument to which it is a party or by which it or any of its
properties may be bound, which such breach, violation or default
could have material adverse consequences to the Offerors and the
Subsidiaries on a consolidated basis, and to the knowledge of the
Offerors, no other party has asserted that the Offerors or any of the
Subsidiaries is in such violation, breach or default (provided that
the foregoing shall not apply to defaults by borrowers from the
Bank), or (B) except as disclosed in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus), any order, decree, judgment, rule or regulation of any
court, arbitrator, government, or governmental agency or
instrumentality, domestic or foreign, having jurisdiction over the
Offerors or the Subsidiaries or any of their respective properties
the breach, violation or default of which could have a material
adverse effect on the condition, financial or otherwise, earnings,
affairs, business, prospects, or results of operations of the
Offerors and the Subsidiaries on a consolidated basis.
(xiv) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated by
this Agreement, the Trust Agreement, the Registration Statement and
the Prospectus (or, if the Prospectus in not in existence, the most
recent Preliminary Prospectus) do not and will not conflict with,
result in the creation or imposition of any material lien, claim,
charge, encumbrance or restriction upon any property or assets of the
Offerors or the Subsidiaries or the Designated Preferred Securities
pursuant to, constitute a breach or violation of, or constitute a
default under, with or without notice or lapse of time or both, any
of the terms, provisions or conditions of the charter or by-laws of
the Company or the Subsidiaries, the Trust Agreement, the Guarantee,
the Indenture, any contract, indenture, mortgage, deed of trust, loan
or credit agreement, note, lease, franchise, license, Permit or any
other agreement or instrument to which the Offerors or the
Subsidiaries is a party or by which any of them or any of their
respective properties may be bound or any order, decree, judgment,
rule or regulation of any court, arbitrator, government, or
governmental
9
<PAGE> 10
agency or instrumentality, domestic or foreign, having jurisdiction
over the Offerors or the Subsidiaries or any of their respective
properties which conflict, creation, imposition, breach, violation or
default would have either singly or in the aggregate a material
adverse effect on the condition, financial or otherwise, earnings,
affairs, business, prospects or results of operations of the Offerors
and the Subsidiaries on a consolidated basis. No authorization,
approval, consent or order of or filing, registration or
qualification with, any person (including, without limitation, any
court, governmental body or authority) is required in connection with
the transactions contemplated by this Agreement, the Trust Agreement,
the Indenture, the Guarantee, the Registration Statement and the
Prospectus, except such as have been obtained under the 1933 Act, the
Trust Indenture Act and from the Nasdaq Stock Market's National
Market relating to the listing of the Designated Preferred
Securities, the Company's Term Loan Agreement dated as of October 2,
1995, the Company's Standby Term Loan Agreement dated September 28,
1994 and such as may be required under state securities laws or
Interpretations or Rules of the National Association of Securities
Dealers, Inc. ("NASD") in connection with the purchase and
distribution of the Designated Preferred Securities by the
Underwriters.
(xv) The Offerors have all requisite corporate power and
authority to enter into this Agreement and this Agreement has been
duly and validly authorized, executed and delivered by the Offerors
and constitutes the legal, valid and binding agreement of the
Offerors, enforceable against the Offerors in accordance with its
terms, except as the enforcement thereof may be limited by general
principles of equity and by bankruptcy or other laws relating to or
affecting creditors' rights generally and except as any
indemnification or contribution provisions thereof may be limited
under applicable securities laws. Each of the Indenture, the Trust
Agreement, the Guarantee and the Expense Agreement has been duly
authorized by the Company, and, when executed and delivered by the
Company on the Closing Date, each of said agreements will constitute
a valid and legally binding obligation of the Company and will be
enforceable against the Company in accordance with its terms, except
as the enforcement thereof may be limited by general principles of
equity and by bankruptcy or other laws relating to or affecting
creditors' rights generally and except as any indemnification or
contribution provisions thereof may be limited under applicable
securities laws. Each of the Indenture, the Trust Agreement and the
Guarantee has been duly qualified under the Trust Indenture Act and
will conform to the description thereof contained in the Prospectus.
(xvi) The Company and the Subsidiaries have good and
marketable title in fee simple to all real property and good title to
all personal property owned by them and material to their business,
in each case free and clear of all security interests, liens,
mortgages, pledges, encumbrances, restrictions, claims, equities and
other defects except such as are referred to in the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus) or such as do not materially affect the value of such
property in the aggregate and do not materially interfere with the
use made or proposed to be made of such property; and all of the
leases under which the Company or the Subsidiaries hold real or
personal property are valid, existing and enforceable leases and in
full force and effect with such exceptions as are not material and do
not materially
10
<PAGE> 11
interfere with the use made or proposed to be made of such real or
personal property, and neither the Company nor any of the
Subsidiaries is in default in any material respect of any of the
terms or provisions of any leases.
(xvii) Coopers & Lybrand L.L.P., who have certified
certain of the consolidated financial statements of the Company and
the Subsidiaries including the notes thereto, included in the
Registration Statement and Prospectus, are independent public
accountants with respect to the Company and the Subsidiaries, as
required by the 1933 Act and the 1933 Act Regulations.
(xviii) The consolidated financial statements including
the notes thereto, included by incorporation by reference or
otherwise in the Registration Statement and the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus) with respect to the Company and the Subsidiaries, comply
in all material respects with the 1933 Act and the 1933 Act
Regulations and present fairly the consolidated financial position of
the Company and the Subsidiaries as of the dates indicated and the
consolidated results of operations, cash flows and shareholders'
equity of the Company and the Subsidiaries for the periods specified
and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis. The selected
and summary consolidated financial data concerning the Offerors and
the Subsidiaries included in the Registration Statement and the
Prospectus (or such Preliminary Prospectus) comply in all material
respects with the 1933 Act and the 1933 Act Regulations, present
fairly the information set forth therein, and have been compiled on a
basis consistent with that of the consolidated financial statements
of the Offerors and the Subsidiaries in the Registration Statement
and the Prospectus (or such Preliminary Prospectus). The other
financial, statistical and numerical information included in the
Registration Statement and the Prospectus (or such Preliminary
Prospectus) comply in all material respects with the 1933 Act and the
1933 Act Regulations, present fairly the information shown therein,
and to the extent applicable have been compiled on a basis consistent
with the consolidated financial statements of the Company and the
Subsidiaries included in the Registration Statement and the
Prospectus (or such Preliminary Prospectus).
(xix) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus), except as otherwise stated therein:
(A) neither of the Offerors nor any of the
Subsidiaries have sustained any loss or interference with its
business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree which is material to the
condition (financial or otherwise), earnings, business, prospects or
results of operations of the Offerors and the Subsidiaries on a
consolidated basis;
(B) there has not been any material adverse change
in, or any development which is reasonably likely to have a material
adverse effect on, the condition (financial or otherwise), earnings,
business, prospects or results of
11
<PAGE> 12
operations of the Offerors and the Subsidiaries on a consolidated
basis, whether or not arising in the ordinary course of business;
(C) neither of the Offerors nor any of the
Subsidiaries have incurred any liabilities or obligations, direct or
contingent, or entered into any material transactions, other than in
the ordinary course of business which is material to the condition
(financial or otherwise), earnings, business, prospects or results of
operations of the Offerors and the Subsidiaries on a consolidated
basis;
(D) neither of the Offerors have declared or paid any
dividend, and neither of the Offerors nor any of the Subsidiaries
have become delinquent in the payment of principal or interest on any
outstanding borrowings; and
(E) there has not been any change in the capital
stock, equity securities, long-term debt, obligations under capital
leases or, other than in the ordinary course of business, short-term
borrowings of the Offerors or the Subsidiaries.
(xx) Except as set forth in the Registration Statement and
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), no charge, investigation, action,
suit or proceeding is pending or, to the knowledge of the Offerors,
threatened, against or affecting the Offerors or the Subsidiaries or
any of their respective properties before or by any court or any
regulatory, administrative or governmental official, commission,
board, agency or other authority or body, or any arbitrator, wherein
an unfavorable decision, ruling or finding could have a material
adverse effect on the consummation of this Agreement or the
transactions contemplated herein or the condition (financial or
otherwise), earnings, affairs, business, prospects or results of
operations of the Offerors and the Subsidiaries on a consolidated
basis or which is required to be disclosed in the Registration
Statement or the Prospectus (or such Preliminary Prospectus) and is
not so disclosed.
(xxi) There are no contracts or other documents required to
be filed as exhibits to the Registration Statement by the 1933 Act or
the 1933 Act Regulations or the Trust Indenture Act (or any rules or
regulations thereunder) which have not been filed as exhibits or
incorporated by reference to the Registration Statement, or that are
required to be summarized in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) that are
not so summarized.
(xxii) Neither of the Offerors has taken, directly or
indirectly, any action designed to result in or which has constituted
or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Offerors to facilitate the sale or resale of the Designated Preferred
Securities, and neither of the Offerors is aware of any such action
taken or to be taken by any affiliate of the Offerors.
(xxiii) The Offerors and the Subsidiaries own, or possess
adequate rights to use, all patents, copyrights, trademarks, service
marks, trade names and other rights necessary to conduct the
businesses now conducted by them in all material respects or as
12
<PAGE> 13
described in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) and neither the
Offerors nor the Subsidiaries have received any notice of
infringement or conflict with asserted rights of others with respect
to any patents, copyrights, trademarks, service marks, trade names or
other rights which, individually or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would have a material
adverse effect on the condition (financial or otherwise), earnings,
affairs, business, prospects or results of operations of the Offerors
and the Subsidiaries on a consolidated basis, and the Offerors do not
know of any basis for any such infringement or conflict.
(xxiv) Except as adequately disclosed in the Prospectus
(or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), no labor dispute involving the Company or
the Subsidiaries exists or, to the knowledge of the Offerors, is
imminent which might be expected to have a material adverse effect on
the condition (financial or otherwise), earnings, affairs, business,
prospects or results of operations of the Offerors and the
Subsidiaries on a consolidated basis or which is required to be
disclosed in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus). Neither the
Company nor any of the Subsidiaries have received notice of any
existing or threatened labor dispute by the employees of any of its
principal suppliers, customers or contractors which might be expected
to have a material adverse effect on the condition (financial or
otherwise), earnings, affairs, business, prospects or results of
operations of the Company and the Subsidiaries on a consolidated
basis.
(xxv) The Offerors and the Subsidiaries have timely and
properly prepared and filed all necessary federal, state, local and
foreign tax returns which are required to be filed and have paid all
taxes shown as due thereon and have paid all other taxes and
assessments to the extent that the same shall have become due, except
such as are being contested in good faith or where the failure to so
timely and properly prepare and file would not have a material
adverse effect on the condition (financial or otherwise), earnings,
affairs, business, prospects or results of operations of the Offerors
and the Subsidiaries on a consolidated basis. The Offerors have no
knowledge of any tax deficiency which has been or might be assessed
against the Offerors or the Subsidiaries which, if the subject of an
unfavorable decision, ruling or finding, would have a material
adverse effect on the condition (financial or otherwise), earnings,
affairs, business, prospects or results of operations of the Offerors
and the Subsidiaries on a consolidated basis.
(xxvi) Each of the material contracts, agreements and
instruments described or referred to in the Registration Statement or
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) and each contract, agreement and
instrument filed as an exhibit to the Registration Statement is in
full force and effect and is the legal, valid and binding agreement
of the Offerors or the Subsidiaries, enforceable in accordance with
its terms, except as the enforcement thereof may be limited by
general principles of equity and by bankruptcy or other laws relating
to or affecting creditors' rights generally. Except as disclosed in
the Prospectus (or such Preliminary Prospectus), to the knowledge of
the Offerors, no other party to any such
13
<PAGE> 14
agreement is (with or without notice or lapse of time or both) in
breach or default in any material respect thereunder.
(xxvii) No relationship, direct or indirect, exists
between or among the Offerors or the Subsidiaries, on the one hand,
and the directors, officers, trustees, shareholders, customers or
suppliers of the Offerors or the Subsidiaries, on the other hand,
which is required to be described in the Registration Statement and
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) which is not adequately described
therein.
(xxviii) No person has the right to request or require the
Offerors or the Subsidiaries to register any securities for offering
and sale under the 1933 Act by reason of the filing of the
Registration Statement with the Commission or the issuance and sale
of the Designated Preferred Securities except as adequately disclosed
in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus).
(xxix) The Designated Preferred Securities have been
approved for quotation on the Nasdaq National Market subject to
official notice of issuance.
(xxx) Except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), there are no contractual encumbrances
or restrictions or material legal restrictions required to be
described therein, on the ability of the Subsidiaries (A) to pay
dividends or make any other distributions on its capital stock or to
pay any indebtedness owed to the Offerors, (B) to make any loans or
advances to, or investments in, the Offerors or (C) to transfer any
of its property or assets to the Offerors.
(xxxi) Neither of the Offerors is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended
(the "Investment Company Act").
(xxxii) The Offerors have not distributed and will not
distribute prior to the Closing Date any prospectus in connection
with the Offering, other than a Preliminary Prospectus, the
Prospectus, the Registration Statement and the other materials
permitted by the 1933 Act and the 1933 Act Regulations and reviewed
by the Representative.
3. OFFERING BY THE UNDERWRITERS. After the Registration Statement
----------------------------
becomes effective or, if the Registration Statement is already effective,
after this Agreement becomes effective, the Underwriters propose to offer the
Firm Preferred Securities for sale to the public upon the terms and
conditions set forth in the Prospectus. The Underwriters may from time to
time thereafter reduce the public offering price and change the other selling
terms, provided the proceeds to the Trust shall not be reduced as a result of
such reduction or change.
The Underwriters may reserve and sell such of the Designated
Preferred Securities purchased by the Underwriters as the Underwriters may
elect to dealers chosen by it (the "Selected Dealers") at the public offering
price set forth in the Prospectus less the applicable
14
<PAGE> 15
Selected Dealers' concessions set forth therein, for re-offering by Selected
Dealers to the public at the public offering price. The Underwriters may
allow, and Selected Dealers may re-allow, a concession set forth in the
Prospectus to certain other brokers and dealers.
4. CERTAIN COVENANTS OF THE OFFERORS. The Offerors jointly and
---------------------------------
severally covenant with the Underwriters as follows:
(a) The Offerors shall use their best efforts to cause the
Registration Statement and any amendments thereto, if not effective at the
time of execution of this Agreement, to become effective as promptly as
possible. If the Registration Statement has become or becomes effective
pursuant to Rule 430A and information has been omitted therefrom in reliance
on Rule 430A, then, the Offerors will prepare and file in accordance with
Rule 430A and Rule 424(b) copies of the Prospectus or, if required by Rule
430A, a post-effective amendment to the Registration Statement (including the
Prospectus) containing all information so omitted and will provide evidence
satisfactory to the Representative of such timely filing.
(b) The Offerors shall notify you immediately, and confirm such
notice in writing:
(i) when the Registration Statement, or any post-effective
amendment to the Registration Statement, has become effective, or
when the Prospectus or any supplement to the Prospectus or any
amended Prospectus has been filed;
(ii) of the receipt of any comments or requests from the
Commission;
(iii) of any request of the Commission to amend or
supplement the Registration Statement, any Preliminary Prospectus or
the Prospectus or for additional information; and
(iv) of the issuance by the Commission or any state or
other regulatory body of any stop order or other order suspending the
effectiveness of the Registration Statement, preventing or suspending
the use of any Preliminary Prospectus or the Prospectus, or
suspending the qualification of any of the Designated Preferred
Securities for offering or sale in any jurisdiction or the
institution or threat of institution of any proceedings for any of
such purposes. The Offerors shall use their best efforts to prevent
the issuance of any such stop order or of any other such order and if
any such order is issued, to cause such order to be withdrawn or
lifted as soon as possible.
(c) The Offerors shall furnish to the Underwriters, from time to
time without charge, as soon as available, as many copies as the Underwriters
may reasonably request of (i) the registration statement as originally filed
and of all amendments thereto, in executed form, including exhibits, whether
filed before or after the Registration Statement becomes effective, (ii) all
exhibits and documents incorporated therein or filed therewith, (iii) all
consents and certificates of experts in executed form, (iv) each Preliminary
Prospectus and all amendments and supplements thereto, and (v) the
Prospectus, and all amendments and supplements thereto.
15
<PAGE> 16
(d) During the time when a prospectus is required to be delivered
under the 1933 Act, the Offerors shall comply to the best of their ability
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934
Act Regulations so as to permit the completion of the distribution of the
Designated Preferred Securities as contemplated herein and in the Trust
Agreement and the Prospectus. The Offerors shall not file any amendment to
the registration statement as originally filed or to the Registration
Statement and shall not file any amendment thereto or make any amendment or
supplement to any Preliminary Prospectus or to the Prospectus of which you
shall not previously have been advised in writing and provided a copy a
reasonable time prior to the proposed filings thereof or to which you or
counsel for the Underwriter shall object. If it is necessary, in the
Company's reasonable opinion or in the reasonable opinion of the Company's
counsel to amend or supplement the Registration Statement or the Prospectus
in connection with the distribution of the Designated Preferred Securities,
the Offerors shall forthwith amend or supplement the Registration Statement
or the Prospectus, as the case may be, by preparing and filing with the
Commission (provided the Underwriters or counsel for the Underwriters does
not reasonably object), and furnishing to you, such number of copies as you
may reasonably request of an amendment or amendments of, or a supplement or
supplements to, the Registration Statement or the Prospectus, as the case may
be (in form and substance reasonably satisfactory to you and counsel for the
Underwriters). If any event shall occur as a result of which it is necessary
to amend or supplement the Prospectus to correct an untrue statement of a
material fact or to include a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or if for any reason it is necessary at any time to amend or
supplement the Prospectus to comply with the 1933 Act and the 1933 Act
Regulations, the Offerors shall, subject to the second sentence of this
subsection (d), forthwith amend or supplement the Prospectus by preparing and
filing with the Commission, and furnishing to you, such number of copies as
you may reasonably request of an amendment or amendments of, or a supplement
or supplements to, the Prospectus (in form and substance satisfactory to you
and counsel for the Underwriters) so that, as so amended or supplemented, the
Prospectus shall not contain an untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(e) The Offerors shall cooperate with you and counsel for the
Underwriters in order to qualify the Designated Preferred Securities for
offering and sale under the securities or blue sky laws of such jurisdictions
as you may reasonably request and shall continue such qualifications in
effect so long as may be advisable for distribution of the Designated
Preferred Securities; provided, however, that the Offerors shall not be
required to qualify to do business as a foreign corporation or file a general
consent to service of process in any jurisdiction in connection with the
foregoing. The Offerors shall file such statements and reports as may be
required by the laws of each jurisdiction in which the Designated Preferred
Securities have been qualified as above. The Offerors will notify you
immediately of, and confirm in writing, the suspension of qualification of
the Designated Preferred Securities or threat thereof in any jurisdiction.
(f) The Offerors shall make generally available to their security
holders in the manner contemplated by Rule 158 of the 1933 Act Regulations
and furnish to you as soon as practicable, but in any event not later than 16
months after the Effective Date, a consolidated
16
<PAGE> 17
earnings statement of the Offerors conforming with the requirements of Section
11(a) of the 1933 Act and Rule 158.
(g) The Offerors shall use the proceeds from the sale of the
Designated Preferred Securities to be sold by the Trust hereunder in the
manner specified in the Prospectus under the caption "Use of Proceeds."
(h) For five years from the Effective Date, the Offerors shall
furnish to the Representative copies of all reports and communications
(financial or otherwise) furnished by the Offerors to the holders of the
Designated Preferred Securities as a class, copies of all reports and
financial statements filed with or furnished to the Commission (other than
portions for which confidential treatment has been obtained from the
Commission) or with any national securities exchange or the Nasdaq National
Market and such other documents, reports and information concerning the
business and financial conditions of the Offerors as the Representative may
reasonably request, other than such documents, reports and information for
which the Offerors has the legal obligation not to reveal to the
Representative.
(i) For a period of 30 days from the Effective Date, the Offerors
shall not, directly or indirectly, offer for sale, sell or agree to sell or
otherwise dispose of any Designated Preferred Securities other than pursuant
to this Agreement, any other beneficial interests in the assets of the Trust
or any securities of the Trust or the Company that are substantially similar
to the Designated Preferred Securities, including any guarantee of such
beneficial interests or substantially similar securities, or securities
convertible into or exchangeable for or that represent the right to
receive any such beneficial interest or substantially similar securities
other than the Floating Rate Cumulative Trust Preferred Securities, with a
liquidation amount of $25 per preferred security, issued by 1st Source Capital
Trust II, a Delaware business trust, and the related guarantee and
subordinated debentures, all as more fully described in the Registration
Statement, without the prior written consent of the Representative.
(j) The Offerors shall use their best efforts to cause the
Designated Preferred Securities to become quoted on the Nasdaq National
Market, or in lieu thereof a national securities exchange, and to remain so
quoted for at least five years from the Effective Date or for such shorter
period as may be specified in a written consent of the Representative,
provided this shall not prevent the Company from redeeming the Designated
Preferred Securities pursuant to the terms of the Trust Agreement. If the
Designated Preferred Securities are exchanged for Debentures, the Company
will use its best efforts to have the Debentures promptly listed on the
Nasdaq National Market or other organization on which the Designated
Preferred Securities are then listed, and to have the Debentures promptly
registered under the Exchange Act.
(k) Subsequent to the date of this Agreement and through the date
which is the later of (i) the day following the date on which the
Underwriters' option to purchase the Option Preferred Securities shall expire
or (ii) the day following the Option Closing Date with respect to any Option
Preferred Securities that the Underwriters shall elect to purchase, except as
described in or contemplated by the Prospectus, neither the Offerors nor any
of the Subsidiaries shall take any action (or refrain from taking any action)
which will result in the Offerors or the Subsidiaries incurring any material
liability or obligation, direct or contingent, or enter into any material
transaction, except in the ordinary course of business, and there will not be
any material change in the financial position, capital stock, or any material
increase in long-term debt, obligations under capital leases or short-term
borrowings of the Offerors and the Subsidiaries on a consolidated basis.
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(l) The Offerors shall not, for a period of 180 days after the
date hereof, without the prior written consent of the Representative,
purchase, redeem or call for redemption, or prepay or give notice of
prepayment (or announce any redemption or call for redemption, or any
repayment or notice of prepayment) of the Offerors' securities.
(m) The Offerors shall not take, directly or indirectly, any
action designed to result in or which has constituted or which might
reasonably be expected to cause or result in stabilization or manipulation of
the price of any security of the Offerors to facilitate the sale or resale of
the Designated Preferred Securities and the Offerors are not aware of any such
action taken or to be taken by any affiliate of the Offerors.
(n) Prior to the Closing Date (and, if applicable, the Option
Closing Date), the Offerors will not issue any press release or other
communication directly or indirectly or hold any press conference with
respect to the Offerors, the Subsidiaries or the offering of the Designated
Preferred Securities (the "Offering") without your prior written consent.
5. PAYMENT OF EXPENSES. Whether or not this Agreement is terminated or
-------------------
the sale of the Designated Preferred Securities to the Underwriters is
consummated, the Company covenants and agrees that it will pay or cause to be
paid (directly or by reimbursement) all costs and expenses incident to the
performance of the obligations of the Offerors under this Agreement,
including:
(a) the preparation, printing, filing, delivery and shipping of
the initial registration statement, the Preliminary Prospectus or
Prospectuses, the Registration Statement and the Prospectus and any amendments
or supplements thereto, and the printing, delivery and shipping of this
Agreement and any other underwriting documents (including, without
limitation, selected dealers agreements), the certificates for the Designated
Preferred Securities and the Preliminary and Final Blue Sky Memoranda and any
legal investment surveys and any supplements thereto;
(b) all fees, expenses and disbursements of the Offerors' counsel
and accountants;
(c) all fees and expenses incurred in connection with the
qualification of the Designated Preferred Securities, Debentures and the
Guarantee under the securities or blue sky laws of such jurisdictions as you
may request, including all filing fees and fees and disbursements of counsel
for the Underwriters in connection therewith, including, without limitation,
in connection with the preparation of the Preliminary and Final Blue Sky
Memoranda and any legal investment surveys and any supplements thereto;
(d) all fees and expenses incurred in connection with filings made
with the NASD;
(e) any applicable fees and other expenses incurred in connection
with the listing of the Designated Preferred Securities and, if applicable,
the Guarantee and the Debentures on the Nasdaq National Market;
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(f) the cost of furnishing to you copies of the initial
registration statements, any Preliminary Prospectus, the Registration
Statement and the Prospectus and all amendments or supplements thereto;
(g) the costs and charges of any transfer agent or registrar and
the fees and disbursements of counsel for any transfer agent or registrar;
(h) all costs and expenses (including stock transfer taxes)
incurred in connection with the printing, issuance and delivery of the
Designated Preferred Securities to the Underwriters;
(i) all expenses incident to the preparation, execution and
delivery of the Trust Agreement, the Indenture and the Guarantee; and
(j) all other costs and expenses incident to the performance of
the obligations of the Company hereunder and under the Trust Agreement that
are not otherwise specifically provided for in this Section 5.
If the sale of Designated Preferred Securities contemplated by this
Agreement is not completed due to the termination pursuant to the terms
hereof (other than pursuant to Section 9 hereof), the Company will pay you
your accountable out-of-pocket expenses in connection herewith or in
contemplation of the performance of your obligations hereunder, including
without limitation travel expenses, reasonable fees, expenses and
disbursements of counsel or other out-of-pocket expenses incurred by you in
connection with any discussion of the Offering or the contents of the
Registration Statement, any investigation of the Offerors and the
Subsidiaries, or any preparation for the marketing, purchase, sale or
delivery of the Designated Preferred Securities, in each case following
presentation of reasonably detailed invoices therefor.
If the sale of Designated Preferred Securities contemplated by this
Agreement is completed, the Company shall not be responsible for payment of
fees or disbursements of counsel for the Underwriters other than in
accordance with paragraph (c) above, or for the reimbursement of any expenses
of the Underwriters.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
-------------------------------------------
Underwriters to purchase and pay for the Firm Preferred Securities and,
following exercise of the option granted by the Offerors in Section 1 of this
Agreement, the Option Preferred Securities, are subject, in your sole
discretion, to the accuracy of and compliance with the representations and
warranties and agreements of the Offerors herein as of the date hereof and as
of the Closing Date (or in the case of the Option Preferred Securities, if
any, as of the Option Closing Date), to the accuracy of the written
statements of the Offerors made pursuant to the provisions hereof, to the
performance by the Offerors of their covenants and obligations hereunder and
to the following additional conditions:
(a) If the Registration Statement or any amendment thereto filed
prior to the Closing Date has not been declared effective prior to the time
of execution hereof, the Registration Statement shall become effective not
later than 10:00 a.m., St. Louis time, on the first business day following
the time of execution of this Agreement, or at such later time and
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<PAGE> 20
date as you may agree to in writing. If required, the Prospectus and any
amendment or supplement thereto shall have been timely filed in accordance
with Rule 424(b) and Rule 430A under the 1933 Act and Section 4(a) hereof. No
stop order suspending the effectiveness of the Registration Statement or any
amendment or supplement thereto shall have been issued under the 1933 Act or
any applicable state securities laws and no proceedings for that purpose
shall have been instituted or shall be pending, or, to the knowledge of the
Offerors or the Representative, shall be contemplated by the Commission or
any state authority. Any request on the part of the Commission or any state
authority for additional information (to be included in the Registration
Statement or Prospectus or otherwise) shall have been disclosed to you and
complied with to your satisfaction and to the satisfaction of counsel for the
Underwriters.
(b) No Underwriter shall have advised the Company at or before the
Closing Date (and, if applicable, the Option Closing Date) that the
Registration Statement or any post-effective amendment thereto, or the
Prospectus or any amendment or supplement thereto, contains an untrue
statement of a fact which, in your opinion, is material or omits to state a
fact which, in your opinion, is material and is required to be stated therein
or is necessary to make statements therein (in the case of the Prospectus or
any amendment or supplement thereto, in light of the circumstances under
which they were made) not misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Trust Agreement,
and the Designated Preferred Securities, and the authorization and form of
the Registration Statement and Prospectus, other than financial statements
and other financial data, and all other legal matters relating to this
Agreement and the transactions contemplated hereby or by the Trust Agreement
shall be satisfactory in all material respects to counsel for the
Underwriters, and the Offerors and the Subsidiaries shall have furnished to
such counsel all documents and information relating thereto that they may
reasonably request to enable them to pass upon such matters.
(d) Lewis, Rice & Fingersh, L.C., counsel for the Offerors, shall
have furnished to you their signed opinion, dated the Closing Date or the
Option Closing Date, as the case may be, in form and substance satisfactory
to counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly
existing and in good standing under the laws of the State of Indiana,
and is duly registered as a bank holding company under the BHC Act.
Each of the Subsidiaries is duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation.
Each of the Company and the Subsidiaries has full corporate power and
authority to own or lease its properties and to conduct its business
as such business is described in the Prospectus and is currently
conducted in all material respects. To the best of such counsel's
knowledge, all outstanding shares of capital stock of the
Subsidiaries have been duly authorized and validly issued and are
fully paid and nonassessable except to the extent such shares may be
deemed assessable under 12 U.S.C. Section 1831 and, to the best of
such counsel's knowledge, except as disclosed in the Prospectus,
there are no outstanding rights, options or warrants to purchase any
such shares or securities convertible into or exchangeable for any
such shares.
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(ii) The capital stock, Debentures and Guarantee of the
Company and the equity securities of the Trust conform to the
description thereof contained in the Prospectus in all material
respects. To the best of such counsel's knowledge, the capital stock
of the Company authorized and issued as of December 31, 1996 is as
set forth under the caption "Capitalization" in the Prospectus, has
been duly authorized and validly issued, and is fully paid and
nonassessable. To the best of such counsel's knowledge, there are no
outstanding rights, options or warrants to purchase, no other
outstanding securities convertible into or exchangeable for, and no
commitments, plans or arrangements to issue, any shares of capital
stock of the Company or equity securities of the Trust, except as
described in the Prospectus.
(iii) The issuance, sale and delivery of the Designated
Preferred Securities and Debentures in accordance with the terms and
conditions of this Agreement and the Indenture have been duly
authorized by all necessary actions of the Offerors. All of the
Designated Preferred Securities have been duly and validly authorized
and, when delivered in accordance with this Agreement will be duly
and validly issued, fully paid and nonassessable, and will conform to
the description thereof in the Registration Statement, the Prospectus
and the Trust Agreement. The Designated Preferred Securities have
been approved for quotation on the Nasdaq National Market subject to
official notice of issuance. There are no preemptive or other rights
to subscribe for or to purchase, and other than as disclosed in the
Prospectus no restrictions upon the voting or transfer of, any shares
of capital stock or equity securities of the Offerors or the
Subsidiaries pursuant to the corporate charter, by-laws or other
governing documents (including without limitation, the Trust
Agreement) of the Offerors or the Subsidiaries, or, to the best of
such counsel's knowledge, any agreement or other instrument to which
either Offeror or any of the Subsidiaries is a party or by which
either Offeror or any of the Subsidiaries may be bound.
(iv) The Offerors have all requisite corporate and trust
power to enter into and perform their obligations under this
Agreement, and this Agreement has been duly and validly authorized,
executed and delivered by the Offerors and constitutes the legal,
valid and binding obligations of the Offerors enforceable in
accordance with its terms, except as the enforcement hereof or
thereof may be limited by general principles of equity and by
bankruptcy or other laws relating to or affecting creditors' rights
generally, and except as the indemnification and contribution
provisions hereof may be limited under applicable laws and certain
remedies may not be available in the case of a non-material breach.
(v) Each of the Indenture, the Trust Agreement and the
Guarantee has been duly qualified under the Trust Indenture Act, has
been duly authorized, executed and delivered by the Company, and is a
valid and legally binding obligation of the Company enforceable in
accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, receivership, moratorium and other laws
affecting the rights and remedies of creditors generally and of
general principles of equity;
(vi) The Debentures have been duly authorized, executed,
authenticated and delivered by the Company, are entitled to the
benefits of the Indenture and are legal,
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<PAGE> 22
valid and binding obligations of the Company enforceable against the
Company in accordance with their terms, subject to the effect of
bankruptcy, insolvency, reorganization, receivership, moratorium and
other laws affecting the rights and remedies of creditors generally
and of general principles of equity;
(vii) The Expense Agreement has been duly authorized,
executed and delivered by the Company, and is a valid and legally
binding obligation of the Company enforceable in accordance with its
terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other laws affecting the
rights and remedies of creditors generally and of general principles
of equity;
(viii) To the best of such counsel's knowledge, neither
of the Offerors nor any of the Subsidiaries is in breach or violation
of, or default under, with or without notice or lapse of time or
both, its corporate charter, by-laws or governing document (including
without limitation, the Trust Agreement). The execution, delivery
and performance of this Agreement and the consummation of the
transactions contemplated by this Agreement, and the Trust Agreement
do not and will not conflict with, result in the creation or
imposition of any material lien, claim, charge, encumbrance or
restriction upon any property or assets of the Offerors or the
Subsidiaries or the Designated Preferred Securities pursuant to, or
constitute a material breach or violation of, or constitute a
material default under, with or without notice or lapse of time or
both, any of the terms, provisions or conditions of the charter,
by-laws or governing document (including without limitation, the
Trust Agreement) of the Offerors or the Subsidiaries, or to the best
of such counsel's knowledge, any material contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease,
franchise, license or any other agreement or instrument to which
either Offeror or the Subsidiaries is a party or by which any of them
or any of their respective properties may be bound or any order,
decree, judgment, franchise, license, Permit, rule or regulation of
any court, arbitrator, government, or governmental agency or
instrumentality, domestic or foreign, known to such counsel having
jurisdiction over the Offerors or the Subsidiaries or any of their
respective properties which, in each case, is material to the
Offerors and the Subsidiaries on a consolidated basis. No
authorization, approval, consent or order of, or filing, registration
or qualification with, any person (including, without limitation, any
court, governmental body or authority) is required under Indiana law
in connection with the transactions contemplated by this Agreement in
connection with the purchase and distribution of the Designated
Preferred Securities by the Underwriters.
(ix) To the best of such counsel's knowledge, holders of
securities of the Offerors either do not have any right that, if
exercised, would require the Offerors to cause such securities to be
included in the Registration Statement or have waived such right. To
the best of such counsel's knowledge, neither the Offerors nor any of
the Subsidiaries is a party to any agreement or other instrument
which grants rights for or relating to the registration of any
securities of the Offerors.
(x) Except as set forth in the Registration Statement and
the Prospectus, to the best of such counsel's knowledge, (i) no
action, suit or proceeding at law or in equity is pending or
threatened in writing to which the Offerors or the
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<PAGE> 23
Subsidiaries is or may be a party, and (ii) no action, suit or
proceeding is pending or threatened in writing against or affecting
the Offerors or the Subsidiaries or any of their properties, before
or by any court or governmental official, commission, board or other
administrative agency, authority or body, or any arbitrator, wherein
an unfavorable decision, ruling or finding could reasonably be
expected to have a material adverse effect on the consummation of
this Agreement or the issuance and sale of the Designated Preferred
Securities as contemplated herein or the condition (financial or
otherwise), earnings, affairs, business, or results of operations of
the Offerors and the Subsidiaries on a consolidated basis or which is
required to be disclosed in the Registration Statement or the
Prospectus and is not so disclosed.
(xi) No authorization, approval, consent or order of or
filing, registration or qualification with, any person (including,
without limitation, any court, governmental body or authority) is
required in connection with the transactions contemplated by this
Agreement, the Trust Agreement, the Registration Statement and the
Prospectus, except such as have been obtained under the 1933 Act and
the Trust Indenture Act, the Company's Term Loan Agreement dated as
of October 2, 1995, the Company's Standby Term Loan Agreement dated
as of September 28, 1994, and except such as may be required under
state securities laws or Interpretations or Rules of the NASD in
connection with the purchase and distribution of the Designated
Preferred Securities by the Underwriters.
(xii) The Registration Statement and the Prospectus and any
amendments or supplements thereto and any documents incorporated
therein by reference (other than the financial statements or other
financial data included therein or omitted therefrom and
Underwriters' Information, as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations as of their
respective dates of effectiveness.
(xiii) To the best of such counsel's knowledge, there are
no contracts, agreements, leases or other documents of a character
required to be disclosed in the Registration Statement or Prospectus
or to be filed as exhibits to the Registration Statement that are not
so disclosed or filed.
(xiv) The statements under the captions "Description of the
Preferred Securities", "Description of the Subordinated Debentures",
"Description of the Guarantee", "Relationship Among the Preferred
Securities, the Subordinated Debentures and the Guarantee", "Certain
Federal Income Tax Consequences", "ERISA Considerations",
"Regulation", "Governmental Policies and Legislation", and
"Legislative Developments" in the Prospectus or incorporated therein
by reference, insofar as such statements constitute a summary of
legal and regulatory matters, documents or instruments referred to
therein, are accurate descriptions of the matters summarized therein
in all material respects and fairly present the information called
for with respect to such legal matters, documents and instruments,
other than financial and statistical data as to which said counsel
expresses no opinion or belief.
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(xv) Such counsel has been advised by the staff of the
Commission that the Registration Statement has become effective under
the 1933 Act; any required filing of the Prospectus pursuant to Rule
424(b) has been made within the time period required by Rule 424(b);
to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for a stop order are pending or threatened by the
Commission.
(xvi) Except as described in or contemplated by the
Prospectus, to the best of such counsel's knowledge, there are no
contractual encumbrances or restrictions, or material legal
restrictions required to be described therein on the ability of the
Subsidiaries (A) to pay dividends or make any other distributions on
its capital stock or to pay indebtedness owed to the Offerors, (B) to
make any loans or advances to, or investments in, the Offerors or (C)
to transfer any of its property or assets to the Offerors.
(xvii) To the best of such counsel's knowledge, (A) the
business and operations of the Offerors and the Subsidiaries comply
in all material respects with all statutes, ordinances, laws, rules
and regulations applicable thereto and which are material to the
Offerors and the Subsidiaries on a consolidated basis, except in
those instances where non-compliance would not materially impair the
ability of the Offerors and the Subsidiaries to conduct their
business; and (B) the Offerors and the Subsidiaries possess and are
operating in all material respects in compliance with the terms,
provisions and conditions of all permits, consents, licenses,
franchises and governmental and regulatory authorizations ("Permits")
and required to conduct their businesses as described in the
Prospectus and which are material to the Offerors and the
Subsidiaries on a consolidated basis, except in those instances where
the loss thereof or non-compliance therewith would not have a
material adverse effect on the condition (financial or otherwise),
earnings, affairs, business, prospects or results of operations of
the Offerors and the Subsidiaries on a consolidated basis; to the
best of such counsel's knowledge, all such Permits are valid and in
full force and effect, and, to the best of such counsel's knowledge,
no action, suit or proceeding is pending or threatened which may lead
to the revocation, termination, suspension or non-renewal of any such
Permit, except in those instances where the loss thereof or
non-compliance therewith would not materially impair the ability of
the Offerors or the Subsidiaries to conduct their businesses.
In giving the above opinion, such counsel may state that, insofar as
such opinion involves factual matters, they have relied upon certificates of
officers of the Offerors including, without limitation, certificates as to
the identity of any and all material contracts, indentures, mortgages, deeds
of trust, loans or credit agreements, notes, leases, franchises, licenses or
other agreements or instruments, and all material permits, easements,
consents, licenses, franchises and government regulatory authorizations, for
purposes of paragraphs (viii), (xiii) and (xvii) hereof and certificates of
public officials. In giving such opinion, such counsel may rely as to
matters of Delaware law upon (A) the opinion of Richards, Layton and Finger
described herein and (B) the opinion of Vincent A. Tamburo, general counsel
of the Company, as to certain matters regarding the Company and the
Subsidiaries, and such counsel shall state in its opinion the amount of
reliance it is placing on the opinion of such Company counsel and that such
reliance is, in the view of such counsel, reasonable under the circumstances.
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<PAGE> 25
Such counsel shall also confirm that, in connection with the
preparation of the Registration Statement and Prospectus, such counsel has
participated in conferences with officers and representatives of the Offerors
and with their independent public accountants and with you and your counsel,
at which conferences such counsel made inquiries of such officers,
representatives and accountants and discussed in detail the contents of the
Registration Statement and Prospectus and the documents incorporated therein
by reference (without taking further action to verify independently the
statements made in the Registration Statement and the Prospectus, and without
assuming responsibility for the accuracy or completeness of such statements,
except to the extent expressly provided above) and such counsel has no reason
to believe (A) that the Registration Statement or any amendment thereto
(except for the financial statements and related schedules and statistical
data included therein or omitted therefrom or Underwriters' Information, as
to which such counsel need express no opinion), at the time the Registration
Statement or any such amendment became effective, contained any untrue
statement of a material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading or (B)
that the Prospectus or any amendment or supplement thereto or the documents
incorporated therein by reference (except for the financial statements and
related schedules and statistical data included therein or omitted therefrom
or Underwriters' Information, as to which such counsel need express no
opinion), at the time the Registration Statement became effective (or, if the
term "Prospectus" refers to the prospectus first filed pursuant to Rule
424(b) of the 1933 Act Regulations, at the time the Prospectus was issued),
at the time any such amended or supplemented Prospectus was issued, at the
Closing Date and, if applicable, the Option Closing Date, contained or
contains any untrue statement of a material fact or omitted or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which
they were made, or (C) that there is any amendment to the Registration
Statement required to be filed that has not already been filed.
(e) Richards, Layton and Finger, special Delaware counsel to the
Offerors, shall have furnished to you their signed opinion, dated as of
Closing Date or the Option Closing Date, as the case may be, in form and
substance satisfactory to such counsel, to the effect that:
(i) The Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware
Business Trust Act and, under the Trust Agreement and the Delaware
Business Trust Act, has the trust power and authority to conduct its
business as described in the Prospectus.
(ii) The Trust Agreement is a legal, valid and binding
agreement of the Trust and the Trustees, and is enforceable against
the Company, as sponsor, and the Trustees, in accordance with its
terms.
(iii) Under the Trust Agreement and the Delaware Business
Trust Act, the execution and delivery of the Underwriting Agreement
by the Trust, and the performance by the Trust of its obligations
thereunder, have been authorized by all requisite trust action on the
part of the Trust.
(iv) The Designated Preferred Securities have been duly
authorized by the Trust Agreement, and when issued and sold in
accordance with the Trust Agreement,
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the Designated Preferred Securities will be, subject to the
qualifications set forth in paragraph (v) below, fully paid and
nonassessable beneficial interest in the assets of the Trust and
entitled to the benefits of the Trust Agreement. The form of
certificates to evidence the Designated Preferred Securities has been
approved by the Trust and is in due and proper form and complies with
all applicable requirements of the Delaware Business Trust Act.
(v) Holders of Designated Preferred Securities, as
beneficial owners of the Trust, will be entitled to the same
limitation of personal liability extended to shareholders of private,
for-profit corporations organized under the General Corporation Law
of the State of Delaware. Such opinion may note that the holders of
Designated Preferred Securities may be obligated to make payments as
set forth in the Trust Agreement.
(vi) Under the Delaware Business Trust Act and the Trust
Agreement, the issuance of the Designated Preferred Securities is not
subject to preemptive rights.
(vii) The issuance and sale by the Trust of the Designated
Preferred Securities and the Common Securities, the execution,
delivery and performance by the Trust of this Agreement, and the
consummation of the transactions contemplated by this Agreement, do
not violate (a) the Trust Agreement, or (b) any applicable Delaware
law, rule or regulation.
Such opinion may state that it is limited to the laws of the State
of Delaware and that the opinion expressed in paragraph (ii) above is subject to
the effect upon the Trust Agreement of (i) bankruptcy, insolvency,
moratorium, receivership, reorganization, liquidation, fraudulent conveyance
and other similar laws relating to or affecting the rights and remedies of
creditors generally, (ii) principles of equity, including applicable law
relating to fiduciary duties (regardless of whether considered and applied in
a proceeding in equity or at law), and (iii) the effect of applicable public
policy on the enforceability of provisions relating to indemnification or
contribution.
(f) Bryan Cave LLP, counsel for the Underwriters, shall have
furnished you their signed opinion, dated the Closing Date or the Option
Closing Date, as the case may be, with respect to the sufficiency of all
corporate procedures and other legal matters relating to this Agreement, the
validity of the Designated Preferred Securities, the Registration Statement,
the Prospectus and such other related matters as you may reasonably request
and there shall have been furnished to such counsel such documents and other
information as they may request to enable them to pass on such matters. In
giving such opinion, Bryan Cave LLP may rely as to matters of fact upon
statements and certifications of officers of the Offerors and of other
appropriate persons and may rely as to matters of law, other than law of the
United States and the State of Missouri, and upon the opinions of Lewis, Rice
& Fingersh, L.C. and Richards, Layton and Finger described herein.
(g) On the date of this Agreement and on the Closing Date (and, if
applicable, any Option Closing Date), the Representative shall have received
from Coopers & Lybrand L.L.P. a letter, dated the date of this Agreement and
the Closing Date (and, if applicable, the
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<PAGE> 27
Option Closing Date), respectively, in form and substance satisfactory to the
Representative, confirming that they are independent public accountants with
respect to Company, within the meaning of the 1933 Act and the 1933 Act
Regulations, and stating in effect that:
(i) In their opinion, the consolidated financial
statements of the Company audited by them and included in the
Registration Statement comply as to form in all material respects
with the applicable accounting requirements of the 1933 Act and the
1933 Act Regulations.
(ii) On the basis of the procedures specified by the
American Institute of Certified Public Accountants as described in
SAS No. 71, "Interim Financial Information", inquiries of officials
of the Company responsible for financial and accounting matters, and
such other inquiries and procedures as may be specified in such
letter, which procedures do not constitute an audit in accordance
with U.S. generally accepted auditing standards, nothing came to
their attention that caused them to believe that, if applicable, the
unaudited interim consolidated financial statements of the Company
included in the Registration Statement do not comply as to form in
all material respects with the applicable accounting requirements of
the 1933 Act and 1933 Act Regulations or are not in conformity with
U.S. generally accepted accounting principles applied on a basis
substantially consistent, except as noted in the Registration
Statement, with the basis for the audited consolidated financial
statements of the Company included in the Registration Statement.
(iii) On the basis of limited procedures, not constituting
an audit in accordance with U.S. generally accepted auditing
standards, consisting of a reading of the unaudited interim financial
statements and other information referred to below, a reading of the
latest available unaudited condensed consolidated financial
statements of the Company, inspection of the minute books of the
Company since the date of the latest audited financial statements of
the Company included in the Registration Statement, inquiries of
officials of the Company responsible for financial and accounting
matters and such other inquiries and procedures as may be specified
in such letter, nothing came to their attention that caused them to
believe that:
(A) as of a specified date not more than five days
prior to the date of such letter, there have been any changes in the
consolidated capital stock of the Company, any increase in the
consolidated debt of the Company, any decreases in consolidated total
assets or shareholders equity of the Company, or any changes,
decreases or increases in other items specified by the Underwriters,
in each case as compared with amounts shown in the latest unaudited
interim consolidated statement of financial condition of the Company
included in the Registration Statement except in each case for
changes, increases or decreases which the Registration Statement
specifically discloses, have occurred or may occur or which are
described in such letter; and
(B) for the period from the date of the latest
unaudited interim consolidated financial statements included in the
Registration Statement to the specified date referred to in Clause
(iii)(A), there were any decreases in the
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<PAGE> 28
consolidated interest income, net interest income, or net income of
the Company or in the per share amount of net income of the Company,
or any changes, decreases or increases in any other items specified
by the Representative, in each case as compared with the comparable
period of the preceding year and with any other period of
corresponding length specified by the Underwriters, except in each
case for increases or decreases which the Registration Statement
discloses have occurred or may occur, or which are described in such
letter.
(iv) In addition to the audit referred to in their report
included in the Registration Statement and the limited procedures,
inspection of minute books, inquiries and other procedures referred
to in paragraphs (ii) and (iii) above, they have carried out certain
specified procedures, not constituting an audit in accordance with
U.S. generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Underwriters which are derived from the general accounting records
and consolidated financial statements of the Company which appear in
the Registration Statement specified by the Underwriters in the
Registration Statement, and have compared such amounts, percentages
and financial information with the accounting records and the
material derived from such records and consolidated financial
statements of the Company have found them to be in agreement.
In the event that the letters to be delivered referred to above set
forth any such changes, decreases or increases as specified in Clauses
(iii)(A) or (iii)(B) above, or any exceptions from such agreement specified
in Clause (iv) above, it shall be a further condition to the obligations of
the Underwriters that the Representative shall have determined, after
discussions with officers of the Company responsible for financial and
accounting matters, that such changes, decreases, increases or exceptions as
are set forth in such letters do not (x) reflect a material adverse change in
the items specified in Clause (iii)(A) above as compared with the amounts
shown in the latest unaudited consolidated statement of financial condition
of the Company included in the Registration Statement, (y) reflect a material
adverse change in the items specified in Clause (iii)(B) above as compared
with the corresponding periods of the prior year or other period specified by
the Representative, or (z) reflect a material change in items specified in
Clause (iv) above from the amounts shown in the Preliminary Prospectus
distributed by the Underwriters in connection with the offering contemplated
hereby or from the amounts shown in the Prospectus.
(h) At the Closing Date and, if applicable, the Option Closing
Date, you shall have received certificates of the chief executive officer and
the chief financial and accounting officer of the Company, which certificates
shall be deemed to be made on behalf of the Company dated as of the Closing
Date and, if applicable, the Option Closing Date, evidencing satisfaction of
the conditions of Section 6(a) and stating that (i) the representations and
warranties of the Company set forth in Section 2(a) hereof are accurate as of
the Closing Date and, if applicable, the Option Closing Date, and that the
Offerors have complied with all agreements and satisfied all conditions on
their part to be performed or satisfied at or prior to such Closing Date;
(ii) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any material
adverse change in the condition (financial or otherwise), earnings, affairs,
business, prospects or results of operations of the Offerors and the
28
<PAGE> 29
Subsidiaries on a consolidated basis; (iii) since such dates there has not
been any material transaction entered into by the Offerors or the
Subsidiaries other than transactions in the ordinary course of business; and
(iv) they have carefully examined the Registration Statement and the
Prospectus as amended or supplemented and nothing has come to their attention
that would lead them to believe that either the Registration Statement or the
Prospectus, or any amendment or supplement thereto as of their respective
effective or issue dates, contained, and the Prospectus as amended or
supplemented at such Closing Date (and, if applicable, the Option Closing
Date), contains any untrue statement of a material fact, or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and (v) covering such other matters as you may
reasonably request. The officers' certificate of the Company shall further
state that no stop order affecting the Registration Statement is in effect
or, to their knowledge, threatened.
(i) At the Closing Date and, if applicable, the Option Closing
Date, you shall have received a certificate of an authorized representative
of the Trust to the effect that to the best of his or her knowledge based
upon a reasonable investigation, the representations and warranties of the
Trust in this Agreement are true and correct as though made on and as of the
Closing Date (and, if applicable, the Option Closing Date); the Trust has
complied with all the agreements and satisfied all the conditions required by
this Agreement to be performed or satisfied by the Trust on or prior to the
Closing Date and since the most recent date as of which information is given
in the Prospectus, except as contemplated by the Prospectus, the Trust has
not incurred any material liabilities or obligations, direct or contingent,
or entered into any material transactions not in the ordinary course of
business and there has not been any material adverse change in the condition
(financial or otherwise) of the Trust.
(j) On the Closing Date, you shall have received duly executed
counterparts of the Trust Agreement, the Guarantee, the Indenture and the
Expense Agreement.
(k) The NASD, upon review of the terms of the public offering of
the Designated Preferred Securities, shall not have objected to the
Underwriters' participation in such offering.
(l) Prior to the Closing Date and, if applicable, the Option
Closing Date, the Offerors shall have furnished to you and counsel for the
Underwriters all such other documents, certificates and opinions as they have
reasonably requested.
All opinions, certificates, letters and other documents shall be in
compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you. The Offerors shall furnish you
with conformed copies of such opinions, certificates, letters and other
documents as you shall reasonably request.
If any of the conditions referred to in this Section 6 shall not
have been fulfilled when and as required by this Agreement, this Agreement and
all of the Underwriters' obligations hereunder may be terminated by you on
notice to the Company at, or at any time before, the Closing Date or the
Option Closing Date, as applicable. Any such termination shall be without
liability of the Underwriters to the Offerors.
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<PAGE> 30
7. INDEMNIFICATION AND CONTRIBUTION.
--------------------------------
(a) The Offerors agree to jointly and severally indemnify and hold
harmless each Underwriter, each of its directors, officers and agents, and
each person, if any, who controls any Underwriter within the meaning of the
1933 Act, against any and all losses, claims, damages, liabilities and
expenses (including reasonable costs of investigation and reasonable attorney
fees and expenses), joint or several, arising out of or based (i) upon any
untrue statement or alleged untrue statement of a material fact made by the
Company or the Trust contained in Section 2(a) of this Agreement (or any
certificate delivered by the Company or the Trust pursuant to Sections 6(h),
6(i) or 6(l) hereof) or the registration statement as originally filed or the
Registration Statement, any Preliminary Prospectus or the Prospectus, or in
any amendment or supplement thereto, (ii) upon any blue sky application or
other document executed by the Company or the Trust specifically for that
purpose or based upon written information furnished by the Company or the
Trust filed in any state or other jurisdiction in order to qualify any of the
Designated Preferred Securities under the securities laws thereof (any such
application, document or information being hereinafter referred to as a "Blue
Sky Application"), (iii) any omission or alleged omission to state a material
fact in the registration statement as originally filed or the Registration
Statement, the Preliminary Prospectus or the Prospectus, or in any amendment
or supplement thereto, or in any Blue Sky Application required to be stated
therein or necessary to make the statements therein not misleading, and
against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation and attorney fees), joint or
several, arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus or the
Prospectus, or in any amendment or supplement thereto, or arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading or
(iv) the enforcement of this indemnification provision or the contribution
provisions of Section 7(d); and shall reimburse each such indemnified party
for any reasonable legal or other expenses as incurred, but in no event less
frequently than 30 days after each invoice is submitted, incurred by them in
connection with investigating or defending against or appearing as a third-
party witness in connection with any such loss, claim, damage, liability
or action, notwithstanding the possibility that payments for such expenses
might later be held to be improper, in which case such payments shall be
promptly refunded; provided, however, that the Offerors shall not be liable in
-----------------
any such case to the extent, but only to the extent, that any such losses,
claims, damages, liabilities and expenses arise out of or are based upon any
untrue statement or omission or allegation thereof that has been made therein
or omitted therefrom in reliance upon and in conformity the Underwriters'
Information; provided, that the indemnification contained in this paragraph
--------
with respect to any Preliminary Prospectus shall not inure to the benefit of
any Underwriter (or of any person controlling any Underwriter) to the extent
any such losses, claims, damages, liabilities or expenses directly results
from the fact that such Underwriter sold Designated Preferred Securities to a
person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus (as amended or
supplemented if any amendments or supplements thereto shall have been
furnished to you in sufficient time to distribute same with or prior to the
written confirmation of the sale involved), if required by law, and if such
loss, claim, damage, liability or expense would not have arisen but for the
failure to give or send such person such document. The foregoing indemnity
agreement is
30
<PAGE> 31
in addition to any liability the Company or the Trust may otherwise have to
any such indemnified party.
(b) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless each Offeror, each of its directors, each of its
officers who signed the Registration Statement and each person, if any, who
controls an Offeror within the meaning of the 1933 Act, to the same extent as
required by the foregoing indemnity from the Company to each Underwriter, but
only with respect to the Underwriters' Information or in a Blue Sky
Application. The foregoing indemnity agreement is in addition to any
liability which any Underwriter may otherwise have to any such indemnified
party.
(c) If any action or claim shall be brought or asserted against
any indemnified party or any person controlling an indemnified party in
respect of which indemnity may be sought from the indemnifying party, such
indemnified party or controlling person shall promptly notify the
indemnifying party in writing, and the indemnifying party shall assume the
defense thereof, including the employment of counsel reasonably satisfactory
to the indemnified party and the payment of all expenses; provided, however,
-----------------
that the failure so to notify the indemnifying party shall not relieve it
from any liability which it may have to an indemnified party otherwise than
under such paragraph, and further, shall only relieve it from liability under
such paragraph to the extent prejudiced thereby. Any indemnified party or
any such controlling person shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such indemnified
party or such controlling person unless (i) the employment thereof has been
specifically authorized by the indemnifying party in writing, (ii) the
indemnifying party has failed to assume the defense or to employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties
to any such action (including any impleaded parties) include both such
indemnified party or such controlling person and the indemnifying party and
such indemnified party or such controlling person shall have been advised by
such counsel that there may be one or more legal defenses available to it
that are different from or in addition to those available to the indemnifying
party (in which case, if such indemnified party or controlling person
notifies the indemnifying party in writing that it elects to employ separate
counsel at the expense of the indemnifying party, the indemnifying party
shall not have the right to assume the defense of such action on behalf of
such indemnified party or such controlling person) it being understood,
however, that the indemnifying party shall not, in connection with any one
such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys at any time and for all such indemnified party
and controlling persons, which firm shall be designated in writing by the
indemnified party (and, if such indemnified parties are Underwriters, by you,
as Representative). Each indemnified party and each controlling person, as a
condition of such indemnity, shall use reasonable efforts to cooperate with
the indemnifying party in the defense of any such action or claim. The
indemnifying party shall not be liable for any settlement of any such action
effected without its written consent, but if there be a final judgment for
the plaintiff in any such action, the indemnifying party agrees to indemnify
and hold harmless any indemnified party and any such controlling person from
and against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.
31
<PAGE> 32
An indemnifying party shall not, without the prior written consent
of each indemnified party, settle, compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnity may be sought hereunder (whether or not such
indemnified party or any person who controls such indemnified party within
the meaning of the 1933 Act is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes a release
of each such indemnified party reasonably satisfactory to each such
indemnified party and each such controlling person from all liability arising
out of such claim, action, suit or proceeding or unless the indemnifying
party shall confirm in a written agreement with each indemnified party, that
notwithstanding any federal, state or common law, such settlement, compromise
or consent shall not alter the right of any indemnified party or controlling
person to indemnification or contribution as provided in this Agreement.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
paragraphs (a), (b) or (c) hereof in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the Offerors on the one hand and
the Underwriters on the other from the offering of the Designated Preferred
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Offerors on the one hand and the Underwriters on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the
Offerors on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering of the
Designated Preferred Securities (before deducting expenses) received by the
Offerors bear to the total underwriting discounts, commissions and
compensation received by the Underwriters, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault of the
Offerors on the one hand and of the Underwriters on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Offerors or by
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Offerors and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this paragraph (d) were determined
by pro rata allocation or by any other method of allocation that does not
take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in the first sentence
of this paragraph (d) shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this paragraph (d), no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Designated Preferred Securities
underwritten by such Underwriter and distributed to the public were offered
to the public exceeds the amount of any damages that such Underwriters has
32
<PAGE> 33
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
For purposes of this paragraph (d), each person who controls an
Underwriter within the meaning of the 1933 Act shall have the same rights to
contribution as such Underwriter, and each person who controls an Offeror
within the meaning of the 1933 Act, each officer and trustee of an Offeror
who shall have signed the Registration Statement and each director of an
Offeror shall have the same rights to contribution as the Offerors subject in
each case to the preceding sentence. The obligations of the Offerors under
this paragraph (d) shall be in addition to any liability which the Offerors
may otherwise have and the obligations of the Underwriters under this
paragraph (d) shall be in addition to any liability that the Underwriters may
otherwise have.
(e) The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Offerors set forth in
this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter
or any person controlling an Underwriter or by or on behalf of the Offerors,
or such directors, trustees or officers (or any person controlling an
Offeror, (ii) acceptance of any Designated Preferred Securities and payment
therefor hereunder and (iii) any termination of this Agreement. A successor
of any Underwriter or of an Offeror, such directors, trustees or officers (or
of any person controlling an Underwriter or an Offeror) shall be entitled to
the benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 7.
(f) The Company agrees to indemnify the Trust against any and all
losses, claims, damages or liabilities that may become due from the Trust
under this Section 7.
8. TERMINATION. You shall have the right to terminate this Agreement
-----------
at any time at or prior to the Closing Date or, with respect to the
Underwriters' obligation to purchase the Option Preferred Securities, at any
time at or prior to the Option Closing Date, without liability on the part of
the Underwriters to the Offerors, if:
(a) Either Offeror shall have failed, refused, or been unable to
perform any agreement on its part to be performed under this Agreement, or
any of the conditions referred to in Section 6 shall not have been fulfilled,
when and as required by this Agreement;
(b) The Offerors or any of the Subsidiaries shall have sustained
any material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree which in the
judgment of the Representative materially impairs the investment quality of
the Designated Preferred Securities;
(c) There has been since the respective dates as of which
information is given in the Registration Statement or the Prospectus, any
materially adverse change in, or any development which is reasonably likely
to have a material adverse effect on, the condition (financial or otherwise),
earnings, affairs, business, prospects or results of operations of the
33
<PAGE> 34
Offerors and the Subsidiaries on a consolidated basis, whether or not arising
in the ordinary course of business;
(d) There has occurred any outbreak of hostilities or other
calamity or crisis or material change in general economic, political or
financial conditions, or internal conditions, the effect of which on the
financial markets of the United States is such as to make it, in your
reasonable judgment, impracticable to market the Designated Preferred
Securities or enforce contracts for the sale of the Designated Preferred
Securities;
(e) Trading generally on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market shall have been suspended, or
minimum or maximum prices for trading shall have been fixed, or maximum
ranges for prices for securities shall have been required, by any of said
exchanges or market system or by the Commission or any other governmental
authority;
(f) A banking moratorium shall have been declared by either
federal, Indiana or Michigan authorities; or
(g) Any action shall have been taken by any government in respect
of its monetary affairs which, your reasonable judgment, has a material
adverse effect on the United States securities markets.
If this Agreement shall be terminated pursuant to this Section 8,
the Offerors shall not then be under any liability to the Underwriters except
as provided in Sections 5 and 7 hereof.
9. DEFAULT OF UNDERWRITERS. If any Underwriter or Underwriters shall
-----------------------
default in its or their obligations to purchase Designated Preferred
Securities hereunder, the other Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the
Designated Preferred Securities which such defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that the
-----------------
non-defaulting Underwriters shall be under no obligation to purchase such
Designated Preferred Securities if the aggregate number of Designated
Preferred Securities to be purchased by such non-defaulting Underwriters
shall exceed 110% of the aggregate underwriting commitments set forth in
Schedule I hereto, and provided further, that no non-defaulting Underwriter
- ---------- ----------------
shall be obligated to purchase Designated Preferred Securities to the extent
that the number of such Designated Preferred Securities is more than 110% of
such Underwriter's underwriting commitment set forth in Schedule I hereto.
----------
In the event that the non-defaulting Underwriters are not obligated
under the above paragraph to purchase the Designated Preferred Securities
which the defaulting Underwriter or Underwriters agreed but failed to
purchase, the Representative may in its discretion arrange for one or more of
the Underwriters or for another party or parties to purchase such Designated
Preferred Securities on the terms contained herein. If within one business
day after such default the Representative does not arrange for the purchase
of such Designated Preferred Securities, then the Company shall be entitled
to a further period of one business day within which to procure another party
or parties satisfactory to the Representative to purchase such Designated
Preferred Securities on such terms.
34
<PAGE> 35
In the event that the Representative or the Company do not arrange
for the purchase of any Designated Preferred Securities to which a default
relates as provided above, this Agreement shall be terminated.
If the remaining Underwriters or substituted underwriters are
required hereby or agree to take up all or a part of the Designated Preferred
Securities of a defaulting Underwriter or Underwriters as provided in this
Section 9, (i) you shall have the right to postpone the Closing Date for a
period of not more than five full business days, in order to effect any
changes that, in the opinion of counsel for the Underwriters or the Company,
may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or agreements, and the Company agrees
promptly to file any amendments to the Registration Statement or supplements
to the Prospectus which, in its opinion, may thereby be made necessary and
(ii) the respective numbers of Designated Preferred Securities to be
purchased by the remaining Underwriters or substituted underwriters shall be
taken as the basis of their underwriting obligation for all purposes of this
Agreement. Nothing herein contained shall relieve any defaulting Underwriter
of any liability it may have for damages occasioned by its default hereunder.
Any termination of this Agreement pursuant to this Section 9 shall be without
liability on the part of any non-defaulting Underwriter or the Company,
except for expenses to be paid or reimbursed pursuant to Section 5 and except
for the provisions of Section 7.
10. EFFECTIVE DATE OF AGREEMENT. If the Registration Statement is not
---------------------------
effective at the time of execution of this Agreement, this Agreement shall
become effective on the Effective Date at the time the Commission declares
the Registration Statement effective. The Company shall immediately notify
the Underwriters when the Registration Statement becomes effective.
If the Registration Statement is effective at the time of execution
of this Agreement, this Agreement shall become effective at the earlier of
11:00 a.m. St. Louis time, on the first full business day following the day
on which this Agreement is executed, or at such earlier time as the
Representative shall release the Designated Preferred Securities for initial
public offering. The Representative shall notify the Offerors immediately
after it has taken any action which causes this Agreement to become
effective.
Until such time as this Agreement shall have become effective, it
may be terminated by the Offerors, by notifying you or by you, as
Representative of the several Underwriters, by notifying either Offeror,
except that the provisions of Sections 5 and 7 shall at all times be
effective.
11. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. The
--------------------------------------------------------------
representations, warranties, indemnities, agreements and other statements of
the Offerors and their officers and trustees set forth in or made pursuant to
this Agreement and the agreements of the Underwriters contained in Section 7
hereof shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Offerors or controlling persons of
either Offeror, or by or on behalf of the Underwriters or controlling persons
of the Underwriters or any termination or cancellation of this Agreement and
shall survive delivery of and payment for the Designated Preferred
Securities.
35
<PAGE> 36
12. NOTICES. Except as otherwise provided in this Agreement, all
-------
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered by hand, mailed by registered or
certified mail, return receipt requested, or transmitted by any standard form
of telecommunication and confirmed. Notices to either Offeror shall be sent
to 100 North Michigan Street, South Bend, Indiana 46601, Attention: Larry E.
Lentych (with a copy to Lewis, Rice & Fingersh, L.C., 500 North Broadway,
Suite 2000, St. Louis, Missouri 63102, Attention: Thomas C. Erb, Esq.; and
notices to the Underwriters shall be sent to Stifel, Nicolaus & Company,
Incorporated, 500 North Broadway, Suite 1500, St. Louis, Missouri 63102,
Attention: Rick E. Maples (with a copy to Bryan Cave LLP, 211 North
Broadway, Suite 3600, St. Louis, Missouri 63102, Attention: Frederick W.
Scherrer, Esq.). In all dealings with the Company under this Agreement,
Stifel, Nicolaus & Company, Incorporated shall act as representative of and
on behalf of the several Underwriters, and the Company shall be entitled to
Act and rely upon any statement, request, notice or agreement on behalf of
the Underwriters, made or given by Stifel, Nicolaus & Company, Incorporated
on behalf of the Underwriters, as if the same shall have been made or given
in writing by the Underwriters.
13. PARTIES. The Agreement herein set forth is made solely for the
-------
benefit of the Underwriters and the Offerors and, to the extent expressed,
directors, trustees and officers of the Offerors, any person controlling the
Offerors or the Underwriters, and their respective successors and assigns.
No other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include any
purchaser, in his status as such purchaser, from the Underwriters of the
Designated Preferred Securities.
14. GOVERNING LAW. This Agreement shall be governed by the laws of the
-------------
State of Missouri, without giving effect to the choice of law or conflicts of
law principles thereof.
15. COUNTERPARTS. This Agreement may be executed in one or more
------------
counterparts, and when a counterpart has been executed by each party hereto
all such counterparts taken together shall constitute one and the same
Agreement.
[The remainder of this page is intentionally left blank.]
36
<PAGE> 37
If the foregoing is in accordance with the your understanding of
our agreement, please sign and return to us a counterpart hereof, whereupon
this shall become a binding agreement between the Company, the Trust and you
in accordance with its terms.
Very truly yours,
1st SOURCE CORPORATION
By:____________________________________
Name:
Title:
1st SOURCE CAPITAL TRUST I
By:____________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of March ___, 1997.
STIFEL, NICOLAUS & COMPANY, INCORPORATED
By:----------------------------------
Name:
Title:
For itself and as Representative of the several
Underwriters named in Schedule I hereto.
37
<PAGE> 38
SCHEDULE I
----------
38
<PAGE> 39
EXHIBIT A
LIST OF SUBSIDIARIES
1st Source Bank
1st Source Leasing, Inc.
1st Source Insurance, Inc.
1st Source Capital Corporation
Trustcorp Mortgage Company
1st Source Capital Trust I
1st Source Capital Trust II
1st Source Auto Leasing, Inc. (inactive)
1st Source Travel, Inc. (inactive)
FBT Capital Corporation (inactive)
<PAGE> 40
1,000,000 Preferred Securities
1st Source Capital Trust I
____% Cumulative Trust Preferred Securities
(Liquidation Amount $25 per Preferred Security)
AGREEMENT AMONG UNDERWRITERS
----------------------------
March ___, 1997
Stifel, Nicolaus & Company, Incorporated
As Representative of the Several Underwriters
500 North Broadway, Suite 1500
St. Louis, Missouri 63102
1. UNDERWRITING AGREEMENT. We understand that 1st Source
Corporation, an Indiana corporation (the "Company") and its financing
subsidiary, 1st Source Capital Trust I, a Delaware business trust (the "Trust",
and hereinafter together with the Company, the "Offerors"), propose to enter
into an underwriting agreement in substantially the form attached (the
"Underwriting Agreement") with you and other prospective underwriters
(including us) (collectively, the "Underwriters") providing for the several
purchase by the Underwriters from the Trust 1,000,000 of the Trust's ____%
Cumulative Trust Preferred Securities with a liquidation amount of $25.00 per
Preferred Security upon the terms stated in the Underwriting Agreement (such
Preferred Securities are herein referred to as the "Firm Preferred
Securities"), in which we will agree in accordance with the terms thereof to
purchase the number of Firm Preferred Securities set forth opposite our name
in Schedule I thereto. In addition, the Trust proposes to grant to the
Underwriters, upon the terms stated in the Underwriting Agreement, the right
to purchase up to an additional 100,000 Preferred Securities (the "Option
Preferred Securities"), identical to the Firm Preferred Securities, for the
sole purpose of covering over-allotments in the sale of the Firm Preferred
Securities. The Firm Preferred Securities and the Option Preferred
Securities are collectively referred to herein as the "Designated Preferred
Securities."
2. REGISTRATION STATEMENT AND PROSPECTUS. The Designated
Preferred Securities are more particularly described in a registration
statement on Form S-3 (Registration Nos. 333-______, 333-______-01 and
333-______-02) filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act").
Amendments to such registration statement have been or are being filed, or a
form of prospectus is being filed pursuant to Rule 424(b) and Rule 430A under
the Act, in which, with our consent hereby confirmed, we have been named as
one of the Underwriters of the Designated Preferred Securities. A copy of the
registration statement as filed and a copy of each amendment as filed
(excluding exhibits) have heretofore been delivered to us. We confirm that
we have examined the registration
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statement, including amendments thereto, relating to the Designated Preferred
Securities, as filed with the Commission, that we are willing to accept the
responsibilities of an Underwriter under the Act in respect of the
registration statement, and we are willing to proceed with a public offering
of the Designated Preferred Securities in the manner contemplated. The
registration statement and the related prospectus may be further amended, but
no such amendment or change shall release or affect our obligations hereunder
or under the Underwriting Agreement. As used herein, the terms "Registration
Statement" and "Prospectus" shall have the same meanings as specified in the
Underwriting Agreement.
3. AUTHORITY OF REPRESENTATIVE. We hereby authorize you,
acting on our behalf, as our representative (a) to complete, execute, and
deliver the Underwriting Agreement, to determine the public offering price of
the Designated Preferred Securities and the underwriting discount with
respect thereto and to make such variations, if any, as in your judgment are
appropriate and are not material, provided that the respective amount of
Designated Preferred Securities set forth opposite our name in Schedule
thereto shall not be increased without our consent, except as provided
herein, (b) to waive performance or satisfaction by the Offerors of
obligations or conditions included in the Underwriting Agreement if in your
judgment such waiver will not have a material adverse effect upon the
interests of the Underwriters, and (c) to take such actions as in your
discretion may be necessary or advisable to carry out the Underwriting
Agreement, this Agreement, and the transactions for the accounts of the
several Underwriters contemplated thereby and hereby. We also authorize you
to determine all matters relating to the public advertisement of the
Designated Preferred Securities.
4. PUBLIC OFFERING. We authorize you, with respect to any
Designated Preferred Securities which we so agree to purchase, to reserve for
sale, and on our behalf to sell, to dealers selected by you (including you or
any of the other Underwriters, such dealers so selected being hereinafter
called "Selected Dealers") and to others all or part of our Designated
Preferred Securities as you may determine. Reservations for sales to persons
other than Selected Dealers shall be as nearly as practicable in proportion
to the respective underwriting obligations of the Underwriters, unless you
agree to a smaller proportion at the request of an Underwriter. Reservations
for sales to Selected Dealers need not be in such proportion. All sales of
reserved Designated Preferred Securities shall be as nearly as practicable in
proportion to the respective reservations as calculated from day to day.
In your discretion, from time to time, you may add to the
reserved Designated Preferred Securities any Designated Preferred Securities
retained by us remaining unsold, and you may upon our request release to us
any of our Designated Preferred Securities reserved but not sold. Any
Designated Preferred Securities so released shall not thereafter be deemed to
have been reserved. Upon termination of this Agreement, or prior thereto at
your discretion, you shall deliver to our account any of our Designated
Preferred Securities reserved but not sold and delivered, except that if the
aggregate of all reserved but unsold and undelivered Designated Preferred
Securities is less than 10% of the Designated Preferred Securities, you are
authorized to sell such Designated Preferred Securities for the accounts of
the several Underwriters at such price or prices as you may determine.
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Sales of reserved Designated Preferred Securities shall be made
to Selected Dealers at the public offering price less the Selected Dealers'
Concession pursuant to the Selected Dealer Agreement in substantially the
form attached hereto, and to others at the public offering price.
Underwriters and Selected Dealers may reallow a concession to other dealers
as set forth in the Selected Dealer Agreement.
After advice from you that the Designated Preferred Securities
are released for sale to the public, we will offer to the public in
conformity with the terms of the offering set forth in the Prospectus such of
our Designated Preferred Securities as you advise us are not reserved. We
authorize you after the Designated Preferred Securities are released for sale
to the public, in your discretion, to change the public offering price of the
Designated Preferred Securities and the concession, and to buy Designated
Preferred Securities for our account from Selected Dealers at the public
offering price less such amount not in excess of the Selected Dealers'
Concession as you may determine.
Sales of Designated Preferred Securities between Underwriters may
be made with your prior consent, or as you deem advisable for blue sky
purposes.
We agree that we will not sell to any accounts over which we
exercise discretionary authority any Designated Preferred Securities which we
have agreed to purchase under the Underwriting Agreement.
5. ADDITIONAL PROVISIONS REGARDING SALES. You may, in your
discretion, charge our account with an amount equal to the Selected Dealers'
Concession in respect of each Designated Preferred Security purchased under
the Underwriting Agreement by you and not sold by you for our account (and
each Designated Preferred Security which you believe has been substituted
therefor) which may be delivered against a purchase contract made by you for
our account prior to the later of (a) the termination of all of the
provisions referred to in Section 10 hereof or (b) the covering by you of any
short position created by you for our account, or in lieu of such charge,
require us to repurchase on demand at the total cost thereof (including
commissions), plus transfer taxes, any such Designated Preferred Security so
delivered.
6. PAYMENT AND DELIVERY. At or before 9:00 a.m., New York
City time, on the Closing Date (as defined in the Underwriting Agreement) and
on each Option Closing Date (as defined in the Underwriting Agreement), we
will deliver to you (a) to an account designated by you by wire transfer, or
(b) at your office at 500 North Broadway, Suite 1500, St. Louis, Missouri
63102, Attention: Syndicate Department a certified or bank cashiers' check
payable to your order in same day funds, in the amount equal to the initial
offering price set forth in the Prospectus less the Selected Dealers'
Concession in respect of the number of Firm Preferred Securities or Option
Preferred Securities, as the case may be, to be purchased by us pursuant to
the Underwriting Agreement. We authorize you for our account to make payment
of the purchase price for the Designated Preferred Securities to be purchased
by us against delivery to you of such Designated Preferred Securities, and
the difference between such price and the amount of our check or wire
transfer delivered to you therefor shall be credited to our account. Unless
we notify you at least three full business days prior to such Closing Date to
make other
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arrangements, you may, in your discretion, advise the Offerors to prepare our
certificates in our name. If you have not received our funds as requested,
you may in your discretion make such payment on our behalf, in which event we
will reimburse you promptly. Any such payment by you shall not relieve us
from any of our obligations hereunder or under the Underwriting Agreement.
We authorize you for our account to accept delivery of our
Designated Preferred Securities from the Trust and to hold such of our
Designated Preferred Securities as you have reserved for sale to Selected
Dealers and others and to deliver such Designated Preferred Securities
against such sales. You will deliver to us our unreserved Designated
Preferred Securities as promptly as practicable.
Notwithstanding the foregoing provisions of this Section 6, if
you so notify us, payment for and delivery of our Designated Preferred
Securities may be made through the facilities of The Depository Trust
Company, if we are a member, unless we have otherwise notified you prior to a
date to be specified by you, or, if we are not a member, settlement may be
made through a correspondent who is a member pursuant to instructions we may
send to you prior to such specified date.
As promptly as practicable after you receive payment for reserved
Designated Preferred Securities sold for our account, you will remit to us
the purchase price paid by us for such Designated Preferred Securities and
credit or debit our account with the difference between the sale price and
such purchase price.
7. AUTHORITY TO BORROW. In connection with the transactions
contemplated in the Underwriting Agreement or this Agreement, we authorize
you, in your discretion, to advance your own funds for our account, charging
current interest rates, to arrange loans for our account and in connection
therewith to execute and deliver any notes or other instruments and hold or
pledge as security any of our Designated Preferred Securities or any
Preferred Securities of the Trust purchased for our account. Any lender may
rely upon your instructions in all matters relating to any such loan.
Any of our Designated Preferred Securities and any Preferred
Securities of the Trust purchased for our account held by you may from time
to time be delivered to us for carrying purposes, and any such securities
will be delivered to you upon demand.
8. STABILIZATION AND OTHER MATTERS. We authorize you in your
discretion to make purchases and sales of the Preferred Securities of the
Trust for our account in the open market or otherwise, for long or short
account, on such terms as you deem advisable and in arranging sales to
overallot. If you have purchased Preferred Securities for stabilizing
purposes prior to the execution of this Agreement, such purchases shall be
treated as having been made pursuant to the foregoing authorization. We also
authorize you, either before or after the termination of the offering
provisions of this Agreement, to cover any short position incurred pursuant
to this Section on such terms as you deem advisable. All such purchases and
sales and over-allotments shall be made for the accounts of the several
Underwriters as nearly as
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practicable in proportion to their respective underwriting obligations. Our
net commitment under this Section (excluding any commitment incurred under the
Underwriting Agreement upon exercise of the right to purchase Option Preferred
Securities) shall not, at the end of any business day, exceed 15 percent of
our maximum underwriting obligation. We will on your demand take up and pay
for at cost any Preferred Securities so purchased or sold or over-allotted for
our account, and, if any other Underwriter defaults in its corresponding
obligation, we will assume our proportionate share of such obligation without
relieving the defaulting Underwriter from liability. We will be obligated in
respect of purchases and sales made for our account hereunder whether or not
any proposed purchase of the Designated Preferred Securities from the Trust is
consummated. The existence of this provision is no assurance that the price
of the Designated Preferred Securities will be stabilized or that, if
stabilizing is commenced, it may not be discontinued at any time.
We agree to advise you, from time to time upon your request,
during the term of this Agreement, of the number of Designated Preferred
Securities retained by us remaining unsold, and will, upon your request, sell
to you for the accounts of one or more of the several Underwriters such
number of such Designated Preferred Securities as you may designate at such
prices, not less than the net price to Selected Dealers nor more than the
public offering price, as you may determine.
If you effect any stabilizing purchase pursuant to this Section
8, you will notify us promptly of the date and time when the first
stabilizing purchase was effected and the date and time when stabilizing was
terminated. You will retain such information as is required to be retained
by you as "Manager" pursuant to Rule 17a-2 under the Securities Exchange Act
of 1934, as amended (the "1934 Act"). We agree that we will not effect any
stabilizing purchases without your express authorization, and, if any
purchases are effected, we agree to furnish to you not later than three
business days following the date upon which stabilization was commenced such
information as is required under Rule 17a-2(d).
With respect to the Underwriting Agreement, you are also
authorized in your discretion (a) to exercise the option therein as to all or
any part of the Option Preferred Securities, and to terminate such option in
whole or in part prior to its expiration, (b) to postpone the Closing Date
and the Option Closing Date referred to in the Underwriting Agreement, and
any other time or date specified therein, (c) to exercise any right of
cancellation or termination, (d) to arrange for the purchase by other persons
(including yourselves or any other Underwriter) of any Designated Preferred
Securities not taken up by any defaulting Underwriter and (e) to consent to
such other changes in the Underwriting Agreement as in your judgment do not
materially adversely affect the substance of our rights and obligations
thereunder.
We further agree that (a) prior to the termination of this
Agreement we will not, directly or indirectly, bid for or purchase any
Designated Preferred Securities for our own account, except as provided in
this Agreement and in the Underwriting Agreement, and (b) prior to the
completion (as defined in Rule 10b-6 under the 1934 Act) of our participation
in this distribution, we will otherwise comply with Rule 10b-6.
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9. ALLOCATION OF EXPENSES AND SETTLEMENT. We authorize you to
charge our account with (a) all transfer taxes on Designated Preferred
Securities purchased by us pursuant to the Underwriting Agreement and sold by
you for our account, (b) Selected Dealers' Concessions in connection with the
purchase, marketing and sale of the Designated Preferred Securities for our
account, and (c) our proportionate share (based upon our underwriting
obligation) of all other expenses incurred by you under this Agreement and in
connection with the purchase, carrying, sale and distribution of the
Designated Preferred Securities. Your determination of the amount and
allocation of such expenses shall be conclusive. In the event of the default
of any Underwriter in carrying out its obligations hereunder, the expenses
chargeable to such Underwriter pursuant to this Agreement and not paid by it,
as well as any additional losses or expenses arising from such default, may
be proportionately charged by you against the other Underwriters not so
defaulting (including such other persons who purchase Designated Preferred
Securities upon a default by an Underwriter pursuant to Section 11 hereof),
without, however, relieving such defaulting Underwriter from its liability
therefor.
As soon as practicable after termination of this Agreement, the
accounts hereunder will be settled, but you may reserve from distribution
such amount as you deem necessary to cover possible additional expenses. You
may at any time make partial distributions of credit balances or call for
payment of debit balances. Any of our funds in your hands may be held with
your general funds without accountability for interest. Notwithstanding the
termination of this Agreement or any settlement, we will pay (a) our
proportionate share (based on our underwriting obligation) of all expenses
and liabilities which may be incurred by or for the accounts of the
Underwriters, including any liability based on the claim that the
Underwriters constitute an association, unincorporated business or other
separate entity, and of any expenses incurred by you or any other Underwriter
with your approval in contesting any such claim or liability, and (b) any
transfer taxes paid after such settlement on account of any sale or transfer
for our account.
10. TERMINATION. The offering provisions of this Agreement
shall terminate 30 days from the date hereof unless extended by you. You may
extend said provisions for a period or periods not exceeding an additional 30
days in the aggregate, provided that the Selected Dealer Agreements, if any,
are similarly extended. Whether extended or not, said provisions may be
terminated in whole or in part by notice from you.
11. DEFAULT BY UNDERWRITERS. Default by one or more
Underwriters in respect of their obligations hereunder or under the
Underwriting Agreement shall not release us from any of our obligations or in
any way affect the liability of any defaulting Underwriter to the other
Underwriters for damages resulting from such default. In case of such
default by one or more Underwriters, you are authorized to increase, pro rata
with other non-defaulting Underwriters, the number of Designated Preferred
Securities which we shall be obligated to purchase pursuant to the
Underwriting Agreement, provided that the aggregate amount of all such
increases for our account shall not exceed our pro rata share of 100,000
Designated Preferred Securities; and you are further authorized to arrange,
but shall not be obligated to arrange, for the purchase by other persons, who
may include yourselves or other Underwriters, of all or a portion of any
aggregate amount not taken up. In the event any such arrangements are
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<PAGE> 46
made, the respective numbers of Designated Preferred Securities to be
purchased by the non-defaulting Underwriters and by any such other persons
shall be taken as the basis for the underwriting obligations under this
Agreement.
12. POSITION OF REPRESENTATIVE. Except as otherwise
specifically provided in this Agreement, you shall have full authority to
take such action as you may deem advisable in respect of all matters
pertaining to the Underwriting Agreement and this Agreement and in connection
with the purchase, carrying, sale, and distribution of the Designated
Preferred Securities (including authority to terminate the Underwriting
Agreement as provided therein). You shall be under no liability to us for or
in respect of the value of the Designated Preferred Securities or the
validity or the form thereof, the Registration Statement, any preliminary
prospectus, the Prospectus, the Underwriting Agreement, or other instruments
executed by the Offerors, or others; or for or in respect of the issuance,
transfer, or delivery of the Designated Preferred Securities; or for the
performance by the Offerors, or others of any agreement on its or their part;
nor shall you be liable under any of the provisions hereof or for any matters
connected herewith, except for your own want of good faith, for obligations
expressly assumed by you in this Agreement and for any liabilities imposed
upon you by the Act. No obligations on your part shall be implied or
inferred herefrom. Authority with respect to matters to be determined by
you, or by you and the Offerors, pursuant to the Underwriting Agreement,
shall survive the termination of this Agreement.
In taking all actions hereunder, except in the performance of
your own obligations hereunder and under the Underwriting Agreement, you
shall act only as the representative of each of the Underwriters. The
commitments and liabilities of each of the several Underwriters are several
in accordance with their respective purchase obligations and are not joint or
joint and several. Nothing contained herein shall constitute the
Underwriters partners or render any of them liable to make payments otherwise
than as herein provided. If for federal income tax purposes the Underwriters
should be deemed to constitute a partnership, then each Underwriter elects to
be excluded from the application of Subchapter K, Chapter 1, Subtitle A, of
the Internal Revenue Code of 1986, as amended, and agrees not to take any
position inconsistent with such election. Each Underwriter authorizes
Stifel, Nicolaus & Company, Incorporated, in its discretion, on behalf of
such Underwriter, to execute such evidence of such election as may be
required by the Internal Revenue Service.
13. COMPENSATION TO REPRESENTATIVE. As compensation for your
services in connection with the purchase of the Designated Preferred
Securities and the management of the public offering of the Designated
Preferred Securities, we agree to pay you and authorize you to charge our
account with an amount equal to $_____ per share of the Designated Preferred
Securities which we have agreed to purchase pursuant to the Underwriting
Agreement.
14. INDEMNIFICATION AND FUTURE CLAIMS. Each Underwriter,
including you, agrees to indemnify, hold harmless and reimburse each other
Underwriter and each person, if any, who controls any other Underwriter
within the meaning of Section 15 of the Act, and any successor of any other
Underwriter, to the extent that, and upon the terms upon which, each
Underwriter will be obligated pursuant to the Underwriting Agreement to
indemnify, hold
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harmless and reimburse the Offerors, its directors, officers, and controlling
persons, therein specified.
In the event that at any time any person other than an
Underwriter asserts a claim against one or more of the Underwriters or
against you as representative of the Underwriters arising out of an alleged
untrue statement or omission in the Registration Statement (or any amendment
thereto) or in any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) or relating to any transaction contemplated by this
Agreement, we authorize you to make such investigation, to retain such
counsel for the Underwriters and to take such action in the defense of such
claim as you may deem necessary or advisable. You may settle such claim with
the approval of a majority in interest of the Underwriters. We will pay our
proportionate share (based upon our underwriting obligation) of all expenses
incurred by you (including the fees and expenses of counsel for the
Underwriters) in investigating and defending against such claim and our
proportionate share of the aggregate liability incurred by all underwriters
in respect of such claim (after deducting any contribution or indemnification
obtained pursuant to the Underwriting Agreement, or otherwise, from persons
other than Underwriters), whether such liability is the result of a judgment
against one or more of the Underwriters or the result of any such settlement.
There shall be credited against any amount paid or payable by us pursuant to
this paragraph any loss, damage, liability or expense which is incurred by us
as a result of any such claim asserted against us, and if such loss, claim,
damage, liability, or expense is incurred by us as a result of any such claim
against us, and if such loss, claim, damage, liability, or expense is
incurred by us subsequent to any payment by us pursuant to this paragraph,
appropriate provision shall be made to effect such credit, by refund or
otherwise. Any Underwriter may retain separate counsel at its own expense.
A claim against or liability incurred by a person who controls an Underwriter
shall be deemed to have been made against or incurred by such Underwriter.
In the event of default by any Underwriter in respect of its obligations
under this Section, the non-defaulting Underwriters shall be obligated to pay
the full amount thereof in the proportions that their respective underwriting
obligations bear to the underwriting obligations of all non-defaulting
Underwriters, without relieving such defaulting Underwriter of its liability
hereunder. Our agreements contained in this Section will remain in full
force and effect regardless of any investigation made by or on behalf of such
other Underwriter or controlling person and will survive the delivery of and
payment for the Designated Preferred Securities and the termination of this
Agreement and the similar agreements entered into with the other
Underwriters.
15. BLUE SKY AND OTHER MATTERS. You will not have any
responsibility with respect to the right of any Underwriter or other person
to sell the Designated Preferred Securities in any jurisdiction
notwithstanding any information you may furnish in that connection. We
authorize you to file a New York Further State Notice, if required, and to
make and carry out on our behalf any agreements which you may deem necessary
in order to procure registration or qualification of any of the Designated
Preferred Securities in any jurisdiction, and we will at your request make
such payments, and furnish to you such information, as you may deem required
by reason of any such agreements.
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We authorize you to file on behalf of the several Underwriters
with the National Association of Securities Dealers, Inc. (the "NASD") such
documents and information, if any, which are available or have been furnished
to you for filing pursuant to the applicable rules, statements, and
interpretations of the
NASD.
16. TITLE TO DESIGNATED PREFERRED SECURITIES. The Designated
Preferred Securities purchased by the respective Underwriters shall remain
the property of such Underwriters until sold and no title to any such
Designated Preferred Securities shall in any event pass to you by virtue of
any of the provisions of this Agreement.
17. CAPITAL REQUIREMENTS. We confirm that the incurrence by us
of our obligations under this Agreement and under the Underwriting Agreement
will not place us in violation of Rule 15c3-1 under the 1934 Act or of any
applicable rules relating to capital requirements of any securities exchange
or association to which we are subject.
18. LIABILITY FOR FUTURE CLAIMS. Neither any statement by you
of any credit or debit balance in our account nor any reservation from
distribution to cover possible additional expenses relating to the Designated
Preferred Securities will constitute any representation by you as to the
existence or nonexistence of possible unforeseen expenses or liabilities of
or charges against the several Underwriters. Notwithstanding the
distribution of any net credit balance to us, we will be and remain liable
for, and will pay on demand, (a) our proportionate share (based upon our
underwriting obligation) of all expenses and liabilities which may be
incurred by or for the accounts of the Underwriters, including any liability
which may be incurred by the Underwriters or any of them based on the claim
that the Underwriters constitute an association, unincorporated business,
partnership, or any separate entity, and (b) any transfer taxes paid after
such settlement on account of any sale or transfer for our account.
19. ACKNOWLEDGMENT OF REGISTRATION STATEMENT, ETC. We hereby
confirm that we have examined the Registration Statement (including any
amendments or supplements thereto) and Prospectus relating to the Designated
Preferred Securities filed with the Commission, that we are willing to accept
the responsibilities of an underwriter thereunder and that we are willing to
proceed as therein contemplated. We confirm that we have authorized you to
advise the Offerors on our behalf (a) as to the statements to be included in
any preliminary prospectus and in the Prospectus (including any supplement
thereto) relating to the Designated Preferred Securities under the heading
"Underwriting," insofar as they relate to us, and (b) that there is no
information about us required to be stated in said Registration Statement or
said preliminary prospectus or the Prospectus (including any supplement
thereto) other than as set forth in the Underwriters' Questionnaire
previously delivered by us to you and the Offerors. We understand that the
aforementioned documents are subject to further change and that we will be
supplied with copies of any amendment or amendments to the Registration
Statement and of any amended Prospectus promptly, if and when received by
you, but the making of such changes and amendments will not release us or
affect our obligations hereunder or under the Underwriting Agreement.
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20. NOTICES AND GOVERNING LAW. Any notice from you to us shall
be mailed, telephoned, or telegraphed to us at our address as set forth in
the Underwriters' Questionnaire. Any notice from us to you shall be deemed
to have been duly given if mailed, telephoned or telegraphed to you at 500
North Broadway, Suite 1500, St. Louis, Missouri 63102, Attention:
Syndicate Department. This Agreement shall be governed by and construed in
accordance with the laws of the State of Missouri.
21. OTHER PROVISIONS. We represent that we are actually
engaged in the investment banking or securities business and that we are a
member in good standing of the NASD or, if we are not such a member, that we
are a foreign dealer not eligible for membership in the NASD and that we will
not offer or sell any Designated Preferred Securities in, or to persons who
are nationals or residents of, the United States of America. In making sales
of Designated Preferred Securities, if we are such a member, we agree to
comply with all applicable rules of the NASD, including, without limitation,
the NASD's Interpretation with respect to Free-Riding and Withholding and
Section 24 of Article III of the NASD's Rules of Fair Practice, or if we are
a foreign dealer, we agree to comply with such Interpretation and Sections 8,
24 and 36 of such Article as though we were such a member, and with Section
25 as that Section applies to a non-member broker or dealer in a foreign
country. We confirm that you have heretofore delivered to us such number of
copies of the Prospectus as have been reasonably requested by us, and we
further confirm that we have complied and will comply with Rule 15c2-8 under
the 1934 Act concerning delivery of each preliminary prospectus and the
Prospectus, and that we will furnish to persons who receive a confirmation of
sale a copy of the Prospectus filed pursuant to Rule 424(b) or Rule 424(c)
under the Act. We are aware of our statutory responsibilities under the Act,
and you are authorized on our behalf to so advise the Commission.
22. COUNTERPARTS. This Agreement may be signed in any number
of counterparts which, taken together, shall constitute one and the same
instrument, and you may confirm the execution of such counterparts by
facsimile signature.
________________________________________________
As Attorney-in-Fact for each of the several
Underwriters named in Schedule 1 to the
Underwriting Agreement
Confirmed as of the date first above written.
STIFEL, NICOLAUS & COMPANY, INCORPORATED
As Representative of the Several Underwriters
By:_____________________________________________
Name:
Title:
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<PAGE> 1
1,000,000 Preferred Securities
1st Source Capital Trust II
Floating Rate Cumulative Trust Preferred Securities
(Liquidation Amount of $25 per Preferred Security)
UNDERWRITING AGREEMENT
----------------------
March ___, 1997
STIFEL, NICOLAUS & COMPANY, INCORPORATED
As Representative of the Several Underwriters
named in Schedule I hereto
500 North Broadway
St. Louis, Missouri 63102
Dear Sirs:
1st Source Corporation, an Indiana corporation (the "Company"), and
its financing subsidiary, 1st Source Capital Trust II, a Delaware business trust
(the "Trust", and hereinafter together with the Company, the "Offerors"),
propose that the Trust issue and sell to the several underwriters listed on
Schedule I hereto (the "Underwriters"), pursuant to the terms of this
Agreement, 1,000,000 of the Trust's Floating Rate Cumulative Trust Preferred
Securities, with a liquidation amount of $25.00 per preferred security (the
"Preferred Securities"), to be issued under the Trust Agreement (as
hereinafter defined), the terms of which are more fully described in the
Prospectus (as hereinafter defined). The aforementioned 1,000,000 Preferred
Securities to be sold to the Underwriter are herein called the "Firm
Preferred Securities". Solely for the purpose of covering over-allotments in
the sale of the Firm Preferred Securities, the Offerors further propose that
the Trust issue and sell to the Underwriters, at their option, up to an
additional 100,000 Preferred Securities (the "Option Preferred Securities")
upon exercise of the over-allotment option granted in Section 1 hereof. The
Firm Preferred Securities and any Option Preferred Securities are herein
collectively referred to as the "Designated Preferred Securities". You are
acting as representative of the Underwriters and in such capacity are
sometimes herein referred to as the "Representative."
The Offerors hereby confirm as follows their agreement with each of
the Underwriters in connection with the proposed purchase of the Designated
Preferred Securities.
1. SALE, PURCHASE AND DELIVERY OF DESIGNATED PREFERRED SECURITIES;
---------------------------------------------------------------
DESCRIPTION OF DESIGNATED PREFERRED SECURITIES.
- -----------------------------------------------
(a) On the basis of the representations, warranties and agreements
herein contained, and subject to the terms and conditions herein set forth,
the Offerors hereby agree that the Trust shall issue and sell to each of the
Underwriters and each of the Underwriters agrees,
<PAGE> 2
severally and not jointly, to purchase from the Trust, at a purchase price of
$25.00 per share (the "Purchase Price"), the respective number of Firm
Preferred Securities set forth opposite the name of such Underwriter in
Schedule I hereto. Because the proceeds from the sale of the Firm Preferred
Securities will be used to purchase from the Company its Debentures (as
hereinafter defined and as described in the Prospectus), the Company shall pay
to each Underwriter a commission of $_____ per Firm Preferred Security
purchased (the "Firm Preferred Securities Commission"). The Representative
may by notice to the Company amend Schedule I to add, eliminate or substitute
names set forth therein (other than to eliminate the name of the
Representative) and to amend the number of firm Preferred Securities to be
purchased by any firm or corporation listed thereon, provided that the total
number of Firm Preferred Securities listed on Schedule I shall equal
1,000,000.
In addition, on the basis of the representations, warranties and
agreements herein contained and subject to the terms and conditions herein
set forth, the Trust hereby grants to the Underwriters, severally and not
jointly, an option to purchase all or any portion of the 100,000 Option
Preferred Securities, and upon the exercise of such option in accordance with
this Section 1, the Offerors hereby agree that the Trust shall issue and sell
to the Underwriters, severally and not jointly, all or any portion of the
Option Preferred Securities at the same Purchase Price per share paid for the
Firm Preferred Securities. If any Option Preferred Securities are to be
purchased, each Underwriter, severally and not jointly, agrees to purchase
from the Trust that proportion (subject to adjustment as you may determine to
avoid fractional shares) of the number of Option Preferred Securities to be
purchased that the number of Firm Preferred Securities set forth opposite the
name of such Underwriter in Schedule I hereto (or such number increased as
set forth in Section 9 hereof) bears to 1,000,000. Because the proceeds from
the sale of the Option Preferred Securities will be used to purchase from the
Company its Debentures, the Company shall pay to the Underwriters a
commission of $_____ per Option Preferred Security for each Option Preferred
Security purchased (the "Option Preferred Securities Commission"). The
option hereby granted (the "Option") shall expire 30 days after the date upon
which the Registration Statement (as hereinafter defined) becomes effective
and may be exercised only for the purpose of covering over-allotments which
may be made in connection with the offering and distribution of the Firm
Preferred Securities. The Option may be exercised in whole or in part at any
time (but not more than once) by you giving notice (confirmed in writing) to
the Trust setting forth the number of Option Preferred Securities as to which
the Underwriters are exercising the Option and the time, date and place for
payment and delivery of certificates for such Option Preferred Securities.
Such time and date of payment and delivery for the Option Preferred
Securities (the "Option Closing Date") shall be determined by you, but shall
not be earlier than two nor later than five full business days after the
exercise of such Option, nor in any event prior to the Closing Date (as
hereinafter defined). The Option Closing Date may be the same as the Closing
Date.
Payment of the Purchase Price and the Firm Preferred Securities
Commission and delivery of certificates for the Firm Preferred Securities
shall be made at the offices of Stifel, Nicolaus & Company, Incorporated, 500
North Broadway, St. Louis, Missouri 63102, or such other place as shall be
agreed to by you and the Offerors, at 10:00 a.m., St. Louis time, on March
_____, 1997, or at such other time not more than five full business days
thereafter as the Offerors and you shall determine (the "Closing Date"). If
the Underwriters exercise the option to
2
<PAGE> 3
purchase any or all of the Option Preferred Securities, payment of the
Purchase Price and Option Preferred Securities Commission and delivery of
certificates for such Option Preferred Securities shall be made on the Option
Closing Date at the Underwriters' offices, or at such other place as the
Offerors and you shall determine. Such payments shall be made to an account
designated by the Trust by wire transfer or certified or bank cashier's check,
in same day funds, in the amount of the Purchase Price therefor, against
delivery by or on behalf of the Trust to you for the respective accounts of
the several Underwriters of certificates for the Designated Preferred
Securities to be purchased by the Underwriters.
The Agreement contained herein with respect to the timing of the
Closing Date and Option Closing Date is intended to, and does, constitute an
express agreement, as described in Rule 15c6-1(c) and (d) promulgated under
the 1934 Act (as defined herein), for a settlement date other than four
business days after the date of the contract.
Certificates for Designated Preferred Securities to be purchased by
the Underwriters shall be delivered by the Offerors in fully registered form
in such authorized denominations and registered in such names as you shall
request in writing not later than 12:00 noon, St. Louis time, two business
days prior to the Closing Date and, if applicable, the Option Closing Date.
Certificates for Designated Preferred Securities to be purchased by the
Underwriters shall be made available by the Offerors to you for inspection,
checking and packaging at such office as you may designate in writing not
later than 1:00 p.m., St. Louis time, on the last business day prior to the
Closing Date and, if applicable, on the last business day prior to the Option
Closing Date.
Time shall be of the essence, and delivery of the certificates for
the Designated Preferred Securities at the time and place specified pursuant
to this Agreement is a further condition of the obligations of each
Underwriter hereunder.
(b) The Offerors propose that the Trust issue the Designated
Preferred Securities pursuant to an Amended and Restated Trust Agreement
among State Street Bank and Trust Company, as Property Trustee, Wilmington
Trust Company, as Delaware Trustee, the Administrative Trustees named
therein, (collectively, the "Trustees"), and the Company, in substantially
the form heretofore delivered to the Underwriters, said Agreement being
hereinafter referred to as the "Trust Agreement". In connection with the
issuance of the Designated Preferred Securities, the Company proposes (i) to
issue its Subordinated Debentures ( the "Debentures") pursuant to an
Indenture, to be dated as of March _____, 1997, between the Company and State
Street Bank and Trust Company, as Trustee (the "Indenture") and (ii) to
guarantee certain payments on the Designated Preferred Securities pursuant to
a Guarantee Agreement between the Company and State Street Bank and Trust
Company, as guarantee trustee (the "Guarantee"), to the extent described
therein.
2. REPRESENTATIONS AND WARRANTIES.
------------------------------
(a) The Offerors jointly and severally represent and warrant to,
and agree with, each of the Underwriters that:
3
<PAGE> 4
(i) The reports filed with the Securities and Exchange
Commission (the "Commission") by the Company under the Securities
Exchange Act of 1934, as amended (the "1934 Act") and the rules and
regulations thereunder (the "1934 Act Regulations") at the time they
were filed with the Commission, complied as to form in all material
respects with the requirements of the 1934 Act and the 1934 Act
Regulations and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading.
(ii) The Offerors have prepared and filed with the Commission
a registration statement on Form S-3 (File Numbers 333-_______,
333-________-01 and 333-________-02) for the registration of the
Designated Preferred Securities, the Guarantee and $27,500,000
aggregate principal amount of Debentures under the Securities Act of
1933, as amended (the "1933 Act"), including the related prospectus
subject to completion, and one or more amendments to such
registration statement may have been so filed, in each case in
conformity in all material respects with the requirements of the 1933
Act, the rules and regulations promulgated thereunder (the "1933 Act
Regulations") and the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act") and the rules and regulations thereunder.
Copies of such registration statement, including any amendments
thereto, each Preliminary Prospectus (as defined herein) contained
therein and the exhibits, financial statements and schedules to such
registration statement, as finally amended and revised, have
heretofore been delivered by the Offerors to the Representative.
After the execution of this Agreement, the Offerors will file with
the Commission (A) if such registration statement, as it may have
been amended, has been declared by the Commission to be effective
under the 1933 Act, a prospectus in the form most recently included
in an amendment to such registration statement (or, if no such
amendment shall have been filed, in such registration statement),
with such changes or insertions as are required by Rule 430A of the
1933 Act Regulations ("Rule 430A") or permitted by Rule 424(b) of the
1933 Act Regulations ("Rule 424(b)") and as have been provided to and
not objected to by the Representative prior to (or as are agreed to
by the Representative subsequent to) the execution of this Agreement,
or (B) if such registration statement, as it may have been amended,
has not been declared by the Commission to be effective under the
1933 Act, an amendment to such registration statement, including a
form of final prospectus, necessary to permit such registration
statement to become effective, a copy of which amendment has been
furnished to and not objected to by the Representative prior to (or
is agreed to by the Representative subsequent to) the execution of
this Agreement. As used in this Agreement, the term "Registration
Statement" means such registration statement, as amended at the time
when it was or is declared effective under the 1933 Act, including
(1) all financial schedules and exhibits thereto, (2) all documents
(or portions thereof) incorporated by reference therein filed under
the 1934 Act, and (3) any information omitted therefrom pursuant to
Rule 430A and included in the Prospectus (as hereinafter defined);
the term "Preliminary Prospectus" means each prospectus subject to
completion filed with such registration statement or any amendment
thereto including all documents (or portions thereof) incorporated by
reference therein under the 1934 Act (including the prospectus
subject to completion, if any, included in the Registration Statement
and each prospectus filed pursuant to Rule 424(a) under the 1933
Act); and the
4
<PAGE> 5
term "Prospectus" means the prospectus first filed with
the Commission pursuant to Rule 424(b)(1) or (4) or, if no prospectus
is required to be filed pursuant to Rule 424(b)(1) or (4), the
prospectus included in the Registration Statement, in each case
including the financial schedules and all documents (or portions
thereof) incorporated by reference therein under the 1934 Act. The
date on which the Registration Statement becomes effective is
hereinafter referred to as the "Effective Date."
(iii) The documents incorporated by reference in the
Preliminary Prospectus or Prospectus or from which information is so
incorporated by reference, when they became effective or were filed
with the Commission, as the case may be, complied in all material
respects with the requirements of the 1934 Act and the 1934 Act
Regulations, and when read together and with the other information in
the Preliminary Prospectus or Prospectus, as the case may be, at the
time the Registration Statement became or becomes effective and at
the Closing Date and any Option Closing Date, did not or will not, as
the case may be, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(iv) No order preventing or suspending the use of any
Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) has been issued by the Commission, nor
has the Commission, to the knowledge of the Offerors, threatened to
issue such an order or instituted proceedings for that purpose. Each
Preliminary Prospectus, at the time of filing thereof, (A) complied
in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and (B) did not contain an untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty does not
-------- -------
apply to statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Offerors by
any of the Underwriters expressly for inclusion in the Prospectus
beneath the heading "Underwriting" and the last sentence on the cover
page of the Prospectus (such information referred to herein as the
"Underwriters' Information").
(v) At the Effective Date and at all times subsequent
thereto, up to and including the Closing Date and, if applicable, the
Option Closing Date, the Registration Statement and any
post-effective amendment thereto (A) complied and will comply in all
material respects with the requirements of the 1933 Act, the 1933 Act
Regulations and the Trust Indenture Act (and the rules and
regulations thereunder) and (B) did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, not misleading. At the Effective Date and at all times when
the Prospectus is required to be delivered in connection with offers
and sales of Designated Preferred Securities, including, without
limitation, the Closing Date and, if applicable, the Option Closing
Date, the Prospectus, as amended or supplemented, (A) complied and
will comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations and the Trust Indenture Act
(and the rules and regulations thereunder) and (B) did not contain
and will not
5
<PAGE> 6
contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that this
-------- -------
representation and warranty does not apply to Underwriters'
Information.
(vi) (A) The Company is duly organized, validly existing
and in good standing under the laws of the State of Indiana, with
full corporate and other power and authority to own, lease and
operate its properties and conduct its business as described in and
contemplated by the Registration Statement and the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus) and as currently being conducted and is duly registered
as a bank holding company under the Bank Holding Company Act of 1956,
as amended (the "BHC Act").
(B) The Trust has been duly created and is validly
existing as a statutory business trust in good standing under the
Delaware Business Trust Act with the power and authority (trust and
other) to own its property and conduct its business as described in
the Registration Statement and Prospectus, to issue and sell its
common securities (the "Common Securities") to the Company pursuant
to the Trust Agreement, to issue and sell the Designated Preferred
Securities, to enter into and perform its obligations under this
Agreement and to consummate the transactions herein contemplated; the
Trust has no subsidiaries and is duly qualified to transact business
and is in good standing in each jurisdiction in which the conduct of
its business or the ownership of its property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Trust; the Trust has conducted and will conduct no
business other than the transactions contemplated by this Agreement
and described in the Prospectus; the Trust is not a party to or bound
by any agreement or instrument other than this Agreement, the Trust
Agreement and the agreements and instruments contemplated by the
Trust Agreement and described in the Prospectus; the Trust has no
liabilities or obligations other than those arising out of the
transactions contemplated by this Agreement and the Trust Agreement
and described in the Prospectus; the Trust is not a party to or
subject to any action, suit or proceeding of any nature; the Trust is
not, and at the Closing Date or any Option Closing Date will not be,
to the knowledge of the Offerors, classified as an association
taxable as a corporation for United States federal income tax
purposes; and the Trust is, and as of the Closing Date or any Option
Closing Date will be, treated as a consolidated subsidiary of the
Company pursuant to generally accepted accounting principles.
(vii) The Company has 10 subsidiaries. They are listed on
Exhibit A attached hereto and incorporated herein (the
---------
"Subsidiaries"). The Company does not own or control, directly or
indirectly, more than 5% of any class of equity security of any
corporation, association or other entity other than the Subsidiaries.
1st Source Bank is referred to as the "Bank". Each Subsidiary is a
bank, corporation or business trust duly organized, validly existing
and in good standing under the laws of its respective jurisdiction of
incorporation. Each such Subsidiary has full corporate and other
power and authority to own, lease and operate its properties and to
conduct its business as described in and contemplated by the
Registration Statement and the Prospectus (or, if
6
<PAGE> 7
the Prospectus is not in existence, the most recent Preliminary
Prospectus) and as currently being conducted. The deposit accounts
of the Bank are insured by the Bank Insurance Fund administered by
the Federal Deposit Insurance Corporation (the "FDIC") up to the
maximum amount provided by law, except to the extent the Prospectus
discloses such deposit accounts are insured by the Savings
Association Insurance Fund administered by the FDIC ("SAIF") and to
such extent the deposit accounts are so insured up to the maximum
amount provided by law; and no proceedings for the modification,
termination or revocation of any such insurance are pending or, to
the knowledge of the Offerors, threatened.
(viii) The Company and each of the Subsidiaries is duly
qualified to transact business as a foreign corporation and is in
good standing in each other jurisdiction in which it owns or leases
property or conducts its business so as to require such qualification
and in which the failure to so qualify would, individually or in the
aggregate, have a material adverse effect on the condition (financial
or otherwise), earnings, business, prospects or results of operations
of the Company and the Subsidiaries on a consolidated basis. All of
the issued and outstanding shares of capital stock of the
Subsidiaries (A) have been duly authorized and are validly issued,
(B) are fully paid and nonassessable except to the extent such shares
may be deemed assessable under 12 U.S.C. Section 55 or 12 U.S.C.
Section 1831o, and (C) except as disclosed in the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus), are directly owned by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance, restriction
upon voting or transfer, preemptive rights, claim or equity. Except
as disclosed in the Prospectus, there are no outstanding rights,
warrants or options to acquire or instruments convertible into or
exchangeable for any capital stock or equity securities of the
Offerors or the Subsidiaries.
(ix) The capital stock of the Company and the equity
securities of the Trust conform to the description thereof contained
in the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus). The outstanding shares of
capital stock and equity securities of each Offeror have been duly
authorized and validly issued and are fully paid and nonassessable,
and no such shares were issued in violation of the preemptive or
similar rights of any security holder of an Offeror; no person has
any preemptive or similar right to purchase any shares of capital
stock or equity securities of the Offerors. Except as disclosed in
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), there are no outstanding rights,
options or warrants to acquire any securities of the Offerors, and
there are no outstanding securities convertible into or exchangeable
for any such securities and no restrictions upon the voting or
transfer of any capital stock of the Company or equity securities of
the Trust pursuant to the Company's corporate charter or bylaws, the
Trust Agreement or any agreement or other instrument to which an
Offeror is a party or by which an Offeror is bound.
(x) (A) The Trust has all requisite power and authority to
issue, sell and deliver the Designated Preferred Securities in
accordance with and upon the terms and conditions set forth in this
Agreement, the Trust Agreement, the Registration
7
<PAGE> 8
Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus). All corporate
and trust action required to be taken by the Offerors for the
authorization, issuance, sale and delivery of the Designated
Preferred Securities in accordance with such terms and conditions has
been validly and sufficiently taken. The Designated Preferred
Securities, when delivered in accordance with this Agreement, will be
duly and validly issued and outstanding, will be fully paid and
nonassessable undivided beneficial interests in the assets of the
Trust, will be entitled to the benefits of the Trust Agreement, will
not be issued in violation of or subject to any preemptive or similar
rights, and will conform to the description thereof in the
Registration Statement and the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) and the
Trust Agreement. None of the Designated Preferred Securities,
immediately prior to delivery, will be subject to any security
interest, lien, mortgage, pledge, encumbrance, restriction upon
voting or transfer, preemptive rights, claim, equity or other defect.
(B) The Debentures have been duly and validly
authorized, and, when duly and validly executed, authenticated and
issued as provided in the Indenture and delivered to the Trust
pursuant to the Trust Agreement, will constitute valid and legally
binding obligations of the Company entitled to the benefits of the
Indenture and will conform to the description thereof contained in
the Prospectus.
(C) The Guarantee has been duly and validly
authorized, and, when duly and validly executed and delivered to the
guarantee trustee for the benefit of the Trust, will constitute a
valid and legally binding obligation of the Company and will conform
to the description thereof contained in the Prospectus.
(D) The Agreement as to Expenses and Liabilities (the
"Expense Agreement") has been duly and validly authorized, and, when
duly and validly executed and delivered by the Company, will
constitute a valid and legally binding obligation of the Company and
will conform to the description thereof contained in the Prospectus.
(xi) The Offerors and the Subsidiaries have complied in all
material respects with all federal, state and local statutes,
regulations, ordinances and rules applicable to the ownership and
operation of their properties or the conduct of their businesses as
described in and contemplated by the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) and as currently being conducted.
(xii) The Offerors and the Subsidiaries have all material
permits, easements, consents, licenses, franchises and other
governmental and regulatory authorizations from all appropriate
federal, state, local or other public authorities ("Permits") as are
necessary to own and lease their properties and conduct their
businesses in the manner described in and contemplated by the
Registration Statement and the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) and as
currently being conducted in all material respects. All such Permits
are in full force and effect and each of the Offerors and the
Subsidiaries are in all material
8
<PAGE> 9
respects complying therewith, and no event has occurred that allows,
or after notice or lapse of time would allow, revocation or
termination thereof or will result in any other material impairment
of the rights of the holder of any such Permit, subject in each case
to such qualification as may be adequately disclosed in the
Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus). Such Permits contain no restrictions
that would materially impair the ability of the Company or the
Subsidiaries to conduct their businesses in the manner consistent
with their past practices. Neither the Offerors nor any of the
Subsidiaries have received notice or otherwise has knowledge of any
proceeding or action relating to the revocation or modification of
any such Permit.
(xiii) Neither of the Offerors nor any of the
Subsidiaries is in breach or violation of their corporate charter,
by-laws or other governing documents (including without limitation,
the Trust Agreement) in any material respect. Neither of the
Offerors nor any of the Subsidiaries are, and to the knowledge of
the Offerors no other party is, in violation, breach or default (with
or without notice or lapse of time or both) in the performance or
observance of any term, covenant, agreement, obligation,
representation, warranty or condition contained in (A) any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease, franchise, license, Permit or any other agreement or
instrument to which it is a party or by which it or any of its
properties may be bound, which such breach, violation or default
could have material adverse consequences to the Offerors and the
Subsidiaries on a consolidated basis, and to the knowledge of the
Offerors, no other party has asserted that the Offerors or any of the
Subsidiaries is in such violation, breach or default (provided that
the foregoing shall not apply to defaults by borrowers from the
Bank), or (B) except as disclosed in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus), any order, decree, judgment, rule or regulation of any
court, arbitrator, government, or governmental agency or
instrumentality, domestic or foreign, having jurisdiction over the
Offerors or the Subsidiaries or any of their respective properties
the breach, violation or default of which could have a material
adverse effect on the condition, financial or otherwise, earnings,
affairs, business, prospects, or results of operations of the
Offerors and the Subsidiaries on a consolidated basis.
(xiv) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated by
this Agreement, the Trust Agreement, the Registration Statement and
the Prospectus (or, if the Prospectus in not in existence, the most
recent Preliminary Prospectus) do not and will not conflict with,
result in the creation or imposition of any material lien, claim,
charge, encumbrance or restriction upon any property or assets of the
Offerors or the Subsidiaries or the Designated Preferred Securities
pursuant to, constitute a breach or violation of, or constitute a
default under, with or without notice or lapse of time or both, any
of the terms, provisions or conditions of the charter or by-laws of
the Company or the Subsidiaries, the Trust Agreement, the Guarantee,
the Indenture, any contract, indenture, mortgage, deed of trust, loan
or credit agreement, note, lease, franchise, license, Permit or any
other agreement or instrument to which the Offerors or the
Subsidiaries is a party or by which any of them or any of their
respective properties may be bound or any order, decree, judgment,
rule or regulation of any court, arbitrator, government, or
governmental
9
<PAGE> 10
agency or instrumentality, domestic or foreign, having jurisdiction
over the Offerors or the Subsidiaries or any of their respective
properties which conflict, creation, imposition, breach, violation or
default would have either singly or in the aggregate a material
adverse effect on the condition, financial or otherwise, earnings,
affairs, business, prospects or results of operations of the Offerors
and the Subsidiaries on a consolidated basis. No authorization,
approval, consent or order of or filing, registration or
qualification with, any person (including, without limitation, any
court, governmental body or authority) is required in connection with
the transactions contemplated by this Agreement, the Trust Agreement,
the Indenture, the Guarantee, the Registration Statement and the
Prospectus, except such as have been obtained under the 1933 Act, the
Trust Indenture Act and from the Nasdaq Stock Market's National
Market relating to the listing of the Designated Preferred
Securities, the Company's Term Loan Agreement dated as of October 2,
1995, the Company's Standby Term Loan Agreement dated September 28,
1994 and such as may be required under state securities laws or
Interpretations or Rules of the National Association of Securities
Dealers, Inc. ("NASD") in connection with the purchase and
distribution of the Designated Preferred Securities by the
Underwriters.
(xv) The Offerors have all requisite corporate power and
authority to enter into this Agreement and this Agreement has been
duly and validly authorized, executed and delivered by the Offerors
and constitutes the legal, valid and binding agreement of the
Offerors, enforceable against the Offerors in accordance with its
terms, except as the enforcement thereof may be limited by general
principles of equity and by bankruptcy or other laws relating to or
affecting creditors' rights generally and except as any
indemnification or contribution provisions thereof may be limited
under applicable securities laws. Each of the Indenture, the Trust
Agreement, the Guarantee and the Expense Agreement has been duly
authorized by the Company, and, when executed and delivered by the
Company on the Closing Date, each of said agreements will constitute
a valid and legally binding obligation of the Company and will be
enforceable against the Company in accordance with its terms, except
as the enforcement thereof may be limited by general principles of
equity and by bankruptcy or other laws relating to or affecting
creditors' rights generally and except as any indemnification or
contribution provisions thereof may be limited under applicable
securities laws. Each of the Indenture, the Trust Agreement and the
Guarantee has been duly qualified under the Trust Indenture Act and
will conform to the description thereof contained in the Prospectus.
(xvi) The Company and the Subsidiaries have good and
marketable title in fee simple to all real property and good title to
all personal property owned by them and material to their business,
in each case free and clear of all security interests, liens,
mortgages, pledges, encumbrances, restrictions, claims, equities and
other defects except such as are referred to in the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus) or such as do not materially affect the value of such
property in the aggregate and do not materially interfere with the
use made or proposed to be made of such property; and all of the
leases under which the Company or the Subsidiaries hold real or
personal property are valid, existing and enforceable leases and in
full force and effect with such exceptions as are not material and do
not materially
10
<PAGE> 11
interfere with the use made or proposed to be made of such real or
personal property, and neither the Company nor any of the
Subsidiaries is in default in any material respect of any of the
terms or provisions of any leases.
(xvii) Coopers & Lybrand L.L.P., who have certified
certain of the consolidated financial statements of the Company and
the Subsidiaries including the notes thereto, included in the
Registration Statement and Prospectus, are independent public
accountants with respect to the Company and the Subsidiaries, as
required by the 1933 Act and the 1933 Act Regulations.
(xviii) The consolidated financial statements including
the notes thereto, included by incorporation by reference or
otherwise in the Registration Statement and the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus) with respect to the Company and the Subsidiaries, comply
in all material respects with the 1933 Act and the 1933 Act
Regulations and present fairly the consolidated financial position of
the Company and the Subsidiaries as of the dates indicated and the
consolidated results of operations, cash flows and shareholders'
equity of the Company and the Subsidiaries for the periods specified
and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis. The selected
and summary consolidated financial data concerning the Offerors and
the Subsidiaries included in the Registration Statement and the
Prospectus (or such Preliminary Prospectus) comply in all material
respects with the 1933 Act and the 1933 Act Regulations, present
fairly the information set forth therein, and have been compiled on a
basis consistent with that of the consolidated financial statements
of the Offerors and the Subsidiaries in the Registration Statement
and the Prospectus (or such Preliminary Prospectus). The other
financial, statistical and numerical information included in the
Registration Statement and the Prospectus (or such Preliminary
Prospectus) comply in all material respects with the 1933 Act and the
1933 Act Regulations, present fairly the information shown therein,
and to the extent applicable have been compiled on a basis consistent
with the consolidated financial statements of the Company and the
Subsidiaries included in the Registration Statement and the
Prospectus (or such Preliminary Prospectus).
(xix) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus), except as otherwise stated therein:
(A) neither of the Offerors nor any of the
Subsidiaries have sustained any loss or interference with its
business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree which is material to the
condition (financial or otherwise), earnings, business, prospects or
results of operations of the Offerors and the Subsidiaries on a
consolidated basis;
(B) there has not been any material adverse change
in, or any development which is reasonably likely to have a material
adverse effect on, the condition (financial or otherwise), earnings,
business, prospects or results of
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<PAGE> 12
operations of the Offerors and the Subsidiaries on a consolidated
basis, whether or not arising in the ordinary course of business;
(C) neither of the Offerors nor any of the
Subsidiaries have incurred any liabilities or obligations, direct or
contingent, or entered into any material transactions, other than in
the ordinary course of business which is material to the condition
(financial or otherwise), earnings, business, prospects or results of
operations of the Offerors and the Subsidiaries on a consolidated
basis;
(D) neither of the Offerors have declared or paid any
dividend, and neither of the Offerors nor any of the Subsidiaries
have become delinquent in the payment of principal or interest on any
outstanding borrowings; and
(E) there has not been any change in the capital
stock, equity securities, long-term debt, obligations under capital
leases or, other than in the ordinary course of business, short-term
borrowings of the Offerors or the Subsidiaries.
(xx) Except as set forth in the Registration Statement and
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), no charge, investigation, action,
suit or proceeding is pending or, to the knowledge of the Offerors,
threatened, against or affecting the Offerors or the Subsidiaries or
any of their respective properties before or by any court or any
regulatory, administrative or governmental official, commission,
board, agency or other authority or body, or any arbitrator, wherein
an unfavorable decision, ruling or finding could have a material
adverse effect on the consummation of this Agreement or the
transactions contemplated herein or the condition (financial or
otherwise), earnings, affairs, business, prospects or results of
operations of the Offerors and the Subsidiaries on a consolidated
basis or which is required to be disclosed in the Registration
Statement or the Prospectus (or such Preliminary Prospectus) and is
not so disclosed.
(xxi) There are no contracts or other documents required to
be filed as exhibits to the Registration Statement by the 1933 Act or
the 1933 Act Regulations or the Trust Indenture Act (or any rules or
regulations thereunder) which have not been filed as exhibits or
incorporated by reference to the Registration Statement, or that are
required to be summarized in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) that are
not so summarized.
(xxii) Neither of the Offerors has taken, directly or
indirectly, any action designed to result in or which has constituted
or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Offerors to facilitate the sale or resale of the Designated Preferred
Securities, and neither of the Offerors is aware of any such action
taken or to be taken by any affiliate of the Offerors.
(xxiii) The Offerors and the Subsidiaries own, or possess
adequate rights to use, all patents, copyrights, trademarks, service
marks, trade names and other rights necessary to conduct the
businesses now conducted by them in all material respects or as
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<PAGE> 13
described in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) and neither the
Offerors nor the Subsidiaries have received any notice of
infringement or conflict with asserted rights of others with respect
to any patents, copyrights, trademarks, service marks, trade names or
other rights which, individually or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would have a material
adverse effect on the condition (financial or otherwise), earnings,
affairs, business, prospects or results of operations of the Offerors
and the Subsidiaries on a consolidated basis, and the Offerors do not
know of any basis for any such infringement or conflict.
(xxiv) Except as adequately disclosed in the Prospectus
(or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), no labor dispute involving the Company or
the Subsidiaries exists or, to the knowledge of the Offerors, is
imminent which might be expected to have a material adverse effect on
the condition (financial or otherwise), earnings, affairs, business,
prospects or results of operations of the Offerors and the
Subsidiaries on a consolidated basis or which is required to be
disclosed in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus). Neither the
Company nor any of the Subsidiaries have received notice of any
existing or threatened labor dispute by the employees of any of its
principal suppliers, customers or contractors which might be expected
to have a material adverse effect on the condition (financial or
otherwise), earnings, affairs, business, prospects or results of
operations of the Company and the Subsidiaries on a consolidated
basis.
(xxv) The Offerors and the Subsidiaries have timely and
properly prepared and filed all necessary federal, state, local and
foreign tax returns which are required to be filed and have paid all
taxes shown as due thereon and have paid all other taxes and
assessments to the extent that the same shall have become due, except
such as are being contested in good faith or where the failure to so
timely and properly prepare and file would not have a material
adverse effect on the condition (financial or otherwise), earnings,
affairs, business, prospects or results of operations of the Offerors
and the Subsidiaries on a consolidated basis. The Offerors have no
knowledge of any tax deficiency which has been or might be assessed
against the Offerors or the Subsidiaries which, if the subject of an
unfavorable decision, ruling or finding, would have a material
adverse effect on the condition (financial or otherwise), earnings,
affairs, business, prospects or results of operations of the Offerors
and the Subsidiaries on a consolidated basis.
(xxvi) Each of the material contracts, agreements and
instruments described or referred to in the Registration Statement or
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) and each contract, agreement and
instrument filed as an exhibit to the Registration Statement is in
full force and effect and is the legal, valid and binding agreement
of the Offerors or the Subsidiaries, enforceable in accordance with
its terms, except as the enforcement thereof may be limited by
general principles of equity and by bankruptcy or other laws relating
to or affecting creditors' rights generally. Except as disclosed in
the Prospectus (or such Preliminary Prospectus), to the knowledge of
the Offerors, no other party to any such
13
<PAGE> 14
agreement is (with or without notice or lapse of time or both) in
breach or default in any material respect thereunder.
(xxvii) No relationship, direct or indirect, exists
between or among the Offerors or the Subsidiaries, on the one hand,
and the directors, officers, trustees, shareholders, customers or
suppliers of the Offerors or the Subsidiaries, on the other hand,
which is required to be described in the Registration Statement and
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) which is not adequately described
therein.
(xxviii) No person has the right to request or require the
Offerors or the Subsidiaries to register any securities for offering
and sale under the 1933 Act by reason of the filing of the
Registration Statement with the Commission or the issuance and sale
of the Designated Preferred Securities except as adequately disclosed
in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus).
(xxix) The Designated Preferred Securities have been
approved for quotation on the Nasdaq National Market subject to
official notice of issuance.
(xxx) Except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), there are no contractual encumbrances
or restrictions or material legal restrictions required to be
described therein, on the ability of the Subsidiaries (A) to pay
dividends or make any other distributions on its capital stock or to
pay any indebtedness owed to the Offerors, (B) to make any loans or
advances to, or investments in, the Offerors or (C) to transfer any
of its property or assets to the Offerors.
(xxxi) Neither of the Offerors is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended
(the "Investment Company Act").
(xxxii) The Offerors have not distributed and will not
distribute prior to the Closing Date any prospectus in connection
with the Offering, other than a Preliminary Prospectus, the
Prospectus, the Registration Statement and the other materials
permitted by the 1933 Act and the 1933 Act Regulations and reviewed
by the Representative.
3. OFFERING BY THE UNDERWRITERS. After the Registration Statement
----------------------------
becomes effective or, if the Registration Statement is already effective,
after this Agreement becomes effective, the Underwriters propose to offer the
Firm Preferred Securities for sale to the public upon the terms and
conditions set forth in the Prospectus. The Underwriters may from time to
time thereafter reduce the public offering price and change the other selling
terms, provided the proceeds to the Trust shall not be reduced as a result of
such reduction or change.
The Underwriters may reserve and sell such of the Designated
Preferred Securities purchased by the Underwriters as the Underwriters may
elect to dealers chosen by it (the "Selected Dealers") at the public offering
price set forth in the Prospectus less the applicable
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<PAGE> 15
Selected Dealers' concessions set forth therein, for re-offering by Selected
Dealers to the public at the public offering price. The Underwriters may
allow, and Selected Dealers may re-allow, a concession set forth in the
Prospectus to certain other brokers and dealers.
4. CERTAIN COVENANTS OF THE OFFERORS. The Offerors jointly and
---------------------------------
severally covenant with the Underwriters as follows:
(a) The Offerors shall use their best efforts to cause the
Registration Statement and any amendments thereto, if not effective at the
time of execution of this Agreement, to become effective as promptly as
possible. If the Registration Statement has become or becomes effective
pursuant to Rule 430A and information has been omitted therefrom in reliance
on Rule 430A, then, the Offerors will prepare and file in accordance with
Rule 430A and Rule 424(b) copies of the Prospectus or, if required by Rule
430A, a post-effective amendment to the Registration Statement (including the
Prospectus) containing all information so omitted and will provide evidence
satisfactory to the Representative of such timely filing.
(b) The Offerors shall notify you immediately, and confirm such
notice in writing:
(i) when the Registration Statement, or any post-effective
amendment to the Registration Statement, has become effective, or
when the Prospectus or any supplement to the Prospectus or any
amended Prospectus has been filed;
(ii) of the receipt of any comments or requests from the
Commission;
(iii) of any request of the Commission to amend or
supplement the Registration Statement, any Preliminary Prospectus or
the Prospectus or for additional information; and
(iv) of the issuance by the Commission or any state or
other regulatory body of any stop order or other order suspending the
effectiveness of the Registration Statement, preventing or suspending
the use of any Preliminary Prospectus or the Prospectus, or
suspending the qualification of any of the Designated Preferred
Securities for offering or sale in any jurisdiction or the
institution or threat of institution of any proceedings for any of
such purposes. The Offerors shall use their best efforts to prevent
the issuance of any such stop order or of any other such order and if
any such order is issued, to cause such order to be withdrawn or
lifted as soon as possible.
(c) The Offerors shall furnish to the Underwriters, from time to
time without charge, as soon as available, as many copies as the Underwriters
may reasonably request of (i) the registration statement as originally filed
and of all amendments thereto, in executed form, including exhibits, whether
filed before or after the Registration Statement becomes effective, (ii) all
exhibits and documents incorporated therein or filed therewith, (iii) all
consents and certificates of experts in executed form, (iv) each Preliminary
Prospectus and all amendments and supplements thereto, and (v) the
Prospectus, and all amendments and supplements thereto.
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<PAGE> 16
(d) During the time when a prospectus is required to be delivered
under the 1933 Act, the Offerors shall comply to the best of their ability
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934
Act Regulations so as to permit the completion of the distribution of the
Designated Preferred Securities as contemplated herein and in the Trust
Agreement and the Prospectus. The Offerors shall not file any amendment to
the registration statement as originally filed or to the Registration
Statement and shall not file any amendment thereto or make any amendment or
supplement to any Preliminary Prospectus or to the Prospectus of which you
shall not previously have been advised in writing and provided a copy a
reasonable time prior to the proposed filings thereof or to which you or
counsel for the Underwriter shall object. If it is necessary, in the
Company's reasonable opinion or in the reasonable opinion of the Company's
counsel to amend or supplement the Registration Statement or the Prospectus
in connection with the distribution of the Designated Preferred Securities,
the Offerors shall forthwith amend or supplement the Registration Statement
or the Prospectus, as the case may be, by preparing and filing with the
Commission (provided the Underwriters or counsel for the Underwriters does
not reasonably object), and furnishing to you, such number of copies as you
may reasonably request of an amendment or amendments of, or a supplement or
supplements to, the Registration Statement or the Prospectus, as the case may
be (in form and substance reasonably satisfactory to you and counsel for the
Underwriters). If any event shall occur as a result of which it is necessary
to amend or supplement the Prospectus to correct an untrue statement of a
material fact or to include a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or if for any reason it is necessary at any time to amend or
supplement the Prospectus to comply with the 1933 Act and the 1933 Act
Regulations, the Offerors shall, subject to the second sentence of this
subsection (d), forthwith amend or supplement the Prospectus by preparing and
filing with the Commission, and furnishing to you, such number of copies as
you may reasonably request of an amendment or amendments of, or a supplement
or supplements to, the Prospectus (in form and substance satisfactory to you
and counsel for the Underwriters) so that, as so amended or supplemented, the
Prospectus shall not contain an untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(e) The Offerors shall cooperate with you and counsel for the
Underwriters in order to qualify the Designated Preferred Securities for
offering and sale under the securities or blue sky laws of such jurisdictions
as you may reasonably request and shall continue such qualifications in
effect so long as may be advisable for distribution of the Designated
Preferred Securities; provided, however, that the Offerors shall not be
required to qualify to do business as a foreign corporation or file a general
consent to service of process in any jurisdiction in connection with the
foregoing. The Offerors shall file such statements and reports as may be
required by the laws of each jurisdiction in which the Designated Preferred
Securities have been qualified as above. The Offerors will notify you
immediately of, and confirm in writing, the suspension of qualification of
the Designated Preferred Securities or threat thereof in any jurisdiction.
(f) The Offerors shall make generally available to their security
holders in the manner contemplated by Rule 158 of the 1933 Act Regulations
and furnish to you as soon as practicable, but in any event not later than 16
months after the Effective Date, a consolidated
16
<PAGE> 17
earnings statement of the Offerors conforming with the requirements of Section
11(a) of the 1933 Act and Rule 158.
(g) The Offerors shall use the proceeds from the sale of the
Designated Preferred Securities to be sold by the Trust hereunder in the
manner specified in the Prospectus under the caption "Use of Proceeds."
(h) For five years from the Effective Date, the Offerors shall
furnish to the Representative copies of all reports and communications
(financial or otherwise) furnished by the Offerors to the holders of the
Designated Preferred Securities as a class, copies of all reports and
financial statements filed with or furnished to the Commission (other than
portions for which confidential treatment has been obtained from the
Commission) or with any national securities exchange or the Nasdaq National
Market and such other documents, reports and information concerning the
business and financial conditions of the Offerors as the Representative may
reasonably request, other than such documents, reports and information for
which the Offerors has the legal obligation not to reveal to the
Representative.
(i) For a period of 30 days from the Effective Date, the Offerors
shall not, directly or indirectly, offer for sale, sell or agree to sell or
otherwise dispose of any Designated Preferred Securities other than pursuant
to this Agreement, any other beneficial interests in the assets of the Trust
or any securities of the Trust or the Company that are substantially similar
to the Designated Preferred Securities, including any guarantee of such
beneficial interests or substantially similar securities, or securities
convertible into or exchangeable for or that represent the right to
receive any such beneficial interest or substantially similar securities
other than the ____% Cumulative Trust Preferred Securities, with a
liquidation amount of $25 per preferred security, issued by 1st Source Capital
Trust I, a Delaware business trust, and the related guarantee and
subordinated debentures, all as more fully described in the Registration
Statement, without the prior written consent of the Representative.
(j) The Offerors shall use their best efforts to cause the
Designated Preferred Securities to become quoted on the Nasdaq National
Market, or in lieu thereof a national securities exchange, and to remain so
quoted for at least five years from the Effective Date or for such shorter
period as may be specified in a written consent of the Representative,
provided this shall not prevent the Company from redeeming the Designated
Preferred Securities pursuant to the terms of the Trust Agreement. If the
Designated Preferred Securities are exchanged for Debentures, the Company
will use its best efforts to have the Debentures promptly listed on the
Nasdaq National Market or other organization on which the Designated
Preferred Securities are then listed, and to have the Debentures promptly
registered under the Exchange Act.
(k) Subsequent to the date of this Agreement and through the date
which is the later of (i) the day following the date on which the
Underwriters' option to purchase the Option Preferred Securities shall expire
or (ii) the day following the Option Closing Date with respect to any Option
Preferred Securities that the Underwriters shall elect to purchase, except as
described in or contemplated by the Prospectus, neither the Offerors nor any
of the Subsidiaries shall take any action (or refrain from taking any action)
which will result in the Offerors or the Subsidiaries incurring any material
liability or obligation, direct or contingent, or enter into any material
transaction, except in the ordinary course of business, and there will not be
any material change in the financial position, capital stock, or any material
increase in long-term debt, obligations under capital leases or short-term
borrowings of the Offerors and the Subsidiaries on a consolidated basis.
17
<PAGE> 18
(l) The Offerors shall not, for a period of 180 days after the
date hereof, without the prior written consent of the Representative,
purchase, redeem or call for redemption, or prepay or give notice of
prepayment (or announce any redemption or call for redemption, or any
repayment or notice of prepayment) of the Offerors' securities.
(m) The Offerors shall not take, directly or indirectly, any
action designed to result in or which has constituted or which might
reasonably be expected to cause or result in stabilization or manipulation of
the price of any security of the Offerors to facilitate the sale or resale of
the Designated Preferred Securities and the Offerors are not aware of any such
action taken or to be taken by any affiliate of the Offerors.
(n) Prior to the Closing Date (and, if applicable, the Option
Closing Date), the Offerors will not issue any press release or other
communication directly or indirectly or hold any press conference with
respect to the Offerors, the Subsidiaries or the offering of the Designated
Preferred Securities (the "Offering") without your prior written consent.
5. PAYMENT OF EXPENSES. Whether or not this Agreement is terminated or
-------------------
the sale of the Designated Preferred Securities to the Underwriters is
consummated, the Company covenants and agrees that it will pay or cause to be
paid (directly or by reimbursement) all costs and expenses incident to the
performance of the obligations of the Offerors under this Agreement,
including:
(a) the preparation, printing, filing, delivery and shipping of
the initial registration statement, the Preliminary Prospectus or
Prospectuses, the Registration Statement and the Prospectus and any amendments
or supplements thereto, and the printing, delivery and shipping of this
Agreement and any other underwriting documents (including, without
limitation, selected dealers agreements), the certificates for the Designated
Preferred Securities and the Preliminary and Final Blue Sky Memoranda and any
legal investment surveys and any supplements thereto;
(b) all fees, expenses and disbursements of the Offerors' counsel
and accountants;
(c) all fees and expenses incurred in connection with the
qualification of the Designated Preferred Securities, Debentures and the
Guarantee under the securities or blue sky laws of such jurisdictions as you
may request, including all filing fees and fees and disbursements of counsel
for the Underwriters in connection therewith, including, without limitation,
in connection with the preparation of the Preliminary and Final Blue Sky
Memoranda and any legal investment surveys and any supplements thereto;
(d) all fees and expenses incurred in connection with filings made
with the NASD;
(e) any applicable fees and other expenses incurred in connection
with the listing of the Designated Preferred Securities and, if applicable,
the Guarantee and the Debentures on the Nasdaq National Market;
18
<PAGE> 19
(f) the cost of furnishing to you copies of the initial
registration statements, any Preliminary Prospectus, the Registration
Statement and the Prospectus and all amendments or supplements thereto;
(g) the costs and charges of any transfer agent or registrar and
the fees and disbursements of counsel for any transfer agent or registrar;
(h) all costs and expenses (including stock transfer taxes)
incurred in connection with the printing, issuance and delivery of the
Designated Preferred Securities to the Underwriters;
(i) all expenses incident to the preparation, execution and
delivery of the Trust Agreement, the Indenture and the Guarantee; and
(j) all other costs and expenses incident to the performance of
the obligations of the Company hereunder and under the Trust Agreement that
are not otherwise specifically provided for in this Section 5.
If the sale of Designated Preferred Securities contemplated by this
Agreement is not completed due to the termination pursuant to the terms
hereof (other than pursuant to Section 9 hereof), the Company will pay you
your accountable out-of-pocket expenses in connection herewith or in
contemplation of the performance of your obligations hereunder, including
without limitation travel expenses, reasonable fees, expenses and
disbursements of counsel or other out-of-pocket expenses incurred by you in
connection with any discussion of the Offering or the contents of the
Registration Statement, any investigation of the Offerors and the
Subsidiaries, or any preparation for the marketing, purchase, sale or
delivery of the Designated Preferred Securities, in each case following
presentation of reasonably detailed invoices therefor.
If the sale of Designated Preferred Securities contemplated by this
Agreement is completed, the Company shall not be responsible for payment of
fees or disbursements of counsel for the Underwriters other than in
accordance with paragraph (c) above, or for the reimbursement of any expenses
of the Underwriters.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
-------------------------------------------
Underwriters to purchase and pay for the Firm Preferred Securities and,
following exercise of the option granted by the Offerors in Section 1 of this
Agreement, the Option Preferred Securities, are subject, in your sole
discretion, to the accuracy of and compliance with the representations and
warranties and agreements of the Offerors herein as of the date hereof and as
of the Closing Date (or in the case of the Option Preferred Securities, if
any, as of the Option Closing Date), to the accuracy of the written
statements of the Offerors made pursuant to the provisions hereof, to the
performance by the Offerors of their covenants and obligations hereunder and
to the following additional conditions:
(a) If the Registration Statement or any amendment thereto filed
prior to the Closing Date has not been declared effective prior to the time
of execution hereof, the Registration Statement shall become effective not
later than 10:00 a.m., St. Louis time, on the first business day following
the time of execution of this Agreement, or at such later time and
19
<PAGE> 20
date as you may agree to in writing. If required, the Prospectus and any
amendment or supplement thereto shall have been timely filed in accordance
with Rule 424(b) and Rule 430A under the 1933 Act and Section 4(a) hereof. No
stop order suspending the effectiveness of the Registration Statement or any
amendment or supplement thereto shall have been issued under the 1933 Act or
any applicable state securities laws and no proceedings for that purpose
shall have been instituted or shall be pending, or, to the knowledge of the
Offerors or the Representative, shall be contemplated by the Commission or
any state authority. Any request on the part of the Commission or any state
authority for additional information (to be included in the Registration
Statement or Prospectus or otherwise) shall have been disclosed to you and
complied with to your satisfaction and to the satisfaction of counsel for the
Underwriters.
(b) No Underwriter shall have advised the Company at or before the
Closing Date (and, if applicable, the Option Closing Date) that the
Registration Statement or any post-effective amendment thereto, or the
Prospectus or any amendment or supplement thereto, contains an untrue
statement of a fact which, in your opinion, is material or omits to state a
fact which, in your opinion, is material and is required to be stated therein
or is necessary to make statements therein (in the case of the Prospectus or
any amendment or supplement thereto, in light of the circumstances under
which they were made) not misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Trust Agreement,
and the Designated Preferred Securities, and the authorization and form of
the Registration Statement and Prospectus, other than financial statements
and other financial data, and all other legal matters relating to this
Agreement and the transactions contemplated hereby or by the Trust Agreement
shall be satisfactory in all material respects to counsel for the
Underwriters, and the Offerors and the Subsidiaries shall have furnished to
such counsel all documents and information relating thereto that they may
reasonably request to enable them to pass upon such matters.
(d) Lewis, Rice & Fingersh, L.C., counsel for the Offerors, shall
have furnished to you their signed opinion, dated the Closing Date or the
Option Closing Date, as the case may be, in form and substance satisfactory
to counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly
existing and in good standing under the laws of the State of Indiana,
and is duly registered as a bank holding company under the BHC Act.
Each of the Subsidiaries is duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation.
Each of the Company and the Subsidiaries has full corporate power and
authority to own or lease its properties and to conduct its business
as such business is described in the Prospectus and is currently
conducted in all material respects. To the best of such counsel's
knowledge, all outstanding shares of capital stock of the
Subsidiaries have been duly authorized and validly issued and are
fully paid and nonassessable except to the extent such shares may be
deemed assessable under 12 U.S.C. Section 1831 and, to the best of
such counsel's knowledge, except as disclosed in the Prospectus,
there are no outstanding rights, options or warrants to purchase any
such shares or securities convertible into or exchangeable for any
such shares.
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(ii) The capital stock, Debentures and Guarantee of the
Company and the equity securities of the Trust conform to the
description thereof contained in the Prospectus in all material
respects. To the best of such counsel's knowledge, the capital stock
of the Company authorized and issued as of December 31, 1996 is as
set forth under the caption "Capitalization" in the Prospectus, has
been duly authorized and validly issued, and is fully paid and
nonassessable. To the best of such counsel's knowledge, there are no
outstanding rights, options or warrants to purchase, no other
outstanding securities convertible into or exchangeable for, and no
commitments, plans or arrangements to issue, any shares of capital
stock of the Company or equity securities of the Trust, except as
described in the Prospectus.
(iii) The issuance, sale and delivery of the Designated
Preferred Securities and Debentures in accordance with the terms and
conditions of this Agreement and the Indenture have been duly
authorized by all necessary actions of the Offerors. All of the
Designated Preferred Securities have been duly and validly authorized
and, when delivered in accordance with this Agreement will be duly
and validly issued, fully paid and nonassessable, and will conform to
the description thereof in the Registration Statement, the Prospectus
and the Trust Agreement. The Designated Preferred Securities have
been approved for quotation on the Nasdaq National Market subject to
official notice of issuance. There are no preemptive or other rights
to subscribe for or to purchase, and other than as disclosed in the
Prospectus no restrictions upon the voting or transfer of, any shares
of capital stock or equity securities of the Offerors or the
Subsidiaries pursuant to the corporate charter, by-laws or other
governing documents (including without limitation, the Trust
Agreement) of the Offerors or the Subsidiaries, or, to the best of
such counsel's knowledge, any agreement or other instrument to which
either Offeror or any of the Subsidiaries is a party or by which
either Offeror or any of the Subsidiaries may be bound.
(iv) The Offerors have all requisite corporate and trust
power to enter into and perform their obligations under this
Agreement, and this Agreement has been duly and validly authorized,
executed and delivered by the Offerors and constitutes the legal,
valid and binding obligations of the Offerors enforceable in
accordance with its terms, except as the enforcement hereof or
thereof may be limited by general principles of equity and by
bankruptcy or other laws relating to or affecting creditors' rights
generally, and except as the indemnification and contribution
provisions hereof may be limited under applicable laws and certain
remedies may not be available in the case of a non-material breach.
(v) Each of the Indenture, the Trust Agreement and the
Guarantee has been duly qualified under the Trust Indenture Act, has
been duly authorized, executed and delivered by the Company, and is a
valid and legally binding obligation of the Company enforceable in
accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, receivership, moratorium and other laws
affecting the rights and remedies of creditors generally and of
general principles of equity;
(vi) The Debentures have been duly authorized, executed,
authenticated and delivered by the Company, are entitled to the
benefits of the Indenture and are legal,
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valid and binding obligations of the Company enforceable against the
Company in accordance with their terms, subject to the effect of
bankruptcy, insolvency, reorganization, receivership, moratorium and
other laws affecting the rights and remedies of creditors generally
and of general principles of equity;
(vii) The Expense Agreement has been duly authorized,
executed and delivered by the Company, and is a valid and legally
binding obligation of the Company enforceable in accordance with its
terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other laws affecting the
rights and remedies of creditors generally and of general principles
of equity;
(viii) To the best of such counsel's knowledge, neither
of the Offerors nor any of the Subsidiaries is in breach or violation
of, or default under, with or without notice or lapse of time or
both, its corporate charter, by-laws or governing document (including
without limitation, the Trust Agreement). The execution, delivery
and performance of this Agreement and the consummation of the
transactions contemplated by this Agreement, and the Trust Agreement
do not and will not conflict with, result in the creation or
imposition of any material lien, claim, charge, encumbrance or
restriction upon any property or assets of the Offerors or the
Subsidiaries or the Designated Preferred Securities pursuant to, or
constitute a material breach or violation of, or constitute a
material default under, with or without notice or lapse of time or
both, any of the terms, provisions or conditions of the charter,
by-laws or governing document (including without limitation, the
Trust Agreement) of the Offerors or the Subsidiaries, or to the best
of such counsel's knowledge, any material contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease,
franchise, license or any other agreement or instrument to which
either Offeror or the Subsidiaries is a party or by which any of them
or any of their respective properties may be bound or any order,
decree, judgment, franchise, license, Permit, rule or regulation of
any court, arbitrator, government, or governmental agency or
instrumentality, domestic or foreign, known to such counsel having
jurisdiction over the Offerors or the Subsidiaries or any of their
respective properties which, in each case, is material to the
Offerors and the Subsidiaries on a consolidated basis. No
authorization, approval, consent or order of, or filing, registration
or qualification with, any person (including, without limitation, any
court, governmental body or authority) is required under Indiana law
in connection with the transactions contemplated by this Agreement in
connection with the purchase and distribution of the Designated
Preferred Securities by the Underwriters.
(ix) To the best of such counsel's knowledge, holders of
securities of the Offerors either do not have any right that, if
exercised, would require the Offerors to cause such securities to be
included in the Registration Statement or have waived such right. To
the best of such counsel's knowledge, neither the Offerors nor any of
the Subsidiaries is a party to any agreement or other instrument
which grants rights for or relating to the registration of any
securities of the Offerors.
(x) Except as set forth in the Registration Statement and
the Prospectus, to the best of such counsel's knowledge, (i) no
action, suit or proceeding at law or in equity is pending or
threatened in writing to which the Offerors or the
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<PAGE> 23
Subsidiaries is or may be a party, and (ii) no action, suit or
proceeding is pending or threatened in writing against or affecting
the Offerors or the Subsidiaries or any of their properties, before
or by any court or governmental official, commission, board or other
administrative agency, authority or body, or any arbitrator, wherein
an unfavorable decision, ruling or finding could reasonably be
expected to have a material adverse effect on the consummation of
this Agreement or the issuance and sale of the Designated Preferred
Securities as contemplated herein or the condition (financial or
otherwise), earnings, affairs, business, or results of operations of
the Offerors and the Subsidiaries on a consolidated basis or which is
required to be disclosed in the Registration Statement or the
Prospectus and is not so disclosed.
(xi) No authorization, approval, consent or order of or
filing, registration or qualification with, any person (including,
without limitation, any court, governmental body or authority) is
required in connection with the transactions contemplated by this
Agreement, the Trust Agreement, the Registration Statement and the
Prospectus, except such as have been obtained under the 1933 Act and
the Trust Indenture Act, the Company's Term Loan Agreement dated as
of October 2, 1995, the Company's Standby Term Loan Agreement dated
as of September 28, 1994, and except such as may be required under
state securities laws or Interpretations or Rules of the NASD in
connection with the purchase and distribution of the Designated
Preferred Securities by the Underwriters.
(xii) The Registration Statement and the Prospectus and any
amendments or supplements thereto and any documents incorporated
therein by reference (other than the financial statements or other
financial data included therein or omitted therefrom and
Underwriters' Information, as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations as of their
respective dates of effectiveness.
(xiii) To the best of such counsel's knowledge, there are
no contracts, agreements, leases or other documents of a character
required to be disclosed in the Registration Statement or Prospectus
or to be filed as exhibits to the Registration Statement that are not
so disclosed or filed.
(xiv) The statements under the captions "Description of the
Preferred Securities", "Description of the Subordinated Debentures",
"Description of the Guarantee", "Relationship Among the Preferred
Securities, the Subordinated Debentures and the Guarantee", "Certain
Federal Income Tax Consequences", "ERISA Considerations",
"Regulation", "Governmental Policies and Legislation", and
"Legislative Developments" in the Prospectus or incorporated therein
by reference, insofar as such statements constitute a summary of
legal and regulatory matters, documents or instruments referred to
therein, are accurate descriptions of the matters summarized therein
in all material respects and fairly present the information called
for with respect to such legal matters, documents and instruments,
other than financial and statistical data as to which said counsel
expresses no opinion or belief.
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<PAGE> 24
(xv) Such counsel has been advised by the staff of the
Commission that the Registration Statement has become effective under
the 1933 Act; any required filing of the Prospectus pursuant to Rule
424(b) has been made within the time period required by Rule 424(b);
to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for a stop order are pending or threatened by the
Commission.
(xvi) Except as described in or contemplated by the
Prospectus, to the best of such counsel's knowledge, there are no
contractual encumbrances or restrictions, or material legal
restrictions required to be described therein on the ability of the
Subsidiaries (A) to pay dividends or make any other distributions on
its capital stock or to pay indebtedness owed to the Offerors, (B) to
make any loans or advances to, or investments in, the Offerors or (C)
to transfer any of its property or assets to the Offerors.
(xvii) To the best of such counsel's knowledge, (A) the
business and operations of the Offerors and the Subsidiaries comply
in all material respects with all statutes, ordinances, laws, rules
and regulations applicable thereto and which are material to the
Offerors and the Subsidiaries on a consolidated basis, except in
those instances where non-compliance would not materially impair the
ability of the Offerors and the Subsidiaries to conduct their
business; and (B) the Offerors and the Subsidiaries possess and are
operating in all material respects in compliance with the terms,
provisions and conditions of all permits, consents, licenses,
franchises and governmental and regulatory authorizations ("Permits")
and required to conduct their businesses as described in the
Prospectus and which are material to the Offerors and the
Subsidiaries on a consolidated basis, except in those instances where
the loss thereof or non-compliance therewith would not have a
material adverse effect on the condition (financial or otherwise),
earnings, affairs, business, prospects or results of operations of
the Offerors and the Subsidiaries on a consolidated basis; to the
best of such counsel's knowledge, all such Permits are valid and in
full force and effect, and, to the best of such counsel's knowledge,
no action, suit or proceeding is pending or threatened which may lead
to the revocation, termination, suspension or non-renewal of any such
Permit, except in those instances where the loss thereof or
non-compliance therewith would not materially impair the ability of
the Offerors or the Subsidiaries to conduct their businesses.
In giving the above opinion, such counsel may state that, insofar as
such opinion involves factual matters, they have relied upon certificates of
officers of the Offerors including, without limitation, certificates as to
the identity of any and all material contracts, indentures, mortgages, deeds
of trust, loans or credit agreements, notes, leases, franchises, licenses or
other agreements or instruments, and all material permits, easements,
consents, licenses, franchises and government regulatory authorizations, for
purposes of paragraphs (viii), (xiii) and (xvii) hereof and certificates of
public officials. In giving such opinion, such counsel may rely as to
matters of Delaware law upon (A) the opinion of Richards, Layton and Finger
described herein and (B) the opinion of Vincent A. Tamburo, general counsel
of the Company, as to certain matters regarding the Company and the
Subsidiaries, and such counsel shall state in its opinion the amount of
reliance it is placing on the opinion of such Company counsel and that such
reliance is, in the view of such counsel, reasonable under the circumstances.
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<PAGE> 25
Such counsel shall also confirm that, in connection with the
preparation of the Registration Statement and Prospectus, such counsel has
participated in conferences with officers and representatives of the Offerors
and with their independent public accountants and with you and your counsel,
at which conferences such counsel made inquiries of such officers,
representatives and accountants and discussed in detail the contents of the
Registration Statement and Prospectus and the documents incorporated therein
by reference (without taking further action to verify independently the
statements made in the Registration Statement and the Prospectus, and without
assuming responsibility for the accuracy or completeness of such statements,
except to the extent expressly provided above) and such counsel has no reason
to believe (A) that the Registration Statement or any amendment thereto
(except for the financial statements and related schedules and statistical
data included therein or omitted therefrom or Underwriters' Information, as
to which such counsel need express no opinion), at the time the Registration
Statement or any such amendment became effective, contained any untrue
statement of a material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading or (B)
that the Prospectus or any amendment or supplement thereto or the documents
incorporated therein by reference (except for the financial statements and
related schedules and statistical data included therein or omitted therefrom
or Underwriters' Information, as to which such counsel need express no
opinion), at the time the Registration Statement became effective (or, if the
term "Prospectus" refers to the prospectus first filed pursuant to Rule
424(b) of the 1933 Act Regulations, at the time the Prospectus was issued),
at the time any such amended or supplemented Prospectus was issued, at the
Closing Date and, if applicable, the Option Closing Date, contained or
contains any untrue statement of a material fact or omitted or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which
they were made, or (C) that there is any amendment to the Registration
Statement required to be filed that has not already been filed.
(e) Richards, Layton and Finger, special Delaware counsel to the
Offerors, shall have furnished to you their signed opinion, dated as of
Closing Date or the Option Closing Date, as the case may be, in form and
substance satisfactory to such counsel, to the effect that:
(i) The Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware
Business Trust Act and, under the Trust Agreement and the Delaware
Business Trust Act, has the trust power and authority to conduct its
business as described in the Prospectus.
(ii) The Trust Agreement is a legal, valid and binding
agreement of the Trust and the Trustees, and is enforceable against
the Company, as sponsor, and the Trustees, in accordance with its
terms.
(iii) Under the Trust Agreement and the Delaware Business
Trust Act, the execution and delivery of the Underwriting Agreement
by the Trust, and the performance by the Trust of its obligations
thereunder, have been authorized by all requisite trust action on the
part of the Trust.
(iv) The Designated Preferred Securities have been duly
authorized by the Trust Agreement, and when issued and sold in
accordance with the Trust Agreement,
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the Designated Preferred Securities will be, subject to the
qualifications set forth in paragraph (v) below, fully paid and
nonassessable beneficial interest in the assets of the Trust and
entitled to the benefits of the Trust Agreement. The form of
certificates to evidence the Designated Preferred Securities has been
approved by the Trust and is in due and proper form and complies with
all applicable requirements of the Delaware Business Trust Act.
(v) Holders of Designated Preferred Securities, as
beneficial owners of the Trust, will be entitled to the same
limitation of personal liability extended to shareholders of private,
for-profit corporations organized under the General Corporation Law
of the State of Delaware. Such opinion may note that the holders of
Designated Preferred Securities may be obligated to make payments as
set forth in the Trust Agreement.
(vi) Under the Delaware Business Trust Act and the Trust
Agreement, the issuance of the Designated Preferred Securities is not
subject to preemptive rights.
(vii) The issuance and sale by the Trust of the Designated
Preferred Securities and the Common Securities, the execution,
delivery and performance by the Trust of this Agreement, and the
consummation of the transactions contemplated by this Agreement, do
not violate (a) the Trust Agreement, or (b) any applicable Delaware
law, rule or regulation.
Such opinion may state that it is limited to the laws of the State
of Delaware and that the opinion expressed in paragraph (ii) above is subject to
the effect upon the Trust Agreement of (i) bankruptcy, insolvency,
moratorium, receivership, reorganization, liquidation, fraudulent conveyance
and other similar laws relating to or affecting the rights and remedies of
creditors generally, (ii) principles of equity, including applicable law
relating to fiduciary duties (regardless of whether considered and applied in
a proceeding in equity or at law), and (iii) the effect of applicable public
policy on the enforceability of provisions relating to indemnification or
contribution.
(f) Bryan Cave LLP, counsel for the Underwriters, shall have
furnished you their signed opinion, dated the Closing Date or the Option
Closing Date, as the case may be, with respect to the sufficiency of all
corporate procedures and other legal matters relating to this Agreement, the
validity of the Designated Preferred Securities, the Registration Statement,
the Prospectus and such other related matters as you may reasonably request
and there shall have been furnished to such counsel such documents and other
information as they may request to enable them to pass on such matters. In
giving such opinion, Bryan Cave LLP may rely as to matters of fact upon
statements and certifications of officers of the Offerors and of other
appropriate persons and may rely as to matters of law, other than law of the
United States and the State of Missouri, and upon the opinions of Lewis, Rice
& Fingersh, L.C. and Richards, Layton and Finger described herein.
(g) On the date of this Agreement and on the Closing Date (and, if
applicable, any Option Closing Date), the Representative shall have received
from Coopers & Lybrand L.L.P. a letter, dated the date of this Agreement and
the Closing Date (and, if applicable, the
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Option Closing Date), respectively, in form and substance satisfactory to the
Representative, confirming that they are independent public accountants with
respect to Company, within the meaning of the 1933 Act and the 1933 Act
Regulations, and stating in effect that:
(i) In their opinion, the consolidated financial
statements of the Company audited by them and included in the
Registration Statement comply as to form in all material respects
with the applicable accounting requirements of the 1933 Act and the
1933 Act Regulations.
(ii) On the basis of the procedures specified by the
American Institute of Certified Public Accountants as described in
SAS No. 71, "Interim Financial Information", inquiries of officials
of the Company responsible for financial and accounting matters, and
such other inquiries and procedures as may be specified in such
letter, which procedures do not constitute an audit in accordance
with U.S. generally accepted auditing standards, nothing came to
their attention that caused them to believe that, if applicable, the
unaudited interim consolidated financial statements of the Company
included in the Registration Statement do not comply as to form in
all material respects with the applicable accounting requirements of
the 1933 Act and 1933 Act Regulations or are not in conformity with
U.S. generally accepted accounting principles applied on a basis
substantially consistent, except as noted in the Registration
Statement, with the basis for the audited consolidated financial
statements of the Company included in the Registration Statement.
(iii) On the basis of limited procedures, not constituting
an audit in accordance with U.S. generally accepted auditing
standards, consisting of a reading of the unaudited interim financial
statements and other information referred to below, a reading of the
latest available unaudited condensed consolidated financial
statements of the Company, inspection of the minute books of the
Company since the date of the latest audited financial statements of
the Company included in the Registration Statement, inquiries of
officials of the Company responsible for financial and accounting
matters and such other inquiries and procedures as may be specified
in such letter, nothing came to their attention that caused them to
believe that:
(A) as of a specified date not more than five days
prior to the date of such letter, there have been any changes in the
consolidated capital stock of the Company, any increase in the
consolidated debt of the Company, any decreases in consolidated total
assets or shareholders equity of the Company, or any changes,
decreases or increases in other items specified by the Underwriters,
in each case as compared with amounts shown in the latest unaudited
interim consolidated statement of financial condition of the Company
included in the Registration Statement except in each case for
changes, increases or decreases which the Registration Statement
specifically discloses, have occurred or may occur or which are
described in such letter; and
(B) for the period from the date of the latest
unaudited interim consolidated financial statements included in the
Registration Statement to the specified date referred to in Clause
(iii)(A), there were any decreases in the
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consolidated interest income, net interest income, or net income of
the Company or in the per share amount of net income of the Company,
or any changes, decreases or increases in any other items specified
by the Representative, in each case as compared with the comparable
period of the preceding year and with any other period of
corresponding length specified by the Underwriters, except in each
case for increases or decreases which the Registration Statement
discloses have occurred or may occur, or which are described in such
letter.
(iv) In addition to the audit referred to in their report
included in the Registration Statement and the limited procedures,
inspection of minute books, inquiries and other procedures referred
to in paragraphs (ii) and (iii) above, they have carried out certain
specified procedures, not constituting an audit in accordance with
U.S. generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Underwriters which are derived from the general accounting records
and consolidated financial statements of the Company which appear in
the Registration Statement specified by the Underwriters in the
Registration Statement, and have compared such amounts, percentages
and financial information with the accounting records and the
material derived from such records and consolidated financial
statements of the Company have found them to be in agreement.
In the event that the letters to be delivered referred to above set
forth any such changes, decreases or increases as specified in Clauses
(iii)(A) or (iii)(B) above, or any exceptions from such agreement specified
in Clause (iv) above, it shall be a further condition to the obligations of
the Underwriters that the Representative shall have determined, after
discussions with officers of the Company responsible for financial and
accounting matters, that such changes, decreases, increases or exceptions as
are set forth in such letters do not (x) reflect a material adverse change in
the items specified in Clause (iii)(A) above as compared with the amounts
shown in the latest unaudited consolidated statement of financial condition
of the Company included in the Registration Statement, (y) reflect a material
adverse change in the items specified in Clause (iii)(B) above as compared
with the corresponding periods of the prior year or other period specified by
the Representative, or (z) reflect a material change in items specified in
Clause (iv) above from the amounts shown in the Preliminary Prospectus
distributed by the Underwriters in connection with the offering contemplated
hereby or from the amounts shown in the Prospectus.
(h) At the Closing Date and, if applicable, the Option Closing
Date, you shall have received certificates of the chief executive officer and
the chief financial and accounting officer of the Company, which certificates
shall be deemed to be made on behalf of the Company dated as of the Closing
Date and, if applicable, the Option Closing Date, evidencing satisfaction of
the conditions of Section 6(a) and stating that (i) the representations and
warranties of the Company set forth in Section 2(a) hereof are accurate as of
the Closing Date and, if applicable, the Option Closing Date, and that the
Offerors have complied with all agreements and satisfied all conditions on
their part to be performed or satisfied at or prior to such Closing Date;
(ii) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any material
adverse change in the condition (financial or otherwise), earnings, affairs,
business, prospects or results of operations of the Offerors and the
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Subsidiaries on a consolidated basis; (iii) since such dates there has not
been any material transaction entered into by the Offerors or the
Subsidiaries other than transactions in the ordinary course of business; and
(iv) they have carefully examined the Registration Statement and the
Prospectus as amended or supplemented and nothing has come to their attention
that would lead them to believe that either the Registration Statement or the
Prospectus, or any amendment or supplement thereto as of their respective
effective or issue dates, contained, and the Prospectus as amended or
supplemented at such Closing Date (and, if applicable, the Option Closing
Date), contains any untrue statement of a material fact, or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and (v) covering such other matters as you may
reasonably request. The officers' certificate of the Company shall further
state that no stop order affecting the Registration Statement is in effect
or, to their knowledge, threatened.
(i) At the Closing Date and, if applicable, the Option Closing
Date, you shall have received a certificate of an authorized representative
of the Trust to the effect that to the best of his or her knowledge based
upon a reasonable investigation, the representations and warranties of the
Trust in this Agreement are true and correct as though made on and as of the
Closing Date (and, if applicable, the Option Closing Date); the Trust has
complied with all the agreements and satisfied all the conditions required by
this Agreement to be performed or satisfied by the Trust on or prior to the
Closing Date and since the most recent date as of which information is given
in the Prospectus, except as contemplated by the Prospectus, the Trust has
not incurred any material liabilities or obligations, direct or contingent,
or entered into any material transactions not in the ordinary course of
business and there has not been any material adverse change in the condition
(financial or otherwise) of the Trust.
(j) On the Closing Date, you shall have received duly executed
counterparts of the Trust Agreement, the Guarantee, the Indenture and the
Expense Agreement.
(k) The NASD, upon review of the terms of the public offering of
the Designated Preferred Securities, shall not have objected to the
Underwriters' participation in such offering.
(l) Prior to the Closing Date and, if applicable, the Option
Closing Date, the Offerors shall have furnished to you and counsel for the
Underwriters all such other documents, certificates and opinions as they have
reasonably requested.
All opinions, certificates, letters and other documents shall be in
compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you. The Offerors shall furnish you
with conformed copies of such opinions, certificates, letters and other
documents as you shall reasonably request.
If any of the conditions referred to in this Section 6 shall not
have been fulfilled when and as required by this Agreement, this Agreement and
all of the Underwriters' obligations hereunder may be terminated by you on
notice to the Company at, or at any time before, the Closing Date or the
Option Closing Date, as applicable. Any such termination shall be without
liability of the Underwriters to the Offerors.
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7. INDEMNIFICATION AND CONTRIBUTION.
--------------------------------
(a) The Offerors agree to jointly and severally indemnify and hold
harmless each Underwriter, each of its directors, officers and agents, and
each person, if any, who controls any Underwriter within the meaning of the
1933 Act, against any and all losses, claims, damages, liabilities and
expenses (including reasonable costs of investigation and reasonable attorney
fees and expenses), joint or several, arising out of or based (i) upon any
untrue statement or alleged untrue statement of a material fact made by the
Company or the Trust contained in Section 2(a) of this Agreement (or any
certificate delivered by the Company or the Trust pursuant to Sections 6(h),
6(i) or 6(l) hereof) or the registration statement as originally filed or the
Registration Statement, any Preliminary Prospectus or the Prospectus, or in
any amendment or supplement thereto, (ii) upon any blue sky application or
other document executed by the Company or the Trust specifically for that
purpose or based upon written information furnished by the Company or the
Trust filed in any state or other jurisdiction in order to qualify any of the
Designated Preferred Securities under the securities laws thereof (any such
application, document or information being hereinafter referred to as a "Blue
Sky Application"), (iii) any omission or alleged omission to state a material
fact in the registration statement as originally filed or the Registration
Statement, the Preliminary Prospectus or the Prospectus, or in any amendment
or supplement thereto, or in any Blue Sky Application required to be stated
therein or necessary to make the statements therein not misleading, and
against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation and attorney fees), joint or
several, arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus or the
Prospectus, or in any amendment or supplement thereto, or arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading or
(iv) the enforcement of this indemnification provision or the contribution
provisions of Section 7(d); and shall reimburse each such indemnified party
for any reasonable legal or other expenses as incurred, but in no event less
frequently than 30 days after each invoice is submitted, incurred by them in
connection with investigating or defending against or appearing as a third-
party witness in connection with any such loss, claim, damage, liability
or action, notwithstanding the possibility that payments for such expenses
might later be held to be improper, in which case such payments shall be
promptly refunded; provided, however, that the Offerors shall not be liable in
-----------------
any such case to the extent, but only to the extent, that any such losses,
claims, damages, liabilities and expenses arise out of or are based upon any
untrue statement or omission or allegation thereof that has been made therein
or omitted therefrom in reliance upon and in conformity the Underwriters'
Information; provided, that the indemnification contained in this paragraph
--------
with respect to any Preliminary Prospectus shall not inure to the benefit of
any Underwriter (or of any person controlling any Underwriter) to the extent
any such losses, claims, damages, liabilities or expenses directly results
from the fact that such Underwriter sold Designated Preferred Securities to a
person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus (as amended or
supplemented if any amendments or supplements thereto shall have been
furnished to you in sufficient time to distribute same with or prior to the
written confirmation of the sale involved), if required by law, and if such
loss, claim, damage, liability or expense would not have arisen but for the
failure to give or send such person such document. The foregoing indemnity
agreement is
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in addition to any liability the Company or the Trust may otherwise have to
any such indemnified party.
(b) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless each Offeror, each of its directors, each of its
officers who signed the Registration Statement and each person, if any, who
controls an Offeror within the meaning of the 1933 Act, to the same extent as
required by the foregoing indemnity from the Company to each Underwriter, but
only with respect to the Underwriters' Information or in a Blue Sky
Application. The foregoing indemnity agreement is in addition to any
liability which any Underwriter may otherwise have to any such indemnified
party.
(c) If any action or claim shall be brought or asserted against
any indemnified party or any person controlling an indemnified party in
respect of which indemnity may be sought from the indemnifying party, such
indemnified party or controlling person shall promptly notify the
indemnifying party in writing, and the indemnifying party shall assume the
defense thereof, including the employment of counsel reasonably satisfactory
to the indemnified party and the payment of all expenses; provided, however,
-----------------
that the failure so to notify the indemnifying party shall not relieve it
from any liability which it may have to an indemnified party otherwise than
under such paragraph, and further, shall only relieve it from liability under
such paragraph to the extent prejudiced thereby. Any indemnified party or
any such controlling person shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such indemnified
party or such controlling person unless (i) the employment thereof has been
specifically authorized by the indemnifying party in writing, (ii) the
indemnifying party has failed to assume the defense or to employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties
to any such action (including any impleaded parties) include both such
indemnified party or such controlling person and the indemnifying party and
such indemnified party or such controlling person shall have been advised by
such counsel that there may be one or more legal defenses available to it
that are different from or in addition to those available to the indemnifying
party (in which case, if such indemnified party or controlling person
notifies the indemnifying party in writing that it elects to employ separate
counsel at the expense of the indemnifying party, the indemnifying party
shall not have the right to assume the defense of such action on behalf of
such indemnified party or such controlling person) it being understood,
however, that the indemnifying party shall not, in connection with any one
such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys at any time and for all such indemnified party
and controlling persons, which firm shall be designated in writing by the
indemnified party (and, if such indemnified parties are Underwriters, by you,
as Representative). Each indemnified party and each controlling person, as a
condition of such indemnity, shall use reasonable efforts to cooperate with
the indemnifying party in the defense of any such action or claim. The
indemnifying party shall not be liable for any settlement of any such action
effected without its written consent, but if there be a final judgment for
the plaintiff in any such action, the indemnifying party agrees to indemnify
and hold harmless any indemnified party and any such controlling person from
and against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.
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<PAGE> 32
An indemnifying party shall not, without the prior written consent
of each indemnified party, settle, compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnity may be sought hereunder (whether or not such
indemnified party or any person who controls such indemnified party within
the meaning of the 1933 Act is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes a release
of each such indemnified party reasonably satisfactory to each such
indemnified party and each such controlling person from all liability arising
out of such claim, action, suit or proceeding or unless the indemnifying
party shall confirm in a written agreement with each indemnified party, that
notwithstanding any federal, state or common law, such settlement, compromise
or consent shall not alter the right of any indemnified party or controlling
person to indemnification or contribution as provided in this Agreement.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
paragraphs (a), (b) or (c) hereof in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the Offerors on the one hand and
the Underwriters on the other from the offering of the Designated Preferred
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Offerors on the one hand and the Underwriters on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the
Offerors on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering of the
Designated Preferred Securities (before deducting expenses) received by the
Offerors bear to the total underwriting discounts, commissions and
compensation received by the Underwriters, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault of the
Offerors on the one hand and of the Underwriters on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Offerors or by
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Offerors and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this paragraph (d) were determined
by pro rata allocation or by any other method of allocation that does not
take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in the first sentence
of this paragraph (d) shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this paragraph (d), no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Designated Preferred Securities
underwritten by such Underwriter and distributed to the public were offered
to the public exceeds the amount of any damages that such Underwriters has
32
<PAGE> 33
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
For purposes of this paragraph (d), each person who controls an
Underwriter within the meaning of the 1933 Act shall have the same rights to
contribution as such Underwriter, and each person who controls an Offeror
within the meaning of the 1933 Act, each officer and trustee of an Offeror
who shall have signed the Registration Statement and each director of an
Offeror shall have the same rights to contribution as the Offerors subject in
each case to the preceding sentence. The obligations of the Offerors under
this paragraph (d) shall be in addition to any liability which the Offerors
may otherwise have and the obligations of the Underwriters under this
paragraph (d) shall be in addition to any liability that the Underwriters may
otherwise have.
(e) The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Offerors set forth in
this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter
or any person controlling an Underwriter or by or on behalf of the Offerors,
or such directors, trustees or officers (or any person controlling an
Offeror, (ii) acceptance of any Designated Preferred Securities and payment
therefor hereunder and (iii) any termination of this Agreement. A successor
of any Underwriter or of an Offeror, such directors, trustees or officers (or
of any person controlling an Underwriter or an Offeror) shall be entitled to
the benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 7.
(f) The Company agrees to indemnify the Trust against any and all
losses, claims, damages or liabilities that may become due from the Trust
under this Section 7.
8. TERMINATION. You shall have the right to terminate this Agreement
-----------
at any time at or prior to the Closing Date or, with respect to the
Underwriters' obligation to purchase the Option Preferred Securities, at any
time at or prior to the Option Closing Date, without liability on the part of
the Underwriters to the Offerors, if:
(a) Either Offeror shall have failed, refused, or been unable to
perform any agreement on its part to be performed under this Agreement, or
any of the conditions referred to in Section 6 shall not have been fulfilled,
when and as required by this Agreement;
(b) The Offerors or any of the Subsidiaries shall have sustained
any material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree which in the
judgment of the Representative materially impairs the investment quality of
the Designated Preferred Securities;
(c) There has been since the respective dates as of which
information is given in the Registration Statement or the Prospectus, any
materially adverse change in, or any development which is reasonably likely
to have a material adverse effect on, the condition (financial or otherwise),
earnings, affairs, business, prospects or results of operations of the
33
<PAGE> 34
Offerors and the Subsidiaries on a consolidated basis, whether or not arising
in the ordinary course of business;
(d) There has occurred any outbreak of hostilities or other
calamity or crisis or material change in general economic, political or
financial conditions, or internal conditions, the effect of which on the
financial markets of the United States is such as to make it, in your
reasonable judgment, impracticable to market the Designated Preferred
Securities or enforce contracts for the sale of the Designated Preferred
Securities;
(e) Trading generally on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market shall have been suspended, or
minimum or maximum prices for trading shall have been fixed, or maximum
ranges for prices for securities shall have been required, by any of said
exchanges or market system or by the Commission or any other governmental
authority;
(f) A banking moratorium shall have been declared by either
federal, Indiana or Michigan authorities; or
(g) Any action shall have been taken by any government in respect
of its monetary affairs which, your reasonable judgment, has a material
adverse effect on the United States securities markets.
If this Agreement shall be terminated pursuant to this Section 8,
the Offerors shall not then be under any liability to the Underwriters except
as provided in Sections 5 and 7 hereof.
9. DEFAULT OF UNDERWRITERS. If any Underwriter or Underwriters shall
-----------------------
default in its or their obligations to purchase Designated Preferred
Securities hereunder, the other Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the
Designated Preferred Securities which such defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that the
-----------------
non-defaulting Underwriters shall be under no obligation to purchase such
Designated Preferred Securities if the aggregate number of Designated
Preferred Securities to be purchased by such non-defaulting Underwriters
shall exceed 110% of the aggregate underwriting commitments set forth in
Schedule I hereto, and provided further, that no non-defaulting Underwriter
- ---------- ----------------
shall be obligated to purchase Designated Preferred Securities to the extent
that the number of such Designated Preferred Securities is more than 110% of
such Underwriter's underwriting commitment set forth in Schedule I hereto.
----------
In the event that the non-defaulting Underwriters are not obligated
under the above paragraph to purchase the Designated Preferred Securities
which the defaulting Underwriter or Underwriters agreed but failed to
purchase, the Representative may in its discretion arrange for one or more of
the Underwriters or for another party or parties to purchase such Designated
Preferred Securities on the terms contained herein. If within one business
day after such default the Representative does not arrange for the purchase
of such Designated Preferred Securities, then the Company shall be entitled
to a further period of one business day within which to procure another party
or parties satisfactory to the Representative to purchase such Designated
Preferred Securities on such terms.
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<PAGE> 35
In the event that the Representative or the Company do not arrange
for the purchase of any Designated Preferred Securities to which a default
relates as provided above, this Agreement shall be terminated.
If the remaining Underwriters or substituted underwriters are
required hereby or agree to take up all or a part of the Designated Preferred
Securities of a defaulting Underwriter or Underwriters as provided in this
Section 9, (i) you shall have the right to postpone the Closing Date for a
period of not more than five full business days, in order to effect any
changes that, in the opinion of counsel for the Underwriters or the Company,
may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or agreements, and the Company agrees
promptly to file any amendments to the Registration Statement or supplements
to the Prospectus which, in its opinion, may thereby be made necessary and
(ii) the respective numbers of Designated Preferred Securities to be
purchased by the remaining Underwriters or substituted underwriters shall be
taken as the basis of their underwriting obligation for all purposes of this
Agreement. Nothing herein contained shall relieve any defaulting Underwriter
of any liability it may have for damages occasioned by its default hereunder.
Any termination of this Agreement pursuant to this Section 9 shall be without
liability on the part of any non-defaulting Underwriter or the Company,
except for expenses to be paid or reimbursed pursuant to Section 5 and except
for the provisions of Section 7.
10. EFFECTIVE DATE OF AGREEMENT. If the Registration Statement is not
---------------------------
effective at the time of execution of this Agreement, this Agreement shall
become effective on the Effective Date at the time the Commission declares
the Registration Statement effective. The Company shall immediately notify
the Underwriters when the Registration Statement becomes effective.
If the Registration Statement is effective at the time of execution
of this Agreement, this Agreement shall become effective at the earlier of
11:00 a.m. St. Louis time, on the first full business day following the day
on which this Agreement is executed, or at such earlier time as the
Representative shall release the Designated Preferred Securities for initial
public offering. The Representative shall notify the Offerors immediately
after it has taken any action which causes this Agreement to become
effective.
Until such time as this Agreement shall have become effective, it
may be terminated by the Offerors, by notifying you or by you, as
Representative of the several Underwriters, by notifying either Offeror,
except that the provisions of Sections 5 and 7 shall at all times be
effective.
11. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. The
--------------------------------------------------------------
representations, warranties, indemnities, agreements and other statements of
the Offerors and their officers and trustees set forth in or made pursuant to
this Agreement and the agreements of the Underwriters contained in Section 7
hereof shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Offerors or controlling persons of
either Offeror, or by or on behalf of the Underwriters or controlling persons
of the Underwriters or any termination or cancellation of this Agreement and
shall survive delivery of and payment for the Designated Preferred
Securities.
35
<PAGE> 36
12. NOTICES. Except as otherwise provided in this Agreement, all
-------
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered by hand, mailed by registered or
certified mail, return receipt requested, or transmitted by any standard form
of telecommunication and confirmed. Notices to either Offeror shall be sent
to 100 North Michigan Street, South Bend, Indiana 46601, Attention: Larry E.
Lentych (with a copy to Lewis, Rice & Fingersh, L.C., 500 North Broadway,
Suite 2000, St. Louis, Missouri 63102, Attention: Thomas C. Erb, Esq.; and
notices to the Underwriters shall be sent to Stifel, Nicolaus & Company,
Incorporated, 500 North Broadway, Suite 1500, St. Louis, Missouri 63102,
Attention: Rick E. Maples (with a copy to Bryan Cave LLP, 211 North
Broadway, Suite 3600, St. Louis, Missouri 63102, Attention: Frederick W.
Scherrer, Esq.). In all dealings with the Company under this Agreement,
Stifel, Nicolaus & Company, Incorporated shall act as representative of and
on behalf of the several Underwriters, and the Company shall be entitled to
Act and rely upon any statement, request, notice or agreement on behalf of
the Underwriters, made or given by Stifel, Nicolaus & Company, Incorporated
on behalf of the Underwriters, as if the same shall have been made or given
in writing by the Underwriters.
13. PARTIES. The Agreement herein set forth is made solely for the
-------
benefit of the Underwriters and the Offerors and, to the extent expressed,
directors, trustees and officers of the Offerors, any person controlling the
Offerors or the Underwriters, and their respective successors and assigns.
No other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include any
purchaser, in his status as such purchaser, from the Underwriters of the
Designated Preferred Securities.
14. GOVERNING LAW. This Agreement shall be governed by the laws of the
-------------
State of Missouri, without giving effect to the choice of law or conflicts of
law principles thereof.
15. COUNTERPARTS. This Agreement may be executed in one or more
------------
counterparts, and when a counterpart has been executed by each party hereto
all such counterparts taken together shall constitute one and the same
Agreement.
[The remainder of this page is intentionally left blank.]
36
<PAGE> 37
If the foregoing is in accordance with the your understanding of
our agreement, please sign and return to us a counterpart hereof, whereupon
this shall become a binding agreement between the Company, the Trust and you
in accordance with its terms.
Very truly yours,
1st SOURCE CORPORATION
By:____________________________________
Name:
Title:
1st SOURCE CAPITAL TRUST II
By:____________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of March ___, 1997.
STIFEL, NICOLAUS & COMPANY, INCORPORATED
By:----------------------------------
Name:
Title:
For itself and as Representative of the several
Underwriters named in Schedule I hereto.
37
<PAGE> 38
SCHEDULE I
----------
38
<PAGE> 39
EXHIBIT A
LIST OF SUBSIDIARIES
1st Source Bank
1st Source Leasing, Inc.
1st Source Insurance, Inc.
1st Source Capital Corporation
Trustcorp Mortgage Company
1st Source Capital Trust I
1st Source Capital Trust II
1st Source Auto Leasing, Inc. (inactive)
1st Source Travel, Inc. (inactive)
FBT Capital Corporation (inactive)
<PAGE> 40
1,000,000 Preferred Securities
1st Source Capital Trust II
Floating Rate Cumulative Trust Preferred Securities
(Liquidation Amount $25 per Preferred Security)
AGREEMENT AMONG UNDERWRITERS
----------------------------
March ___, 1997
Stifel, Nicolaus & Company, Incorporated
As Representative of the Several Underwriters
500 North Broadway, Suite 1500
St. Louis, Missouri 63102
1. UNDERWRITING AGREEMENT. We understand that 1st Source
Corporation, an Indiana corporation (the "Company") and its financing
subsidiary, 1st Source Capital Trust II, a Delaware business trust (the
"Trust", and hereinafter together with the Company, the "Offerors"), propose
to enter into an underwriting agreement in substantially the form attached
(the "Underwriting Agreement") with you and other prospective underwriters
(including us) (collectively, the "Underwriters") providing for the several
purchase by the Underwriters from the Trust 1,000,000 of the Trust's Floating
Rate Cumulative Trust Preferred Securities with a liquidation amount of $25.00
per Preferred Security upon the terms stated in the Underwriting Agreement
(such Preferred Securities are herein referred to as the "Firm Preferred
Securities"), in which we will agree in accordance with the terms thereof to
purchase the number of Firm Preferred Securities set forth opposite our name
in Schedule I thereto. In addition, the Trust proposes to grant to the
Underwriters, upon the terms stated in the Underwriting Agreement, the right
to purchase up to an additional 100,000 Preferred Securities (the "Option
Preferred Securities"), identical to the Firm Preferred Securities, for the
sole purpose of covering over-allotments in the sale of the Firm Preferred
Securities. The Firm Preferred Securities and the Option Preferred
Securities are collectively referred to herein as the "Designated Preferred
Securities."
2. REGISTRATION STATEMENT AND PROSPECTUS. The Designated
Preferred Securities are more particularly described in a registration
statement on Form S-3 (Registration Nos. 333-______, 333-______-01 and
333-______-02) filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act").
Amendments to such registration statement have been or are being filed, or a
form of prospectus is being filed pursuant to Rule 424(b) and Rule 430A under
the Act, in which, with our consent hereby confirmed, we have been named as
one of the Underwriters of the Designated Preferred Securities. A copy of the
registration statement as filed and a copy of each amendment as filed
(excluding exhibits) have heretofore been delivered to us. We confirm that
we have examined the registration
<PAGE> 41
statement, including amendments thereto, relating to the Designated Preferred
Securities, as filed with the Commission, that we are willing to accept the
responsibilities of an Underwriter under the Act in respect of the
registration statement, and we are willing to proceed with a public offering
of the Designated Preferred Securities in the manner contemplated. The
registration statement and the related prospectus may be further amended, but
no such amendment or change shall release or affect our obligations hereunder
or under the Underwriting Agreement. As used herein, the terms "Registration
Statement" and "Prospectus" shall have the same meanings as specified in the
Underwriting Agreement.
3. AUTHORITY OF REPRESENTATIVE. We hereby authorize you,
acting on our behalf, as our representative (a) to complete, execute, and
deliver the Underwriting Agreement, to determine the public offering price of
the Designated Preferred Securities and the underwriting discount with
respect thereto and to make such variations, if any, as in your judgment are
appropriate and are not material, provided that the respective amount of
Designated Preferred Securities set forth opposite our name in Schedule
thereto shall not be increased without our consent, except as provided
herein, (b) to waive performance or satisfaction by the Offerors of
obligations or conditions included in the Underwriting Agreement if in your
judgment such waiver will not have a material adverse effect upon the
interests of the Underwriters, and (c) to take such actions as in your
discretion may be necessary or advisable to carry out the Underwriting
Agreement, this Agreement, and the transactions for the accounts of the
several Underwriters contemplated thereby and hereby. We also authorize you
to determine all matters relating to the public advertisement of the
Designated Preferred Securities.
4. PUBLIC OFFERING. We authorize you, with respect to any
Designated Preferred Securities which we so agree to purchase, to reserve for
sale, and on our behalf to sell, to dealers selected by you (including you or
any of the other Underwriters, such dealers so selected being hereinafter
called "Selected Dealers") and to others all or part of our Designated
Preferred Securities as you may determine. Reservations for sales to persons
other than Selected Dealers shall be as nearly as practicable in proportion
to the respective underwriting obligations of the Underwriters, unless you
agree to a smaller proportion at the request of an Underwriter. Reservations
for sales to Selected Dealers need not be in such proportion. All sales of
reserved Designated Preferred Securities shall be as nearly as practicable in
proportion to the respective reservations as calculated from day to day.
In your discretion, from time to time, you may add to the
reserved Designated Preferred Securities any Designated Preferred Securities
retained by us remaining unsold, and you may upon our request release to us
any of our Designated Preferred Securities reserved but not sold. Any
Designated Preferred Securities so released shall not thereafter be deemed to
have been reserved. Upon termination of this Agreement, or prior thereto at
your discretion, you shall deliver to our account any of our Designated
Preferred Securities reserved but not sold and delivered, except that if the
aggregate of all reserved but unsold and undelivered Designated Preferred
Securities is less than 10% of the Designated Preferred Securities, you are
authorized to sell such Designated Preferred Securities for the accounts of
the several Underwriters at such price or prices as you may determine.
2
<PAGE> 42
Sales of reserved Designated Preferred Securities shall be made
to Selected Dealers at the public offering price less the Selected Dealers'
Concession pursuant to the Selected Dealer Agreement in substantially the
form attached hereto, and to others at the public offering price.
Underwriters and Selected Dealers may reallow a concession to other dealers
as set forth in the Selected Dealer Agreement.
After advice from you that the Designated Preferred Securities
are released for sale to the public, we will offer to the public in
conformity with the terms of the offering set forth in the Prospectus such of
our Designated Preferred Securities as you advise us are not reserved. We
authorize you after the Designated Preferred Securities are released for sale
to the public, in your discretion, to change the public offering price of the
Designated Preferred Securities and the concession, and to buy Designated
Preferred Securities for our account from Selected Dealers at the public
offering price less such amount not in excess of the Selected Dealers'
Concession as you may determine.
Sales of Designated Preferred Securities between Underwriters may
be made with your prior consent, or as you deem advisable for blue sky
purposes.
We agree that we will not sell to any accounts over which we
exercise discretionary authority any Designated Preferred Securities which we
have agreed to purchase under the Underwriting Agreement.
5. ADDITIONAL PROVISIONS REGARDING SALES. You may, in your
discretion, charge our account with an amount equal to the Selected Dealers'
Concession in respect of each Designated Preferred Security purchased under
the Underwriting Agreement by you and not sold by you for our account (and
each Designated Preferred Security which you believe has been substituted
therefor) which may be delivered against a purchase contract made by you for
our account prior to the later of (a) the termination of all of the
provisions referred to in Section 10 hereof or (b) the covering by you of any
short position created by you for our account, or in lieu of such charge,
require us to repurchase on demand at the total cost thereof (including
commissions), plus transfer taxes, any such Designated Preferred Security so
delivered.
6. PAYMENT AND DELIVERY. At or before 9:00 a.m., New York
City time, on the Closing Date (as defined in the Underwriting Agreement) and
on each Option Closing Date (as defined in the Underwriting Agreement), we
will deliver to you (a) to an account designated by you by wire transfer, or
(b) at your office at 500 North Broadway, Suite 1500, St. Louis, Missouri
63102, Attention: Syndicate Department a certified or bank cashiers' check
payable to your order in same day funds, in the amount equal to the initial
offering price set forth in the Prospectus less the Selected Dealers'
Concession in respect of the number of Firm Preferred Securities or Option
Preferred Securities, as the case may be, to be purchased by us pursuant to
the Underwriting Agreement. We authorize you for our account to make payment
of the purchase price for the Designated Preferred Securities to be purchased
by us against delivery to you of such Designated Preferred Securities, and
the difference between such price and the amount of our check or wire
transfer delivered to you therefor shall be credited to our account. Unless
we notify you at least three full business days prior to such Closing Date to
make other
3
<PAGE> 43
arrangements, you may, in your discretion, advise the Offerors to prepare our
certificates in our name. If you have not received our funds as requested,
you may in your discretion make such payment on our behalf, in which event we
will reimburse you promptly. Any such payment by you shall not relieve us
from any of our obligations hereunder or under the Underwriting Agreement.
We authorize you for our account to accept delivery of our
Designated Preferred Securities from the Trust and to hold such of our
Designated Preferred Securities as you have reserved for sale to Selected
Dealers and others and to deliver such Designated Preferred Securities
against such sales. You will deliver to us our unreserved Designated
Preferred Securities as promptly as practicable.
Notwithstanding the foregoing provisions of this Section 6, if
you so notify us, payment for and delivery of our Designated Preferred
Securities may be made through the facilities of The Depository Trust
Company, if we are a member, unless we have otherwise notified you prior to a
date to be specified by you, or, if we are not a member, settlement may be
made through a correspondent who is a member pursuant to instructions we may
send to you prior to such specified date.
As promptly as practicable after you receive payment for reserved
Designated Preferred Securities sold for our account, you will remit to us
the purchase price paid by us for such Designated Preferred Securities and
credit or debit our account with the difference between the sale price and
such purchase price.
7. AUTHORITY TO BORROW. In connection with the transactions
contemplated in the Underwriting Agreement or this Agreement, we authorize
you, in your discretion, to advance your own funds for our account, charging
current interest rates, to arrange loans for our account and in connection
therewith to execute and deliver any notes or other instruments and hold or
pledge as security any of our Designated Preferred Securities or any
Preferred Securities of the Trust purchased for our account. Any lender may
rely upon your instructions in all matters relating to any such loan.
Any of our Designated Preferred Securities and any Preferred
Securities of the Trust purchased for our account held by you may from time
to time be delivered to us for carrying purposes, and any such securities
will be delivered to you upon demand.
8. STABILIZATION AND OTHER MATTERS. We authorize you in your
discretion to make purchases and sales of the Preferred Securities of the
Trust for our account in the open market or otherwise, for long or short
account, on such terms as you deem advisable and in arranging sales to
overallot. If you have purchased Preferred Securities for stabilizing
purposes prior to the execution of this Agreement, such purchases shall be
treated as having been made pursuant to the foregoing authorization. We also
authorize you, either before or after the termination of the offering
provisions of this Agreement, to cover any short position incurred pursuant
to this Section on such terms as you deem advisable. All such purchases and
sales and over-allotments shall be made for the accounts of the several
Underwriters as nearly as
4
<PAGE> 44
practicable in proportion to their respective underwriting obligations. Our
net commitment under this Section (excluding any commitment incurred under the
Underwriting Agreement upon exercise of the right to purchase Option Preferred
Securities) shall not, at the end of any business day, exceed 15 percent of
our maximum underwriting obligation. We will on your demand take up and pay
for at cost any Preferred Securities so purchased or sold or over-allotted for
our account, and, if any other Underwriter defaults in its corresponding
obligation, we will assume our proportionate share of such obligation without
relieving the defaulting Underwriter from liability. We will be obligated in
respect of purchases and sales made for our account hereunder whether or not
any proposed purchase of the Designated Preferred Securities from the Trust is
consummated. The existence of this provision is no assurance that the price
of the Designated Preferred Securities will be stabilized or that, if
stabilizing is commenced, it may not be discontinued at any time.
We agree to advise you, from time to time upon your request,
during the term of this Agreement, of the number of Designated Preferred
Securities retained by us remaining unsold, and will, upon your request, sell
to you for the accounts of one or more of the several Underwriters such
number of such Designated Preferred Securities as you may designate at such
prices, not less than the net price to Selected Dealers nor more than the
public offering price, as you may determine.
If you effect any stabilizing purchase pursuant to this Section
8, you will notify us promptly of the date and time when the first
stabilizing purchase was effected and the date and time when stabilizing was
terminated. You will retain such information as is required to be retained
by you as "Manager" pursuant to Rule 17a-2 under the Securities Exchange Act
of 1934, as amended (the "1934 Act"). We agree that we will not effect any
stabilizing purchases without your express authorization, and, if any
purchases are effected, we agree to furnish to you not later than three
business days following the date upon which stabilization was commenced such
information as is required under Rule 17a-2(d).
With respect to the Underwriting Agreement, you are also
authorized in your discretion (a) to exercise the option therein as to all or
any part of the Option Preferred Securities, and to terminate such option in
whole or in part prior to its expiration, (b) to postpone the Closing Date
and the Option Closing Date referred to in the Underwriting Agreement, and
any other time or date specified therein, (c) to exercise any right of
cancellation or termination, (d) to arrange for the purchase by other persons
(including yourselves or any other Underwriter) of any Designated Preferred
Securities not taken up by any defaulting Underwriter and (e) to consent to
such other changes in the Underwriting Agreement as in your judgment do not
materially adversely affect the substance of our rights and obligations
thereunder.
We further agree that (a) prior to the termination of this
Agreement we will not, directly or indirectly, bid for or purchase any
Designated Preferred Securities for our own account, except as provided in
this Agreement and in the Underwriting Agreement, and (b) prior to the
completion (as defined in Rule 10b-6 under the 1934 Act) of our participation
in this distribution, we will otherwise comply with Rule 10b-6.
5
<PAGE> 45
9. ALLOCATION OF EXPENSES AND SETTLEMENT. We authorize you to
charge our account with (a) all transfer taxes on Designated Preferred
Securities purchased by us pursuant to the Underwriting Agreement and sold by
you for our account, (b) Selected Dealers' Concessions in connection with the
purchase, marketing and sale of the Designated Preferred Securities for our
account, and (c) our proportionate share (based upon our underwriting
obligation) of all other expenses incurred by you under this Agreement and in
connection with the purchase, carrying, sale and distribution of the
Designated Preferred Securities. Your determination of the amount and
allocation of such expenses shall be conclusive. In the event of the default
of any Underwriter in carrying out its obligations hereunder, the expenses
chargeable to such Underwriter pursuant to this Agreement and not paid by it,
as well as any additional losses or expenses arising from such default, may
be proportionately charged by you against the other Underwriters not so
defaulting (including such other persons who purchase Designated Preferred
Securities upon a default by an Underwriter pursuant to Section 11 hereof),
without, however, relieving such defaulting Underwriter from its liability
therefor.
As soon as practicable after termination of this Agreement, the
accounts hereunder will be settled, but you may reserve from distribution
such amount as you deem necessary to cover possible additional expenses. You
may at any time make partial distributions of credit balances or call for
payment of debit balances. Any of our funds in your hands may be held with
your general funds without accountability for interest. Notwithstanding the
termination of this Agreement or any settlement, we will pay (a) our
proportionate share (based on our underwriting obligation) of all expenses
and liabilities which may be incurred by or for the accounts of the
Underwriters, including any liability based on the claim that the
Underwriters constitute an association, unincorporated business or other
separate entity, and of any expenses incurred by you or any other Underwriter
with your approval in contesting any such claim or liability, and (b) any
transfer taxes paid after such settlement on account of any sale or transfer
for our account.
10. TERMINATION. The offering provisions of this Agreement
shall terminate 30 days from the date hereof unless extended by you. You may
extend said provisions for a period or periods not exceeding an additional 30
days in the aggregate, provided that the Selected Dealer Agreements, if any,
are similarly extended. Whether extended or not, said provisions may be
terminated in whole or in part by notice from you.
11. DEFAULT BY UNDERWRITERS. Default by one or more
Underwriters in respect of their obligations hereunder or under the
Underwriting Agreement shall not release us from any of our obligations or in
any way affect the liability of any defaulting Underwriter to the other
Underwriters for damages resulting from such default. In case of such
default by one or more Underwriters, you are authorized to increase, pro rata
with other non-defaulting Underwriters, the number of Designated Preferred
Securities which we shall be obligated to purchase pursuant to the
Underwriting Agreement, provided that the aggregate amount of all such
increases for our account shall not exceed our pro rata share of 100,000
Designated Preferred Securities; and you are further authorized to arrange,
but shall not be obligated to arrange, for the purchase by other persons, who
may include yourselves or other Underwriters, of all or a portion of any
aggregate amount not taken up. In the event any such arrangements are
6
<PAGE> 46
made, the respective numbers of Designated Preferred Securities to be
purchased by the non-defaulting Underwriters and by any such other persons
shall be taken as the basis for the underwriting obligations under this
Agreement.
12. POSITION OF REPRESENTATIVE. Except as otherwise
specifically provided in this Agreement, you shall have full authority to
take such action as you may deem advisable in respect of all matters
pertaining to the Underwriting Agreement and this Agreement and in connection
with the purchase, carrying, sale, and distribution of the Designated
Preferred Securities (including authority to terminate the Underwriting
Agreement as provided therein). You shall be under no liability to us for or
in respect of the value of the Designated Preferred Securities or the
validity or the form thereof, the Registration Statement, any preliminary
prospectus, the Prospectus, the Underwriting Agreement, or other instruments
executed by the Offerors, or others; or for or in respect of the issuance,
transfer, or delivery of the Designated Preferred Securities; or for the
performance by the Offerors, or others of any agreement on its or their part;
nor shall you be liable under any of the provisions hereof or for any matters
connected herewith, except for your own want of good faith, for obligations
expressly assumed by you in this Agreement and for any liabilities imposed
upon you by the Act. No obligations on your part shall be implied or
inferred herefrom. Authority with respect to matters to be determined by
you, or by you and the Offerors, pursuant to the Underwriting Agreement,
shall survive the termination of this Agreement.
In taking all actions hereunder, except in the performance of
your own obligations hereunder and under the Underwriting Agreement, you
shall act only as the representative of each of the Underwriters. The
commitments and liabilities of each of the several Underwriters are several
in accordance with their respective purchase obligations and are not joint or
joint and several. Nothing contained herein shall constitute the
Underwriters partners or render any of them liable to make payments otherwise
than as herein provided. If for federal income tax purposes the Underwriters
should be deemed to constitute a partnership, then each Underwriter elects to
be excluded from the application of Subchapter K, Chapter 1, Subtitle A, of
the Internal Revenue Code of 1986, as amended, and agrees not to take any
position inconsistent with such election. Each Underwriter authorizes
Stifel, Nicolaus & Company, Incorporated, in its discretion, on behalf of
such Underwriter, to execute such evidence of such election as may be
required by the Internal Revenue Service.
13. COMPENSATION TO REPRESENTATIVE. As compensation for your
services in connection with the purchase of the Designated Preferred
Securities and the management of the public offering of the Designated
Preferred Securities, we agree to pay you and authorize you to charge our
account with an amount equal to $_____ per share of the Designated Preferred
Securities which we have agreed to purchase pursuant to the Underwriting
Agreement.
14. INDEMNIFICATION AND FUTURE CLAIMS. Each Underwriter,
including you, agrees to indemnify, hold harmless and reimburse each other
Underwriter and each person, if any, who controls any other Underwriter
within the meaning of Section 15 of the Act, and any successor of any other
Underwriter, to the extent that, and upon the terms upon which, each
Underwriter will be obligated pursuant to the Underwriting Agreement to
indemnify, hold
7
<PAGE> 47
harmless and reimburse the Offerors, its directors, officers, and controlling
persons, therein specified.
In the event that at any time any person other than an
Underwriter asserts a claim against one or more of the Underwriters or
against you as representative of the Underwriters arising out of an alleged
untrue statement or omission in the Registration Statement (or any amendment
thereto) or in any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) or relating to any transaction contemplated by this
Agreement, we authorize you to make such investigation, to retain such
counsel for the Underwriters and to take such action in the defense of such
claim as you may deem necessary or advisable. You may settle such claim with
the approval of a majority in interest of the Underwriters. We will pay our
proportionate share (based upon our underwriting obligation) of all expenses
incurred by you (including the fees and expenses of counsel for the
Underwriters) in investigating and defending against such claim and our
proportionate share of the aggregate liability incurred by all underwriters
in respect of such claim (after deducting any contribution or indemnification
obtained pursuant to the Underwriting Agreement, or otherwise, from persons
other than Underwriters), whether such liability is the result of a judgment
against one or more of the Underwriters or the result of any such settlement.
There shall be credited against any amount paid or payable by us pursuant to
this paragraph any loss, damage, liability or expense which is incurred by us
as a result of any such claim asserted against us, and if such loss, claim,
damage, liability, or expense is incurred by us as a result of any such claim
against us, and if such loss, claim, damage, liability, or expense is
incurred by us subsequent to any payment by us pursuant to this paragraph,
appropriate provision shall be made to effect such credit, by refund or
otherwise. Any Underwriter may retain separate counsel at its own expense.
A claim against or liability incurred by a person who controls an Underwriter
shall be deemed to have been made against or incurred by such Underwriter.
In the event of default by any Underwriter in respect of its obligations
under this Section, the non-defaulting Underwriters shall be obligated to pay
the full amount thereof in the proportions that their respective underwriting
obligations bear to the underwriting obligations of all non-defaulting
Underwriters, without relieving such defaulting Underwriter of its liability
hereunder. Our agreements contained in this Section will remain in full
force and effect regardless of any investigation made by or on behalf of such
other Underwriter or controlling person and will survive the delivery of and
payment for the Designated Preferred Securities and the termination of this
Agreement and the similar agreements entered into with the other
Underwriters.
15. BLUE SKY AND OTHER MATTERS. You will not have any
responsibility with respect to the right of any Underwriter or other person
to sell the Designated Preferred Securities in any jurisdiction
notwithstanding any information you may furnish in that connection. We
authorize you to file a New York Further State Notice, if required, and to
make and carry out on our behalf any agreements which you may deem necessary
in order to procure registration or qualification of any of the Designated
Preferred Securities in any jurisdiction, and we will at your request make
such payments, and furnish to you such information, as you may deem required
by reason of any such agreements.
8
<PAGE> 48
We authorize you to file on behalf of the several Underwriters
with the National Association of Securities Dealers, Inc. (the "NASD") such
documents and information, if any, which are available or have been furnished
to you for filing pursuant to the applicable rules, statements, and
interpretations of the
NASD.
16. TITLE TO DESIGNATED PREFERRED SECURITIES. The Designated
Preferred Securities purchased by the respective Underwriters shall remain
the property of such Underwriters until sold and no title to any such
Designated Preferred Securities shall in any event pass to you by virtue of
any of the provisions of this Agreement.
17. CAPITAL REQUIREMENTS. We confirm that the incurrence by us
of our obligations under this Agreement and under the Underwriting Agreement
will not place us in violation of Rule 15c3-1 under the 1934 Act or of any
applicable rules relating to capital requirements of any securities exchange
or association to which we are subject.
18. LIABILITY FOR FUTURE CLAIMS. Neither any statement by you
of any credit or debit balance in our account nor any reservation from
distribution to cover possible additional expenses relating to the Designated
Preferred Securities will constitute any representation by you as to the
existence or nonexistence of possible unforeseen expenses or liabilities of
or charges against the several Underwriters. Notwithstanding the
distribution of any net credit balance to us, we will be and remain liable
for, and will pay on demand, (a) our proportionate share (based upon our
underwriting obligation) of all expenses and liabilities which may be
incurred by or for the accounts of the Underwriters, including any liability
which may be incurred by the Underwriters or any of them based on the claim
that the Underwriters constitute an association, unincorporated business,
partnership, or any separate entity, and (b) any transfer taxes paid after
such settlement on account of any sale or transfer for our account.
19. ACKNOWLEDGMENT OF REGISTRATION STATEMENT, ETC. We hereby
confirm that we have examined the Registration Statement (including any
amendments or supplements thereto) and Prospectus relating to the Designated
Preferred Securities filed with the Commission, that we are willing to accept
the responsibilities of an underwriter thereunder and that we are willing to
proceed as therein contemplated. We confirm that we have authorized you to
advise the Offerors on our behalf (a) as to the statements to be included in
any preliminary prospectus and in the Prospectus (including any supplement
thereto) relating to the Designated Preferred Securities under the heading
"Underwriting," insofar as they relate to us, and (b) that there is no
information about us required to be stated in said Registration Statement or
said preliminary prospectus or the Prospectus (including any supplement
thereto) other than as set forth in the Underwriters' Questionnaire
previously delivered by us to you and the Offerors. We understand that the
aforementioned documents are subject to further change and that we will be
supplied with copies of any amendment or amendments to the Registration
Statement and of any amended Prospectus promptly, if and when received by
you, but the making of such changes and amendments will not release us or
affect our obligations hereunder or under the Underwriting Agreement.
9
<PAGE> 49
20. NOTICES AND GOVERNING LAW. Any notice from you to us shall
be mailed, telephoned, or telegraphed to us at our address as set forth in
the Underwriters' Questionnaire. Any notice from us to you shall be deemed
to have been duly given if mailed, telephoned or telegraphed to you at 500
North Broadway, Suite 1500, St. Louis, Missouri 63102, Attention:
Syndicate Department. This Agreement shall be governed by and construed in
accordance with the laws of the State of Missouri.
21. OTHER PROVISIONS. We represent that we are actually
engaged in the investment banking or securities business and that we are a
member in good standing of the NASD or, if we are not such a member, that we
are a foreign dealer not eligible for membership in the NASD and that we will
not offer or sell any Designated Preferred Securities in, or to persons who
are nationals or residents of, the United States of America. In making sales
of Designated Preferred Securities, if we are such a member, we agree to
comply with all applicable rules of the NASD, including, without limitation,
the NASD's Interpretation with respect to Free-Riding and Withholding and
Section 24 of Article III of the NASD's Rules of Fair Practice, or if we are
a foreign dealer, we agree to comply with such Interpretation and Sections 8,
24 and 36 of such Article as though we were such a member, and with Section
25 as that Section applies to a non-member broker or dealer in a foreign
country. We confirm that you have heretofore delivered to us such number of
copies of the Prospectus as have been reasonably requested by us, and we
further confirm that we have complied and will comply with Rule 15c2-8 under
the 1934 Act concerning delivery of each preliminary prospectus and the
Prospectus, and that we will furnish to persons who receive a confirmation of
sale a copy of the Prospectus filed pursuant to Rule 424(b) or Rule 424(c)
under the Act. We are aware of our statutory responsibilities under the Act,
and you are authorized on our behalf to so advise the Commission.
22. COUNTERPARTS. This Agreement may be signed in any number
of counterparts which, taken together, shall constitute one and the same
instrument, and you may confirm the execution of such counterparts by
facsimile signature.
________________________________________________
As Attorney-in-Fact for each of the several
Underwriters named in Schedule 1 to the
Underwriting Agreement
Confirmed as of the date first above written.
STIFEL, NICOLAUS & COMPANY, INCORPORATED
As Representative of the Several Underwriters
By:_____________________________________________
Name:
Title:
10
<PAGE> 1
==============================================================================
[FORM OF INDENTURE]
1ST SOURCE CORPORATION
AND
STATE STREET BANK AND TRUST COMPANY,
AS TRUSTEE
INDENTURE
----% SUBORDINATED DEBENTURES DUE 2027
DATED AS OF --------------, 1997.
==============================================================================
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
----
<C> <S> <C>
ARTICLE I. DEFINITIONS. . . . . . . . . . . . . . . . 1
Section 1.1. Definitions of Terms . . . . . . . . . . . 1
ARTICLE II. ISSUE, DESCRIPTION, TERMS, CONDITIONS,
REGISTRATION AND EXCHANGE OF THE
DEBENTURES . . . . . . . . . . . . . . . . 8
Section 2.1. Designation and Principal Amount . . . . . 8
Section 2.2. Maturity . . . . . . . . . . . . . . . . . 8
Section 2.3. Form and Payment . . . . . . . . . . . . . 9
Section 2.4. [Intentionally Omitted]. . . . . . . . . . 10
Section 2.5. Interest . . . . . . . . . . . . . . . . . 10
Section 2.6. Execution and Authentications. . . . . . . 10
Section 2.7. Registration of Transfer and Exchange. . . 11
Section 2.8. Temporary Debentures . . . . . . . . . . . 12
Section 2.9. Mutilated, Destroyed, Lost or Stolen
Debentures . . . . . . . . . . . . . . . . 12
Section 2.10. Cancellation . . . . . . . . . . . . . . . 13
Section 2.11. Benefit of Indenture . . . . . . . . . . . 13
Section 2.12. Authentication Agent . . . . . . . . . . . 13
ARTICLE III. REDEMPTION OF DEBENTURES . . . . . . . . . 14
Section 3.1. Redemption . . . . . . . . . . . . . . . . 14
Section 3.2. Special Event Redemption . . . . . . . . . 14
Section 3.3. Optional Redemption by Company . . . . . . 14
Section 3.4. Notice of Redemption . . . . . . . . . . . 15
Section 3.5. Payment Upon Redemption. . . . . . . . . . 16
Section 3.6. No Sinking Fund. . . . . . . . . . . . . . 16
ARTICLE IV. EXTENSION OF INTEREST PAYMENT PERIOD . . . 16
Section 4.1. Extension of Interest Payment Period . . . 16
Section 4.2. Notice of Extension. . . . . . . . . . . . 17
Section 4.3. Limitation on Transactions . . . . . . . . 17
ARTICLE V. PARTICULAR COVENANTS OF THE COMPANY. . . . 18
Section 5.1. Payment of Principal and Interest. . . . . 18
Section 5.2. Maintenance of Agency. . . . . . . . . . . 18
Section 5.3. Paying Agents. . . . . . . . . . . . . . . 18
Section 5.4. Appointment to Fill Vacancy in Office of
Trustee. . . . . . . . . . . . . . . . . . 19
Section 5.5. Compliance with Consolidation
Provisions . . . . . . . . . . . . . . . . 19
Section 5.6. Limitation on Transactions . . . . . . . . 19
Section 5.7. Covenants as to the Trust. . . . . . . . . 20
Section 5.8. Covenants as to Purchases. . . . . . . . . 20
ARTICLE VI. DEBENTUREHOLDERS' LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE. . . . . . . . 20
i
<PAGE> 3
Section 6.1. Company to Furnish Trustee Names and
Addresses of Debentureholders. . . . . . . 20
Section 6.2. Preservation of Information
Communications with Debentureholders . . . 21
Section 6.3. Reports by the Company . . . . . . . . . . 21
Section 6.4. Reports by the Trustee . . . . . . . . . . 21
ARTICLE VII. REMEDIES OF THE TRUSTEE AND
DEBENTUREHOLDERS ON EVENT OF DEFAULT . . . 22
Section 7.1. Events of Default. . . . . . . . . . . . . 22
Section 7.2. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . 23
Section 7.3. Application of Moneys Collected. . . . . . 24
Section 7.4. Limitation on Suits. . . . . . . . . . . . 25
Section 7.5. Rights and Remedies Cumulative; Delay or
Omission not Waiver. . . . . . . . . . . . 25
Section 7.6. Control by Debentureholders. . . . . . . . 26
Section 7.7. Undertaking to Pay Costs . . . . . . . . . 26
ARTICLE VIII. FORM OF DEBENTURE AND ORIGINAL ISSUE . . . 27
Section 8.1. Form of Debenture. . . . . . . . . . . . . 27
Section 8.2. Original Issue of Debentures . . . . . . . 27
ARTICLE IX. CONCERNING THE TRUSTEE . . . . . . . . . . 27
Section 9.1. Certain Duties and Responsibilities
Trustee. . . . . . . . . . . . . . . . . . 27
Section 9.2. Notice of Defaults . . . . . . . . . . . . 28
Section 9.3. Certain Rights of Trustee. . . . . . . . . 28
Section 9.4. Trustee Not Responsible for Recitals,
etc. . . . . . . . . . . . . . . . . . . . 30
Section 9.5. May Hold Debentures. . . . . . . . . . . . 30
Section 9.6. Moneys Held in Trust . . . . . . . . . . . 30
Section 9.7. Compensation and Reimbursement . . . . . . 30
Section 9.8. Reliance on Officers' Certificate. . . . . 31
Section 9.9. Disqualification: Conflicting
Interests. . . . . . . . . . . . . . . . . 31
Section 9.10. Corporate Trustee Required; Eligibility. . 31
Section 9.11. Resignation and Removal; Appointment of
Successor. . . . . . . . . . . . . . . . . 31
Section 9.12. Acceptance of Appointment by Successor . . 32
Section 9.13. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . 33
Section 9.14. Preferential Collection of Claims Against
the Company. . . . . . . . . . . . . . . . 33
ARTICLE X. CONCERNING THE DEBENTUREHOLDERS. . . . . . 33
Section 10.1. Evidence of Action by Holders. . . . . . . 33
Section 10.2. Proof of Execution by Debentureholders . . 34
Section 10.3. Who May be Deemed Owners . . . . . . . . . 34
Section 10.4. Certain Debentures Owned by Company
Disregarded. . . . . . . . . . . . . . . . 34
Section 10.5. Actions Binding on Future
Debentureholders . . . . . . . . . . . . . 35
ARTICLE XI. SUPPLEMENTAL INDENTURES. . . . . . . . . . 35
Section 11.1. Supplemental Indentures Without the
Consent of Debentureholders. . . . . . . . 35
Section 11.2. Supplemental Indentures with Consent of
Debentureholders . . . . . . . . . . . . . 36
Section 11.3. Effect of Supplemental Indentures. . . . . 36
Section 11.4. Debentures Affected by Supplemental
Indentures . . . . . . . . . . . . . . . . 37
ii
<PAGE> 4
Section 11.5. Execution of Supplemental Indentures . . . 37
ARTICLE XII. SUCCESSOR CORPORATION. . . . . . . . . . . 37
Section 12.1. Company May Consolidate, etc . . . . . . . 37
Section 12.2. Successor Corporation Substituted. . . . . 38
Section 12.3. Evidence of Consolidation, etc. to
Trustee. . . . . . . . . . . . . . . . . . 38
ARTICLE XIII. SATISFACTION AND DISCHARGE . . . . . . . . 38
Section 13.1. Satisfaction and Discharge of Indenture. . 39
Section 13.2. Discharge of Obligations . . . . . . . . . 39
Section 13.3. Deposited Moneys to be Held in Trust . . . 39
Section 13.4. Payment of Monies Held by Paying Agents. . 40
Section 13.5. Repayment to Company . . . . . . . . . . . 40
ARTICLE XIV. IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS . . . . . . . . . . 40
Section 14.1. No Recourse. . . . . . . . . . . . . . . . 40
ARTICLE XV. MISCELLANEOUS PROVISIONS . . . . . . . . . 41
Section 15.1. Effect on Successors and Assigns . . . . . 41
Section 15.2. Actions by Successor . . . . . . . . . . . 41
Section 15.3. Surrender of Company Powers. . . . . . . . 41
Section 15.4. Notices. . . . . . . . . . . . . . . . . . 41
Section 15.5. Governing Law. . . . . . . . . . . . . . . 41
Section 15.6. Treatment of Debentures as Debt. . . . . . 41
Section 15.7. Compliance Certificates and Opinions . . . 41
Section 15.8. Payments on Business Days. . . . . . . . . 42
Section 15.9. Conflict with Trust Indenture Act. . . . . 42
Section 15.10. Counterparts . . . . . . . . . . . . . . . 42
Section 15.11. Separability . . . . . . . . . . . . . . . 42
Section 15.12. Assignment . . . . . . . . . . . . . . . . 42
Section 15.13. Acknowledgment of Rights . . . . . . . . . 43
ARTICLE XVI. SUBORDINATION OF DEBENTURES. . . . . . . . 43
Section 16.1. Agreement to Subordinate . . . . . . . . . 43
Section 16.2. Default on Senior Debt, Subordinated Debt
or Additional Senior Obligations . . . . . 43
Section 16.3. Liquidation; Dissolution; Bankruptcy . . . 44
Section 16.4. Subrogation. . . . . . . . . . . . . . . . 45
Section 16.5. Trustee to Effectuate Subordination. . . . 45
Section 16.6. Notice by the Company. . . . . . . . . . . 46
Section 16.7. Rights of the Trustee; Holders of Senior
Indebtedness . . . . . . . . . . . . . . . 46
Section 16.8. Subordination may not be Impaired. . . . . 48
</TABLE>
iii
<PAGE> 5
<TABLE>
CROSS REFERENCE TABLE
<CAPTION>
SECTION OF TRUST
INDENTURE ACT OF SECTION OF
1939, AS AMENDED INDENTURE
---------------- ----------
<S> <C>
310(a). . . . . . . . . . . . . . . . . . . . . . . 9.10
310(b). . . . . . . . . . . . . . . . . . . . .9.9, 9.11
310(c). . . . . . . . . . . . . . . . . . Not Applicable
311(a). . . . . . . . . . . . . . . . . . . . . . . 9.14
311(b). . . . . . . . . . . . . . . . . . . . . . . 9.14
311(c). . . . . . . . . . . . . . . . . . Not Applicable
312(a). . . . . . . . . . . . . . . . . . . .6.1, 6.2(a)
312(b). . . . . . . . . . . . . . . . . . . . . . 6.2(c)
312(c). . . . . . . . . . . . . . . . . . . . . . 6.2(c)
313(a). . . . . . . . . . . . . . . . . . . . . . 6.4(a)
313(b). . . . . . . . . . . . . . . . . . . . . . 6.4(b)
313(c). . . . . . . . . . . . . . . . . . 6.4(a), 6.4(b)
313(d). . . . . . . . . . . . . . . . . . . . . . 6.4(c)
314(a). . . . . . . . . . . . . . . . . . . . . . 6.3(a)
314(b). . . . . . . . . . . . . . . . . . Not Applicable
314(c). . . . . . . . . . . . . . . . . . . . . . . 15.7
314(d). . . . . . . . . . . . . . . . . . Not Applicable
314(e). . . . . . . . . . . . . . . . . . . . . . . 15.7
314(f). . . . . . . . . . . . . . . . . . Not Applicable
315(a). . . . . . . . . . . . . . . . . . . .9.1(a), 9.3
315(b). . . . . . . . . . . . . . . . . . . . . . . .9.2
315(c). . . . . . . . . . . . . . . . . . . . . . 9.1(a)
315(d). . . . . . . . . . . . . . . . . . . . . . 9.1(b)
315(e). . . . . . . . . . . . . . . . . . . . . . . .7.7
316(a). . . . . . . . . . . . . . . . . . . . . 1.1, 7.6
316(b). . . . . . . . . . . . . . . . . . . . . . 7.4(b)
316(c). . . . . . . . . . . . . . . . . . . . . .10.1(b)
317(a). . . . . . . . . . . . . . . . . . . . . . . .7.2
317(b). . . . . . . . . . . . . . . . . . . . . . . .5.3
318(a). . . . . . . . . . . . . . . . . . . . . . . 15.9
Note: This Cross-Reference Table does not
constitute part of this Indenture and shall not
affect the interpretation of any of its terms or
provisions.
</TABLE>
iv
<PAGE> 6
INDENTURE
INDENTURE, dated as of -------------, 1997, between 1ST SOURCE
CORPORATION, an Indiana corporation (the "Company") and STATE
STREET BANK AND TRUST COMPANY, a trust company duly organized and
existing under the laws of the Commonwealth of Massachusetts, as
trustee (the "Trustee");
RECITALS
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the execution and delivery of this Indenture to
provide for the issuance of securities to be known as its ----%
Subordinated Debentures due 2027 (hereinafter referred to as the
"Debentures"), the form and substance of such Debentures and the
terms, provisions and conditions thereof to be set forth as
provided in this Indenture;
WHEREAS, 1st Source Capital Trust I, a Delaware statutory
business trust (the "Trust"), has offered to the public
$--------- aggregate liquidation amount of its Preferred Securities
(as defined herein) and proposes to invest the proceeds from such
offering, together with the proceeds of the issuance and sale by
the Trust to the Company of $--------- million aggregate
liquidation amount of its Common Securities (as defined herein), in
$---------- million aggregate principal amount of the Debentures;
and
WHEREAS, the Company has requested that the Trustee execute
and deliver this Indenture; and
WHEREAS, all requirements necessary to make this Indenture a
valid instrument in accordance with its terms, and to make the
Debentures, when executed by the Company and authenticated and
delivered by the Trustee, the valid obligations of the Company,
have been performed, and the execution and delivery of this
Indenture have been duly authorized in all respects:
WHEREAS, to provide the terms and conditions upon which the
Debentures are to be authenticated, issued and delivered, the
Company has duly authorized the execution of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been
done.
NOW, THEREFORE, in consideration of the premises and the
purchase of the Debentures by the holders thereof, it is mutually
covenanted and agreed as follows for the equal and ratable benefit
of the holders of the Debentures:
ARTICLE I.
DEFINITIONS
SECTION 1.1. DEFINITIONS OF TERMS.
The terms defined in this Section 1.1 (except as in this
Indenture otherwise expressly provided or unless the context
otherwise requires) for all purposes of this Indenture and of any
indenture supplemental hereto shall have the respective meanings
specified in this Section 1.1 and shall include the plural as well
as the singular. All other terms used in this Indenture that are
defined in the Trust Indenture Act, or that are by reference in the
Trust Indenture Act defined in the Securities Act (except as herein
otherwise expressly provided or unless the context otherwise
requires), shall have the meanings
<PAGE> 7
assigned to such terms in the Trust Indenture Act and in the Securities Act as
in force at the date of the execution of this instrument. All accounting
terms used herein and not expressly defined shall have the meanings
assigned to such terms in accordance with Generally Accepted
Accounting Principles.
"Accelerated Maturity Date" means if the Company elects to
accelerate the Maturity Date in accordance with Section 2.2(c), the
date selected by the Company which is prior to the Scheduled
Maturity Date, but is after March 31, 2002.
"Additional Interest" shall have the meaning set forth in
Section 2.5.
"Additional Senior Obligations" means all indebtedness of the
Company whether incurred on or prior to the date of this Indenture
or thereafter incurred, for claims in respect of derivative
products such as interest and foreign exchange rate contracts,
commodity contracts and similar arrangements; provided, however,
that Additional Senior Obligations does not include claims in
respect of Senior Debt or Subordinated Debt or obligations which,
by their terms, are expressly stated to be not superior in right of
payment to the Debentures or to rank pari passu in right of payment
with the Debentures. For purposes of this definition, "claim"
shall have the meaning assigned thereto in Section 101(4) of the
United States Bankruptcy Code of 1978, as amended.
"Administrative Trustees" shall have the meaning set forth in
the Trust Agreement.
"Affiliate" means, with respect to a specified Person, (a) any
Person directly or indirectly owning, controlling or holding with
power to vote 10% or more of the outstanding voting securities or
other ownership interests of the specified Person; (b) any Person
10% or more of whose outstanding voting securities or other
ownership interests are directly or indirectly owned, controlled or
held with power to vote by the specified Person; (c) any Person
directly or indirectly controlling, controlled by, or under common
control with the specified Person; (d) a partnership in which the
specified Person is a general partner; (e) any officer or director
of the specified Person; and (f) if the specified Person is an
individual, any entity of which the specified Person is an officer,
director or general partner.
"Authenticating Agent" means an authenticating agent with
respect to the Debentures appointed by the Trustee pursuant to
Section 2.12.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar
federal or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the
Company or any duly authorized committee of such Board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been
duly adopted by the Board of Directors and to be in full force and
effect on the date of such certification.
"Business Day" means, with respect to the Debentures, any day
other than a Saturday or a Sunday or a day on which federal or
state banking institutions in the Borough of Manhattan, The City of
New York, are authorized or required by law, executive order or
regulation to close, or a day on which the Corporate Trust Office
of the Trustee or the Property Trustee is closed for business.
2
<PAGE> 8
"Capital Treatment Event" means the receipt by the Trust of an
Opinion of Counsel, rendered by a law firm having a recognized
banking law practice, to the effect that, as a result of
any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision thereof or therein, or as a
result of any official administrative pronouncement or judicial
decision interpreting or applying such laws or regulations, which
amendment or change is effective or such proposed change,
pronouncement or decision is announced on or after the date of
issuance of the Preferred Securities under the Trust Agreement,
there is more than an insubstantial risk of impairment of the
Company's ability to treat the aggregate liquidation amount of the
Preferred Securities (or any substantial portion thereof) as Tier
1 capital (or the then equivalent thereof) for purposes of the
capital adequacy guidelines of the Federal Reserve, as then in
effect and appicable to the Company.
"Certificate" means a certificate signed by the principal
executive officer, the principal financial officer, the principal
accounting officer, the treasurer or any vice president of the
Company. The Certificate need not comply with the provisions of
Section 15.7.
"Change in 1940 Act Law" shall have the meaning set forth in
the definition of "Investment Company Event."
"Commission" means the Securities and Exchange Commission.
"Common Securities" means undivided beneficial interests in
the assets of the Trust which rank pari passu with the Preferred
Securities; provided, however, that upon the occurrence of an Event
of Default, the rights of holders of Common Securities to payment
in respect of (i) distributions, and (ii) payments upon
liquidation, redemption and otherwise are subordinated to the
rights of holders of Preferred Securities.
"Company" means 1st Source Corporation, a corporation duly
organized and existing under the laws of the State of Indiana, and,
subject to the provisions of Article XII, shall also include its
successors and assigns.
"Compounded Interest" shall have the meaning set forth in
Section 4.1.
"Corporate Trust Office" means the office of the Trustee at
which, at any particular time, its corporate trust business shall
be principally administered, which office at the date hereof is
located at Two International Place, 4th Floor, Boston Massachusetts
02110, Attention: Corporate Trust Department.
"Coupon Rate" shall have the meaning set forth in Section 2.5.
"Custodian" means any receiver, trustee, assignee, liquidator,
or similar official under any Bankruptcy Law.
"Debentures" shall have the meaning set forth in the Recitals
hereto.
"Debentureholder," "holder of Debentures," "registered
holder," or other similar term, means the Person or Persons in
whose name or names a particular Debenture shall be registered on
the books of the Company or the Trustee kept for that purpose in
accordance with the terms of this Indenture.
3
<PAGE> 9
"Debenture Register" shall have the meaning set forth in
Section 2.7(b).
"Debt" means with respect to any Person, whether recourse is
to all or a portion of the assets of such Person and whether or not
contingent, (i) every obligation of such Person for money borrowed;
(ii) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including
obligations incurred in connection with the acquisition of
property, assets or businesses; (iii) every reimbursement
obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account
of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but
excluding trade accounts payable or accrued liabilities arising in
the ordinary course of business); (v) every capital lease
obligation of such Person; and (vi) and every obligation of the
type referred to in clauses (i) through (v) of another Person and
all dividends of another Person the payment of which, in either
case, such Person has guaranteed or is responsible or liable,
directly or indirectly, as obligor or otherwise.
"Default" means any event, act or condition that with notice
or lapse of time, or both, would constitute an Event of Default.
"Deferred Interest" shall have the meaning set forth in
Section 4.1.
"Dissolution Event" means that as a result of the occurrence
and continuation of a Special Event, the Trust is to be dissolved
in accordance with the Trust Agreement and the Debentures held by
the Property Trustee are to be distributed to the holders of the
Trust Securities issued by the Trust pro rata in accordance with
the Trust Agreement.
"Event of Default" means, with respect to the Debentures, any
event specified in Section 7.1, which has continued for the period
of time, if any, and after the giving of the notice, if any,
therein designated.
"Exchange Act," means the Securities Exchange Act of 1934, as
amended, as in effect at the date of execution of this instrument.
"Extended Interest Payment Period" shall have the meaning set
forth in Section 4.1.
"Extended Maturity Date" means if the Company elects to extend
the Maturity Date in accordance with Section 2.2(b), the date
selected by the Company which is after the Scheduled Maturity Date
but before March 31, 2036.
"Federal Reserve" means the Board of Governors of the Federal
Reserve System.
"Generally Accepted Accounting Principles" means such
accounting principles as are generally accepted at the time of any
computation required hereunder.
"Governmental Obligations" means securities that are
(i) direct obligations of the United States of America for the
payment of which its full faith and credit is pledged; or
(ii) obligations of a Person controlled or supervised by and acting
as an agency or instrumentality of the United States of America,
the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America that, in
either case, are not callable or redeemable at the option of the
issuer thereof, and shall also include a depositary receipt issued
by a bank (as defined in Section 3(a)(2) of the Securities
4
<PAGE> 10
Act) as custodian with respect to any such Governmental Obligation or a
specific payment of principal of or interest on any such
Governmental Obligation held by such custodian for the account of
the holder of such depositary receipt; provided, however, that
(except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such
depositary receipt from any amount received by the custodian in
respect of the Governmental Obligation or the specific payment of
principal of or interest on the Governmental Obligation evidenced
by such depositary receipt.
"Herein," "hereof," and "hereunder," and other words of
similar import, refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more
indentures supplemental hereto entered into in accordance with the
terms hereof.
"Interest Payment Date," when used with respect to any
installment of interest on the Debentures, means the date specified
in the Debenture or in a Board Resolution or in an indenture
supplemental hereto with respect to the Debentures as the fixed
date on which an installment of interest with respect to the
Debentures is due and payable.
"Investment Company Act" means the Investment Company Act of
1940, as amended, as in effect at the date of execution of this
instrument.
"Investment Company Event" means the receipt by the Trust of
an Opinion of Counsel, rendered by a law firm having a recognized
tax and securities law practice, to the effect that, as a
result of the occurrence of a change in law or regulation or a
change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), the Trust is or shall be
considered an "investment company" that is required to be
registered under the Investment Company Act, which Change in 1940
Act Law becomes effective on or after the date of original issuance
of the Preferred Securities under the Trust Agreement.
"Maturity Date" means the date on which the Debentures mature
and on which the principal shall be due and payable together with
all accrued and unpaid interest thereon including Compounded
Interest and Additional Interest, if any.
"Ministerial Action" shall have the meaning set forth in
Section 3.2.
"Officers' Certificate" means a certificate signed by the
President or a Vice President and by the Treasurer or an Assistant
Treasurer or the Controller or an Assistant Controller or the
Secretary or an Assistant Secretary of the Company that is
delivered to the Trustee in accordance with the terms hereof. Each
such certificate shall include the statements provided for in
Section 15.7, if and to the extent required by the provisions
thereof.
"Opinion of Counsel" means an opinion in writing of legal
counsel, who may be an employee of or counsel for the Company, that
is delivered to the Trustee in accordance with the terms hereof.
Each such opinion shall include the statements provided for in
Section 15.7, if and to the extent required by the provisions
thereof.
5
<PAGE> 11
"Outstanding," when used with reference to the Debentures,
means, subject to the provisions of Section 10.4, as of any
particular time, all Debentures theretofore authenticated and
delivered by the Trustee under this Indenture, except
(a) Debentures theretofore canceled by the Trustee or any paying
agent, or delivered to the Trustee or any paying agent for
cancellation or that have previously been canceled; (b) Debentures
or portions thereof for the payment or redemption of which moneys
or Governmental Obligations in the necessary amount shall have been
deposited in trust with the Trustee or with any paying agent (other
than the Company) or shall have been set aside and segregated in
trust by the Company (if the Company shall act as its own paying
agent); provided, however, that if such Debentures or portions of
such Debentures are to be redeemed prior to the maturity thereof,
notice of such redemption shall have been given as in Article III
provided, or provision satisfactory to the Trustee shall have been
made for giving such notice; and (c) Debentures in lieu of or in
substitution for which other Debentures shall have been
authenticated and delivered pursuant to the terms of Section 2.7.
"Person" means any individual, corporation, partnership,
joint-venture, joint-stock company, unincorporated organization or
government or any agency or political subdivision thereof.
"Predecessor Debenture" means every previous Debenture
evidencing all or a portion of the same debt as that evidenced by
such particular Debenture; and, for the purposes of this
definition, any Debenture authenticated and delivered under Section
2.9 in lieu of a lost, destroyed or stolen Debenture shall be
deemed to evidence the same debt as the lost, destroyed or stolen
Debenture.
"Preferred Securities" means undivided beneficial interests in
the assets of the Trust which rank pari passu with Common
Securities issued by the Trust; provided, however, that upon the
occurrence of an Event of Default, the rights of holders of Common
Securities to payment in respect of distributions and payments upon
liquidation, redemption and otherwise are subordinated to the
rights of holders of Preferred Securities.
"Preferred Securities Guarantee" means any guarantee that the
Company may enter into with the Trustee or other Persons that
operate directly or indirectly for the benefit of holders of
Preferred Securities.
"Property Trustee" has the meaning set forth in the Trust
Agreement.
"Responsible Officer" when used with respect to the Trustee
means the Chairman of the Board of Directors, the President, any
Vice President, the Secretary, the Treasurer, any trust officer,
any corporate trust officer or any other officer or assistant
officer of the Trustee customarily performing functions similar to
those performed by the Persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is
referred because of his or her knowledge of and familiarity with
the particular subject.
"Scheduled Maturity Date" means March 31, 2027.
"Securities Act," means the Securities Act of 1933, as
amended, as in effect at the date of execution of this instrument.
"Senior Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the
filing of any petition in bankruptcy or for reorganization relating
to the Company whether or not such claim for post-petition interest
is allowed in such proceeding), on Debt, whether
6
<PAGE> 12
incurred on or prior to the date of this Indenture or thereafter incurred,
unless, in the instrument creating or evidencing the same or pursuant to
which the same is outstanding, it is provided that such obligations
are not superior in right of payment to the Debentures or to other
Debt which is pari passu with, or subordinated to, the Debentures;
provided, however, that Senior Debt shall not be deemed to include
(i) any Debt of the Company which when incurred and without respect
to any election under section 1111(b) of the United States
Bankruptcy Code of 1978, as amended, was without recourse to the
Company; (ii) any Debt of the Company to any of its subsidiaries;
(iii) Debt to any employee of the Company; (iv) Debt which by its
terms is subordinated to trade accounts payable or accrued
liabilities arising in the ordinary course of business to the
extent that payments made to the holders of such Debt by the
holders of the Debentures as a result of the subordination
provisions of this Indenture would be greater than they otherwise
would have been as a result of any obligation of such holders to
pay amounts over to the obligees on such trade accounts payable or
accrued liabilities arising in the ordinary course of business as
a result of subordination provisions to which such Debt is subject;
and (v) Debt which constitutes Subordinated Debt.
"Senior Indebtedness" shall have the meaning set forth in
Section 16.2.
"Special Event" means a Tax Event, a Capital Treatment Event
or an Investment Company Event.
"Subordinated Debt" means the principal of (and premium, if
any) and interest, if any (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization
relating to the Company whether or not such claim for post-petition
interest is allowed in such proceeding), on Debt, whether incurred
on or prior to the date of this Indenture or thereafter incurred,
which is by its terms expressly provided to be junior and
subordinate to other Debt of the Company (other than the
Debentures).
"Subsidiary" means, with respect to any Person, (i) any
corporation at least a majority of whose outstanding Voting Stock
shall at the time be owned, directly or indirectly, by such Person
or by one or more of its Subsidiaries or by such Person and one or
more of its Subsidiaries; (ii) any general partnership, joint
venture, trust or similar entity, at least a majority of whose
outstanding partnership or similar interests shall at the time be
owned by such Person, or by one or more of its Subsidiaries, or by
such Person and one or more of its Subsidiaries; and (iii) any
limited partnership of which such Person or any of its Subsidiaries
is a general partner.
"Tax Event" means the receipt by the Trust of an Opinion of
Counsel, rendered by a law firm having a recognized tax and
securities practice, to the effect that, as a result of any
amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or
therein, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date
of issuance of the Preferred Securities under the Trust Agreement,
there is more than an insubstantial risk that (i) the Trust is, or
shall be within 90 days after the date of such Opinion of Counsel,
subject to United States federal income tax with respect to income
received or accrued on the Debentures; (ii) interest payable by the
Company on the Debentures is not, or within 90 days after the date
of such Opinion of Counsel, shall not be, deductible by the
Company, in whole or in part, for United States federal income tax
purposes; or (iii) the Trust is, or shall be within 90 days after
the date of such Opinion of Counsel, subject to more than a de
minimis amount of other taxes, duties, assessments or other
governmental charges. The Trust or the Company shall request and
receive such Opinion of
7
<PAGE> 13
Counsel with regard to such matters within a reasonable period of time after
the Trust or the Company shall have become aware of any of the events
described in clauses (i) through (iii) above.
"Trust" means 1st Source Capital Trust, a Delaware statutory
business trust.
"Trust Agreement" means the Amended and Restated Trust
Agreement, dated -------------, 1997, of the Trust.
"Trustee" means State Street Bank and Trust Company and,
subject to the provisions of Article IX, shall also include its
successors and assigns, and, if at any time there is more than one
Person acting in such capacity hereunder, "Trustee" shall mean each
such Person.
"Trust Indenture Act," means the Trust Indenture Act of 1939,
as amended, subject to the provisions of Sections 11.1, 11.2, and
12.1, as in effect at the date of execution of this instrument.
"Trust Securities" means the Common Securities and Preferred
Securities, collectively.
"Voting Stock," as applied to stock of any Person, means
shares, interests, participations or other equivalents in the
equity interest (however designated) in such Person having ordinary
voting power for the election of a majority of the directors (or
the equivalent) of such Person, other than shares, interests,
participations or other equivalents having such power only by
reason of the occurrence of a contingency.
ARTICLE II.
ISSUE, DESCRIPTION, TERMS, CONDITIONS
REGISTRATION AND EXCHANGE OF THE DEBENTURES
SECTION 2.1. DESIGNATION AND PRINCIPAL AMOUNT.
There is hereby authorized Debentures designated the "----%
Subordinated Debentures due 2027," limited in aggregate principal
amount to $--------------, which amount shall be as set forth in
any written order of the Company for the authentication and
delivery of Debentures pursuant to Section 2.6.
SECTION 2.2. MATURITY.
(a) The Maturity Date shall be either:
(i) the Scheduled Maturity Date; or
(ii) if the Company elects to extend the Maturity Date
beyond the Scheduled Maturity Date in accordance
with Section 2.2(b), the Extended Maturity Date;
or
(iii) if the Company elects to accelerate the Maturity
Date to be a date prior to the Scheduled Maturity
Date in accordance with Section 2.2(c), the
Accelerated Maturity Date.
8
<PAGE> 14
(b) the Company may at any time before the day which is 90
days before the Scheduled Maturity Date, elect to extend
the Maturity Date to the Extended Maturity Date, provided
that the Company has received the prior approval of the
Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve and further
provided that the following conditions in this
Section 2.2(b) are satisfied both at the date the Company
gives notice in accordance with Section 2.2(d) of its
election to extend the Maturity Date and at the Scheduled
Maturity Date:
(i) the Company is not in bankruptcy, otherwise
insolvent or in liquidation;
(ii) the Company is not in default in the payment of
interest or principal on the Debentures; and
(iii) the Trust is not in arrears on payments of
Distributions on the Trust Securities issued by
it and no deferred Distributions are accumulated.
(c) the Company may at any time before the day which is 90
days before the Scheduled Maturity Date and after
March 31, 2002, elect to shorten the Maturity Date only
once to the Accelerated Maturity Date provided that the
Company has received the prior approval of the Federal
Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve.
(d) if the Company elects to extend the Maturity Date in
accordance with Section 2.2(b), the Company shall give
notice to the registered holders of the Debentures, the
Property Trustee and the Trust of the extension of the
Maturity Date and the Extended Maturity Date at least 90
days and no more than 180 days before the Scheduled
Maturity Date.
(e) if the Company elects to accelerate the Maturity Date in
accordance with Section 2.2(c), the Company shall give
notice to the registered holders of the Debentures, the
Property Trustee and the Trust of the extension of the
Maturity Date and the Accelerated Maturity Date at least
90 days and no more than 180 days before the Accelerated
Maturity Date.
SECTION 2.3. FORM AND PAYMENT.
The Debentures shall be issued in fully registered
certificated form without interest coupons. Principal and interest
on the Debentures issued in certificated form shall be payable, the
transfer of such Debentures shall be registrable and such
Debentures shall be exchangeable for Debentures bearing identical
terms and provisions at the office or agency of the Trustee;
provided, however, that payment of interest may be made at the
option of the Company by check mailed to the holder at such address
as shall appear in the Debenture Register or by wire transfer to an
account maintained by the holder as specified in the Debenture
Register, provided that the holder provides proper transfer
instructions by the regular record date. Notwithstanding the
foregoing, so long as the holder of any Debentures is the Property
Trustee, the payment of the principal of and interest (including
Compounded Interest and Additional Interest, if any) on such
Debentures held by the Property Trustee shall be made at such place
and to such account as may be designated by the Property Trustee.
9
<PAGE> 15
SECTION 2.4. [INTENTIONALLY OMITTED].
SECTION 2.5. INTEREST.
(a) Each Debenture shall bear interest at the rate of ----%
per annum (the "Coupon Rate") from the original date of issuance
until the principal thereof becomes due and payable, and on any
overdue principal and (to the extent that payment of such interest
is enforceable under applicable law) on any overdue installment of
interest at the Coupon Rate, compounded quarterly, payable (subject
to the provisions of Article IV) quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year (each, an
"Interest Payment Date," commencing on June 30, 1997), to the
Person in whose name such Debenture or any Predecessor Debenture is
registered, at the close of business on the regular record date for
such interest installment, which shall be the fifteenth day of the
last month of the calendar quarter.
(b) The amount of interest payable for any period shall be
computed on the basis of a 360-day year of twelve 30-day months.
The amount of interest payable for any period shorter than a full
quarterly period for which interest is computed shall be computed
on the basis of the number of days elapsed in a 360-day year of
twelve 30-day months. In the event that any date on which interest
is payable on the Debentures is not a Business Day, then payment of
interest payable on such date shall be made on the next succeeding
day which is a Business Day (and without any interest or other
payment in respect of any such delay) with the same force and
effect as if made on the date such payment was originally payable.
(c) If, at any time while the Property Trustee is the holder
of any Debentures, the Trust or the Property Trustee is required to
pay any taxes, duties, assessments or governmental charges of
whatever nature (other than withholding taxes) imposed by the
United States, or any other taxing authority, then, in any case,
the Company shall pay as additional interest ("Additional
Interest") on the Debentures held by the Property Trustee, such
additional amounts as shall be required so that the net amounts
received and retained by the Trust and the Property Trustee after
paying such taxes, duties, assessments or other governmental
charges shall be equal to the amounts the Trust and the Property
Trustee would have received had no such taxes, duties, assessments
or other government charges been imposed.
SECTION 2.6. EXECUTION AND AUTHENTICATIONS.
(a) The Debentures shall be signed on behalf of the Company
by its Chief Executive Officer, President or one of its Vice
Presidents, under its corporate seal attested by its Secretary or
one of its Assistant Secretaries. Signatures may be in the form of
a manual or facsimile signature. The Company may use the facsimile
signature of any Person who shall have been a Chief Executive
Officer, President or Vice President thereof, or of any Person who
shall have been a Secretary or Assistant Secretary thereof,
notwithstanding the fact that at the time the Debentures shall be
authenticated and delivered or disposed of such Person shall have
ceased to be the Chief Executive Officer, President or a Vice
President, or the Secretary or an Assistant Secretary, of the
Company. The seal of the Company may be in the form of a facsimile
of such seal and may be impressed, affixed, imprinted or otherwise
reproduced on the Debentures. The Debentures may contain such
notations, legends or endorsements required by law, stock exchange
rule or usage. Each Debenture shall be dated the date of its
authentication by the Trustee.
(b) A Debenture shall not be valid until authenticated
manually by an authorized signatory of the Trustee, or by an
Authenticating Agent. Such signature shall be conclusive evidence
that the Debenture
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so authenticated has been duly authenticated and delivered hereunder and that
the holder is entitled to the benefits of this Indenture.
(c) At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Debentures
executed by the Company to the Trustee for authentication, together
with a written order of the Company for the authentication and
delivery of such Debentures signed by its Chief Executive Officer,
President or any Vice President and its Treasurer or any Assistant
Treasurer, and the Trustee in accordance with such written order
shall authenticate and deliver such Debentures.
(d) In authenticating such Debentures and accepting the
additional responsibilities under this Indenture in relation to
such Debentures, the Trustee shall be entitled to receive, and
(subject to Section 9.1) shall be fully protected in relying upon,
an Opinion of Counsel stating that the form and terms thereof have
been established in conformity with the provisions of this
Indenture.
(e) The Trustee shall not be required to authenticate such
Debentures if the issue of such Debentures pursuant to this
Indenture shall affect the Trustee's own rights, duties or
immunities under the Debentures and this Indenture or otherwise in
a manner that is not reasonably acceptable to the Trustee.
SECTION 2.7. REGISTRATION OF TRANSFER AND EXCHANGE.
(a) Debentures may be exchanged upon presentation thereof at
the office or agency of the Company designated for such purpose
or at the office of the Debenture Registrar, for other Debentures and
for a like aggregate principal amount, upon payment of a sum sufficient
to cover any tax or other governmental charge in relation thereto, all
as provided in this Section 2.7. In respect of any Debentures so
surrendered for exchange, the Company shall execute, the Trustee
shall authenticate and such office or agency shall deliver in
exchange therefor the Debenture or Debentures that the
Debentureholder making the exchange shall be entitled to receive,
bearing numbers not contemporaneously outstanding.
(b) The Company shall keep, or cause to be kept, at its
office or agency designated for such purpose or at the office of
the Debenture Registrar, or such other location designated by the
Company a register or registers (herein referred to as the "Debenture
Register") in which, subject to such reasonable regulations as it
may prescribe, the Company shall register the Debentures and the
transfers of Debentures as in this Article II provided and which at
all reasonable times shall be open for inspection by the Trustee.
The registrar for the purpose of registering Debentures and
transfer of Debentures as herein provided shall initially be the
Trustee and thereafter as may be appointed by the Company as
authorized by Board Resolution (the "Debenture Registrar"). Upon
surrender for transfer of any Debenture at the office or agency of
the Company designated for such purpose, the Company shall execute,
the Trustee shall authenticate and such office or agency shall
deliver in the name of the transferee or transferees a new
Debenture or Debentures for a like aggregate principal amount. All
Debentures presented or surrendered for exchange or registration of
transfer, as provided in this Section 2.7, shall be accompanied (if
so required by the Company or the Debenture Registrar) by a written
instrument or instruments of transfer, in form satisfactory to the
Company or the Debenture Registrar, duly executed by the registered
holder or by such holder's duly authorized attorney in writing.
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(c) No service charge shall be made for any exchange or
registration of transfer of Debentures, or issue of new Debentures
in case of partial redemption, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge
in relation thereto, other than exchanges pursuant to Section 2.8,
the second paragraph of Section 3.5 and Section 11.4 not involving
any transfer.
(d) The Company shall not be required (i) to issue, exchange
or register the transfer of any Debentures during a period
beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of less than all the Outstanding
Debentures and ending at the close of business on the day of such
mailing; nor (ii) to register the transfer of or exchange any
Debentures or portions thereof called for redemption.
SECTION 2.8. TEMPORARY DEBENTURES.
Pending the preparation of definitive Debentures, the Company
may execute, and the Trustee shall authenticate and deliver,
temporary Debentures (printed, lithographed, or typewritten). Such
temporary Debentures shall be substantially in the form of the
definitive Debentures in lieu of which they are issued, but with
such omissions, insertions and variations as may be appropriate for
temporary Debentures, all as may be determined by the Company.
Every temporary Debenture shall be executed by the Company and be
authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with like effect, as the
definitive Debentures. Without unnecessary delay the Company shall
execute and shall furnish definitive Debentures and thereupon any
or all temporary Debentures may be surrendered in exchange therefor
(without charge to the holders), at the office or agency of the
Company designated for the purpose and the Trustee shall authenticate
and such office or agency shall deliver in exchange for such temporary
Debentures an equal aggregate principal amount of definitive
Debentures, unless the Company advises the Trustee to the effect
that definitive Debentures need not be executed and furnished until
further notice from the Company. Until so exchanged, the temporary
Debentures shall be entitled to the same benefits under this
Indenture as definitive Debentures authenticated and delivered
hereunder.
SECTION 2.9. MUTILATED, DESTROYED, LOST OR STOLEN DEBENTURES.
(a) In case any temporary or definitive Debenture shall
become mutilated or be destroyed, lost or stolen, the Company
(subject to the next succeeding sentence) shall execute, and upon
the Company's request the Trustee (subject as aforesaid) shall
authenticate and deliver, a new Debenture bearing a number not
contemporaneously outstanding, in exchange and substitution for the
mutilated Debenture, or in lieu of and in substitution for the
Debenture so destroyed, lost or stolen. In every case the
applicant for a substituted Debenture shall furnish to the Company
and the Trustee such security or indemnity as may be required by
them to save each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the
Company and the Trustee evidence to their satisfaction of the
destruction, loss or theft of the applicant's Debenture and of the
ownership thereof. The Trustee may authenticate any such
substituted Debenture and deliver the same upon the written request
or authorization of the Chairman, President or any Vice-President
and the Treasurer or any Assistant Treasurer of the Company. Upon
the issuance of any substituted Debenture, the Company may require
the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee)
connected therewith. In case any Debenture that has matured or is
about to mature shall become mutilated or be destroyed, lost or
stolen, the Company may, instead of issuing a substitute Debenture,
pay or authorize the payment of the same (without surrender thereof
except in the case of a mutilated Debenture) if the applicant for
such payment
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shall furnish to the Company and the Trustee such security or indemnity as
they may require to save them harmless, and, in case of destruction, loss or
theft, evidence to the satisfaction of the Company and the Trustee of the
destruction, loss or theft of such Debenture and of the ownership thereof.
(b) Every replacement Debenture issued pursuant to the
provisions of this Section 2.9 shall constitute an additional
contractual obligation of the Company whether or not the mutilated,
destroyed, lost or stolen Debenture shall be found at any time, or
be enforceable by anyone, and shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all
other Debentures duly issued hereunder. All Debentures shall be
held and owned upon the express condition that the foregoing
provisions are exclusive with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Debentures, and shall
preclude (to the extent lawful) any and all other rights or
remedies, notwithstanding any law or statute existing or hereafter
enacted to the contrary with respect to the replacement or payment
of negotiable instruments or other securities without their
surrender.
SECTION 2.10. CANCELLATION.
All Debentures surrendered for the purpose of payment,
redemption, exchange or registration of transfer shall, if
surrendered to the Company or any paying agent, be delivered to the
Trustee for cancellation, or, if surrendered to the Trustee, shall
be canceled by it, and no Debentures shall be issued in lieu
thereof except as expressly required or permitted by any of the
provisions of this Indenture. On request of the Company at the
time of such surrender, the Trustee shall deliver to the Company
canceled Debentures held by the Trustee. In the absence of such
request the Trustee may dispose of canceled Debentures in
accordance with its standard procedures and deliver a certificate
of disposition to the Company. If the Company shall otherwise
acquire any of the Debentures, however, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness
represented by such Debentures unless and until the same are
delivered to the Trustee for cancellation.
SECTION 2.11. BENEFIT OF INDENTURE.
Nothing in this Indenture or in the Debentures, express or
implied, shall give or be construed to give to any Person, other
than the parties hereto and the holders of the Debentures (and,
with respect to the provisions of Article XVI, the holders of
Senior Indebtedness) any legal or equitable right, remedy or claim
under or in respect of this Indenture, or under any covenant,
condition or provision herein contained; all such covenants,
conditions and provisions being for the sole benefit of the parties
hereto and of the holders of the Debentures (and, with respect to
the provisions of Article XVI, the holders of Senior Indebtedness).
SECTION 2.12. AUTHENTICATION AGENT.
(a) So long as any of the Debentures remain Outstanding there
may be an Authenticating Agent for any or all such Debentures,
which the Trustee shall have the right to appoint. Said
Authenticating Agent shall be authorized to act on behalf of the
Trustee to authenticate Debentures issued upon exchange, transfer
or partial redemption thereof, and Debentures so authenticated
shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. All references in this Indenture to the
authentication of Debentures by the Trustee shall be deemed to
include authentication by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall
be a corporation that has a combined capital and surplus, as most
recently reported or determined by it, sufficient under the laws of
any jurisdiction under which it is
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organized or in which it is doing business to conduct a trust business, and
that is otherwise authorized under such laws to conduct such business and is
subject to supervision or examination by federal or state authorities. If
at any time any Authenticating Agent shall cease to be eligible in
accordance with these provisions, it shall resign immediately.
(b) Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company.
The Trustee may at any time (and upon request by the Company shall)
terminate the agency of any Authenticating Agent by giving written
notice of termination to such Authenticating Agent and to the
Company. Upon resignation, termination or cessation of eligibility
of any Authenticating Agent, the Trustee may appoint an eligible
successor Authenticating Agent acceptable to the Company. Any
successor Authenticating Agent, upon acceptance of its appointment
hereunder, shall become vested with all the rights, powers and
duties of its predecessor hereunder as if originally named as an
Authenticating Agent pursuant hereto.
ARTICLE III.
REDEMPTION OF DEBENTURES
SECTION 3.1. REDEMPTION.
Subject to the Company having received prior approval of the
Federal Reserve, if then required under the applicable capital
guidelines or policies of the Federal Reserve, the Company may
redeem the Debentures issued hereunder on and after the dates set
forth in and in accordance with the terms of this Article III.
SECTION 3.2. SPECIAL EVENT REDEMPTION.
Subject to the Company having received the prior approval of
the Federal Reserve, if then required under the applicable capital
guidelines or policies of the Federal Reserve, if a Special Event
has occurred and is continuing, then, notwithstanding
Section 3.3(a) but subject to Section 3.3(b), the Company shall
have the right upon not less than 30 days nor more than 60 days
notice to the holders of the Debentures to redeem the Debentures,
in whole but not in part, for cash within 180 days following the
occurrence of such Special Event (the "180-Day Period") at a
redemption price equal to 100% of the principal amount to be
redeemed plus any accrued and unpaid interest thereon to the date
of such redemption (the "Redemption Price"), provided that if at
the time there is available to the Company the opportunity to
eliminate, within the 180-Day Period, a Tax Event by taking some
ministerial action (a "Ministerial Action"), such as filing a form
or making an election, or pursuing some other similar reasonable
measure which has no adverse effect on the Company, the Trust or
the holders of the Trust Securities issued by the Trust, the
Company shall pursue such Ministerial Action in lieu of redemption,
and, provided further, that the Company shall have no right to
redeem the Debentures while it is pursuing any Ministerial
Action pursuant to its obligations hereunder, and, provided further,
that, if it is determined that the taking of a Ministerial Action would
not eliminate the Tax Event within the 180-Day Period, the Company's
right to redeem the Debentures shall be restored and it shall have no
further obligations to pursue the Ministerial Action. The
Redemption Price shall be paid prior to 12:00 noon, New York time,
on the date of such redemption or such earlier time as the Company
determines, provided that the Company shall deposit with the
Trustee an amount sufficient to pay the Redemption Price by 10:00
a.m., New York time, on the date such Redemption Price is to be
paid.
SECTION 3.3. OPTIONAL REDEMPTION BY COMPANY.
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(a) Subject to the provisions of Section 3.3(b), except as
otherwise may be specified in this Indenture, the Company shall
have the right to redeem the Debentures, in whole or in part, from
time to time, on or after March 31, 2002, at a Redemption Price
equal to 100% of the principal amount to be redeemed plus any
accrued and unpaid interest thereon to the date of such redemption.
Any redemption pursuant to this Section 3.3(a) shall be made upon
not less than 30 days nor more than 60 days notice to the holder of
the Debentures, at the Redemption Price. If the Debentures are
only partially redeemed pursuant to this Section 3.3, the
Debentures shall be redeemed pro rata or by lot or in such other
manner as the Trustee shall deem appropriate and fair in its
discretion. The Redemption Price shall be paid prior to
12:00 noon, New York time, on the date of such redemption or at
such earlier time as the Company determines provided that the
Company shall deposit with the Trustee an amount sufficient to pay
the Redemption Price by 10:00 a.m., New York time, on the date such
Redemption Price is to be paid.
(b) If a partial redemption of the Debentures would result in
the delisting of the Preferred Securities issued by the Trust from
The Nasdaq Stock Market's National Market or any comparable level or
successor listing or any national securities exchange or other
organization on which the Preferred Securities are then listed or quoted,
the Company shall not be permitted to effect such partial redemption and
may only redeem the Debentures in whole.
SECTION 3.4. NOTICE OF REDEMPTION.
(a) In case the Company shall desire to exercise such right
to redeem all or, as the case may be, a portion of the Debentures
in accordance with the right reserved so to do, the Company shall,
or shall cause the Trustee to upon receipt of 45 days' written
notice from the Company (which notice shall, in the event of a
partial redemption, include a representation to the effect that
such partial redemption shall not result in the delisting of the
Preferred Securities as described in Section 3.3(b) above), give
notice of such redemption to holders of the Debentures to be
redeemed by mailing, first class postage prepaid, a notice of such
redemption not less than 30 days and not more than 60 days before
the date fixed for redemption to such holders at their last
addresses as they shall appear upon the Debenture Register unless
a shorter period is specified in the Debentures to be redeemed.
Any notice that is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the
registered holder receives the notice. In any case, failure duly
to give such notice to the holder of any Debenture designated for
redemption in whole or in part, or any defect in the notice, shall
not affect the validity of the proceedings for the redemption of
any other Debentures. In the case of any redemption of Debentures
prior to the expiration of any restriction on such redemption
provided in the terms of such Debentures or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers'
Certificate evidencing compliance with any such restriction. Each
such notice of redemption shall specify the date fixed for
redemption and the Redemption Price and shall state that payment of
the Redemption Price shall be made at the Corporate Trust Office,
upon presentation and surrender of such Debentures, that interest
accrued to the date fixed for redemption shall be paid as specified
in said notice and that from and after said date interest shall cease
to accrue. If less than all the Debentures are to be redeemed, the
notice to the holders of the Debentures shall specify the particular
Debentures to be redeemed. If the Debentures are to be redeemed in part
only, the notice shall state the portion of the principal amount thereof
to be redeemed and shall state that on and after the redemption date, upon
surrender of such Debenture, a new Debenture or Debentures in
principal amount equal to the unredeemed portion thereof shall be
issued.
(b) If less than all the Debentures are to be redeemed, the
Company shall give the Trustee at least 45 days' notice in advance
of the date fixed for redemption as to the aggregate principal
amount of
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Debentures to be redeemed, and thereupon the Trustee shall select, by lot or
in such other manner as it shall deem appropriate and fair in its discretion,
the portion or portions (equal to $25 or any integral multiple thereof) of the
Debentures to be redeemed and shall thereafter promptly notify the Company in
writing of the numbers of the Debentures to be redeemed, in whole
or in part. The Company may, if and whenever it shall so elect
pursuant to the terms hereof, by delivery of instructions signed on
its behalf by its President or any Vice President, instruct the
Trustee or any paying agent to call all or any part of the
Debentures for redemption and to give notice of redemption in the
manner set forth in this Section 3.4, such notice to be in the name
of the Company or its own name as the Trustee or such paying agent
may deem advisable. In any case in which notice of redemption is
to be given by the Trustee or any such paying agent, the Company
shall deliver or cause to be delivered to, or permit to remain
with, the Trustee or such paying agent, as the case may be, such
Debenture Register, transfer books or other records, or suitable
copies or extracts therefrom, sufficient to enable the Trustee or
such paying agent to give any notice by mail that may be required
under the provisions of this Section 3.4.
SECTION 3.5. PAYMENT UPON REDEMPTION.
(a) If the giving of notice of redemption shall have been
completed as above provided, the Debentures or portions of
Debentures to be redeemed specified in such notice shall become due
and payable on the date and at the place stated in such notice at
the applicable Redemption Price, and interest on such Debentures or
portions of Debentures shall cease to accrue on and after the date
fixed for redemption, unless the Company shall default in the
payment of such Redemption Price with respect to any such Debenture
or portion thereof. On presentation and surrender of such
Debentures on or after the date fixed for redemption at the place
of payment specified in the notice, said Debentures shall be paid
and redeemed at the Redemption Price (but if the date fixed for
redemption is an interest payment date, the interest installment
payable on such date shall be payable to the registered holder at
the close of business on the applicable record date pursuant to
Section 3.3).
(b) Upon presentation of any Debenture that is to be redeemed
in part only, the Company shall execute and the Trustee shall
authenticate and the office or agency where the Debenture is
presented shall deliver to the holder thereof, at the expense of
the Company, a new Debenture of authorized denomination in
principal amount equal to the unredeemed portion of the Debenture
so presented.
SECTION 3.6. NO SINKING FUND.
The Debentures are not entitled to the benefit of any sinking
fund.
ARTICLE IV.
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. EXTENSION OF INTEREST PAYMENT PERIOD.
So long as no Event of Default has occurred and is continuing,
the Company shall have the right, at any time and from time to time
during the term of the Debentures, to defer payments of interest by
extending the interest payment period of such Debentures for a
period not exceeding 20 consecutive quarters (the "Extended
Interest Payment Period"), during which Extended Interest Payment
Period no interest shall be due and payable; provided that no
Extended Interest Payment Period may extend beyond the Maturity
Date. Interest, the payment of which has been deferred because of
the extension of the
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interest payment period pursuant to this Section 4.1, shall bear interest
thereon at the Coupon Rate compounded quarterly for each quarter of the
Extended Interest Payment Period ("Compounded Interest"). At the end of the
Extended Interest Payment Period, the Company shall calculate (and deliver
such calculation to the Trustee) and pay all interest accrued and
unpaid on the Debentures, including any Additional Interest and
Compounded Interest (together, "Deferred Interest") that shall be
payable to the holders of the Debentures in whose names the
Debentures are registered in the Debenture Register on the first
record date after the end of the Extended Interest Payment Period.
Before the termination of any Extended Interest Payment Period, the
Company may further extend such period, provided that such period
together with all such further extensions thereof shall not exceed
20 consecutive quarters, or extend beyond the Maturity Date of the
Debentures. Upon the termination of any Extended Interest Payment
Period and upon the payment of all Deferred Interest then due, the
Company may commence a new Extended Interest Payment Period,
subject to the foregoing requirements. No interest shall be due
and payable during an Extended Interest Payment Period, except at
the end thereof, but the Company may prepay at any time all or any
portion of the interest accrued during an Extended Interest Payment
Period.
SECTION 4.2. NOTICE OF EXTENSION.
(a) If the Property Trustee is the only registered holder of
the Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give written notice to the
Administrative Trustees, the Property Trustee and the Trustee of
its selection of such Extended Interest Payment Period two Business
Days before the earlier of (i) the next succeeding date on which
Distributions on the Trust Securities issued by the Trust are
payable; or (ii) the date the Trust is required to give notice of
the record date, or the date such Distributions are payable, to The
Nasdaq Stock Market's National Market or other applicable
self-regulatory organization or to holders of the Preferred
Securities issued by the Trust, but in any event at least one
Business Day before such record date.
(b) If the Property Trustee is not the only holder of the
Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give the holders of the
Debentures and the Trustee written notice of its selection of such
Extended Interest Payment Period at least two Business Days before
the earlier of (i) the next succeeding Interest Payment Date; or
(ii) the date the Company is required to give notice of the record
or payment date of such interest payment to The Nasdaq Stock
Market's National Market or other applicable self-regulatory
organization or to holders of the Debentures.
(c) The quarter in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 4.2 shall be counted as one
of the 20 quarters permitted in the maximum Extended Interest
Payment Period permitted under Section 4.1.
SECTION 4.3. LIMITATION ON TRANSACTIONS.
If (i) the Company shall exercise its right to defer payment
of interest as provided in Section 4.1; or (ii) there shall have
occurred any Event of Default, then (a) the Company shall not
declare or pay any dividend on, make any distributions with respect
to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock (other than (i) dividends or
distributions in common stock of the Company, or any declaration of
a non-cash dividend in connection with the implementation of a
shareholders' rights plan, or the issuance of stock under any such
plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, and (ii) purchases of common stock of the
Company related to the rights under any of the Company's benefit
plans for its directors, officers or employees) as a result of a
reclassification of its capital stock for another class of its
capital stock); (b) the Company
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shall not make any payment of interest, principal or premium, if any, or
repay, repurchase or redeem any debt securities issued by the Company which
rank pari passu with or junior to the Debentures; provided, however, that
notwithstanding the foregoing the Company may make payments
pursuant to its obligations under the Preferred Securities
Guarantee; and (c) the Company shall not redeem, purchase or
acquire less than all of the outstanding Debentures or any of the
Preferred Securities.
ARTICLE V.
PARTICULAR COVENANTS OF THE COMPANY
SECTION 5.1. PAYMENT OF PRINCIPAL AND INTEREST.
The Company shall duly and punctually pay or cause to be paid
the principal of and interest on the Debentures at the time and
place and in the manner provided herein.
SECTION 5.2. MAINTENANCE OF AGENCY.
So long as any of the Debentures remain Outstanding, the
Company shall maintain an office or agency at such location or
locations as may be designated as provided in this Section 5.2,
where (i) Debentures may be presented for payment; (ii) Debentures
may be presented as hereinabove authorized for registration of
transfer and exchange; and (iii) notices and demands to or upon the
Company in respect of the Debentures and this Indenture may be
given or served, such designation to continue with respect to such
office or agency until the Company shall, by written notice signed
by its President or a Vice President and delivered to the Trustee,
designate some other office or agency for such purposes or any of
them. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with
the address thereof, such presentations, notices and demands may be
made or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its agent to receive all
such presentations, notices and demands. The Company shall give the
Trustee prompt written notice of any such designation or rescission
thereof.
SECTION 5.3. PAYING AGENTS.
(a) The Property Trustee shall act as the Paying Agent. If
the Company shall appoint one or more paying agents for the
Debentures, other than the Trustee, the Company shall cause each
such paying agent to execute and deliver to the Trustee an
instrument in which such agent shall agree with the Trustee,
subject to the provisions of this Section 5.3:
(i) that it shall hold all sums held by it as such agent
for the payment of the principal of or interest on the
Debentures (whether such sums have been paid to it by the
Company or by any other obligor of such Debentures) in trust
for the benefit of the Persons entitled thereto;
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(ii) that it shall give the Trustee notice of any
failure by the Company (or by any other obligor of such
Debentures) to make any payment of the principal of or
interest on the Debentures when the same shall be due and
payable;
(iii) that it shall, at any time during the continuance
of any failure referred to in the preceding paragraph (a)(ii)
above, upon the written request of the Trustee, forthwith pay
to the Trustee all sums so held in trust by such paying agent;
and
(iv) that it shall perform all other duties of paying
agent as set forth in this Indenture.
(b) If the Company shall act as its own paying agent with
respect to the Debentures, it shall on or before each due date of
the principal of or interest on such Debentures, set aside,
segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay such principal or interest so
becoming due on Debentures until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and shall
promptly notify the Trustee of such action, or any failure (by it
or any other obligor on such Debentures) to take such action.
Whenever the Company shall have one or more paying agents for the
Debentures, it shall, prior to each due date of the principal of or
interest on any Debentures, deposit with the paying agent a sum
sufficient to pay the principal or interest so becoming due, such
sum to be held in trust for the benefit of the Persons entitled to
such principal or interest, and (unless such paying agent is the
Trustee) the Company shall promptly notify the Trustee of this
action or failure so to act.
(c) Notwithstanding anything in this Section 5.3 to the
contrary, (i) the agreement to hold sums in trust as provided in
this Section 5.3 is subject to the provisions of Section 13.3 and
13.4; and (ii) the Company may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for
any other purpose, pay, or direct any paying agent to pay, to the
Trustee all sums held in trust by the Company or such paying agent,
such sums to be held by the Trustee upon the same terms and
conditions as those upon which such sums were held by the Company
or such paying agent; and, upon such payment by any paying agent to
the Trustee, such paying agent shall be released from all further
liability with respect to such money.
SECTION 5.4. APPOINTMENT TO FILL VACANCY IN OFFICE OF TRUSTEE.
The Company, whenever necessary to avoid or fill a vacancy in
the office of Trustee, shall appoint, in the manner provided in
Section 9.10, a Trustee, so that there shall at all times be a
Trustee hereunder.
SECTION 5.5. COMPLIANCE WITH CONSOLIDATION PROVISIONS.
The Company shall not, while any of the Debentures remain
outstanding, consolidate with, or merge into, or merge into itself,
or sell or convey all or substantially all of its property to any
other company unless the provisions of Article XII hereof are
complied with.
SECTION 5.6. LIMITATION ON TRANSACTIONS.
If Debentures are issued to the Trust or a trustee of the
Trust in connection with the issuance of Trust Securities by the
Trust and (i) there shall have occurred any event that would
constitute an Event of Default; (ii) the Company shall be in
default with respect to its payment of any obligations under the
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Preferred Securities Guarantee relating to the Trust; or (iii) the
Company shall have given notice of its election to defer payments
of interest on such Debentures by extending the interest payment
period as provided in this Indenture and such period, or any
extension thereof, shall be continuing, then (a) the Company shall
not declare or pay any dividend on, make any distributions with
respect to, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock (other than
(i) dividends or distributions in common stock of the Company, or
any declaration of a non-cash dividend in connection with the
implementation of a shareholders' rights plan, or the issuance of
stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, and (ii) purchases
of common stock of the Company related to the rights under any of
the Company's benefit plans for its directors, officers or
employees); (b) the Company shall not make any payment of interest,
principal or premium, if any, or repay, repurchase or redeem any
debt securities issued by the Company which rank pari passu with or
junior to the Debentures; provided, however, that the Company may
make payments pursuant to its obligations under the Preferred
Securities Guarantee; and (c) the Company shall not redeem,
purchase or acquire less than all of the outstanding Debentures or
any of the Preferred Securities.
SECTION 5.7. COVENANTS AS TO THE TRUST.
For so long as such Trust Securities of the Trust remain
outstanding, the Company shall (i) maintain 100% direct or indirect
ownership of the Common Securities of the Trust; provided, however,
that any permitted successor of the Company under this Indenture
may succeed to the Company's ownership of the Common Securities;
(ii) not voluntarily terminate, wind up or liquidate the Trust,
except upon prior approval of the Federal Reserve if then so
required under applicable capital guidelines or policies of the
Federal Reserve and use its reasonable efforts to cause the Trust
(a) to remain a business trust, except in connection with a
distribution of Debentures, the redemption of all of the Trust
Securities of the Trust or certain mergers, consolidations or
amalgamations, each as permitted by the Trust Agreement; and (b) to
otherwise continue not to be treated as an association taxable as
a corporation or partnership for United States federal income tax
purposes; and (iii) use its reasonable efforts to cause each holder
of Trust Securities to be treated as owning an individual
beneficial interest in the Debentures. In connection with the
distribution of the Debentures to the holders of the Preferred
Securities issued by the Trust upon a Dissolution Event, the
Company shall use its best efforts to list such Debentures on The
Nasdaq Stock Market's National Market or on such other exchange as
the Preferred Securities are then listed.
SECTION 5.8. COVENANTS AS TO PURCHASES.
Prior to March 31, 2002, the Company shall not purchase any
Debentures, in whole or in part, from the Trust.
ARTICLE VI.
DEBENTUREHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 6.1. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
DEBENTUREHOLDERS.
The Company shall furnish or cause to be furnished to the
Trustee (a) on a monthly basis on each regular record date (as
described in Section 2.5) a list, in such form as the Trustee may
reasonably
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require, of the names and addresses of the holders of the Debentures as of
such regular record date, provided that the Company shall not be obligated to
furnish or cause to furnish such list at any time that the list shall not
differ in any respect from the most recent list furnished to the Trustee by
the Company (in the event the Company fails to provide such list on a monthly
basis, the Trustee shall be entitled to rely on the most recent
list provided by the Company); and (b) at such other times as the
Trustee may request in writing within 30 days after the receipt by
the Company 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; provided, however, that, in either case, no such list
need be furnished if the Trustee shall be the Debenture Registrar.
SECTION 6.2. PRESERVATION OF INFORMATION COMMUNICATIONS WITH
DEBENTUREHOLDERS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and
addresses of the holders of Debentures contained in the most recent
list furnished to it as provided in Section 6.1 and as to the names
and addresses of holders of Debentures received by the Trustee in
its capacity as registrar for the Debentures (if acting in such
capacity).
(b) The Trustee may destroy any list furnished to it as
provided in Section 6.1 upon receipt of a new list so furnished.
(c) Debentureholders may communicate as provided in Section
312(b) of the Trust Indenture Act with other Debentureholders with
respect to their rights under this Indenture or under the
Debentures.
SECTION 6.3. REPORTS BY THE COMPANY.
(a) The Company covenants and agrees to file with the
Trustee, within 15 days after the Company is required to file the
same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) that the Company may be
required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company is not
required to file information, documents or reports pursuant to
either of such sections, then to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed
from time to time by the Commission, such of the supplementary and
periodic information, documents and reports that may be required
pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations.
(b) The Company covenants and agrees to file with the Trustee
and the Commission, in accordance with the rules and regulations
prescribed from to time by the Commission, such additional
information, documents and reports with respect to compliance by
the Company with the conditions and covenants provided for in this
Indenture as may be required from time to time by such rules and
regulations.
(c) The Company covenants and agrees to transmit by mail,
first class postage prepaid, or reputable over-night delivery
service that provides for evidence of receipt, to the
Debentureholders, as their names and addresses appear upon the
Debenture Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and
reports required to be filed by the
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Company pursuant to subsections (a) and (b) of this Section 6.3 as may be
required by rules and regulations prescribed from time to time by the
Commission.
SECTION 6.4. REPORTS BY THE TRUSTEE.
(a) On or before July 15 in each year in which any of the
Debentures are Outstanding, the Trustee shall transmit by mail,
first class postage prepaid, to the Debentureholders, as their
names and addresses appear upon the Debenture Register, a brief
report dated as of the preceding May 15, if and to the extent
required under Section 313(a) of the Trust Indenture Act.
(b) The Trustee shall comply with Section 313(b) and 313(c)
of the Trust Indenture Act.
(c) A copy of each such report shall, at the time of such
transmission to Debentureholders, be filed by the Trustee with the
Company, with each stock exchange upon which any Debentures are
listed (if so listed) and also with the Commission. The Company
agrees to notify the Trustee when any Debentures become listed on
any stock exchange.
ARTICLE VII.
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
ON EVENT OF DEFAULT
SECTION 7.1. EVENTS OF DEFAULT.
(a) Whenever used herein with respect to the Debentures,
"Event of Default" means any one or more of the following events
that has occurred and is continuing:
(i) the Company defaults in the payment of any
installment of interest upon any of the Debentures, as and
when the same shall become due and payable, and continuance of
such default for a period of 30 days; provided, however, that
a valid extension of an interest payment period by the Company
in accordance with the terms of this Indenture shall not
constitute a default in the payment of interest for this
purpose;
(ii) the Company defaults in the payment of the principal
on the Debentures as and when the same shall become due and
payable whether at maturity, upon redemption, by declaration
or otherwise; provided, however, that a valid extension of the
maturity of such Debentures in accordance with the terms of
this Indenture shall not constitute a default in the payment
of principal;
(iii) the Company fails to observe or perform any other
of its covenants or agreements with respect to the Debentures
for a period of 90 days after the date on which written notice
of such failure, requiring the same to be remedied and stating
that such notice is a "Notice of Default" hereunder, shall
have been given to the Company by the Trustee, by registered
or certified mail, or to the Company and the Trustee by the
holders of at least 25% in principal amount of the Debentures
at the time Outstanding;
(iv) the Company pursuant to or within the meaning of any
Bankruptcy Law (i) commences a voluntary case; (ii) consents
to the entry of an order for relief against it in an
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involuntary case; (iii) consents to the appointment of a
Custodian of it or for all or substantially all of its
property; or (iv) makes a general assignment for the benefit
of its creditors;
(v) a court of competent jurisdiction enters an order
under any Bankruptcy Law that (i) is for relief against the
Company in an involuntary case; (ii) appoints a Custodian of
the Company for all or substantially all of its property; or
(iii) orders the liquidation of the Company, and the order or
decree remains unstayed and in effect for 90 days; or
(vi) the Trust shall have voluntarily or involuntarily
dissolved, wound-up its business or otherwise terminated its
existence except in connection with (i) the distribution of
Debentures to holders of Trust Securities in liquidation of
their interests in the Trust; (ii) the redemption of all of
the outstanding Trust Securities of the Trust; or
(iii) certain mergers, consolidations or amalgamations, each
as permitted by the Trust Agreement.
(b) In each and every such case, unless the principal of all
the Debentures shall have already become due and payable, either
the Trustee or the holders of not less than 25% in aggregate
principal amount of the Debentures then Outstanding hereunder, by
notice in writing to the Company (and to the Trustee if given by
such Debentureholders) may declare the principal of all the
Debentures to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and
payable, notwithstanding anything contained in this Indenture or in
the Debentures.
(c) At any time after the principal of the Debentures shall
have been so declared due and payable, and before any judgment or
decree for the payment of the moneys due shall have been obtained
or entered as hereinafter provided, the holders of a majority in
aggregate principal amount of the Debentures then Outstanding
hereunder, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if:
(i) the Company has paid or deposited with the Trustee a sum
sufficient to pay all matured installments of interest upon all the
Debentures and the principal of any and all Debentures that shall
have become due otherwise than by acceleration (with interest upon
such principal, and upon overdue installments of interest, at the
rate per annum expressed in the Debentures to the date of such
payment or deposit) and the amount payable to the Trustee under
Section 9.6; and (ii) any and all Events of Default under this
Indenture, other than the nonpayment of principal on Debentures
that shall not have become due by their terms, shall have been
remedied or waived as provided in Section 7.6. No such rescission
and annulment shall extend to or shall affect any subsequent
default or impair any right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any
right with respect to Debentures under this Indenture and such
proceedings shall have been discontinued or abandoned because of
such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such
case the Company and the Trustee shall be restored respectively to
their former positions and rights hereunder, and all rights,
remedies and powers of the Company and the Trustee shall continue
as though no such proceedings had been taken.
SECTION 7.2. COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE.
(a) The Company covenants that (1) in case it shall default
in the payment of any installment of interest on any of the
Debentures, and such default shall have continued for a period of
90 Business Days; or (2) in case it shall default in the payment of
the principal of any of the Debentures when the same shall have
become due and payable, whether upon maturity of the Debentures or upon
redemption or upon
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declaration or otherwise, then, upon demand of the Trustee, the Company shall
pay to the Trustee, for the benefit of the holders of the Debentures, the
whole amount that then shall have been become due and payable on all such
Debentures for principal or interest, or both, as the case may be, with
interest upon the overdue principal and (if the Debentures are held
by the Trust or a trustee of the Trust, without duplication of any
other amounts paid by the Trust or trustee in respect thereof) upon
overdue installments of interest at the rate per annum expressed in
the Debentures; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection,
and the amount payable to the Trustee under Section 9.7.
(b) If the Company shall fail to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as trustee of an
express trust, shall be entitled and empowered to institute any
action or proceedings at law or in equity for the collection of the
sums so due and unpaid, and may prosecute any such action or
proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon
the Debentures and collect the moneys adjudged or decreed to be
payable in the manner provided by law out of the property of the
Company or other obligor upon the Debentures, wherever situated.
(c) In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, readjustment, arrangement, composition
or judicial proceedings affecting the Company or the creditors or
property of either, the Trustee shall have power to intervene in
such proceedings and take any action therein that may be permitted
by the court and shall (except as may be otherwise provided by law)
be entitled to file such proofs of claim and other papers and
documents as may be necessary or advisable in order to have the
claims of the Trustee and of the holders of the Debentures allowed
for the entire amount due and payable by the Company under this
Indenture at the date of institution of such proceedings and for
any additional amount that may become due and payable by the
Company after such date, and to collect and receive any moneys or
other property payable or deliverable on any such claim, and to
distribute the same after the deduction of the amount payable to
the Trustee under Section 9.7; and any receiver, assignee or
trustee in bankruptcy or reorganization is hereby authorized by
each of the holders of the Debentures to make such payments to the
Trustee, and, in the event that the Trustee shall consent to the
making of such payments directly to such Debentureholders, to pay
to the Trustee any amount due it under Section 9.7.
(d) All rights of action and of asserting claims under this
Indenture, or under any of the terms established with respect to
Debentures, may be enforced by the Trustee without the possession
of any of such Debentures, or the production thereof at any trial
or other proceeding relative thereto, and any such suit or
proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment
shall, after provision for payment to the Trustee of any amounts
due under Section 9.7, be for the ratable benefit of the holders of
the Debentures. In case of an Event of Default hereunder, the
Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and
enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of
the exercise of any power granted in this Indenture, or to enforce
any other legal or equitable right vested in the Trustee by this
Indenture or by law. Nothing contained herein shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Debentureholder any plan of reorganization,
arrangement, adjustment or composition affecting the Debentures or
the rights of any holder thereof or to authorize the Trustee to
vote in respect of the claim of any Debentureholder in any such
proceeding.
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SECTION 7.3. APPLICATION OF MONEYS COLLECTED.
Any moneys collected by the Trustee pursuant to this Article
VII with respect to the Debentures shall be applied in the
following order, at the date or dates fixed by the Trustee and, in
case of the distribution of such moneys on account of principal or
interest, upon presentation of the Debentures, and notation thereon
the payment, if only partially paid, and upon surrender thereof if
fully paid:
FIRST: To the payment of costs and expenses of
collection and of all amounts payable to the Trustee under
Section 9.7;
SECOND: To the payment of all Senior Indebtedness of the
Company if and to the extent required by Article XVI; and
THIRD: To the payment of the amounts then due and unpaid
upon the Debentures for principal and interest, in respect of
which or for the benefit of which such money has been
collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such
Debentures for principal and interest, respectively.
SECTION 7.4. LIMITATION ON SUITS.
(a) No holder of any Debenture shall have any right by virtue
or by availing of any provision of this Indenture to institute any
suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless (i) such
holder previously shall have given to the Trustee written notice of
an Event of Default and of the continuance thereof with respect to
the Debentures specifying such Event of Default, as hereinbefore
provided; (ii) the holders of not less than 25% in aggregate
principal amount of the Debentures then Outstanding shall have made
written request upon the Trustee to institute such action, suit or
proceeding in its own name as trustee hereunder; (iii) such holder
or holders shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby; and (iv) the Trustee
for 60 days after its receipt of such notice, request and offer of
indemnity, shall have failed to institute any such action, suit or
proceeding; and (v) during such 60 day period, the holders of a
majority in principal amount of the Debentures do not give the
Trustee a direction inconsistent with the request.
(b) Notwithstanding anything contained herein to the contrary
or any other provisions of this Indenture, the right of any holder
of the Debentures to receive payment of the principal of and
interest on the Debentures, as therein provided, on or after the
respective due dates expressed in such Debenture (or in the case of
redemption, on the redemption date), or to institute suit for the
enforcement of any such payment on or after such respective dates
or redemption date, shall not be impaired or affected without the
consent of such holder and by accepting a Debenture hereunder it is
expressly understood, intended and covenanted by the taker and
holder of every Debenture with every other such taker and holder
and the Trustee, that no one or more holders of Debentures shall
have any right in any manner whatsoever by virtue or by availing of
any provision of this Indenture to affect, disturb or prejudice the
rights of the holders of any other of such Debentures, or to obtain
or seek to obtain priority over or preference to any other such
holder, or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common
benefit of all holders of Debentures. For the protection and
enforcement of the provisions of this Section 7.4, each and every
Debentureholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
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SECTION 7.5. RIGHTS AND REMEDIES CUMULATIVE; DELAY OR OMISSION
NOT WAIVER.
(a) Except as otherwise provided in Section 2.9, all powers
and remedies given by this Article VII to the Trustee or to the
Debentureholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any other powers and remedies
available to the Trustee or the holders of the Debentures, by
judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this
Indenture or otherwise established with respect to such Debentures.
(b) No delay or omission of the Trustee or of any holder of
any of the Debentures to exercise any right or power accruing upon
any Event of Default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a
waiver of any such default or on acquiescence therein; and, subject
to the provisions of Section 7.4, every power and remedy given by
this Article VII or by law to the Trustee or the Debentureholders
may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Debentureholders.
SECTION 7.6. CONTROL BY DEBENTUREHOLDERS.
The holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding, determined in accordance with
Section 10.4, shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee;
provided, however, that such direction shall not be in conflict
with any rule of law or with this Indenture. Subject to the
provisions of Section 9.1, the Trustee shall have the right to
decline to follow any such direction if the Trustee in good faith
shall, by a Responsible Officer or Officers of the Trustee,
determine that the proceeding so directed would involve the Trustee
in personal liability. The holders of a majority in aggregate
principal amount of the Debentures at the time Outstanding affected
thereby, determined in accordance with Section 10.4, may on behalf
of the holders of all of the Debentures waive any past default in
the performance of any of the covenants contained herein and its
consequences, except (i) a default in the payment of the principal
of or interest on, any of the Debentures as and when the same shall
become due by the terms of such Debentures otherwise than by
acceleration (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and
principal has been deposited with the Trustee (in accordance with
Section 7.1(c)); (ii) a default in the covenants contained in
Section 5.6; or (iii) in respect of a covenant or provision hereof
which cannot be modified or amended without the consent of the
holder of each Outstanding Debenture affected; provided, however,
that if the Debentures are held by the Trust or a trustee of the
Trust, such waiver or modification to such waiver shall not be
effective until the holders of a majority in liquidation preference
of Trust Securities of the Trust shall have consented to such
waiver or modification to such waiver; provided further, that if
the consent of the holder of each Outstanding Debenture is
required, such waiver shall not be effective until each holder of
the Trust Securities of the Trust shall have consented to such
waiver. Upon any such waiver, the default covered thereby shall be
deemed to be cured for all purposes of this Indenture and the
Company, the Trustee and the holders of the Debentures shall be
restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 7.7. UNDERTAKING TO PAY COSTS.
All parties to this Indenture agree, and each holder of any
Debentures by such holder's acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any
suit for the
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enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in
such suit, having due regard to the merits and good faith of the claims
or defenses made by such party litigant; but the provisions of this
Section 7.8 shall not apply to any suit instituted by the Trustee,
to any suit instituted by any Debentureholder, or group of
Debentureholders holding more than 10% in aggregate principal
amount of the Outstanding Debentures, or to any suit instituted by
any Debentureholder for the enforcement of the payment of the
principal of or interest on the Debentures, on or after the
respective due dates expressed in such Debenture or established
pursuant to this Indenture.
ARTICLE VIII.
FORM OF DEBENTURE AND ORIGINAL ISSUE
SECTION 8.1. FORM OF DEBENTURE.
The Debenture and the Trustee's Certificate of Authentication
to be endorsed thereon are to be substantially in the forms
contained as Exhibit A attached hereto and incorporated herein by
reference.
SECTION 8.2. ORIGINAL ISSUE OF DEBENTURES.
Debentures in the aggregate principal amount of $----------
may, upon execution of this Indenture, be executed by the Company
and delivered to the Trustee for authentication. If the
Underwriters exercise their Option and there is an Option Closing
Date (as such terms are defined in the Underwriting Agreement,
dated ---------, 1997, by and among the Company, the Trust and
Stifel Nicolaus & Company, Incorporated, for itself and as
representative of the Underwriters) then, on such Option Closing
Date, Debentures in the additional aggregate principal amount of
$-------- may be executed by the Company and delivered to the
Trustee for authentication. In either such event, the Trustee
shall thereupon authenticate and deliver said Debentures to or upon
the written order of the Company, signed by its Chairman, its Vice
Chairman, its President, or any Vice President and its Treasurer or
an Assistant Treasurer, without any further action by the Company.
ARTICLE IX.
CONCERNING THE TRUSTEE
SECTION 9.1. CERTAIN DUTIES AND RESPONSIBILITIES TRUSTEE.
(a) The Trustee, prior to the occurrence of an Event of
Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform with respect to the Debentures
such duties and only such duties as are specifically set forth in
this Indenture, and no implied covenants shall be read into this
Indenture against the Trustee. In case an Event of Default has
occurred that has not been cured or waived, the Trustee shall
exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
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(b) No provision of this Indenture shall be construed to
relieve the 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 an Event of Default and
after the curing or waiving of all such Events of Default that
may have occurred:
(i) the duties and obligations of the Trustee
shall with respect to the Debentures be determined solely
by the express provisions of this Indenture, and the
Trustee shall not be liable with respect to the
Debentures except for the performance of such duties and
obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of
the Trustee, the Trustee may with respect to the
Debentures 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 Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Indenture;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent
facts;
(3) the 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 principal amount of the Debentures at the time
Outstanding relating to the time, method and place of
conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the
Trustee under this Indenture with respect to the Debentures;
and
(4) none of the provisions contained in this Indenture
shall require the 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 there is reasonable ground for
believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Indenture or
adequate indemnity against such risk is not reasonably assured
to it.
SECTION 9.2. NOTICE OF DEFAULTS.
Within 90 days after actual knowledge by a Responsible Officer
of the Trustee of the occurrence of any default hereunder with
respect to the Securities, the Trustee shall transmit by mail to
all holders of the Debentures, as their names and addresses appear
in the Debenture Register, notice of such default, unless such
default shall have been cured or waived; provided, however, that,
except in the case default in the payment of the principal or
interest (including any Additional Interest) on any Debenture, the
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 the directors and/or Responsible Officers of the
Trustee determines in good faith that the withholding of such
notice is in the interests of the holders of such Debentures; and
provided, further, that in the case of any default of the character
specified in section 7.1(a)(iii), no such notice to holders of
Debentures need be sent until at least 30 days after the occurrence
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thereof. For the purposes of this Section 9.2, the term "default"
means any event which is, or after notice or lapse of time or both,
would become, an Event of Default with respect to the Debentures.
SECTION 9.3. CERTAIN RIGHTS OF TRUSTEE.
Except as otherwise provided in Section 9.1:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order,
approval, bond, security or other paper or document believed by it
to be genuine and to have been signed or presented by the proper
party or parties;
(b) Any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Board
Resolution or an instrument signed in the name of the Company by
the President or any Vice President and by the Secretary or an
Assistant Secretary or the Treasurer or an Assistant Treasurer
thereof (unless other evidence in respect thereof is specifically
prescribed herein);
(c) The Trustee shall not be deemed to have knowledge of a
default or an Event of Default, other than an Event of Default
specified in Section 7.1(a)(i); or (ii), unless and until it
receives written notification of such Event of Default from the
Company or by holders of at least 25% of the aggregate principal
amount of the Debentures at the time Outstanding;
(d) The Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action
taken or suffered or omitted hereunder in good faith and in
reliance thereon;
(e) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Debentureholders,
pursuant to the provisions of this Indenture, unless such
Debentureholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby; nothing contained herein
shall, however, relieve the Trustee of the obligation, upon the
occurrence of an Event of Default (that has not been cured or
waived) to exercise with respect to the Debentures such of the
rights and powers vested in it by this Indenture, and to use the
same degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct of his
own affairs;
(f) The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred
upon it by this Indenture;
(g) The 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, consent,
order, approval, bond, security, or other papers or documents,
unless requested in writing so to do by the holders of not less
than a majority in principal amount of the Outstanding Debentures
(determined as provided in Section 10.4); provided, however, that
if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require reasonable
indemnity against such costs, expenses or
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liabilities as a condition to so proceeding. The reasonable expense of every
such examination shall be paid by the Company or, if paid by the Trustee,
shall be repaid by the Company upon demand; and
(h) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the 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.
SECTION 9.4. TRUSTEE NOT RESPONSIBLE FOR RECITALS, ETC.
(a) The Recitals contained herein and in the Debentures shall
be taken as the statements of the Company, and the Trustee assumes
no responsibility for the correctness of the same.
(b) The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Debentures.
(c) The Trustee shall not be accountable for the use or
application by the Company of any of the Debentures or of the
proceeds of such Debentures, or for the use or application of any
moneys paid over by the Trustee in accordance with any provision of
this Indenture, or for the use or application of any moneys
received by any paying agent other than the Trustee.
SECTION 9.5. MAY HOLD DEBENTURES.
The Trustee or any paying agent or registrar for the
Debentures, in its individual or any other capacity, may become the
owner or pledgee of Debentures with the same rights it would have
if it were not Trustee, paying agent or Debenture Registrar.
SECTION 9.6. MONEYS HELD IN TRUST.
Subject to the provisions of Section 13.5, all moneys received
by the Trustee shall, until used or applied as herein provided, be
held in trust for the purposes for which they were received, but
need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for
interest on any moneys received by it hereunder except such as it
may agree with the Company to pay thereon.
SECTION 9.7. COMPENSATION AND REIMBURSEMENT.
(a) The Company covenants and agrees to pay to the Trustee,
and the Trustee shall be entitled to, such reasonable compensation
(which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust), as the Company
and the Trustee may from time to time agree in writing, for all
services rendered by it in the execution of the trusts hereby
created and in the exercise and performance of any of the powers
and duties hereunder of the Trustee, and, except as otherwise
expressly provided herein, the Company shall pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
of the provisions of this Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel and
of all Persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence
or bad faith. The Company also covenants to indemnify the Trustee
(and its officers, agents, directors and employees) for, and to
hold it harmless
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against, any loss, liability or expense incurred without negligence or bad
faith on the part of the Trustee and arising out of or in connection with the
acceptance or administration of this trust, including the costs and expenses
of defending itself against any claim of liability in the premises.
(b) The obligations of the Company under this Section 9.7 to
compensate and indemnify the Trustee and to pay or reimburse the
Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder. Such additional indebtedness
shall be secured by a lien prior to that of the Debentures upon all
property and funds held or collected by the Trustee as such, except
funds held in trust for the benefit of the holders of particular
Debentures.
SECTION 9.8. RELIANCE ON OFFICERS' CERTIFICATE.
Except as otherwise provided in Section 9.1, whenever in the
administration of the provisions of this Indenture the Trustee
shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering or omitting to take any
action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of
negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate
delivered to the Trustee and such certificate, in the absence of
negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted to
be taken by it under the provisions of this Indenture upon the
faith thereof.
SECTION 9.9. DISQUALIFICATION: CONFLICTING INTERESTS.
If the Trustee has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the Trust Indenture Act,
the Trustee and the Company shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 9.10. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee with respect to the
Debentures issued hereunder which shall at all times 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 other Person
permitted to act as trustee by the Commission, authorized under
such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $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 aforesaid supervising or examining authority,
then for the purposes of this Section 9.10, 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. The Company may not, nor may any Person
directly or indirectly controlling, controlled by, or under common
control with the Company, serve as Trustee. In case at any time
the Trustee shall cease to be eligible in accordance with the
provisions of this Section 9.10, the Trustee shall resign
immediately in the manner and with the effect specified in Section
9.11.
SECTION 9.11. RESIGNATION AND REMOVAL; APPOINTMENT OF
SUCCESSOR.
(a) The Trustee or any successor hereafter appointed, may at
any time resign by giving written notice thereof to the Company and
by transmitting notice of resignation by mail, first class postage
prepaid, to the Debentureholders, as their names and addresses
appear upon the Debenture Register.
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Upon receiving such notice of resignation, the Company shall promptly appoint
a successor trustee with respect to Debentures by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the resigning Trustee and one copy
to the successor trustee. If no successor trustee shall have been
so appointed and have accepted appointment within 30 days after the
mailing of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of
a successor trustee with respect to Debentures, or any
Debentureholder who has been a bona fide holder of a Debenture or
Debentures for at least six months may, subject to the provisions
of Section 9.9, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon after such notice, if
any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any one of the following shall occur
(i) the Trustee shall fail to comply with the provisions
of Section 9.9 after written request therefor by the Company
or by any Debentureholder who has been a bona fide holder of
a Debenture or Debentures for at least six months; or
(ii) the Trustee shall cease to be eligible in
accordance with the provisions of Section 9.10 and shall fail
to resign after written request therefor by the Company or by
any such Debentureholder; or
(iii) the Trustee shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or commence a
voluntary bankruptcy proceeding, or a receiver of the Trustee
or of its property shall be appointed or consented to, or any
public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, the
Company may remove the Trustee with respect to all Debentures
and appoint a successor trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one
copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to
the provisions of Section 9.9, unless the Trustee's duty to
resign is stayed as provided herein, any Debentureholder who
has been a bona fide holder of a Debenture or Debentures for
at least six months may, on behalf of that holder and all
others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the
appointment of a successor trustee. Such court may thereupon
after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount
of the Debentures at the time Outstanding may at any time remove
the Trustee by so notifying the Trustee and the Company and may
appoint a successor Trustee with the consent of the Company.
(d) Any resignation or removal of the Trustee and appointment
of a successor trustee with respect to the Debentures pursuant to
any of the provisions of this Section 9.11 shall become effective
upon acceptance of appointment by the successor trustee as provided
in Section 9.12.
(e) Any successor trustee appointed pursuant to this Section
9.11 may be appointed with respect to the Debentures, and at any
time there shall be only one Trustee with respect to the
Debentures.
SECTION 9.12. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
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(a) In case of the appointment hereunder of a successor
trustee with respect to the Debentures, every successor trustee so
appointed shall execute, acknowledge and deliver to the Company and
to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor trustee, without any
further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on
the request of the Company or the successor trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor trustee all the rights,
powers, and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor trustee all property and
money held by such retiring Trustee hereunder.
(b) Upon request of any successor trustee, the Company shall
execute any and all instruments for more fully and certainly
vesting in and confirming to such successor trustee all such
rights, powers and trusts referred to in paragraph (a) of this
Section 9.12.
(c) No successor trustee shall accept its appointment unless
at the time of such acceptance such successor trustee shall be
qualified and eligible under this Article IX.
(d) Upon acceptance of appointment by a successor trustee as
provided in this Section 9.12, the Company shall transmit notice of
the succession of such trustee hereunder by mail, first class
postage prepaid, to the Debentureholders, as their names and
addresses appear upon the Debenture Register. If the Company fails
to transmit such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall
cause such notice to be transmitted at the expense of the Company.
SECTION 9.13. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION
TO BUSINESS.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to the
corporate trust business of the Trustee, shall be the successor of
the Trustee hereunder, provided that such corporation shall be
qualified under the provisions of Section 9.9 and eligible under
the provisions of Section 9.10, without the execution or filing of
any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding. In case
any Debentures shall have been authenticated, but not delivered, by
the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such
authentication and deliver the Debentures so authenticated with the
same effect as if such successor Trustee had itself authenticated
such Debentures.
SECTION 9.14. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE
COMPANY.
The Trustee shall comply with Section 311(a) of the Trust
Indenture Act, excluding any creditor relationship described in
Section 311(b) of the Trust Indenture Act. A Trustee who has
resigned or been removed shall be subject to Section 311(a) of the
Trust Indenture Act to the extent included therein.
ARTICLE X.
CONCERNING THE DEBENTUREHOLDERS
SECTION 10.1. EVIDENCE OF ACTION BY HOLDERS.
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(a) Whenever in this Indenture it is provided that the
holders of a majority or specified percentage in aggregate
principal amount of the Debentures may take any action (including
the making of any demand or request, the giving of any notice,
consent or waiver or the taking of any other action), the fact that
at the time of taking any such action the holders of such majority
or specified percentage have joined therein may be evidenced by any
instrument or any number of instruments of similar tenor executed
by such holders of Debentures in Person or by agent or proxy
appointed in writing.
(b) If the Company shall solicit from the Debentureholders
any request, demand, authorization, direction, notice, consent,
waiver or other action, the Company may, at its option, as
evidenced by an Officers' Certificate, fix in advance a record date
for the determination of Debentureholders entitled to give such
request, demand, authorization, direction, notice, consent, waiver
or other action, but the Company shall have no obligation to do so.
If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action
may be given before or after the record date, but only the
Debentureholders of record at the close of business on the record
date shall be deemed to be Debentureholders for the purposes of
determining whether Debentureholders of the requisite proportion of
Outstanding Debentures have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent,
waiver or other action, and for that purpose the Outstanding
Debentures shall be computed as of the record date; provided,
however, that no such authorization, agreement or consent by such
Debentureholders on the record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
SECTION 10.2. PROOF OF EXECUTION BY DEBENTUREHOLDERS.
Subject to the provisions of Section 9.1, proof of the
execution of any instrument by a Debentureholder (such proof shall
not require notarization) or his agent or proxy and proof of the
holding by any Person of any of the Debentures shall be sufficient
if made in the following manner:
(a) The fact and date of the execution by any such Person of
any instrument may be proved in any reasonable manner acceptable to
the Trustee.
(b) The ownership of Debentures shall be proved by the
Debenture Register of such Debentures or by a certificate of the
Debenture Registrar thereof.
(c) The Trustee may require such additional proof of any
matter referred to in this Section 10.2 as it shall deem necessary.
SECTION 10.3. WHO MAY BE DEEMED OWNERS.
Prior to the due presentment for registration of transfer of
any Debenture, the Company, the Trustee, any paying agent, any
Authenticating Agent and any Debenture Registrar may deem and treat
the Person in whose name such Debenture shall be registered upon
the books of the Company as the absolute owner of such Debenture
(whether or not such Debenture shall be overdue and notwithstanding
any notice of ownership or writing thereon made by anyone other
than the Debenture Registrar) for the purpose of receiving payment
of or on account of the principal of and interest on such Debenture
(subject to Section 2.3) and for all other purposes; and neither
the Company nor the Trustee nor any paying agent nor any
Authenticating Agent nor any Debenture Registrar shall be affected
by any notice to the contrary.
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SECTION 10.4. CERTAIN DEBENTURES OWNED BY COMPANY DISREGARDED.
In determining whether the holders of the requisite aggregate
principal amount of Debentures have concurred in any direction,
consent or waiver under this Indenture, the Debentures that are
owned by the Company or any other obligor on the Debentures or by
any Person directly or indirectly controlling or controlled by or
under common control with the Company or any other obligor on the
Debentures shall be disregarded and deemed not to be Outstanding
for the purpose of any such determination, except that for the
purpose of determining whether the Trustee shall be protected in
relying on any such direction, consent or waiver, only Debentures
that the Trustee actually knows are so owned shall be so
disregarded. The Debentures so owned that have been pledged in
good faith may be regarded as Outstanding for the purposes of this
Section 10.4, if the pledgee shall establish to the satisfaction of
the Trustee the pledgee's right so to act with respect to such
Debentures and that the pledgee is not a Person directly or
indirectly controlling or controlled by or under direct or indirect
common control with the Company or any such other obligor. In case
of a dispute as to such right, any decision by the Trustee taken
upon the advice of counsel shall be full protection to the Trustee.
SECTION 10.5. ACTIONS BINDING ON FUTURE DEBENTUREHOLDERS.
At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 10.1, of the taking of any action
by the holders of the majority or percentage in aggregate principal
amount of the Debentures specified in this Indenture in connection
with such action, any holder of a Debenture that is shown by the
evidence to be included in the Debentures the holders of which have
consented to such action may, by filing written notice with the
Trustee, and upon proof of holding as provided in Section 10.2,
revoke such action so far as concerns such Debenture. Except as
aforesaid any such action taken by the holder of any Debenture
shall be conclusive and binding upon such holder and upon all
future holders and owners of such Debenture, and of any Debenture
issued in exchange therefor, on registration of transfer thereof or
in place thereof, irrespective of whether or not any notation in
regard thereto is made upon such Debenture. Any action taken by
the holders of the majority or percentage in aggregate principal
amount of the Debentures specified in this Indenture in connection
with such action shall be conclusively binding upon the Company,
the Trustee and the holders of all the Debentures.
ARTICLE XI.
SUPPLEMENTAL INDENTURES
SECTION 11.1. SUPPLEMENTAL INDENTURES WITHOUT THE CONSENT OF
DEBENTUREHOLDERS.
In addition to any supplemental indenture otherwise authorized
by this Indenture, the Company and the Trustee may from time to
time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as then in effect), without the consent of the
Debentureholders, for one or more of the following purposes:
(a) to cure any ambiguity, defect, or inconsistency herein,
in the Debentures;
(b) to comply with Article X;
(c) to provide for uncertificated Debentures in addition to
or in place of certificated Debentures;
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(d) to add to the covenants of the Company for the benefit of
the holders of all or any of the Debentures or to surrender any
right or power herein conferred upon the Company;
(e) to add to, delete from, or revise the conditions,
limitations, and restrictions on the authorized amount, terms, or
purposes of issue, authentication, and delivery of Debentures, as
herein set forth;
(f) to make any change that does not adversely affect the
rights of any Debentureholder in any material respect;
(g) to provide for the issuance of and establish the form and
terms and conditions of the Debentures, to establish the form of
any certifications required to be furnished pursuant to the terms
of this Indenture or of the Debentures, or to add to the rights of
the holders of the Debentures; or
(h) qualify or maintain the qualification of this Indenture
under the Trust Indenture Act.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, and to make any
further appropriate agreements and stipulations that may be therein
contained, but the Trustee shall not be obligated to enter into any
such supplemental indenture that affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise. Any
supplemental indenture authorized by the provisions of this Section
11.1 may be executed by the Company and the Trustee without the
consent of the holders of any of the Debentures at the time
Outstanding, notwithstanding any of the provisions of Section 11.2.
SECTION 11.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF
DEBENTUREHOLDERS.
With the consent (evidenced as provided in Section 10.1) of
the holders of not less than a majority in aggregate principal
amount of the Debentures at the time Outstanding, the Company, when
authorized by Board Resolutions, and the Trustee may from time to
time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as then in effect) for the purpose of adding
any provisions to or changing in any manner or eliminating any of
the provisions of this Indenture or of any supplemental indenture
or of modifying in any manner not covered by Section 11.1 the
rights of the holders of the Debentures under this Indenture;
provided, however, that no such supplemental indenture shall
without the consent of the holders of each Debenture then
Outstanding and affected thereby, (i) extend the fixed maturity of
any Debentures, reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, without the
consent of the holder of each Debenture so affected; or (ii) reduce
the aforesaid percentage of Debentures, the holders of which are
required to consent to any such supplemental indenture; provided
further, that if the Debentures are held by the Trust or a trustee
of the Trust, such supplemental indenture shall not be effective
until the holders of a majority in liquidation preference of Trust
Securities of the Trust shall have consented to such supplemental
indenture; provided further, that if the consent of the holder of
each Outstanding Debenture is required, such supplemental indenture
shall not be effective until each holder of the Trust Securities of
the Trust shall have consented to such supplemental indenture. It
shall not be necessary for the consent of the Debentureholders
affected thereby under this Section 11.2 to approve the particular
form of any proposed supplemental indenture, but it shall be
sufficient if such consent shall approve the substance thereof.
SECTION 11.3. EFFECT OF SUPPLEMENTAL INDENTURES.
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Upon the execution of any supplemental indenture pursuant to
the provisions of this Article XI, this Indenture shall be and be
deemed to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties and
immunities under this Indenture of the Trustee, the Company and the
holders of Debentures shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 11.4. DEBENTURES AFFECTED BY SUPPLEMENTAL INDENTURES.
Debentures affected by a supplemental indenture, authenticated
and delivered after the execution of such supplemental indenture
pursuant to the provisions of this Article XI, may bear a notation
in form approved by the Company, provided such form meets the
requirements of any exchange upon which the Debentures may be
listed, as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Debentures so
modified as to conform, in the opinion of the Board of Directors of
the Company, to any modification of this Indenture contained in any
such supplemental indenture may be prepared by the Company,
authenticated by the Trustee and delivered in exchange for the
Debentures then Outstanding.
SECTION 11.5. EXECUTION OF SUPPLEMENTAL INDENTURES.
(a) Upon the request of the Company, accompanied by their
Board Resolutions authorizing the execution of any such
supplemental indenture, and upon the filing with the Trustee of
evidence of the consent of Debentureholders required to consent
thereto as aforesaid, the Trustee shall join with the Company in
the execution of such supplemental indenture unless such
supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion but shall not be obligated to enter
into such supplemental indenture. The Trustee, subject to the
provisions of Sections 9.1, may receive an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed
pursuant to this Article XI is authorized or permitted by, and
conforms to, the terms of this Article XI and that it is proper for
the Trustee under the provisions of this Article XI to join in the
execution thereof.
(b) Promptly after the execution by the Company and the
Trustee of any supplemental indenture pursuant to the provisions of
this Section 11.5, the Trustee shall transmit by mail, first class
postage prepaid, a notice, setting forth in general terms the
substance of such supplemental indenture, to the Debentureholders
as their names and addresses appear upon the Debenture Register.
Any failure of the Trustee to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the
validity of any such supplemental indenture.
ARTICLE XII.
SUCCESSOR CORPORATION
SECTION 12.1. COMPANY MAY CONSOLIDATE, ETC.
Nothing contained in this Indenture or in any of the
Debentures shall prevent any consolidation or merger of the Company
with or into any other corporation or corporations (whether or not
affiliated with the Company, as the case may be), or successive
consolidations or mergers in which the Company,
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as the case may be, or its successor or successors shall be a party or
parties, or shall prevent any sale, conveyance, transfer or other disposition
of the property of the Company, as the case may be, or its
successor or successors as an entirety, or substantially as an
entirety, to any other corporation (whether or not affiliated with
the Company, as the case may be, or its successor or successors)
authorized to acquire and operate the same; provided, however, the
Company hereby covenants and agrees that, (i) upon any such
consolidation, merger, sale, conveyance, transfer or other
disposition, the due and punctual payment, in the case of the
Company, of the principal of and interest on all of the Debentures,
according to their tenor and the due and punctual performance and
observance of all the covenants and conditions of this Indenture to
be kept or performed by the Company as the case may be, shall be
expressly assumed, by supplemental indenture (which shall conform
to the provisions of the Trust Indenture Act, as then in effect)
satisfactory in form to the Trustee executed and delivered to the
Trustee by the entity formed by such consolidation, or into which
the Company, as the case may be, shall have been merged, or by the
entity which shall have acquired such property; (ii) in case the
Company consolidates with or merges into another Person or conveys
or transfers its properties and assets substantially then as an
entirety to any Person, the successor Person is organized under the
laws of the United States or any state or the District of Columbia;
and (iii) immediately after giving effect thereto, an Event of
Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have occurred and be
continuing.
SECTION 12.2. SUCCESSOR CORPORATION SUBSTITUTED.
(a) In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition and upon the assumption
by the successor corporation, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the
Trustee, of, in the case of the Company, the due and punctual
payment of the principal of and interest on all of the Debentures
Outstanding and the due and punctual performance of all of the
covenants and conditions of this Indenture to be performed by the
Company, as the case may be, such successor corporation shall
succeed to and be substituted for the Company, with the same effect
as if it had been named as the Company herein, and thereupon the
predecessor corporation shall be relieved of all obligations and
covenants under this Indenture and the Debentures.
(b) In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition such changes in
phraseology and form (but not in substance) may be made in the
Debentures thereafter to be issued as may be appropriate.
(c) Nothing contained in this Indenture or in any of the
Debentures shall prevent the Company from merging into itself or
acquiring by purchase or otherwise all or any part of the property
of any other Person (whether or not affiliated with the Company).
SECTION 12.3. EVIDENCE OF CONSOLIDATION, ETC. TO TRUSTEE.
The Trustee, subject to the provisions of Section 9.1, may
receive an Opinion of Counsel as conclusive evidence that any such
consolidation, merger, sale, conveyance, transfer or other
disposition, and any such assumption, comply with the provisions of
this Article XII.
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ARTICLE XIII.
SATISFACTION AND DISCHARGE
SECTION 13.1. SATISFACTION AND DISCHARGE OF INDENTURE.
If at any time: (a) the Company shall have delivered to the
Trustee for cancellation all Debentures theretofore authenticated
(other than any Debentures that shall have been destroyed, lost or
stolen and that shall have been replaced or paid as provided in
Section 2.9) and Debentures for whose payment money or Governmental
Obligations have theretofore been deposited in trust or segregated
and held in trust by the Company (and thereupon repaid to the
Company or discharged from such trust, as provided in Section
13.5); or (b) all such Debentures not theretofore delivered to the
Trustee for cancellation shall have become due and payable, or are
by their terms to become due and payable within one year or are to
be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption,
and the Company shall deposit or cause to be deposited with the
Trustee as trust funds the entire amount in moneys or Governmental
Obligations sufficient or a combination thereof, sufficient in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered
to the Trustee, to pay at maturity or upon redemption all
Debentures not theretofore delivered to the Trustee for
cancellation, including principal and interest due or to become due
to such date of maturity or date fixed for redemption, as the case
may be, and if the Company shall also pay or cause to be paid all
other sums payable hereunder by the Company; then this Indenture
shall thereupon cease to be of further effect except for the
provisions of Sections 2.3, 2.7, 2.9, 5.1, 5.2, 5.3 and 9.10, that
shall survive until the date of maturity or redemption date, as the
case may be, and Sections 9.6 and 13.5, that shall survive to such
date and thereafter, and the Trustee, on demand of the Company and
at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this
Indenture.
SECTION 13.2. DISCHARGE OF OBLIGATIONS.
If at any time all Debentures not heretofore delivered to the
Trustee for cancellation or that have not become due and payable as
described in Section 13.1 shall have been paid by the Company by
depositing irrevocably with the Trustee as trust funds moneys or an
amount of Governmental Obligations sufficient in the opinion of a
nationally recognized certified public accounting firm to pay at
maturity or upon redemption all Debentures not theretofore
delivered to the Trustee for cancellation, including principal and
interest due or to become due to such date of maturity or date
fixed for redemption, as the case may be, and if the Company shall
also pay or cause to be paid all other sums payable hereunder by
the Company, then after the date such moneys or Governmental
Obligations, as the case may be, are deposited with the Trustee,
the obligations of the Company under this Indenture shall cease to
be of further effect except for the provisions of Sections 2.3,
2.7, 2.9, 5.1, 5.2, 5.3, 9.6, 9.10 and 13.5 hereof that shall
survive until such Debentures shall mature and be paid.
Thereafter, Sections 9.6 and 13.5 shall survive.
SECTION 13.3. DEPOSITED MONEYS TO BE HELD IN TRUST.
All monies or Governmental Obligations deposited with the
Trustee pursuant to Sections 13.1 or 13.2 shall be held in trust
and shall be available for payment as due, either directly or
through any paying agent (including the Company acting as its own
paying agent), to the holders of the Debentures for the payment or
redemption of which such moneys or Governmental Obligations have
been deposited with the Trustee.
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SECTION 13.4. PAYMENT OF MONIES HELD BY PAYING AGENTS.
In connection with the satisfaction and discharge of this
Indenture, all moneys or Governmental Obligations then held by any
paying agent under the provisions of this Indenture shall, upon
demand of the Company, be paid to the Trustee and thereupon such
paying agent shall be released from all further liability with
respect to such moneys or Governmental Obligations.
SECTION 13.5. REPAYMENT TO COMPANY.
Any monies or Governmental Obligations deposited with any
paying agent or the Trustee, or then held by the Company in trust,
for payment of principal of or interest on the Debentures that are
not applied but remain unclaimed by the holders of such Debentures
for at least two years after the date upon which the principal of
or interest on such Debentures shall have respectively become due
and payable, shall be repaid to the Company, as the case may be, on
May 31 of each year or (if then held by the Company) shall be
discharged from such trust; and thereupon the paying agent and the
Trustee shall be released from all further liability with respect
to such moneys or Governmental Obligations, and the holder of any
of the Debentures entitled to receive such payment shall
thereafter, as an unsecured general creditor, look only to the
Company for the payment thereof.
ARTICLE XIV.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
SECTION 14.1. NO RECOURSE.
No recourse under or upon any obligation, covenant or
agreement of this Indenture, or of the Debentures, or for any claim
based thereon or otherwise in respect thereof, shall be had against
any incorporator, stockholder, officer or director, past, present
or future as such, of the Company or of any predecessor or
successor corporation, either directly or through the Company or
any such predecessor or successor corporation, whether by virtue of
any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder
are solely corporate obligations, and that no such personal
liability whatever shall attach to, or is or shall be incurred by,
the incorporators, stockholders, officers or directors as such, of
the Company or of any predecessor or successor corporation, or any
of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or
agreements contained in this Indenture or in any of the Debentures
or implied therefrom; and that any and all such personal liability
of every name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and claims
against, every such incorporator, stockholder, officer or director
as such, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or
agreements contained in this Indenture or in any of the Debentures
or implied therefrom, are hereby expressly waived and released as
a condition of, and as a consideration for, the execution of this
Indenture and the issuance of such Debentures.
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ARTICLE XV.
MISCELLANEOUS PROVISIONS
SECTION 15.1. EFFECT ON SUCCESSORS AND ASSIGNS.
All the covenants, stipulations, promises and agreements in
this Indenture contained by or on behalf of the Company shall bind
their respective successors and assigns, whether so expressed or
not.
SECTION 15.2. ACTIONS BY SUCCESSOR.
Any act or proceeding by any provision of this Indenture
authorized or required to be done or performed by any board,
committee or officer of the Company shall and may be done and
performed with like force and effect by the corresponding board,
committee or officer of any corporation that shall at the time be
the lawful sole successor of the Company.
SECTION 15.3. SURRENDER OF COMPANY POWERS.
The Company by instrument in writing executed by appropriate
authority of its Board of Directors and delivered to the Trustee
may surrender any of the powers reserved to the Company, and
thereupon such power so surrendered shall terminate both as to the
Company, as the case may be, and as to any successor corporation.
SECTION 15.4. NOTICES.
Except as otherwise expressly provided herein any notice or
demand that by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the holders of
Debentures to or on the Company may be given or served by being
deposited first class postage prepaid in a post-office letterbox
addressed (until another address is filed in writing by the Company
with the Trustee), as follows: c/o 1st Source Corporation, 100
North Michigan Avenue, South Bend, Indiana 46601, Attention: Chief
Financial Officer. Any notice, election, request or demand by the
Company or any Debentureholder to or upon the Trustee shall be
deemed to have been sufficiently given or made, for all purposes,
if given or made in writing at the Corporate Trust Office of the
Trustee.
SECTION 15.5. GOVERNING LAW.
This Indenture and each Debenture shall be deemed to be a
contract made under the internal laws of the State of Indiana and
for all purposes shall be construed in accordance with the laws of
said State.
SECTION 15.6. TREATMENT OF DEBENTURES AS DEBT.
It is intended that the Debentures shall be treated as
indebtedness and not as equity for federal income tax purposes.
The provisions of this Indenture shall be interpreted to further
this intention.
SECTION 15.7. COMPLIANCE CERTIFICATES AND OPINIONS.
(a) Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent provided for in
this Indenture relating to the proposed action have
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been complied with and an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent have been complied with,
except that in the case of any such application or demand as to
which the furnishing of such documents is specifically required by
any provision of this Indenture relating to such particular
application or demand, no additional certificate or opinion need be
furnished.
(b) Each certificate or opinion of the Company provided for
in this Indenture and delivered to the Trustee with respect to
compliance with a condition or covenant in this Indenture shall
include (1) a statement that the Person making such certificate or
opinion has read such covenant or condition; (2) a brief statement
as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or
opinion are based; (3) a statement that, in the opinion of such
Person, he has made such examination or investigation as, in the
opinion of such Person, is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition
has been complied with; and (4) a statement as to whether or not,
in the opinion of such Person, such condition or covenant has been
complied with.
SECTION 15.8. PAYMENTS ON BUSINESS DAYS.
In any case where the date of maturity of interest or
principal of any Debenture or the date of redemption of any
Debenture shall not be a Business Day, then payment of interest or
principal may be made on the next succeeding Business Day with the
same force and effect as if made on the nominal date of maturity or
redemption, and no interest shall accrue for the period after such
nominal date.
SECTION 15.9. CONFLICT WITH TRUST INDENTURE ACT.
If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with the duties imposed by Sections
310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
SECTION 15.10. COUNTERPARTS.
This Indenture may be executed in any number of counterparts,
each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
SECTION 15.11. SEPARABILITY.
In case any one or more of the provisions contained in this
Indenture or in the Debentures shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other
provisions of this Indenture or of the Debentures, but this
Indenture and the Debentures shall be construed as if such invalid
or illegal or unenforceable provision had never been contained
herein or therein.
SECTION 15.12. ASSIGNMENT.
The Company shall have the right at all times to assign any of
its respective rights or obligations under this Indenture to a
direct or indirect wholly owned Subsidiary of the Company, provided
that, in the event of any such assignment, the Company shall remain
liable for all such obligations. Subject to the foregoing, this
Indenture is binding upon and inures to the benefit of the parties
thereto and their respective successors and assigns. This
Indenture may not otherwise be assigned by the parties thereto.
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SECTION 15.13. ACKNOWLEDGMENT OF RIGHTS.
The Company acknowledges that, with respect to any Debentures
held by the Trust or a trustee of the Trust, if the Property
Trustee fails to enforce its rights under this Indenture as the
holder of the Debentures held as the assets of the Trust, any
holder of Preferred Securities may institute legal proceedings
directly against the Company to enforce such Property Trustee's
rights under this Indenture without first instituting any legal
proceedings against such Property Trustee or any other person or
entity. Notwithstanding the foregoing, if an Event of Default has
occurred and is continuing and such event is attributable to the
failure of the Company to pay interest or principal on the
Debentures on the date such interest or principal is otherwise
payable (or in the case of redemption, on the redemption date), the
Company acknowledges that a holder of Preferred Securities may
directly institute a proceeding for enforcement of payment to such
holder of the principal of or interest on the Debentures having a
principal amount equal to the aggregate liquidation amount of the
Preferred Securities of such holder on or after the respective due
date specified in the Debentures.
ARTICLE XVI.
SUBORDINATION OF DEBENTURES
SECTION 16.1. AGREEMENT TO SUBORDINATE.
The Company covenants and agrees, and each holder of
Debentures issued hereunder by such holder's acceptance thereof
likewise covenants and agrees, that all Debentures shall be issued
subject to the provisions of this Article XVI; and each holder of
a Debenture, whether upon original issue or upon transfer or
assignment thereof, accepts and agrees to be bound by such
provisions. The payment by the Company of the principal of and
interest on all Debentures issued hereunder shall, to the extent
and in the manner hereinafter set forth, be subordinated and junior
in right of payment to the prior payment in full of all Senior
Debt, Subordinated Debt and Additional Senior Obligations
(collectively, "Senior Indebtedness") to the extent provided
herein, whether outstanding at the date of this Indenture or
thereafter incurred. No provision of this Article XVI shall
prevent the occurrence of any default or Event of Default
hereunder.
SECTION 16.2. DEFAULT ON SENIOR DEBT, SUBORDINATED DEBT OR
ADDITIONAL SENIOR OBLIGATIONS.
In the event and during the continuation of any default by the
Company in the payment of principal, premium, interest or any other
payment due on any Senior Indebtedness of the Company, or in the
event that the maturity of any Senior Indebtedness of the Company
has been accelerated because of a default, then, in either case, no
payment shall be made by the Company with respect to the principal
(including redemption payments) of or interest on the Debentures.
In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee when such payment is prohibited by the
preceding sentence of this Section 16.2, such payment shall be held
in trust for the benefit of, and shall be paid over or delivered
to, the holders of Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Indebtedness may have been
issued, as their respective interests may appear, but only to the
extent that the holders of the Senior Indebtedness (or their
representative or representatives or a trustee) notify the Trustee
in writing within 90 days of such payment of the amounts then due
and owing on the Senior Indebtedness and only the amounts specified
in such notice to the Trustee shall be paid to the holders of
Senior Indebtedness.
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SECTION 16.3. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
(a) Upon any payment by the Company or distribution of assets
of the Company of any kind or character, whether in cash, property
or securities, to creditors upon any dissolution or winding-up or
liquidation or reorganization of the Company, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other
proceedings, all amounts due upon all Senior Indebtedness of the
Company shall first be paid in full, or payment thereof provided
for in money in accordance with its terms, before any payment is
made by the Company on account of the principal or interest on the
Debentures; and upon any such dissolution or winding-up or
liquidation or reorganization, any payment by the Company, or
distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the holders of
the Debentures or the Trustee would be entitled to receive from the
Company, except for the provisions of this Article XVI, shall be
paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or
distribution, or by the holders of the Debentures or by the Trustee
under this Indenture if received by them or it, directly to the
holders of Senior Indebtedness of the Company (pro rata to such
holders on the basis of the respective amounts of Senior
Indebtedness held by such holders, as calculated by the Company) or
their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their
respective interests may appear, to the extent necessary to pay
such Senior Indebtedness in full, in money or money's worth, after
giving effect to any concurrent payment or distribution to or for
the holders of such Senior Indebtedness, before any payment or
distribution is made to the holders of Debentures or to the
Trustee.
(b) In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, prohibited by
the foregoing, shall be received by the Trustee before all Senior
Indebtedness of the Company is paid in full, or provision is made
for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of such Senior
Indebtedness or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any
instruments evidencing such Senior Indebtedness may have been
issued, and their respective interests may appear, as calculated by
the Company, for application to the payment of all Senior
Indebtedness of the Company, as the case may be, remaining unpaid
to the extent necessary to pay such Senior Indebtedness in full in
money in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the benefit of the
holders of such Senior Indebtedness.
(c) For purposes of this Article XVI, the words "cash,
property or securities" shall not be deemed to include shares of
stock of the Company as reorganized or readjusted, or securities of
the Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article XVI
with respect to the Debentures to the payment of all Senior
Indebtedness of the Company, as the case may be, that may at the
time be outstanding, provided that (i) such Senior Indebtedness is
assumed by the new corporation, if any, resulting from any such
reorganization or readjustment; and (ii) the rights of the holders
of such Senior Indebtedness are not, without the consent of such
holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company
into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an
entirety, or substantially as an entirety, to another corporation
upon the terms and conditions provided for in Article XII shall not
be deemed a dissolution, winding-up, liquidation or reorganization
for the purposes of this Section 16.3 if such other corporation
shall, as a part of such consolidation, merger,
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conveyance or transfer, comply with the conditions stated in Article XII.
Nothing in Section 16.2 or in this Section 16.3 shall apply to
claims of, or payments to, the Trustee under or pursuant to
Section 9.7.
SECTION 16.4. SUBROGATION.
(a) Subject to the payment in full of all Senior Indebtedness
of the Company, the rights of the holders of the Debentures shall
be subrogated to the rights of the holders of such Senior
Indebtedness to receive payments or distributions of cash, property
or securities of the Company, as the case may be, applicable to
such Senior Indebtedness until the principal of and interest on the
Debentures shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of such
Senior Indebtedness of any cash, property or securities to which
the holders of the Debentures or the Trustee would be entitled
except for the provisions of this Article XVI, and no payment over
pursuant to the provisions of this Article XVI to or for the
benefit of the holders of such Senior Indebtedness by holders of
the Debentures or the Trustee, shall, as between the Company, its
creditors other than holders of Senior Indebtedness of the Company,
and the holders of the Debentures, be deemed to be a payment by the
Company to or on account of such Senior Indebtedness. It is
understood that the provisions of this Article XVI are and are
intended solely for the purposes of defining the relative rights of
the holders of the Debentures, on the one hand, and the holders of
such Senior Indebtedness on the other hand.
(b) Nothing contained in this Article XVI or elsewhere in
this Indenture or in the Debentures is intended to or shall impair,
as between the Company, its creditors (other than the holders of
Senior Indebtedness of the Company), and the holders of the
Debentures, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Debentures the
principal of and interest on the Debentures as and when the same
shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the holders of
the Debentures and creditors of the Company, as the case may be,
other than the holders of Senior Indebtedness of the Company, as
the case may be, nor shall anything herein or therein prevent the
Trustee or the holder of any Debenture from exercising all remedies
otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XVI of
the holders of such Senior Indebtedness in respect of cash,
property or securities of the Company, as the case may be, received
upon the exercise of any such remedy.
(c) Upon any payment or distribution of assets of the Company
referred to in this Article XVI, the Trustee, subject to the
provisions of Article IX, and the holders of the Debentures shall
be entitled to conclusively rely upon any order or decree made by
any court of competent jurisdiction in which such dissolution,
winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy,
liquidation trustee, agent or other Person making such payment or
distribution, delivered to the Trustee or to the holders of the
Debentures, for the purposes of ascertaining the Persons entitled
to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, as the case may
be, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto
or to this Article XVI.
SECTION 16.5. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each holder of Debentures by such holder's acceptance thereof
authorizes and directs the Trustee on such holder's behalf to take
such action as may be necessary or appropriate to effectuate the
subordination provided in this Article XVI and appoints the Trustee
such holder's attorney-in-fact for any and all such purposes.
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SECTION 16.6. NOTICE BY THE COMPANY.
(a) The Company shall give prompt written notice to a
Responsible Officer of the Trustee of any fact known to the Company
that would prohibit the making of any payment of monies to or by
the Trustee in respect of the Debentures pursuant to the provisions
of this Article XVI. Notwithstanding the provisions of this
Article XVI or any other provision of this Indenture, the Trustee
shall not be charged with knowledge of the existence of any facts
that would prohibit the making of any payment of monies to or by
the Trustee in respect of the Debentures pursuant to the provisions
of this Article XVI, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof from the Company
or a holder or holders of Senior Indebtedness or from any trustee
therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 9.1, shall be
entitled in all respects to assume that no such facts exist;
provided, however, that if the Trustee shall not have received the
notice provided for in this Section 16.6 at least two Business Days
prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the
payment of the principal of or interest on any Debenture), then,
anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such money
and to apply the same to the purposes for which they were received,
and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to such date.
(b) The Trustee, subject to the provisions of Section 9.1,
shall be entitled to conclusively rely on the delivery to it of a
written notice by a Person representing himself to be a holder of
Senior Indebtedness of the Company (or a trustee on behalf of such
holder) to establish that such notice has been given by a holder of
such Senior Indebtedness or a trustee on behalf of any such holder
or holders. In the event that the Trustee determines in good faith
that further evidence is required with respect to the right of any
Person as a holder of such Senior Indebtedness to participate in
any payment or distribution pursuant to this Article XVI, the
Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such
Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person under
this Article XVI, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such
payment.
SECTION 16.7. RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR
INDEBTEDNESS.
(a) The Trustee in its individual capacity shall be entitled
to all the rights set forth in this Article XVI in respect of any
Senior Indebtedness at any time held by it, to the same extent as
any other holder of Senior Indebtedness, and nothing in this
Indenture shall deprive the Trustee of any of its rights as such
holder. The Trustee's right to compensation and reimbursement of
expenses as set forth in Section 9.7 shall not be subject to the
subordination provisions of the Article XVI.
(b) With respect to the holders of Senior Indebtedness of the
Company, the Trustee undertakes to perform or to observe only such
of its covenants and obligations as are specifically set forth in
this Article XVI, and no implied covenants or obligations with
respect to the holders of such Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of such Senior
Indebtedness and, subject to the provisions of Section 9.1, the
Trustee shall not be liable to any holder of such Senior
Indebtedness if it shall pay over or deliver to holders of
Debentures, the Company or any other Person money or assets to
which any holder of such Senior Indebtedness shall be entitled by
virtue of this Article XVI or otherwise.
46
<PAGE> 52
SECTION 16.8. SUBORDINATION MAY NOT BE IMPAIRED.
(a) No right of any present or future holder of any Senior
Indebtedness of the Company to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by
any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof
that any such holder may have or otherwise be charged with.
(b) Without in any way limiting the generality of the
foregoing paragraph, the holders of Senior Indebtedness of the
Company may, at any time and from time to time, without the consent
of or notice to the Trustee or the holders of the Debentures,
without incurring responsibility to the holders of the Debentures
and without impairing or releasing the subordination provided in
this Article XVI or the obligations hereunder of the holders of the
Debentures to the holders of such Senior Indebtedness, do any one
or more of the following: (i) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, such
Senior Indebtedness, or otherwise amend or supplement in any manner
such Senior Indebtedness or any instrument evidencing the same or
any agreement under which such Senior Indebtedness is outstanding;
(ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Senior Indebtedness;
(iii) release any Person liable in any manner for the collection of
such Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year
first above written.
1ST SOURCE CORPORATION
By:------------------------------------
Name:----------------------------------
Title:---------------------------------
Attest:
- -------------------------------------
STATE STREET BANK AND TRUST COMPANY,
as trustee
By:------------------------------------
Name:----------------------------------
Title:---------------------------------
Attest:
- -------------------------------------
47
<PAGE> 53
STATE OF INDIANA )
) ss:
COUNTY OF ST. JOSEPH )
On this ------- day of -------------------------------,
199---, before me appeared ------------------------------, to me
personally known, who, being by me duly sworn, did say that he is
the ---------------------------- of 1ST SOURCE CORPORATION, and
that the seal affixed to said instrument is the corporate seal of
said corporation, and that said instrument was signed and sealed in
behalf of said corporation by authority of its board of directors
and said ------------------------------, acknowledged said
instrument to be the free act and deed of said corporation.
In testimony whereof I have hereunto set my hand and affixed
my official seal at my office in said county and state the day and
year last above written.
---------------------------------------
Notary Public
[seal] My term expires:-----------------------
COMMONWEALTH OF MASSACHUSETTS )
) ss:
COUNTY OF SUFFOLK )
On this ------- day of -------------------------------,
199---, before me appeared ------------------------------, to me
personally known, who, being by me duly sworn, did say that he is
the ---------------------------- of STATE STREET BANK AND TRUST
COMPANY, and that the seal affixed to said instrument is the
corporate seal of said corporation, and that said instrument was
signed and sealed in behalf of said corporation by authority of its
board of directors and said ------------------------------,
acknowledged said instrument to be the free act and deed of said
corporation.
In testimony whereof I have hereunto set my hand and affixed
my official seal at my office in said county and state the day and
year last above written.
---------------------------------------
Notary Public
[seal] My term expires:-----------------------
48
<PAGE> 54
EXHIBIT A
(FORM OF FACE OF DEBENTURE)
No.------------------------- $ ----------
CUSIP No. ------------------
1ST SOURCE CORPORATION
----% SUBORDINATED DEBENTURE
DUE MARCH 31, 2027
1st Source Corporation, an Indiana corporation (the "Company,"
which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to
pay to, State Street Bank and Trust Company, as Property Trustee,
or registered assigns, the principal sum of ($----------) on March 31, 2027
(the "Stated Maturity"), and to pay interest on said principal sum from
- ----------, 1997, or from the most recent interest payment date (each such
date, an "Interest Payment Date") to which interest has been paid or duly
provided for, quarterly (subject to deferral as set forth herein)
in arrears on March 31, June 30, September 30 and December 31 of
each year commencing June 30, 1997, at the rate of ----% per annum
until the principal hereof shall have become due and payable, and
on any overdue principal and (without duplication) on any overdue
installment of interest at the same rate per annum compounded
quarterly. The amount of interest payable on any Interest Payment
Date shall be computed on the basis of a 360-day year of twelve
30-day months. The amount of interest for any partial period shall
be computed on the basis of the number of days elapsed in a 360-day
year of twelve 30-day months. In the event that any date on which
interest is payable on this Debenture is not a business day, then
payment of interest payable on such date shall be made on the next
succeeding day that is a business day (and without any interest or
other payment in respect of any such delay) with the same force and
effect as if made on such date. The interest installment so
payable, and punctually paid or duly provided for, on any Interest
Payment Date shall, as provided in the Indenture, be paid to the
person in whose name this Debenture (or one or more Predecessor
Debentures, as defined in said Indenture) is registered at the
close of business on the regular record date for such interest
installment, which shall be the fifteenth day of the last month of
the calendar quarter in which such Interest Payment Date occurs
unless otherwise provided in the Indenture. Any such interest
installment not punctually paid or duly provided for shall
forthwith cease to be payable to the registered holders on such
regular record date and may be paid to the Person in whose name
this Debenture (or one or more Predecessor Debentures) is
registered at the close of business on a special record date to be
fixed by the Trustee for the payment of such defaulted interest,
notice whereof shall be given to the registered holders of the
Debentures not less than 10 days prior to such special record date,
or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which the Debentures may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the
Indenture. The principal of and the interest on this Debenture
shall be payable at the office or agency of the Trustee maintained
for that purpose in any coin or currency of the United States of
America that at the time of
Exhibit A-1
<PAGE> 55
payment is legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of the Company by
check mailed to the registered holder at such address as shall appear in the
Debenture Register. Notwithstanding the foregoing, so long as the
holder of this Debenture is the Property Trustee, the payment of
the principal of and interest on this Debenture shall be made at
such place and to such account as may be designated by the Trustee.
The Stated Maturity may be shortened at any time by the
Company to any date not earlier than March 31, 2002, subject to the
Company having received prior approval of the Federal Reserve if
then required under applicable capital guidelines or policies of
the Federal Reserve. Such date may also be extended at any time at
the election of the Company for one or more periods, but in no
event to a date later than March 31, 2036, subject to certain
limitations described in the Indenture.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of
payment to the prior payment in full of all Senior Indebtedness,
and this Debenture is issued subject to the provisions of the
Indenture with respect thereto. Each holder of this Debenture, by
accepting the same, (a) agrees to and shall be bound by such
provisions; (b) authorizes and directs the Trustee on his or her
behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination so provided; and (c)
appoints the Trustee his or her attorney-in-fact for any and all
such purposes. Each holder hereof, by his or her acceptance
hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by
each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon
said provisions.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory
for any purpose until the Certificate of Authentication hereon
shall have been signed by or on behalf of the Trustee.
The provisions of this Debenture are continued on the reverse
side hereof and such continued provisions shall for all purposes
have the same effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to
be executed.
Dated
1ST SOURCE CORPORATION
By:------------------------------------
Name:----------------------------------
Title:---------------------------------
Attest:
By:----------------------------------
Name:--------------------------------
Title:-------------------------------
Exhibit A-2
<PAGE> 56
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the
within-mentioned Indenture.
Dated:
STATE STREET BANK AND TRUST COMPANY, ---------------------------------
as Trustee or Authentication Agent
By-------------------------------------- By-------------------------------
Authorized Signatory
Exhibit A-3
<PAGE> 57
[FORM OF REVERSE OF DEBENTURE]
----% SUBORDINATED DEBENTURE
(CONTINUED)
This Debenture is one of the subordinated debentures of the
Company (herein sometimes referred to as the "Debentures"),
specified in the Indenture, all issued or to be issued under and
pursuant to an Indenture dated as of ------------- (the
"Indenture") duly executed and delivered between the Company and
State Street Bank and Trust Company, as Trustee (the "Trustee"), to
which Indenture reference is hereby made for a description of the
rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the holders of the
Debentures. The Debentures are limited in aggregate principal
amount as specified in the Indenture.
Because of the occurrence and continuation of a Special Event,
in certain circumstances, this Debenture may become due and payable
at the principal amount together with any interest accrued thereon
(the "Redemption Price"). The Redemption Price shall be paid prior
to 12:00 noon, Eastern Standard Time, time, on the date of such
redemption or at such earlier time as the Company determines. The
Company shall have the right to redeem this Debenture at the option
of the Company, without premium or penalty, in whole or in part at
any time on or after March 31, 2002 (an "Optional Redemption"), or
at any time in certain circumstances upon the occurrence of a
Special Event, at a Redemption Price equal to 100% of the principal
amount plus any accrued but unpaid interest, to the date of such
redemption. Any redemption pursuant to this paragraph shall be
made upon not less than 30 days nor more than 60 days notice, at
the Redemption Price. If the Debentures are only partially
redeemed by the Company pursuant to an Optional Redemption, the
Debentures shall be redeemed pro rata or by lot or by any other
method utilized by the Trustee.
In the event of redemption of this Debenture in part only, a
new Debenture or Debentures for the unredeemed portion hereof shall
be issued in the name of the holder hereof upon the cancellation
hereof.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of the
Debentures may be declared, and upon such declaration shall become,
due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a
majority in aggregate principal amount of the Debentures at the
time outstanding, as defined in the Indenture, to execute
supplemental indentures for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or of modifying in
any manner the rights of the holders of the Debentures; provided,
however, that no such supplemental indenture shall (i) extend the
fixed maturity of the Debentures except as provided in the
Indenture, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, without the
consent of the holder of each Debenture so affected; or (ii) reduce
the aforesaid percentage of Debentures, the holders of which are
required to consent to any such supplemental indenture, without the
consent of the holders of each Debenture then outstanding and
affected thereby. The Indenture also contains provisions
permitting the holders of a majority in aggregate principal amount
of the Debentures at the time outstanding, on behalf of all of the
holders of the Debentures, to waive any past default in the
performance of any of the covenants contained in the Indenture, or
established pursuant to the Indenture, and its consequences,
Exhibit A-4
<PAGE> 58
except a default in the payment of the principal of or interest on any of
the Debentures. Any such consent or waiver by the registered
holder of this Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such holder and
upon all future holders and owners of this Debenture and of any
Debenture issued in exchange herefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or
not any notation of such consent or waiver is made upon this
Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the
principal and interest on this Debenture at the time and place and
at the rate and in the money herein prescribed.
The Company shall have the right at any time during the term
of the Debentures and from time to time to extend the interest
payment period of such Debentures for up to 20 consecutive quarters
(each, an "Extended Interest Payment Period"), at the end of which
period the Company shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the
Debentures to the extent that payment of such interest is
enforceable under applicable law). Before the termination of any
such Extended Interest Payment Period, the Company may further
extend such Extended Interest Payment Period, provided that such
Extended Interest Payment Period together with all such further
extensions thereof shall not exceed 20 consecutive quarters. At
the termination of any such Extended Interest Payment Period and
upon the payment of all accrued and unpaid interest and any
additional amounts then due, the Company may commence a new
Extended Interest Payment Period.
As provided in the Indenture and subject to certain
limitations therein set forth, this Debenture is transferable by
the registered holder hereof on the Debenture Register of the
Company, upon surrender of this Debenture for registration of
transfer at the office or agency of the Trustee accompanied by a
written instrument or instruments of transfer in form satisfactory
to the Company or the Trustee duly executed by the registered
holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Debentures of authorized denominations
and for the same aggregate principal amount shall be issued to the
designated transferee or transferees. No service charge shall be
made for any such transfer, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge
payable in relation thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and the
Debenture Registrar may deem and treat the registered holder hereof
as the absolute owner hereof (whether or not this Debenture shall
be overdue and notwithstanding any notice of ownership or writing
hereon made by anyone other than the Debenture Registrar) for the
purpose of receiving payment of or on account of the principal
hereof and interest due hereon and for all other purposes, and
neither the Company nor the Trustee nor any paying agent nor any
Debentures Registrar shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal of
or the interest on this Debenture, or for any claim based hereon,
or otherwise in respect hereof, or based on or in respect of the
Indenture, against any incorporator, stockholder, officer or
director, past, present or future, as such, of the Company or of
any predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by
the acceptance hereof and as part of the consideration for the
issuance hereof, expressly waived and released.
Exhibit A-5
<PAGE> 59
The Debentures are issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof.
All terms used in this Debenture that are defined in the
Indenture shall have the meanings assigned to them in the
Indenture.
Exhibit A-6
<PAGE> 1
RESTATED CERTIFICATE OF TRUST OF
1ST SOURCE CAPITAL TRUST
THIS Restated Certificate of Trust of 1st Source Capital Trust
(the "Trust"), dated February 27, 1997 is being duly executed and
filed by Wilmington Trust Company, a Delaware banking corporation,
as trustee, to restate the original Certificate of Trust which was
filed on February 20, 1997 with the Secretary of State of the State
of Delaware under the Delaware Business Trust Act (12 Del. C.
-------
Section 3801 et seq.).
-- ---
The Certificate of Trust is hereby restated in its entirety to
read as follows:
1. Name. The name of the business trust formed hereby is 1st
----
Source Capital Trust I.
2. Delaware Trustee. The name and business address of the
----------------
trustee of the Trust in the State of Delaware is Wilmington Trust
Company, Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890-0001, Attn: Corporate Trust Administration.
3. Effective Date. This Restated Certificate of Trust shall
--------------
be effective upon filing with the Secretary of State.
IN WITNESS WHEREOF, the undersigned, being a trustee of the
Trust, has executed this Restated Certificate of Trust as of the
date first above written.
WILMINGTON TRUST COMPANY,
as trustee
By: /s/
--------------------------------------
Name:
Title:
<PAGE> 1
AMENDED AND RESTATED TRUST AGREEMENT
This AMENDED AND RESTATED TRUST AGREEMENT, dated as of
February 27, 1997 (this "Trust Agreement"), among (i) 1st Source
Corporation, an Indiana corporation (the "Depositor"), (ii) Wilmington
Trust Company, a Delaware banking corporation, as trustee, and
(iii) Christopher J. Murphy III, Wellington D. Jones III and
Larry E. Lentych, each an individual, as trustees (each of such
trustees in (ii) and (iii) a "Trustee" and collectively, the "Trustees").
The Depositor and the Trustees hereby agree as follows:
1. The trust created hereby (the "Trust") shall be known as
"1st Source Capital Trust I" in which name the Trustees, or the
Depositor to the extent provided herein, may engage in the
transactions contemplated hereby, make and execute contracts, and
sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets
over the Trustees the sum of $10.00. The Trustees hereby
acknowledge receipt of such amount in trust from the Depositor,
which amount shall constitute the initial trust estate. The
Trustees hereby declare that they will hold the trust estate in
trust for the Depositor. It is the intention of the parties hereto
that the Trust created hereby constitute a business trust under
Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. Section
3801, et seq. (the "Business Trust Act"), and that this document
constitutes the governing instrument of the Trust. The Trustees
are hereby authorized and directed to execute and file a
certificate of trust with the Delaware Secretary of State in
accordance with the provisions of the Business Trust Act.
3. The Depositor and the Trustees will enter into an amended
and restated Trust Agreement, satisfactory to each such party and
substantially in the form included as an exhibit to the 1933 Act
Registration Statement (as defined below), to provide for the
contemplated operation of the Trust created hereby and the issuance
of the Preferred Securities and Common Securities referred to
therein. Prior to the execution and delivery of such amended and
restated Trust Agreement, the Trustees shall not have any duty or
obligation hereunder or with respect to the trust estate, except as
otherwise required by applicable law or as may be necessary to
obtain prior to such execution and delivery of any licenses,
consents or approvals required by applicable law or otherwise.
4. The Depositor and the Trustees hereby authorize and
direct the Depositor, as the sponsor of the Trust, (i) to file with
the Securities and Exchange Commission (the "Commission") and
execute, in each case on behalf of the Trust, (a) the Registration
Statement on Form S-3 (the "1933 Act Registration Statement"),
including any pre-effective or post-effective amendments to the
1933 Act Registration Statement, relating to the registration under
the Securities Act of 1933, as amended, of the Preferred Securities
of the Trust and possibly certain other securities and (b) a
Registration Statement on Form 8-A (the "1934 Act Registration
Statement") (including all pre-effective and post-effective
amendments thereto) relating to the registration of the Preferred
Securities of the Trust under the Securities Exchange Act of 1934,
as amended; (ii) to file with The Nasdaq Stock Market's National
Market or a national stock exchange (each, an "Exchange") and
execute on behalf of the Trust one or more listing applications and
all other applications, statements, certificates, agreements and
other instruments as shall be necessary or desirable to cause the
Preferred Securities to be listed on any of the Exchanges; (iii) to
file and execute on behalf of the Trust such applications, reports,
surety bonds, irrevocable consents, appointments of attorney for
service of process and other papers and documents as shall be
necessary or desirable to register the Preferred Securities under
the securities or blue sky laws of such jurisdictions as the
Depositor, on behalf of the Trust, may deem necessary or desirable;
and (iv) to execute on behalf of the Trust that certain
Underwriting Agreement relating to the Preferred Securities, among
the Trust, the Depositor and the several Underwriters named
therein, substantially in
<PAGE> 2
the form included as an exhibit to the 1933 Act Registration
Statement. In the event that any filing referred to in clauses (i),
(ii) and (iii) above is required by the rules and regulations of the
Commission, an Exchange or state securities or blue sky laws, to be
executed on behalf of the Trust by one or more of the Trustees, each
of the Trustees, in its or his capacity as a Trustee of the Trust, is
hereby authorized and, to the extent so required, directed to join in
any such filing and to execute on behalf of the Trust any and all of
the foregoing, it being understood that Wilmington Trust Company in
its capacity as a Trustee of the Trust shall not be required to join
in any such filing or execute on behalf of the Trust any such document
unless required by the rules and regulations of the Commission, the
Exchange or state securities or blue sky laws. In connection with
the filings referred to above, the Depositor and Christopher J.
Murphy III, Wellington D. Jones III and Larry E. Lentych, each as
Trustees and not in their individual capacities, hereby constitutes
and appoints Christopher J. Murphy III, Wellington D. Jones III and
Larry E. Lentych, and each of them, as its true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for the Depositor or such Trustee or in the
Depositor's or such Trustees' name, place and stead, in any and all
capacities, to sign any and all amendments (including post-
effective amendments) to the 1933 Act Registration Statement and
the 1934 Act Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with
the Commission, the Exchange and administrators of the state
securities or blue sky laws, granting unto said attorneys-in-fact
and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as the
Depositor or such Trustee might or could to in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents
or any of them, or their respective substitute or substitutes,
shall do or cause to be done by virtue hereof.
5. This Trust Agreement may be executed in one or more
counterparts.
6. The number of Trustees initially shall be four and
thereafter the number of Trustees shall be such number as shall be
fixed from time to time by a written instrument signed by the
Depositor which may increase or decrease the number of Trustees;
provided, however, that to the extent required by the Business
Trust Act, one Trustee shall either be a natural person who is a
resident of the State of Delaware or, if not a natural person, an
entity which has its principal place of business in the State of
Delaware and otherwise meets the requirements of applicable
Delaware law. Subject to the foregoing, the Depositor is entitled
to appoint or remove without cause any Trustee at any time. The
Trustees may resign upon 30 days' prior notice to the Depositor.
7. This Trust Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware (without
regard to conflict of laws of principles).
[Signatures On Next Page]
2
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed as of the day and year first above
written.
1ST SOURCE CORPORATION
as Depositor
By: /s/ Christopher J. Murphy III
-----------------------------------------
Christopher J. Murphy III
President and Chief Executive Officer
WILMINGTON TRUST COMPANY
as Trustee
By: /s/
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
/s/ Christopher J. Murphy III
---------------------------------------------
Christopher J. Murphy III
as Trustee
/s/ Wellington D. Jones III
---------------------------------------------
Wellington D. Jones III
as Trustee
/s/ Larry E. Lentych
---------------------------------------------
Larry E. Lentych
as Trustee
3
<PAGE> 1
==============================================================================
1ST SOURCE CAPITAL TRUST I
AMENDED AND RESTATED
TRUST AGREEMENT
AMONG
1ST SOURCE CORPORATION, AS DEPOSITOR
STATE STREET BANK AND TRUST COMPANY, AS PROPERTY TRUSTEE
WILMINGTON TRUST COMPANY, AS DELAWARE TRUSTEE,
AND
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
DATED AS OF -------------, 1997
==============================================================================
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<CAPTION>
PAGE
<S> <C>
ARTICLE I - DEFINED TERMS. . . . . . . . . . . . . . . . . . 1
Section 101. Definitions . . . . . . . . . . . . . . . . 1
ARTICLE II - ESTABLISHMENT OF THE TRUST. . . . . . . . . . . 8
Section 201. Name. . . . . . . . . . . . . . . . . . . . 8
Section 202. Office of the Delaware Trustee; Principal
Place of Business . . . . . . . . . . . . . . . . 8
Section 203. Initial Contribution of Trust Property;
Organizational Expenses. . . . . . . . . . . . . . 9
Section 204. Issuance of the Preferred Securities. . . . 9
Section 205. Issuance of the Common Securities;
Subscription and Purchase of Debentures. . . . . . 9
Section 206. Declaration of Trust. . . . . . . . . . . . 10
Section 207. Authorization to Enter into Certain
Transactions . . . . . . . . . . . . . . . . . . . 10
Section 208. Assets of Trust . . . . . . . . . . . . . . 13
Section 209. Title to Trust Property . . . . . . . . . . 13
ARTICLE III - PAYMENT ACCOUNT. . . . . . . . . . . . . . . . 13
Section 301. Payment Account . . . . . . . . . . . . . . 13
ARTICLE IV - DISTRIBUTIONS; REDEMPTION . . . . . . . . . . . 14
Section 401. Distributions . . . . . . . . . . . . . . . 14
Section 402. Redemption. . . . . . . . . . . . . . . . . 14
Section 403. Subordination of Common Securities. . . . . 16
Section 404. Payment Procedures. . . . . . . . . . . . . 16
Section 405. Tax Returns and Reports . . . . . . . . . . 17
Section 406. Payment of Taxes, Duties, etc. of the
Trust. . . . . . . . . . . . . . . . . . . . . . . 17
Section 407. Payments Under Indenture. . . . . . . . . . 17
ARTICLE V - TRUST SECURITIES CERTIFICATES. . . . . . . . . . 17
Section 501. Initial Ownership . . . . . . . . . . . . . 17
Section 502. The Trust Securities Certificates . . . . . 17
Section 503. Execution, Authentication and Delivery of
Trust Securities Certificates. . . . . . . . . . . 18
Section 504. Registration of Transfer and Exchange of
Preferred Securities Certificates. . . . . . . . . 18
Section 505. Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates. . . . . . . . . . . . . . 19
Section 506. Persons Deemed Securityholders. . . . . . . 19
Section 507. Access to List of Securityholders' Names
and Addresses. . . . . . . . . . . . . . . . . . . 19
Section 508. Maintenance of Office or Agency . . . . . . 20
Section 509. Appointment of Paying Agent . . . . . . . . 20
Section 510. Ownership of Common Securities by
Depositor. . . . . . . . . . . . . . . . . . . . . 21
Section 511. Preferred Securities Certificates . . . . . 21
Section 512. [Intentionally Omitted] . . . . . . . . . . 21
Section 513. [Intentionally Omitted] . . . . . . . . . . 21
Section 514. Rights of Securityholders . . . . . . . . . 21
i
<PAGE> 3
ARTICLE VI - ACTS OF SECURITYHOLDERS; MEETINGS; VOTING . . . 22
Section 601. Limitations on Voting Rights. . . . . . . . 22
Section 602. Notice of Meetings. . . . . . . . . . . . . 23
Section 603. Meetings of Preferred Securityholders . . . 23
Section 604. Voting Rights . . . . . . . . . . . . . . . 23
Section 605. Proxies, etc. . . . . . . . . . . . . . . . 23
Section 606. Securityholder Action by Written Consent. . 24
Section 607. Record Date for Voting and Other
Purposes . . . . . . . . . . . . . . . . . . . . . 24
Section 608. Acts of Securityholders . . . . . . . . . . 24
Section 609. Inspection of Records . . . . . . . . . . . 25
ARTICLE VII - REPRESENTATIONS AND WARRANTIES . . . . . . . . 25
Section 701. Representations and Warranties of the Bank
and the Property Trustee . . . . . . . . . . . . . 25
Section 702. Representations and Warranties of the
Delaware Bank and the Delaware Trustee . . . . . . 26
Section 703. Representations and Warranties of
Depositor. . . . . . . . . . . . . . . . . . . . . 27
ARTICLE VIII - TRUSTEES. . . . . . . . . . . . . . . . . . . 28
Section 801. Certain Duties and Responsibilities . . . . 28
Section 802. Certain Notices . . . . . . . . . . . . . . 29
Section 803. Certain Rights of Property Trustee. . . . . 29
Section 804. Not Responsible for Recitals or Issuance
of Securities. . . . . . . . . . . . . . . . . . . 31
Section 805. May Hold Securities . . . . . . . . . . . . 31
Section 806. Compensation; Indemnity; Fees . . . . . . . 31
Section 807. Corporate Property Trustee Required;
Eligibility of Trustees. . . . . . . . . . . . . . 32
Section 808. Conflicting Interests . . . . . . . . . . . 32
Section 809. Co-Trustees and Separate Trustee. . . . . . 32
Section 810. Resignation and Removal; Appointment of
Successor. . . . . . . . . . . . . . . . . . . . . 34
Section 811. Acceptance of Appointment by Successor. . . 35
Section 812. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . . . . . 35
Section 813. Preferential Collection of Claims Against
Depositor or Trust . . . . . . . . . . . . . . . . 36
Section 814. Reports by Property Trustee . . . . . . . . 36
Section 815. Reports to the Property Trustee . . . . . . 36
Section 816. Evidence of Compliance with Conditions
Precedent. . . . . . . . . . . . . . . . . . . . . 36
Section 817. Number of Trustees. . . . . . . . . . . . . 37
Section 818. Delegation of Power . . . . . . . . . . . . 37
Section 819. Voting. . . . . . . . . . . . . . . . . . . 37
ARTICLE IX - TERMINATION, LIQUIDATION AND MERGER . . . . . . 37
Section 901. Termination Upon Expiration Date. . . . . . 37
Section 902. Early Termination . . . . . . . . . . . . . 38
Section 903. Termination . . . . . . . . . . . . . . . . 38
Section 904. Liquidation . . . . . . . . . . . . . . . . 38
Section 905. Mergers, Consolidations, Amalgamations or
Replacements of the Trust. . . . . . . . . . . . . 39
ARTICLE X - MISCELLANEOUS PROVISIONS . . . . . . . . . . . . 40
Section 1001. Limitation of Rights of Securityholders. . 40
Section 1002. Amendment. . . . . . . . . . . . . . . . . 40
ii
<PAGE> 4
Section 1003. Separability . . . . . . . . . . . . . . . 42
Section 1004. Governing law. . . . . . . . . . . . . . . 42
Section 1005. Payments Due on Non-Business Day . . . . . 42
Section 1006. Successors . . . . . . . . . . . . . . . . 42
Section 1007. Headings . . . . . . . . . . . . . . . . . 42
Section 1008. Reports, Notices and Demands . . . . . . . 42
Section 1009. Agreement Not to Petition. . . . . . . . . 43
Section 1010. Trust Indenture Act; Conflict with Trust
Indenture Act. . . . . . . . . . . . . . . . . . . 43
Section 1011. Acceptance of Terms of Trust Agreement,
Guarantee and Indenture. . . . . . . . . . . . . . 44
Exhibit A Certificate of Trust
Exhibit B [Intentionally Omitted]
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Expense Agreement
Exhibit E Form of Preferred Securities Certificate
</TABLE>
iii
<PAGE> 5
<TABLE>
CROSS-REFERENCE TABLE
<CAPTION>
Section of Section of
Trust Indenture Act Amended and Restated
of 1939, as amended Trust Agreement
- ------------------- ---------------
<S> <C>
310(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . .807
310(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . .807
310(a)(3). . . . . . . . . . . . . . . . . . . . . . . . . . .807
310(a)(4). . . . . . . . . . . . . . . . . . . . . . . 207(a)(ii)
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . .808
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . .813
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . .813
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . .507
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . .507
312(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . .507
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 814(a)
313(a)(4). . . . . . . . . . . . . . . . . . . . . . . . . 814(b)
313(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 814(b)
313(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1008
313(d) . . . . . . . . . . . . . . . . . . . . . . . . . . 814(c)
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . .815
314(b) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
314(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . . .816
314(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . . .816
314(c)(3). . . . . . . . . . . . . . . . . . . . . Not Applicable
314(d) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
314(e) 101, 816
315(a) . . . . . . . . . . . . . . . . . . . . . . 801(a), 803(a)
315(b) . . . . . . . . . . . . . . . . . . . . . . . . .802, 1008
315(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 801(a)
315(d) . . . . . . . . . . . . . . . . . . . . . . . . . 801, 803
316(a)(2). . . . . . . . . . . . . . . . . . . . . Not Applicable
316(b) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
316(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . .607
317(a)(1). . . . . . . . . . . . . . . . . . . . . Not Applicable
317(a)(2). . . . . . . . . . . . . . . . . . . . . Not Applicable
317(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . .509
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1010
</TABLE>
Note: This Cross-Reference Table does not constitute part of
this Agreement and should not affect the interpretation
of any of its terms or provisions.
iv
<PAGE> 6
AMENDED AND RESTATED TRUST AGREEMENT
AMENDED AND RESTATED TRUST AGREEMENT, dated as of
- ----------------, 1997 among (i) 1ST SOURCE CORPORATION, an Indiana
corporation (including any successors or assigns, the "Depositor"),
(ii) STATE STREET BANK AND TRUST COMPANY, a trust company duly
organized and existing under the laws of the Commonwealth of
Massachusetts, as property trustee (the "Property Trustee" and, in
its separate corporate capacity and not in its capacity as Property
Trustee, the "Bank"), (iii) WILMINGTON TRUST COMPANY, a Delaware
banking corporation duly organized and existing under the laws of
the State of Delaware, as Delaware trustee (the "Delaware Trustee,"
and, in its separate corporate capacity and not in its capacity as
Delaware Trustee, the "Delaware Bank") (iv) Christopher J. Murphy
III, an individual, Wellington D. Jones III, an individual, and
Larry E. Lentych, an individual, each of whose address is c/o 1st
Source Corporation, 100 North Michigan Street, South Bend, Indiana
46601 (each an "Administrative Trustee" and collectively the
"Administrative Trustees") (the Property Trustee, the Delaware
Trustee and the Administrative Trustees referred to collectively as
the "Trustees"), and (v) the several Holders (as hereinafter
defined).
RECITALS
WHEREAS, the Depositor, the Delaware Trustee, and Christopher
J. Murphy III, Wellington D. Jones III and Larry E. Lentych, each
as an Administrative Trustee, have heretofore duly declared and
established a business trust pursuant to the Delaware Business
Trust Act by the entering into of that certain Trust Agreement,
dated as of February 20, 1997 (the "Original Trust Agreement"), and
by the execution and filing by the Delaware Trustee, the Depositor
and the Administrative Trustees with the Secretary of State of the
State of Delaware of the Certificate of Trust, filed on February
20, 1997, the form of which is attached as Exhibit A; and
WHEREAS, the Depositor, the Delaware Trustee, the Property
Trustee and the Administrative Trustees desire to amend and restate
the Original Trust Agreement in its entirety as set forth herein to
provide for, among other things, (i) the issuance of the Common
Securities (as defined herein) by the Trust (as defined herein) to
the Depositor; (ii) the issuance and sale of the Preferred
Securities (as defined herein) by the Trust pursuant to the
Underwriting Agreement (as defined herein); (iii) the acquisition
by the Trust from the Depositor of all of the right, title and
interest in the Debentures (as defined herein); and (iv) the
appointment of the Trustees;
NOW THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, each party, for the benefit of the other parties and
for the benefit of the Securityholders (as defined herein), hereby
amends and restates the Original Trust Agreement in its entirety
and agrees as follows:
ARTICLE I
DEFINED TERMS
SECTION 101. DEFINITIONS.
For all purposes of this Trust Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
<PAGE> 7
(a) the terms defined in this Article I have the meanings
assigned to them in this Article I and include the plural as well
as the singular;
(b) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) unless the context otherwise requires, any reference to
an "Article" or a "Section" refers to an Article or a Section, as
the case may be, of this Trust Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Trust Agreement as a whole
and not to any particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 608.
"Additional Amount" means, with respect to Trust Securities of
a given Liquidation Amount and/or a given period, the amount of
additional interest accrued on interest in arrears and paid by the
Depositor on a Like Amount of Debentures for such period.
"Additional Interest" has the meaning specified in Section 1.1
of the Indenture.
"Administrative Trustee" means each of Christopher J. Murphy
III, Wellington D. Jones III and Larry E. Lentych, solely in his
capacity as Administrative Trustee of the Trust formed and
continued hereunder and not in his individual capacity, or such
Administrative Trustee's successor in interest in such capacity, or
any successor trustee appointed as herein provided.
"Affiliate" means, with respect to a specified Person, (a) any
Person directly or indirectly owning, controlling or holding with
power to vote 10% or more of the outstanding voting securities or
other ownership interests of the specified Person, any Person 10%
or more of whose outstanding voting securities or other ownership
interests are directly or indirectly owned, controlled or held with
power to vote by the specified Person; (c) any Person directly or
indirectly controlling, controlled by, or under common control with
the specified Person; (d) a partnership in which the specified
Person is a general partner; (e) any officer or director of the
specified Person; and (f) if the specified Person is an individual,
any entity of which the specified Person is an officer, director or
general partner.
"Authenticating Agent" means an authenticating agent with
respect to the Preferred Securities appointed by the Property
Trustee pursuant to Section 503.
"Bank" has the meaning specified in the Preamble to this Trust
Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having
jurisdiction in the premises adjudging such Person a bankrupt or
insolvent, or approving as properly filed a petition seeking
liquidation or reorganization of or in respect of such Person under
the United States Bankruptcy Code of 1978, as amended, or any other
similar applicable federal or state law, and the continuance of any
such decree or order unvacated and unstayed for a period of
90 days; or the commencement of an involuntary case under the
United States Bankruptcy Code of 1978, as amended, in respect of
such Person, which shall continue undismissed for a period of
90 days or entry of an order for relief in such case; or the entry
of a decree
2
<PAGE> 8
or order of a court having jurisdiction in the premises for the
appointment on the ground of insolvency or bankruptcy of a receiver,
custodian, liquidator, trustee or assignee in bankruptcy or
insolvency of such Person or of its property, or for the winding up
or liquidation of its affairs, and such decree or order shall have
remained in force unvacated and unstayed for a period of 90 days; or
(b) the institution by such Person of proceedings to be
adjudicated a voluntary bankrupt, or the consent by such Person to
the filing of a bankruptcy proceeding against it, or the filing by
such Person of a petition or answer or consent seeking liquidation
or reorganization under the United States Bankruptcy Code of 1978,
as amended, or other similar applicable Federal or State law, or
the consent by such Person to the filing of any such petition or to
the appointment on the ground of insolvency or bankruptcy of a
receiver or custodian or liquidator or trustee or assignee in
bankruptcy or insolvency of such Person or of its property, or
shall make a general assignment for the benefit of creditors.
"Bankruptcy Laws" has the meaning specified in Section 1009.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Depositor to have
been duly adopted by the Depositor's Board of Directors, or such
committee of the Board of Directors or officers of the Depositor to
which authority to act on behalf of the Board of Directors has been
delegated, and to be in full force and effect on the date of such
certification, and delivered to the appropriate Trustee.
"Business Day" means a day other than a Saturday or Sunday, a
day on which banking institutions in The City of New York are
authorized or required by law, executive order or regulation to
remain closed, or a day on which the Property Trustee's Corporate
Trust Office or the Corporate Trust Office of the Debenture Trustee
is closed for business.
"Certificate of Trust" means the certificate of trust filed
with the Secretary of State of the State of Delaware with respect
to the Trust, as amended or restated from time to time.
"Closing Date" means the date of execution and delivery of
this Trust Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or,
if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned
to it under the Trust Indenture Act, then the body performing such
duties at such time.
"Common Security" means an undivided beneficial interest in
the assets of the Trust, having a Liquidation Amount of $25 and
having the rights provided therefor in this Trust Agreement,
including the right to receive Distributions and a Liquidation
Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached
as Exhibit C.
"Corporate Trust Office" means the office at which, at any
particular time, the corporate trust business of the Property
Trustee or the Debenture Trustee, as the case may be, shall be
principally
3
<PAGE> 9
administered, which office at the date hereof, in each such case, is
located at Two International Place, 4th Floor, Boston, Massachusetts
02110, Attention: Corporate Trust Department.
"Debenture Event of Default" means an "Event of Default" as
defined in Section 7.1 of the Indenture.
"Debenture Redemption Date" means, with respect to any
Debentures to be redeemed under the Indenture, the date fixed for
redemption under the Indenture.
"Debenture Trustee" means State Street Bank and Trust Company,
a banking corporation organized under the laws of the Commonwealth
of Massachusetts and any successor thereto, as trustee under the
Indenture.
"Debentures" means the $---------- aggregate principal amount
of the Depositor's ----% Subordinated Debentures due 2027, issued
pursuant to the Indenture.
"Definitive Preferred Securities Certificates" means the
Preferred Securities Certificates issued in certificated, fully
registered form as provided in Section 513.
"Delaware Bank" has the meaning specified in the Preamble to
this Trust Agreement.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of
the Delaware Code, 12 Delaware Code Sections 3801 et seq. as it may
be amended from time to time.
"Delaware Trustee" means the commercial bank or trust company
identified as the "Delaware Trustee" in the Preamble to this Trust
Agreement solely in its capacity as Delaware Trustee of the Trust
formed and continued hereunder and not in its individual capacity,
or its successor in interest in such capacity, or any successor
trustee appointed as herein provided.
"Depositor" has the meaning specified in the Preamble to this
Trust Agreement.
"Distribution Date" has the meaning specified in
Section 401(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 401.
"Event of Default" means any one of the following events
(whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental
body):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Trust or the Property Trustee in the
payment of any Distribution when it becomes due and payable, and
continuation of such default for a period of 30 days; or
(c) default by the Trust or the Property Trustee in the
payment of any Redemption Price of any Trust Security when it
becomes due and payable; or
4
<PAGE> 10
(d) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Trustees in this Trust
Agreement (other than a covenant or warranty a default in the
performance of which or the breach of which is dealt with in clause
(b) or (c), above) and continuation of such default or breach for
a period of 60 days after there has been given, by registered or
certified mail, to the defaulting Trustee or Trustees by the
Holders of at least 25% in aggregate liquidation preference of the
Outstanding Preferred Securities a written notice specifying such
default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the
Property Trustee and the failure by the Depositor to appoint a
successor Property Trustee within 60 days thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Expense Agreement" means the Agreement as to Expenses and
Liabilities between the Depositor and the Trust, substantially in
the form attached as Exhibit D, as amended from time to time.
"Expiration Date" has the meaning specified in Section 901.
"Extended Interest Payment Period" has the meaning specified
in Section 4.1 of the Indenture.
"Guarantee" means the Preferred Securities Guarantee Agreement
executed and delivered by the Depositor and State Street Bank and
Trust Company, as trustee, contemporaneously with the execution and
delivery of this Trust Agreement, for the benefit of the holders of
the Preferred Securities, as amended from time to time.
"Indenture" means the Indenture, dated as of -------------,
1997, between the Depositor and the Debenture Trustee, as trustee,
as amended or supplemented from time to time pertaining to the
- ----% Subordinated Debentures due 2027 of the Depositor.
"Investment Company Act," means the Investment Company Act of
1940, as amended, as in effect at the date of execution of this
instrument.
"Lien" means any lien, pledge, charge, encumbrance, mortgage,
deed of trust, adverse ownership interest, hypothecation,
assignment, security interest or preference, priority or other
security agreement or preferential arrangement of any kind or
nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to
the principal amount of Debentures to be contemporaneously redeemed
in accordance with the Indenture and the proceeds of which shall be
used to pay the Redemption Price of such Trust Securities; and
(b) with respect to a distribution of Debentures to Holders of
Trust Securities in connection with a termination or liquidation of
the Trust, Debentures having a principal amount equal to the
Liquidation Amount of the Trust Securities of the Holder to whom
such Debentures are distributed. Each Debenture distributed
pursuant to clause (b) above shall carry with it accumulated
interest in an amount equal to the accumulated and unpaid interest
then due on such Debentures.
"Liquidation Amount" means the stated amount of $25 per Trust
Security.
5
<PAGE> 11
"Liquidation Date" means the date on which Debentures are to
be distributed to Holders of Trust Securities in connection with a
termination and liquidation of the Trust pursuant to
Section 904(a).
"Liquidation Distribution" has the meaning specified in
Section 904(d).
"Officers' Certificate" means a certificate signed by the
President or a Vice President and by the Treasurer or an Assistant
Treasurer or the Controller or an Assistant Controller or the
Secretary or an Assistant Secretary, of the Depositor, and
delivered to the appropriate Trustee. One of the officers signing
an Officers' Certificate given pursuant to Section 816 shall be the
principal executive, financial or accounting officer of the
Depositor. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Trust
Agreement shall include:
(a) a statement that each officer signing the Officers'
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 Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as
to whether or not such covenant or condition has been complied
with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means an opinion in writing of legal
counsel, who may be counsel for the Trust, the Property Trustee,
the Delaware Trustee or the Depositor, but not an employee of any
thereof, and who shall be reasonably acceptable to the Property
Trustee.
"Original Trust Agreement" has the meaning specified in the
Recitals to this Trust Agreement.
"Outstanding", when used with respect to Preferred Securities,
means, as of the date of determination, all Preferred Securities
theretofore executed and delivered under this Trust Agreement,
except:
(a) Preferred securities theretofore canceled by the Property
Trustee or delivered to the Property Trustee for cancellation;
(b) Preferred Securities for whose payment or redemption
money in the necessary amount has been theretofore deposited with
the Property Trustee or any Paying Agent for the Holders of such
Preferred Securities; provided that, if such Preferred Securities
are to be redeemed, notice of such redemption has been duly given
pursuant to this Trust Agreement; and
(c) Preferred Securities which have been paid or in exchange
for or in lieu of which other Preferred Securities have been
executed and delivered pursuant to Sections 504, 505, 511 and 513;
provided, however, that in determining whether the Holders of the
requisite Liquidation Amount of the Outstanding Preferred Securities
have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Preferred Securities owned by the
Depositor, any Trustee or any Affiliate of the
6
<PAGE> 12
Depositor or any Trustee shall be disregarded and deemed not to
be Outstanding, except that (a) in determining whether any Trustee
shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Preferred
Securities that such Trustee knows to be so owned shall be so
disregarded; and (b) the foregoing shall not apply at any time when
all of the outstanding Preferred Securities are owned by the
Depositor, one or more of the Trustees and/or any such Affiliate.
Preferred Securities so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Administrative Trustees the pledgee's right so
to the Depositor or any Affiliate of the Depositor.
"Paying Agent" means any paying agent or co-paying agent
appointed pursuant to Section 509 and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing
corporate trust account maintained by the Property Trustee with the
Bank in its trust department for the benefit of the Securityholders
in which all amounts paid in respect of the Debentures shall be
held and from which the Property Trustee shall make payments to the
Securityholders in accordance with Sections 401 and 402.
"Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company or corporation,
unincorporated organization or government or any agency or
political subdivision thereof.
"Preferred Security" means an undivided beneficial interest in
the assets of the Trust, having a Liquidation Amount of $25 and
having the rights provided therefor in this Trust Agreement,
including the right to receive Distributions and a Liquidation
Distribution as provided herein.
"Preferred Securities Certificate", means a certificate
evidencing ownership of Preferred Securities, substantially in the
form attached as Exhibit E.
"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee," in the Preamble to this Trust
Agreement solely in its capacity as Property Trustee of the Trust
heretofore formed and continued hereunder and not in its individual
capacity, or its successor in interest in such capacity, or any
successor property trustee appointed as herein provided.
"Redemption Date" means, with respect to any Trust Security to
be redeemed, the date fixed for such redemption by or pursuant to
this Trust Agreement; provided that each Debenture Redemption Date
and the stated maturity of the Debentures shall be a Redemption
Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Trust Security,
the Liquidation Amount of such Trust Security, plus accumulated and
unpaid Distributions to the Redemption Date, paid by the Depositor
upon the concurrent redemption of a Like Amount of Debentures,
allocated on a pro rata basis (based on Liquidation Amounts) among
the Trust Securities.
"Relevant Trustee" shall have the meaning specified in
Section 810.
"Securities Register" and "Securities Registrar" have the
respective meanings specified in Section 504.
7
<PAGE> 13
"Securityholder" or "Holder" means a Person in whose name a
Trust Security or Securities is registered in the Securities
Register; any such Person is a beneficial owner within the meaning
of the Delaware Business Trust Act.
"Trust" means the Delaware business trust created and
continued hereby and identified on the cover page to this Trust
Agreement.
"Trust Agreement" means this Amended and Restated Trust
Agreement, as the same may be modified, amended or supplemented in
accordance with the applicable provisions hereof, including all
exhibits hereto, including, for all purposes of this Trust
Agreement and any such modification, amendment or supplement, the
provisions of the Trust Indenture Act that are deemed to be a part
of and govern this Trust Agreement and any such modification,
amendment or supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended, as in force at the date as of which this instrument was
executed; provided, however, that in the event the Trust Indenture
Act of 1939, as amended, is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Debentures; (b) the rights of
the Property Trustee under the Guarantee; (c) any cash on deposit
in, or owing to, the Payment Account; and (d) all proceeds and
rights in respect of the foregoing and any other property and
assets for the time being held or deemed to be held by the Property
Trustee pursuant to the trusts of this Trust Agreement.
"Trust Security" means any one of the Common Securities or the
Preferred Securities.
"Trust Securities Certificate" means any one of the Common
Securities Certificates or the Preferred Securities Certificates.
"Trustees" means, collectively, the Property Trustee, the
Delaware Trustee and the Administrative Trustees.
"Underwriting Agreement" means the Underwriting Agreement,
dated as of ------------, 1997 among the Trust, the Depositor and
the Underwriters named therein.
ARTICLE II
ESTABLISHMENT OF THE TRUST
SECTION 201. NAME.
The Trust created and continued hereby shall be known as "1st
Source Capital Trust I," as such name may be modified from time to
time by the Administrative Trustees following written notice to the
Holders of Trust Securities and the other Trustees, in which name
the Trustees may engage in the transactions contemplated hereby,
make and execute contracts and other instruments on behalf of the
Trust and sue and be sued.
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SECTION 202. OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE
OF BUSINESS.
The address of the Delaware Trustee in the State of Delaware
is c/o Wilmington Trust Company, Rodney Square North, 1100 North
Market Street, Wilmington, Delaware 19890-0001, Attention:
Corporate Trust Administration, or such other address in the State
of Delaware as the Delaware Trustee may designate by written notice
to the Securityholders and the Depositor. The principal executive
office of the Trust is c/o 1st Source Corporation, 100 North
Michigan Street, South Bend, Indiana 46601.
SECTION 203. INITIAL CONTRIBUTION OF TRUST PROPERTY;
ORGANIZATIONAL EXPENSES.
The Trustees acknowledge receipt in trust from the Depositor
in connection with the Original Trust Agreement of the sum of $10,
which constituted the initial Trust Property. The Depositor shall
pay organizational expenses of the Trust as they arise or shall,
upon request of any Trustee, promptly reimburse such Trustee for
any such expenses paid by such Trustee. The Depositor shall make
no claim upon the Trust Property for the payment of such expenses.
SECTION 204. ISSUANCE OF THE PREFERRED SECURITIES.
On ------, 1997, the Depositor and an Administrative Trustee,
on behalf of the Trust and pursuant to the Original Trust
Agreement, executed and delivered the Underwriting Agreement.
Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 502 and deliver in accordance
with the Underwriting Agreement, Preferred Securities Certificates,
registered in the name of the Persons entitled thereto, in an
aggregate amount of --------------- Preferred Securities having an
aggregate Liquidation Amount of $---------- against receipt of the
aggregate purchase price of such Preferred Securities of
$----------, which amount such Administrative Trustee shall
promptly deliver to the Property Trustee. If the underwriters
exercise their Option and there is an Option Closing Date (as such
terms are defined in the Underwriting Agreement), then an
Administrative Trustee, on behalf of the Trust, shall execute in
accordance with Section 502 and deliver in accordance with the
Underwriting Agreement, additional Preferred Securities
Certificates, registered in the name of the Persons entitled
thereto, in an aggregate amount of up to ----------- Preferred
Securities having an aggregate Liquidation Amount of up to
$---------- against receipt of the aggregate purchase price of such
Preferred Securities of $-----------, which amount such
Administrative Trustee shall promptly deliver to the Property
Trustee.
SECTION 205. ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION
AND PURCHASE OF DEBENTURES.
(a) Contemporaneously with the execution and delivery of this
Trust Agreement, an Administrative Trustee, on behalf of the Trust,
shall execute in accordance with Section 502 and deliver to the
Depositor, Common Securities Certificates, registered in the name
of the Depositor, in an aggregate amount of Common Securities
having an aggregate Liquidation Amount of $---------- against
payment by the Depositor of such amount. Contemporaneously
therewith, an Administrative Trustee, on behalf of the Trust, shall
subscribe to and purchase from the Depositor Debentures, registered
in the name of the Property Trustee on behalf of the Trust and
having an aggregate principal amount equal to $----------, and, in
satisfaction of the purchase price for such Debentures, the
Property Trustee, on behalf of the Trust, shall deliver to the
Depositor the sum of $----------.
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(b) If the underwriters exercise the Option and there is an
Option Closing Date, then an Administrative Trustee, on behalf of
the Trust, shall execute in accordance with Section 502 and deliver
to the Depositor, additional Common Securities Certificates,
registered in the name of the Depositor, in an aggregate amount of
Common Securities having an aggregate Liquidation Amount of up to
$---------- against payment by the Depositor of such amount.
Contemporaneously therewith, an Administrative Trustee, on behalf
of the Trust, shall subscribe to and purchase from the Depositor,
Debentures, registered in the name of the Property Trustee and
having an aggregate principal amount of up to $----------, and, in
satisfaction of the purchase price of such Debentures, the Property
Trustee, on behalf of the Trust, shall deliver to the Depositor the
amount received from one of the Administrative Trustees pursuant to
the last sentence of Section 204.
SECTION 206. DECLARATION OF TRUST.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Trust Securities and use the proceeds from such sale
to acquire the Debentures; and (b) to engage in those activities
necessary, convenient or incidental thereto. The Depositor hereby
appoints the Trustees as trustees of the Trust, to have all the
rights, powers and duties to the extent set forth herein, and the
Trustees hereby accept such appointment. The Property Trustee
hereby declares that it shall hold the Trust Property in trust upon
and subject to the conditions set forth herein for the benefit of
the Securityholders. The Administrative Trustees shall have all
rights, powers and duties set forth herein and in accordance with
applicable law with respect to accomplishing the purposes of the
Trust. The Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities, of the Property Trustee or the Administrative
Trustees set forth herein. The Delaware Trustee shall be one of
the Trustees of the Trust for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Delaware
Business Trust Act.
SECTION 207. AUTHORIZATION TO ENTER INTO CERTAIN
TRANSACTIONS.
(a) The Trustees shall conduct the affairs of the Trust in
accordance with the terms of this Trust Agreement. Subject to the
limitations set forth in paragraph (b) of this Section 207 and
Article VIII, and in accordance with the following provisions (i)
and (ii), the Administrative Trustees shall have the authority to
enter into all transactions and agreements determined by the
Administrative Trustees to be appropriate in exercising the
authority, express or implied, otherwise granted to the
Administrative Trustees under this Trust Agreement, and to perform
all acts in furtherance thereof, including without limitation, the
following:
(i) As among the Trustees, each Administrative Trustee,
acting singly or jointly, shall have the power and authority to act
on behalf of the Trust with respect to the following matters:
(A) the issuance and sale of the Trust Securities;
(B) to cause the Trust to enter into, and to
execute, deliver and perform on behalf of the Trust, the Expense
Agreement and such other agreements or documents as may be
necessary or desirable in connection with the purposes and function
of the Trust;
(C) assisting in the registration of the Preferred
Securities under the Securities Act of 1933, as amended, and under
state securities or blue sky laws, and the qualification of this
Trust Agreement as a trust indenture under the Trust Indenture Act;
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(D) assisting in the listing of the Preferred
Securities upon The Nasdaq Stock Market's National Market or such
securities exchange or exchanges as shall be determined by the
Depositor and the registration of the Preferred Securities under
the Exchange Act, and the preparation and filing of all periodic
and other reports and other documents pursuant to the foregoing;
(E) the sending of notices (other than notices of
default) and other information regarding the Trust Securities and
the Debentures to the Securityholders in accordance with this Trust
Agreement;
(F) the appointment of a Paying Agent,
authenticating agent and Securities Registrar in accordance with
this Trust Agreement;
(G) to the extent provided in this Trust Agreement,
the winding up of the affairs of and liquidation of the Trust and
the preparation, execution and filing of the certificate of
cancellation with the Secretary of State of the State of Delaware;
(H) to take all action that may be necessary or
appropriate for the preservation and the continuation of the
Trust's valid existence, rights, franchises and privileges as a
statutory business trust under the laws of the State of Delaware
and of each other jurisdiction in which such existence is necessary
to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which
the Trust was created; and
(I) the taking of any action incidental to the
foregoing as the Administrative Trustees may from time to time
determine is necessary or advisable to give effect to the terms of
this Trust Agreement for the benefit of the Securityholders
(without consideration of the effect of any such action on any
particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall
have the power, duty and authority to act on behalf of the Trust
with respect to the following matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and any
other payments made in respect of the Debentures in the Payment
Account;
(D) the distribution of amounts owed to the
Securityholders in respect of the Trust Securities in accordance
with the terms of this Trust Agreement;
(E) the exercise of all of the rights, powers and
privileges of a holder of the Debentures;
(F) the sending of notices of default and other
information regarding the Trust Securities and the Debentures to
the Securityholders in accordance with this Trust Agreement;
(G) the distribution of the Trust Property in
accordance with the terms of this Trust Agreement;
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(H) to the extent provided in this Trust Agreement,
the winding up of the affairs of and liquidation of the Trust;
(I) after an Event of Default, the taking of any
action incidental to the foregoing as the Property Trustee may from
time to time determine is necessary or advisable to give effect to
the terms of this Trust Agreement and protect and conserve the
Trust Property for the benefit of the Securityholders (without
consideration of the effect of any such action on any particular
Securityholder);
(J) registering transfers of the Trust Securities
in accordance with this Trust Agreement; and
(K) except as otherwise provided in this Section
207(a)(ii), the Property Trustee shall have none of the duties,
liabilities, powers or the authority of the Administrative Trustees
set forth in Section 207(a)(i).
(b) So long as this Trust Agreement remains in effect, the
Trust (or the Trustees acting on behalf of the Trust) shall not
undertake any business, activities or transaction except as
expressly provided herein or contemplated hereby. In particular,
the Trustees shall not (i) acquire any investments or engage in any
activities not authorized by this Trust Agreement; (ii) sell,
assign, transfer, exchange, mortgage, pledge, set-off or otherwise
dispose of any of the Trust Property or interests therein,
including to Securityholders, except as expressly provided herein;
(iii) take any action that would cause the Trust to fail or cease
to qualify as a "grantor trust" for United States federal income
tax purposes; (iv) incur any indebtedness for borrowed money or
issue any other debt; or (v) take or consent to any action that
would result in the placement of a Lien on any of the Trust
Property. The Administrative Trustees shall defend all claims and
demands of all Persons at any time claiming any Lien on any of the
Trust Property adverse to the interest of the Trust or the
Securityholders in their capacity as Securityholders.
(c) In connection with the issue and sale of the Preferred
Securities, the Depositor shall have the right and responsibility
to assist the Trust with respect to, or effect on behalf of the
Trust, the following (and any actions taken by the Depositor in
furtherance of the following prior to the date of this Trust
Agreement are hereby ratified and confirmed in all respects):
(i) the preparation and filing by the Trust with the
Commission and the execution on behalf of the Trust of a
registration statement on the appropriate form in relation to the
Preferred Securities and the Debentures, including any amendments
thereto;
(ii) the determination of the states in which to take
appropriate action to qualify or, register for sale all or part of
the Preferred Securities and to do any and all such acts, other
than actions which must be taken by or on behalf of the Trust, and
advise the Trustees of actions they must take on behalf of the
Trust, and prepare for execution and filing any documents to be
executed and filed by the Trust or on behalf of the Trust, as the
Depositor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(iii) the preparation for filing by the Trust and
execution on behalf of the Trust of an application to The Nasdaq
Stock Market's National Market or a national stock exchange or
other organizations for listing upon notice of issuance of any
Preferred Securities and to file or cause an
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Administrative Trustee to file thereafter with such exchange or
organization such notifications and documents as may be necessary
from time to time;
(iv) the preparation for filing by the Trust with the
Commission and the execution on behalf of the Trust of a
registration statement on Form 8-A relating to the registration of
the Preferred Securities under Section 12(b) or 12(g) of the
Exchange Act, including any amendments thereto;
(v) the negotiation of the terms of, and the execution
and delivery of, the Underwriting Agreement providing for the sale
of the Preferred Securities; and
(vi) the taking of any other actions necessary or
desirable to carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the
affairs of the Trust and to operate the Trust so that the Trust
shall not be deemed to be an "investment company" required to be
registered under the Investment Company Act, shall be classified as
a "grantor trust" and not as an association taxable as a
corporation for United States federal income tax purposes and so
that the Debentures shall be treated as indebtedness of the
Depositor for United States federal income tax purposes. In this
connection, subject to Section 1002, the Depositor and the
Administrative Trustees are authorized to take any action, not
inconsistent with applicable law or this Trust Agreement, that each
of the Depositor and the Administrative Trustees determines in
their discretion to be necessary or desirable for such purposes.
SECTION 208. ASSETS OF TRUST.
The assets of the Trust shall consist of the Trust Property.
SECTION 209. TITLE TO TRUST PROPERTY.
Legal title to all Trust Property shall be vested at all times
in the Property Trustee (in its capacity as such) and shall be held
and administered by the Property Trustee for the benefit of the
Securityholders in accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
SECTION 301. PAYMENT ACCOUNT.
(a) On or prior to the Closing Date, the Property Trustee
shall establish the Payment Account. The Property Trustee and any
agent of the Property Trustee shall have exclusive control and sole
right of withdrawal with respect to the Payment Account for the
purpose of making deposits and withdrawals from the Payment Account
in accordance with this Trust Agreement. All monies and other
property deposited or held from time to time in the Payment Account
shall be held by the Property Trustee in the Payment Account for
the exclusive benefit of the Securityholders and for distribution
as herein provided, including (and subject to) any priority of
payments provided for herein.
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(b) The Property Trustee shall deposit in the Payment
Account, promptly upon receipt, all payments of principal of or
interest on, and any other payments or proceeds with respect to,
the Debentures. Amounts held in the Payment Account shall not be
invested by the Property Trustee pending distribution thereof.
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 401. DISTRIBUTIONS.
(a) Distributions on the Trust Securities shall be
cumulative, and shall accumulate whether or not there are funds of
the Trust available for the payment of Distributions.
Distributions shall accumulate from ----------------, 1997, and,
except during any Extended Interest Payment Period with respect to
the Debentures, shall be payable quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year, commencing on
June 30, 1997. If any date on which a Distribution is otherwise
payable on the Trust Securities is not a Business Day, then the
payment of such Distribution shall be made on the next succeeding
day that is a Business Day (and without any interest or other
payment in respect of any such delay) with the same force and
effect as if made on such date (each date on which distributions
are payable in accordance with this Section 401(a), a "Distribution
Date").
(b) The Trust Securities represent undivided beneficial
interests in the Trust Property, and, as a practical matter, the
Distributions on the Trust Securities shall be payable at a rate of
- ----% per annum of the Liquidation Amount of the Trust Securities.
The amount of Distributions payable for any full period shall be
computed on the basis of a 360-day year of twelve 30-day months.
The amount of Distributions for any partial period shall be
computed on the basis of the number of days elapsed in a 360-day
year of twelve 30 day months. During any Extended Interest Payment
Period with respect to the Debentures, Distributions on the
Preferred Securities shall be deferred for a period equal to the
Extended Interest Payment Period. The amount of Distributions
payable for any period shall include the Additional Amounts, if
any.
(c) Distributions on the Trust Securities shall be made by
the Property Trustee solely from the Payment Account and shall be
payable on each Distribution Date only to the extent that the Trust
has funds then on hand and immediately available by 12:30 p.m. on
each Distribution Date in the Payment Account for the payment of
such Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they
appear on the Securities Register for the Trust Securities on the
relevant record date, which shall be the 15th day of the month in
which the Distribution is payable.
SECTION 402. REDEMPTION.
(a) On each Debenture Redemption Date and on the stated
maturity of the Debentures, the Trust shall be required to redeem
a Like Amount of Trust Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property
Trustee by first-class mail, postage prepaid, mailed not less than
30 nor more than 60 days prior to the Redemption Date to each
Holder of Trust Securities to be redeemed, at such Holder's address
appearing in the Securities Register. The
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Property Trustee shall have no responsibility for the accuracy of any
CUSIP number contained in such notice. All notices of redemption
shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities
are to be redeemed, the identification and the aggregate
Liquidation Amount of the particular Trust Securities to be
redeemed; and
(v) that, on the Redemption Date, the Redemption Price
shall become due and payable upon each such Trust Security to be
redeemed and that Distributions thereon shall cease to accumulate
on and after said date.
(c) The Trust Securities redeemed on each Redemption Date
shall be redeemed at the Redemption Price with the proceeds from
the contemporaneous redemption of Debentures. Redemptions of the
Trust Securities shall be made and the Redemption Price shall be
payable on each Redemption Date only to the extent that the Trust
has immediately available funds then on hand and available in the
Payment Account for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in
respect of any Preferred Securities, then, by 12:00 noon, New York
City time, on the Redemption Date, subject to Section 402(c), the
Property Trustee shall deposit with the Paying Agent funds
sufficient to pay the applicable Redemption Price and shall give
the Paying Agent irrevocable instructions and authority to pay the
Redemption Price to the Holders thereof upon surrender of their
Preferred Securities Certificates. Notwithstanding the foregoing,
Distributions payable on or prior to the Redemption Date for any
Trust Securities called for redemption shall be payable to the
Holders of such Trust Securities as they appear on the Register for
the Trust Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given
and funds deposited as required, then upon the date of such
deposit, all rights of Securityholders holding Trust Securities so
called for redemption shall cease, except the right of such
Securityholders to receive the Redemption Price and any
Distribution payable on or prior to the Redemption Date, but
without interest, and such Securities shall cease to be
Outstanding. In the event that any date on which any Redemption
Price is payable is not a Business Day, then payment of the
Redemption Price payable on such date shall be made on the next
succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) with the same force and
effect as if made on such date. In the event that payment of the
Redemption Price in respect of any Trust Securities called for
redemption is improperly withheld or refused and not paid either by
the Trust or by the Depositor pursuant to the Guarantee,
Distributions on such Trust Securities shall continue to
accumulate, at the then applicable rate, from the Redemption Date
originally established by the Trust for such Trust Securities to
the date such Redemption Price is actually paid, in which case the
actual payment date shall be the date fixed for redemption for
purposes of calculating the Redemption Price.
(e) Payment of the Redemption Price on the Trust Securities
shall be made to the record holders thereof as they appear on the
Securities Register for the Trust Securities on the relevant record
date, which shall be the date 15 days prior to the relevant
Redemption Date.
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(f) Subject to Section 403(a), if less than all the
Outstanding Trust Securities are to be redeemed on a Redemption
Date, then the aggregate Liquidation Amount of Trust Securities to
be redeemed shall be allocated on a pro rata basis (based on
Liquidation Amounts) among the Common Securities and the Preferred
Securities. The particular Preferred Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption
Date by the Property Trustee from the outstanding Preferred
Securities not previously called for redemption, by such method
(including, without limitation, by lot) as the Property Trustee
shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to $25 or an integral
multiple of $25 in excess thereof) of the Liquidation Amount of
Preferred Securities of a denomination larger than $25. The
Property Trustee shall promptly notify the Securities Registrar in
writing of the Preferred Securities selected for redemption and, in
the case of any Preferred Securities selected for partial
redemption, the Liquidation Amount thereof to be redeemed. For all
purposes of this Trust Agreement, unless the context otherwise
requires, all provisions relating to the redemption of Preferred
Securities shall relate, in the case of any Preferred Securities
redeemed or to be redeemed only in part, to the portion of the
Liquidation Amount of Preferred Securities which has been or is to
be redeemed.
SECTION 403. SUBORDINATION OF COMMON SECURITIES.
(a) Payment of Distributions (including Additional Amounts,
if applicable) on, and the Redemption Price of, the Trust
Securities, as applicable, shall be made, subject to
Section 402(f), pro rata among the Common Securities and the
Preferred Securities based on the Liquidation Amount of the Trust
Securities; provided, however, that if on any Distribution Date or
Redemption Date any Event of Default resulting from a Debenture
Event of Default shall have occurred and be continuing, no payment
of any Distribution (including Additional Amounts, if applicable)
on, or Redemption Price of, any Common Security, and no other
payment on account of the redemption, liquidation or other
acquisition of Common Securities, shall be made unless payment in
full in cash of all accumulated and unpaid Distributions (including
Additional Amounts, if applicable) on all Outstanding Preferred
Securities for all Distribution periods terminating on or prior
thereto, or in the case of payment of the Redemption Price the full
amount of such Redemption Price on all Outstanding Preferred
Securities then called for redemption, shall have been made or
provided for, and all funds immediately available to the Property
Trustee shall first be applied to the payment in full in cash of
all Distributions (including Additional Amounts, if applicable) on,
or the Redemption Price of, Preferred Securities then due and
payable.
(b) In the case of the occurrence of any Event of Default
resulting from a Debenture Event of Default, the Holder of Common
Securities shall be deemed to have waived any right to act with
respect to any such Event of Default under this Trust Agreement
until the effect of all such Events of Default with respect to the
Preferred Securities shall have been cured, waived or otherwise
eliminated. Until any such Event of Default under this Trust
Agreement with respect to the Preferred Securities shall have been
so cured, waived or otherwise eliminated, the Property Trustee
shall act solely on behalf of the Holders of the Preferred
Securities and not the Holder of the Common Securities, and only
the Holders of the Preferred Securities shall have the right to
direct the Property Trustee to act on their behalf.
SECTION 404. PAYMENT PROCEDURES.
Payments of Distributions (including Additional Amounts, if
applicable) in respect of the Preferred Securities shall be made by
check mailed to the address of the Person entitled thereto as such
address shall appear on the Securities Register. Payments in
respect of the Common Securities shall be
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made in such manner as shall be mutually agreed between the Property
Trustee and the Common Securityholder.
SECTION 405. TAX RETURNS AND REPORTS.
The Administrative Trustees shall prepare (or cause to be
prepared), at the Depositor's expense, and file all United States
federal, state and local tax and information returns and reports
required to be filed by or in respect of the Trust. In this
regard, the Administrative Trustees shall (a) prepare and file (or
cause to be prepared and filed) the appropriate Internal Revenue
Service Form required to be filed in respect of the Trust in each
taxable year of the Trust; and (b) prepare and furnish (or cause to
be prepared and furnished) to each Securityholder the appropriate
Internal Revenue Service form required to be furnished to such
Securityholder or the information required to be provided on such
form. The Administrative Trustees shall provide the Depositor with
a copy of all such returns and reports promptly after such filing
or furnishing. The Property Trustee shall comply with United
States federal withholding and backup withholding tax laws and
information reporting requirements with respect to any payments to
Securityholders under the Trust Securities.
SECTION 406. PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST.
Upon receipt under the Debentures of Additional Interest (as
defined in Section 1.1 of the Indenture), the Property Trustee, at
the direction of an Administrative Trustee or the Depositor, shall
promptly pay any taxes, duties or governmental charges of
whatsoever nature (other than withholding taxes) imposed on the
Trust by the United States or any other taxing authority.
SECTION 407. PAYMENTS UNDER INDENTURE.
Any amount payable hereunder to any Holder of Preferred
Securities shall be reduced by the amount of any corresponding
payment such Holder has directly received under the Indenture
pursuant to Section 514(b) or (c) hereof.
ARTICLE V
TRUST SECURITIES CERTIFICATES
SECTION 501. INITIAL OWNERSHIP.
Upon the creation of the Trust and the contribution by the
Depositor pursuant to Section 203 and until the issuance of the
Trust Securities, and at any time during which no Trust Securities
are outstanding, the Depositor shall be the sole beneficial owner
of the Trust.
SECTION 502. THE TRUST SECURITIES CERTIFICATES.
The Preferred Securities Certificates shall be issued in
minimum denominations of $25 Liquidation Amount and integral
multiples of $25 in excess thereof, and the Common Securities
Certificates shall be issued in denominations of $25 Liquidation
Amount and integral multiples thereof. The Trust Securities
Certificates shall be executed on behalf of the Trust by manual or
facsimile signature of at least one Administrative Trustee. Trust
Securities Certificates bearing the manual or facsimile signatures
of individuals who were, at the time when such signatures shall
have been affixed, authorized
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to sign on behalf of the Trust, shall be validly issued and entitled
to the benefits of this Trust Agreement, notwithstanding that such
individuals or any of them shall have ceased to be so authorized
prior to the delivery of such Trust Securities Certificates or did
not hold such offices at the date of delivery of such Trust
Securities Certificates. A transferee of a Trust Securities
Certificate shall become a Securityholder, and shall be entitled to
the rights and subject to the obligations of a Securityholder
hereunder, upon due registration of such Trust Securities Certificate
in such transferee's name pursuant to Sections 504, 511 and 513.
SECTION 503. EXECUTION, AUTHENTICATION AND DELIVERY OF TRUST
SECURITIES CERTIFICATES.
(a) On the Closing Date and on the date on which the
Underwriter exercises the Option, as applicable (the "Option
Closing Date"), the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as
provided in Sections 204 and 205, to be executed on behalf of the
Trust by at least one of the Administrative Trustees and delivered
to or upon the written order of the Depositor, signed by its Chief
Executive Officer, President, any Vice President, the Treasurer or
any Assistant Treasurer without further corporate action by the
Depositor, in authorized denominations.
(b) A Preferred Securities Certificate shall not be valid
until authenticated by the manual signature of an authorized
signatory of the Property Trustee. The signature shall be
conclusive evidence that the Preferred Securities Certificate has
been authenticated under this Trust Agreement. Each Preferred
Security Certificate shall be dated the date of its authentication.
Upon the written order of the Trust signed by the
Administrative Trustee, the Property Trustee shall authenticate and
make available for delivery the Preferred Securities Certificates.
The Property Trustee may appoint an Authenticating Agent
acceptable to the Trust to authenticate the Preferred Securities.
An Authenticating Agent may authenticate the Preferred Securities
whenever the Property Trustee may do so. Each reference in this
Trust Agreement to authentication by the Property Trustee includes
authentication by such agent. An Authenticating Agent has the same
rights as the Property Trustee to deal with the Company or the
Trust.
SECTION 504. REGISTRATION OF TRANSFER AND EXCHANGE OF
PREFERRED SECURITIES CERTIFICATES.
(a) The Depositor shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 508, a register or
registers for the purpose of registering Trust Securities
Certificates and transfers and exchanges of Preferred Securities
Certificates (herein referred to as the "Securities Register") in
which the registrar designated by the Depositor (the "Securities
Registrar"), subject to such reasonable regulations as it may
prescribe, shall provide for the registration of Preferred
Securities Certificates and Common Securities Certificates (subject
to Section 510 in the case of the Common Securities Certificates)
and registration of transfers and exchanges of Preferred Securities
Certificates as herein provided. The Property Trustee shall be the
initial Securities Registrar.
(b) Upon surrender for registration of transfer of any
Preferred Securities Certificate at the office or agency maintained
pursuant to Section 508, the Administrative Trustees or any one of
them shall execute and deliver, in the name of the designated
transferee or transferees, one or more new Preferred Securities
Certificates in authorized denominations of a like aggregate
Liquidation Amount dated the date of execution by such
Administrative Trustee or Trustees. The Securities Registrar shall
not be required
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to register the transfer of any Preferred Securities that have been
called for redemption. At the option of a Holder, Preferred
Securities Certificates may be exchanged for other Preferred
Securities Certificates in authorized denominations of the same class
and of a like aggregate Liquidation Amount upon surrender of the
Preferred Securities Certificates to be exchanged at the office or
agency maintained pursuant to Section 508.
(c) Every Preferred Securities Certificate presented or
surrendered for registration of transfer or exchange shall be
accompanied by a written instrument of transfer in form
satisfactory to the Property Trustee and the Securities Registrar
duly executed by the Holder or his attorney duly authorized in
writing. Each Preferred Securities Certificate surrendered for
registration of transfer or exchange shall be canceled and
subsequently disposed of by the Property Trustee in accordance with
its customary practice. The Trust shall not be required to
(i) issue, register the transfer of, or exchange any Preferred
Securities during a period beginning at the opening of business
15 calendar days before the date of mailing of a notice of
redemption of any Preferred Securities called for redemption and
ending at the close of business on the day of such mailing; or
(ii) register the transfer of or exchange any Preferred Securities
so selected for redemption, in whole or in part, except the
unredeemed portion of any such Preferred Securities being redeemed
in part.
(d) No service charge shall be made for any registration of
transfer or exchange of Preferred Securities Certificates, but the
Securities Registrar may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Preferred Securities
Certificates.
SECTION 505. MUTILATED, DESTROYED, LOST OR STOLEN TRUST
SECURITIES CERTIFICATES.
If (a) any mutilated Trust Securities certificate shall be
surrendered to the Securities Registrar, or if the Securities
Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Trust Securities Certificate; and
(b) there shall be delivered to the Securities Registrar and the
Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence
of notice that such Trust Securities Certificate shall have been
acquired by a bona fide purchaser, the Administrative Trustees, or
any one of them, on behalf of the Trust shall execute and make
available for delivery, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Trust Securities Certificate,
a new Trust Securities Certificate of like class, tenor and
denomination. In connection with the issuance of any new Trust
Securities Certificate under this Section 505, the Administrative
Trustees or the Securities Registrar may require the payment of a
sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate Trust
Securities Certificate issued pursuant to this Section 505 shall
constitute conclusive evidence of an undivided beneficial interest
in the assets of the Trust, as if originally issued, whether or not
the lost, stolen or destroyed Trust Securities Certificate shall be
found at any time.
SECTION 506. PERSONS DEEMED SECURITYHOLDERS.
The Trustees, the Paying Agent and the Securities Registrar
shall treat the Person in whose name any Trust Securities
Certificate shall be registered in the Securities Register as the
owner of such Trust Securities Certificate for the purpose of
receiving Distributions and for all other purposes whatsoever, and
neither the Trustees nor the Securities Registrar shall be bound by
any notice to the contrary.
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SECTION 507. ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND
ADDRESSES.
At any time when the Property Trustee is not also acting as
the Securities Registrar, the Administrative Trustees or the
Depositor shall furnish or cause to be furnished to the Property
Trustee (a) semi-annually on or before January 15 and July 15 in
each year, a list, in such form as the Property Trustee may
reasonably require, of the names and addresses of the
Securityholders as of the most recent record date; and (b) promptly
after receipt by any Administrative Trustee or the Depositor of a
request therefor from the Property Trustee in order to enable the
Property Trustee to discharge its obligations under this Trust
Agreement, in each case to the extent such information is in the
possession or control of the Administrative Trustees or the
Depositor and is not identical to a previously supplied list or has
not otherwise been received by the Property Trustee in its capacity
as Securities Registrar. The rights of Securityholders to
communicate with other Securityholders with respect to their rights
under this Trust Agreement or under the Trust Securities, and the
corresponding rights of the Trustee shall be as provided in the
Trust Indenture Act. Each Holder, by receiving and holding a Trust
Securities Certificate, and each owner shall be deemed to have
agreed not to hold the Depositor, the Property Trustee or the
Administrative Trustees accountable by reason of the disclosure of
its name and address, regardless of the source from which such
information was derived.
SECTION 508. MAINTENANCE OF OFFICE OR AGENCY.
The Administrative Trustees shall maintain in The City of New
York or other location designated by the Administrative Trustees,
an office or offices or agency or agencies where Preferred
Securities Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the
Trustees in respect of the Trust Securities Certificates may be
served. The Administrative Trustees initially designate the
Corporate Trust Office of the Property Trustee, Two International
Place, 4th Floor, Boston, Massachusetts 02110, as the principal
corporate trust office for such purposes. The Administrative
Trustees shall give prompt written notice to the Depositor and to
the Securityholders of any change in the location of the Securities
Register or any such office or agency.
SECTION 509. APPOINTMENT OF PAYING AGENT.
The Property Trustee shall act as the Paying Agent. The
Paying Agent shall make Distributions to Securityholders from the
Payment Account and shall report the amounts of such Distributions
to the Property Trustee and the Administrative Trustees. Any
Paying Agent shall have the revocable power to withdraw funds from
the Payment Account for the purpose of making the Distributions
referred to above. The Administrative Trustees may revoke such
power and remove the Paying Agent if such Trustees determine in
their sole discretion that the Paying Agent shall have failed to
perform its obligations under this Trust Agreement in any material
respect. The Paying Agent shall initially be the Property Trustee,
and any co-paying agent chosen by the Property Trustee, and
acceptable to the Administrative Trustees and the Depositor. Any
Person acting as Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Administrative
Trustees, the Property Trustee and the Depositor. In the event
that the Property Trustee shall no longer be the Paying Agent or a
successor Paying Agent shall resign or its authority to act be
revoked, the Administrative Trustees shall appoint a successor that
is acceptable to the Property Trustee and the Depositor to act as
Paying Agent (which shall be a bank or trust company). The
Administrative Trustees shall cause such successor Paying Agent or
any additional Paying Agent appointed by the Administrative
Trustees to execute and deliver to the Trustees an instrument in
which such successor Paying Agent or additional Paying Agent shall
agree with the Trustees that as Paying Agent, such successor Paying
Agent or additional Paying Agent shall hold all sums, if any,
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held by it for payment to the Securityholders in trust for the
benefit of the Securityholders entitled thereto until such sums shall
be paid to such Securityholders. The Paying Agent shall return all
unclaimed funds to the Property Trustee and, upon removal of a
Paying Agent, such Paying Agent shall also return all funds in its
possession to the Property Trustee. The provisions of
Sections 801, 803 and 806 shall apply to the Property Trustee also
in its role as Paying Agent, for so long as the Property Trustee
shall act as Paying Agent and, to the extent applicable, to any
other paying agent appointed hereunder. Any reference in this
Agreement to the Paying Agent shall include any co-paying agent
unless the context requires otherwise.
SECTION 510. OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR.
On the Closing Date, the Depositor shall acquire and retain
beneficial and record ownership of the Common Securities. To the
fullest extent permitted by law, any attempted transfer of the
Common Securities (other than a transfer in connection with a
merger or consolidation of the Depositor into another corporation
pursuant to Section 12.1 of the Indenture) shall be void. The
Administrative Trustees shall cause each Common Securities
Certificate issued to the Depositor to contain a legend stating
"THIS CERTIFICATE IS NOT TRANSFERABLE".
SECTION 511. PREFERRED SECURITIES CERTIFICATES.
(a) Each owner shall receive a Preferred Securities
Certificate representing such owner's interest in such Preferred
Securities. Upon the issuance of Definitive Preferred Securities
Certificates, the Trustees shall recognize the record holders of
the Definitive Preferred Securities Certificates as
Securityholders. The Definitive Preferred Securities Certificates
shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Administrative
Trustees, as evidenced by the execution thereof by the
Administrative Trustees or any one of them.
(b) A single Common Securities Certificate representing the
Common Securities shall be issued to the Depositor in the form of
a definitive Common Securities Certificate.
SECTION 512. [INTENTIONALLY OMITTED].
SECTION 513. [INTENTIONALLY OMITTED].
SECTION 514. RIGHTS OF SECURITYHOLDERS.
(a) The legal title to the Trust Property is vested
exclusively in the Property Trustee (in its capacity as such) in
accordance with Section 209, and the Securityholders shall not have
any right or title therein other than the undivided beneficial
interest in the assets of the Trust conferred by their Trust
Securities and they shall have no right to call for any partition
or division of property, profits or rights of the Trust except as
described below. The Trust Securities shall be personal property
giving only the rights specifically set forth therein and in this
Trust Agreement. The Trust Securities shall have no preemptive or
similar rights. When issued and delivered to Holders of the
Preferred Securities against payment of the purchase price
therefor, the Preferred Securities shall be fully paid and
nonassessable interests in the Trust. The Holders of the Preferred
Securities, in their capacities as such, shall be entitled to the
same limitation of personal liability extended to stockholders of
private corporations for profit organized under the General
Corporation Law of the State of Delaware.
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(b) For so long as any Preferred Securities remain
Outstanding, if, upon a Debenture Event of Default, the Debenture
Trustee fails or the holders of not less than 25% in principal
amount of the outstanding Debentures fail to declare the principal
of all of the Debentures to be immediately due and payable, the
Holders of at least 25% in Liquidation Amount of the Preferred
Securities then Outstanding shall have such right by a notice in
writing to the Depositor and the Debenture Trustee; and upon any
such declaration such principal amount of and the accrued interest
on all of the Debentures shall become immediately due and payable,
provided that the payment of principal and interest on such
Debentures shall remain subordinated to the extent provided in the
Indenture.
(c) For so long as any Preferred Securities remain
outstanding, if, upon a Debenture Event of Default arising from the
failure to pay interest or principal on the Debentures, the Holders
of any Preferred Securities then Outstanding shall, to the fullest
extent permitted by law, have the right to directly institute
proceedings for enforcement of payment to such Holders of principal
of or interest on the Debentures having a principal amount equal to
the Liquidation Amount of the Preferred Securities of such Holders.
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 601. LIMITATIONS ON VOTING RIGHTS.
(a) Except as provided in this Section 601, in Sections 514,
810 and 1002 and in the Indenture and as otherwise required by law,
no Holder of Preferred Securities shall have any right to vote or
in any manner otherwise control the administration, operation and
management of the Trust or the obligations of the parties hereto,
nor shall anything herein set forth, or contained in the terms of
the Trust Securities Certificates, be construed so as to constitute
the Securityholders from time to time as partners or members of an
association.
(b) So long as any Debentures are held by the Property
Trustee, the Trustees shall not (i) direct the time, method and
place of conducting any proceeding for any remedy available to the
Debenture Trustee, or executing any trust or power conferred on the
Debenture Trustee with respect to such Debentures; (ii) waive any
past default which is waivable under Article VII of the Indenture;
(iii) exercise any right to rescind or annul a declaration that the
principal of all the Debentures shall be due and payable; or
(iv) consent to any amendment, modification or termination of the
Indenture or the Debentures, where such consent shall be required,
without, in each case, obtaining the prior approval of the Holders
of at least a majority in Liquidation Amount of all Outstanding
Preferred Securities; provided, however, that where a consent under
the Indenture would require the consent of each Holder of
Outstanding Debentures affected thereby, no such consent shall be
given by the Property Trustee without the prior written consent of
each holder of Preferred Securities. The Trustees shall not revoke
any action previously authorized or approved by a vote of the
Holders of the Outstanding Preferred Securities, except by a
subsequent vote of the Holders of the Outstanding Preferred
Securities. The Property Trustee shall notify each Holder of the
Outstanding Preferred Securities of any notice of default received
from the Debenture Trustee with respect to the Debentures. In
addition to obtaining the foregoing approvals of the Holders of the
Preferred Securities, prior to taking any of the foregoing actions,
the Trustees shall, at the expense of the Depositor, obtain an
Opinion of Counsel experienced in such matters to the effect that
the Trust shall continue to be classified as a grantor trust and
not as an association taxable as a corporation for United States
federal income tax purposes on account of such action.
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(c) If any proposed amendment to the Trust Agreement provides
for, or the Trustees otherwise propose to effect, (i) any action
that would adversely affect in any material respect the powers,
preferences or special rights of the Preferred Securities, whether
by way of amendment to the Trust Agreement or otherwise; or
(ii) the dissolution, winding-up or termination of the Trust, other
than pursuant to the terms of this Trust Agreement, then the
Holders of Outstanding Preferred Securities as a class shall be
entitled to vote on such amendment or proposal and such amendment
or proposal shall not be effective except with the approval of the
Holders of at least a majority in Liquidation Amount of the
Outstanding Preferred Securities. No amendment to this Trust
Agreement may be made if, as a result of such amendment, the Trust
would cease to be classified as a grantor trust or would be
classified as an association taxable as a corporation for United
States federal income tax purposes.
SECTION 602. NOTICE OF MEETINGS.
Notice of all meetings of the Preferred Securityholders,
stating the time, place and purpose of the meeting, shall be given
by the Property Trustee pursuant to Section 1008 to each Preferred
Securityholder of record, at his registered address, at least
15 days and not more than 90 days before the meeting. At any such
meeting, any business properly before the meeting may be so
considered whether or not stated in the notice of the meeting. Any
adjourned meeting may be held as adjourned without further notice.
SECTION 603. MEETINGS OF PREFERRED SECURITYHOLDERS.
(a) No annual meeting of Securityholders is required to be
held. The Administrative Trustees, however, shall call a meeting
of Securityholders to vote on any matter in respect of which
Preferred Securityholders are entitled to vote upon the written
request of the Preferred Securityholders of 25% of the Outstanding
Preferred Securities (based upon their aggregate Liquidation
Amount) and the Administrative Trustees or the Property Trustee
may, at any time in their discretion, call a meeting of Preferred
Securityholders to vote on any matters as to which the Preferred
Securityholders are entitled to vote.
(b) Preferred Securityholders of record of 50% of the
Outstanding Preferred Securities (based upon their aggregate
Liquidation Amount), present in person or by proxy, shall
constitute a quorum at any meeting of Securityholders.
(c) If a quorum is present at a meeting, an affirmative vote
by the Preferred Securityholders of record present, in person or by
proxy, holding more than a majority of the Preferred Securities
(based upon their aggregate Liquidation Amount) held by the
Preferred Securityholders of record present, either in person or by
proxy, at such meeting shall constitute the action of the
Securityholders, unless this Trust Agreement requires a greater
number of affirmative votes.
SECTION 604. VOTING RIGHTS.
Securityholders shall be entitled to one vote for each $25 of
Liquidation Amount represented by their Trust Securities in respect
of any matter as to which such Securityholders are entitled to
vote.
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SECTION 605. PROXIES, ETC.
At any meeting of Securityholders, any Securityholder entitled
to vote thereat may vote by proxy, provided that no proxy, shall be
voted at any meeting unless it shall have been placed on file with
the Administrative Trustees, or with such other officer or agent of
the Trust as the Administrative Trustees may direct, for
verification prior to the time at which such vote shall be taken.
When Trust Securities are held jointly by several persons, any one
of them may vote at any meeting in person or by proxy in respect of
such Trust Securities, but if more than one of them shall be
present at such meeting in person or by proxy, and such joint
owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Trust
Securities. A proxy purporting to be executed by or on behalf of
a Securityholder shall be deemed valid unless challenged at or
prior to its exercise, and, the burden of proving invalidity shall
rest on the challenger. No proxy shall be valid more than three
years after its date of execution.
SECTION 606. SECURITYHOLDER ACTION BY WRITTEN CONSENT.
Any action which may be taken by Securityholders at a meeting
may be taken without a meeting if Securityholders holding more than
a majority of all Outstanding Trust Securities (based upon their
aggregate Liquidation Amount) entitled to vote in respect of such
action (or such larger proportion thereof as shall be required by
any express provision of this Trust Agreement) shall consent to the
action in writing (based upon their aggregate Liquidation Amount).
SECTION 607. RECORD DATE FOR VOTING AND OTHER PURPOSES.
For the purposes of determining the Securityholders who are
entitled to notice of and to vote at any meeting or by written
consent, or to participate in any Distribution on the Trust
Securities in respect of which a record date is not otherwise
provided for in this Trust Agreement, or for the purpose of any
other action, the Administrative Trustees may from time to time fix
a date, not more than 90 days prior to the date of any meeting of
Securityholders or the payment of Distribution or other action, as
the case may be, as a record date for the determination of the
identity of the Securityholders of record for such purposes.
SECTION 608. ACTS OF SECURITYHOLDERS.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Trust
Agreement to be given, made or taken by Securityholders may be
embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders in
person or by an agent duly appointed in writing; and, except as
otherwise expressly provided herein, such action shall become
effective when such instrument or instruments are delivered to an
Administrative Trustee. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Securityholders signing such
instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Trust Agreement and (subject to
Section 801) conclusive in favor of the Trustees, if made in the
manner provided in this Section 608.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a
witness of such execution or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such
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instrument or writing acknowledged to him the execution thereof.
Where such execution is by a signer acting in a capacity other than
his individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority. The fact and date of
the execution of any such instrument or writing, or the authority of
the Person executing the same, may also be proved in any other
manner which any Trustee receiving the same deems sufficient.
(c) The ownership of Preferred Securities shall be proved by
the Securities Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Securityholder of any Trust
Security shall bind every future Securityholder of the same Trust
Security and the Securityholder of every Trust Security issued upon
the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to be
done by the Trustees or the Trust in reliance thereon, whether or
not notation of such action is made upon such Trust Security.
(e) Without limiting the foregoing, a Securityholder entitled
hereunder to take any action hereunder with regard to any
particular Trust Security may do so with regard to all or any part
of the Liquidation Amount of such Trust Security or by one or more
duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such liquidation
amount.
(f) A Securityholder may institute a legal proceeding
directly against the Depositor under the Guarantee to enforce its
rights under the Guarantee without first instituting a legal
proceeding against the Guarantee Trustee (as defined in the
Guarantee), the Trust or any Person.
SECTION 609. INSPECTION OF RECORDS.
Upon reasonable notice to the Administrative Trustees and the
Property Trustee, the records of the Trust shall be open to
inspection and copying by Securityholders and their authorized
representatives during normal business hours for any purpose
reasonably related to such Securityholder's interest as a
Securityholder.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 701. REPRESENTATIONS AND WARRANTIES OF THE BANK AND
THE PROPERTY TRUSTEE.
The Bank and the Property Trustee, each severally on behalf of
and as to itself, as of the date hereof, and each Successor
Property Trustee at the time of the Successor Property Trustee's
acceptance of its appointment as Property Trustee hereunder (the
term "Bank" being used to refer to such Successor Property Trustee
in its separate corporate capacity) hereby represents and warrants
(as applicable) for the benefit of the Depositor and the
Securityholders that:
(a) the Bank is a trust company duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts;
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(b) the Bank has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this
Trust Agreement and has taken all necessary action to authorize the
execution, delivery and performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed
and delivered by the Property Trustee and constitutes the valid and
legally binding agreement of the Property Trustee enforceable
against it in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors, rights and to general equity principles;
(d) the execution, delivery and performance by the Property
Trustee of this Trust Agreement has been duly authorized by all
necessary corporate or other action on the part of the Property
Trustee and does not require any approval of stockholders of the
Bank and such execution, delivery and performance shall not
(i) violate the Bank's charter or by-laws; (ii) violate any
provision of, or constitute, with or without notice or lapse of
time, a default under, or result in the creation or imposition of,
any Lien on any properties included in the Trust Property pursuant
to the provisions of, any indenture, mortgage, credit agreement,
license or other agreement or instrument to which the Property
Trustee or the Bank is a party or by which it is bound; or
(iii) violate any law, governmental rule or regulation of the
United States or the Commonwealth of Massachusetts, as the case may
be, governing the banking or trust powers of the Bank or the
Property Trustee (as appropriate in context) or any order, judgment
or decree applicable to the Property Trustee or the Bank;
(e) neither the authorization, execution or delivery by the
Property Trustee of this Trust Agreement nor the consummation of
any of the transactions by the Property Trustee contemplated herein
or therein requires the consent or approval of, the giving of
notice to, the registration with or the taking of any other action
with respect to any governmental authority or agency under any
existing federal law governing the banking or trust powers of the
Bank or the Property Trustee, as the case may be, under the laws of
the United States or the Commonwealth of Massachusetts; and
(f) there are no proceedings pending or, to the best of the
Property Trustee's knowledge, threatened against or affecting the
Bank or the Property Trustee in any court or before any
governmental authority, agency or arbitration board or tribunal
which, individually or in the aggregate, would materially and
adversely affect the Trust or would question the right, power and
authority of the Property Trustee to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
SECTION 702. REPRESENTATIONS AND WARRANTIES OF THE DELAWARE
BANK AND THE DELAWARE TRUSTEE.
The Delaware Bank and the Delaware Trustee, each severally on
behalf of and as to itself, as of the date hereof, and each
Successor Delaware Trustee at the time of the Successor Delaware
Trustee's acceptance of appointment as Delaware Trustee hereunder
(the term "Delaware Bank" being used to refer to such Successor
Delaware Trustee in its separate corporate capacity), hereby
represents and warrants (as applicable) for the benefit of the
Depositor and the Securityholders that:
(a) the Delaware Bank is a Delaware banking corporation duly
organized, validly existing and in good standing under the laws of
the State of Delaware;
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(b) the Delaware Bank has full corporate power, authority and
legal right to execute, deliver and perform its obligations under
this Trust Agreement and has taken all necessary action to
authorize the execution, delivery and performance by it of this
Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed
and delivered by the Delaware Trustee and constitutes the valid and
legally binding agreement of the Delaware Trustee enforceable
against it in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors, rights and to general equity principles;
(d) the execution, delivery and performance by the Delaware
Trustee of this Trust Agreement has been duly authorized by all
necessary corporate or other action on the part of the Delaware
Trustee and does not require any approval of stockholders of the
Delaware Bank and such execution, delivery and performance shall
not (i) violate the Delaware Bank's charter or by-laws;
(ii) violate any provision of, or constitute, with or without
notice or lapse of time, a default under, or result in the creation
or imposition of, any Lien on any properties included in the Trust
Property pursuant to the provisions of, any indenture, mortgage,
credit agreement, license or other agreement or instrument to which
the Delaware Bank or the Delaware Trustee is a party or by which it
is bound; or (iii) violate any law, governmental rule or regulation
of the United States or the State of Delaware, as the case may be,
governing the banking or trust powers of the Delaware Bank or the
Delaware Trustee (as appropriate in context) or any order, judgment
or decree applicable to the Delaware Bank or the Delaware Trustee;
(e) neither the authorization, execution or delivery by the
Delaware Trustee of this Trust Agreement nor the consummation of
any of the transactions by the Delaware Trustee contemplated herein
or therein requires the consent or approval of, the giving of
notice to, the registration with or the taking of any other action
with respect to any governmental authority or agency under any
existing federal law governing the banking or trust powers of the
Delaware Bank or the Delaware Trustee, as the case may be, under
the laws of the United States or the State of Delaware; and
(f) there are no proceedings pending or, to the best of the
Delaware Trustee's knowledge, threatened against or affecting the
Delaware Bank or the Delaware Trustee in any court or before any
governmental authority, agency or arbitration board or tribunal
which, individually or in the aggregate, would materially and
adversely affect the Trust or would question the right, power and
authority of the Delaware Trustee to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
SECTION 703. REPRESENTATIONS AND WARRANTIES OF DEPOSITOR.
The Depositor hereby represents and warrants for the benefit
of the Securityholders that:
(a) the Trust Securities Certificates issued on the Closing
Date or the Option Closing Date, if applicable, on behalf of the
Trust have been duly authorized and, shall have been, duly and
validly executed, issued and delivered by the Administrative
Trustees pursuant to the terms and provisions of, and in accordance
with the requirements of, this Trust Agreement and the
Securityholders shall be, as of such date, entitled to the benefits
of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges
payable by the Trust (or the Trustees on behalf of the Trust) under
the laws of the State of Delaware or any political subdivision
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thereof in connection with the execution, delivery and performance
by the Bank, the Property Trustee or the Delaware Trustee, as the
case may be, of this Trust Agreement.
ARTICLE VIII
TRUSTEES
SECTION 801. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The duties and responsibilities of the Trustees shall be
as provided by this Trust Agreement and, in the case of the
Property Trustee, by the Trust Indenture Act. Notwithstanding the
foregoing, no provision of this Trust Agreement shall require the
Trustees to expend or risk their own funds or otherwise incur any
financial liability in the performance of any of their duties
hereunder, or in the exercise of any of their rights or powers, if
they shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is
not reasonably assured to it. No Administrative Trustee nor the
Delaware Trustee shall be liable for its act or omissions hereunder
except as a result of its own gross negligence or willful
misconduct. The Property Trustee's liability shall be determined
under the Trust Indenture Act. Whether or not therein expressly so
provided, every provision of this Trust Agreement relating to the
conduct or affecting the liability of or affording protection to
the Trustees shall be subject to the provisions of this Section
801. To the extent that, at law or in equity, the Delaware Trustee
or an Administrative Trustee has duties (including fiduciary
duties) and liabilities relating thereto to the Trust or to the
Securityholders, the Delaware Trustee or such Administrative
Trustee shall not be liable to the Trust or to any Securityholder
for such Trustee's good faith reliance on the provisions of this
Trust Agreement. The provisions of this Trust Agreement, to the
extent that they restrict the duties and liabilities of the
Delaware Trustee or the Administrative Trustees otherwise existing
at law or in equity, are agreed by the Depositor and the
Securityholders to replace such other duties and liabilities of the
Delaware Trustee and the Administrative Trustees, as the case may
be.
(b) All payments made by the Property Trustee or a Paying
Agent in respect of the Trust Securities shall be made only from
the revenue and proceeds from the Trust Property and only to the
extent that there shall be sufficient revenue or proceeds from the
Trust Property to enable the Property Trustee or a Paying Agent to
make payments in accordance with the terms hereof. With respect to
the relationship of each Securityholder and the Trustee, each
Securityholder, by its acceptance of a Trust Security, agrees that
it shall look solely to the revenue and proceeds from the Trust
Property to the extent legally available for distribution to it as
herein provided and that the Trustees are not personally liable to
it for any amount distributable in respect of any Trust Security or
for any other liability in respect of any Trust Security. This
Section 801(b) does not limit the liability of the Trustees
expressly set forth elsewhere in this Trust Agreement or, in the
case of the Property Trustee, in the Trust Indenture Act.
(c) No provision of this Trust Agreement shall be construed
to relieve the Property Trustee from liability for its own
negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(i) the Property Trustee shall not be liable for any
error of judgment made in good faith by an authorized officer of
the Property Trustee, unless it shall be proved that the Property
Trustee was negligent in ascertaining the pertinent facts;
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(ii) the Property 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 Trust Securities
relating to the time, method and place of conducting any proceeding
for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee under this Trust
Agreement;
(iii) the Property Trustee's sole duty with respect
to the custody, safe keeping and physical preservation of the
Debentures and the Payment Account shall be to deal with such
Property in a similar manner as the Property Trustee deals with
similar property for its own account, subject to the protections
and limitations on liability afforded to the Property Trustee under
this Trust Agreement and the Trust Indenture Act;
(iv) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise
agree with the Depositor and money held by the Property Trustee
need not be segregated from other funds held by it except in
relation to the Payment Account maintained by the Property Trustee
pursuant to Section 301 and except to the extent otherwise required
by law; and
(v) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the
Depositor with their respective duties under this Trust Agreement,
nor shall the Property Trustee be liable for the negligence,
default or misconduct of the Administrative Trustees or the
Depositor.
SECTION 802. CERTAIN NOTICES.
(a) Within 5 Business Days after the occurrence of any Event
of Default actually known to the Property Trustee, the Property
Trustee shall transmit, in the manner and to the extent provided in
Section 1008, notice of such Event of Default to the
Securityholders, the Administrative Trustees and the Depositor,
unless such Event of Default shall have been cured or waived. For
purposes of this Section 802 the term "Event of Default" means any
event that is, or after notice or lapse of time or both would
become, an Event of Default.
(b) The Administrative Trustees shall transmit, to the
Securityholders in the manner and to the extent provided in
Section 1008, notice of the Depositor's election to begin or
further extend an Extended Interest Payment Period on the
Debentures (unless such election shall have been revoked) within
the time specified for transmitting such notice to the holders of
the Debentures pursuant to the Indenture as originally executed.
SECTION 803. CERTAIN RIGHTS OF PROPERTY TRUSTEE.
Subject to the provisions of Section 801:
(a) the Property Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any resolution,
Opinion of Counsel, certificate, written representation of a Holder
or transferee, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
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(b) if (i) in performing its duties under this Trust
Agreement the Property Trustee is required to decide between
alternative courses of action; or (ii) in construing any of the
provisions of this Trust Agreement the Property Trustee finds the
same ambiguous or inconsistent with other provisions contained
herein; or (iii) the Property Trustee is unsure of the application
of any provision of this Trust Agreement, then, except as to any
matter as to which the Preferred Securityholders are entitled to
vote under the terms of this Trust Agreement, the Property Trustee
shall deliver a notice to the Depositor requesting written
instructions of the Depositor as to the course of action to be
taken and the Property Trustee shall take such action, or refrain
from taking such action, as the Property Trustee shall be
instructed in writing to take, or to refrain from taking, by the
Depositor; provided, however, that if the Property Trustee does not
receive such instructions of the Depositor within 10 Business Days
after it has delivered such notice, or such reasonably shorter
period of time set forth in such notice (which to the extent
practicable shall not be less than 2 Business Days), it may, but
shall be under no duty to, take or refrain from taking such action
not inconsistent with this Trust Agreement as it shall deem
advisable and in the best interests of the Securityholders, in
which event the Property Trustee shall have no liability except for
its own bad faith, negligence or willful misconduct;
(c) any direction or act of the Depositor or the
Administrative Trustees contemplated by this Trust Agreement shall
be sufficiently evidenced by an Officers' Certificate;
(d) whenever in the administration of this Trust Agreement,
the Property Trustee shall deem it desirable that a matter be
established before undertaking, suffering or omitting any action
hereunder, the Property 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
which, upon receipt of such request, shall be promptly delivered by
the Depositor or the Administrative Trustees;
(e) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement, any filing under tax or
securities laws or any filing under tax or securities laws) or any
rerecording, refiling or reregistration thereof;
(f) the Property Trustee may consult with counsel of its
choice (which counsel may be counsel to the Depositor or any of its
Affiliates) and the advice of such counsel 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
reliance thereon and, in accordance with such advice, such counsel
may be counsel to the Depositor or any of its Affiliates, and may
include any of its employees; the Property Trustee shall have the
right at any time to seek instructions concerning the
administration of this Trust Agreement from any court of competent
jurisdiction;
(g) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust
Agreement at the request or direction of any of the Securityholders
pursuant to this Trust Agreement, unless such Securityholders shall
have offered to the Property Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might
be incurred by it in compliance with such request or direction;
(h) the Property 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, consent, order, approval, bond, debenture, note or other
evidence of indebtedness or other paper or document, unless
requested in writing to do so by one or more Securityholders, but
the Property Trustee may make such further inquiry or investigation
into such facts or matters as it may see fit;
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(i) the Property 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, provided that the Property
Trustee shall be responsible for its own negligence or recklessness
with respect to selection of any agent or attorney appointed by it
hereunder;
(j) whenever in the administration of this Trust Agreement
the Property Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or
taking any other action hereunder the Property Trustee (i) may
request instructions from the Holders of the Trust Securities which
instructions may only be given by the Holders of the same
proportion in Liquidation Amount of the Trust Securities as would
be entitled to direct the Property Trustee under the terms of the
Trust Securities in respect of such remedy, right or action;
(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 acting in accordance with such instructions; and
(k) except as otherwise expressly provided by this Trust
Agreement, the Property Trustee shall not be under any obligation
to take any action that is discretionary under the provisions of
this Trust Agreement. No provision of this Trust Agreement shall
be deemed to impose any duty or obligation on the Property 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 Property 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 Property Trustee shall be construed to be a duty.
SECTION 804. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES.
The Recitals contained herein and in the Trust Securities
Certificates shall be taken as the statements of the Trust, and the
Trustees do not assume any responsibility for their correctness.
The Trustees shall not be accountable for the use or application by
the Depositor of the proceeds of the Debentures.
SECTION 805. MAY HOLD SECURITIES.
Any Trustee or any other agent of any Trustee or the Trust, in
its individual or any other capacity, may become the owner or
pledgee of Trust Securities and, subject to Sections 808 and 813
and except as provided in the definition of the term "Outstanding"
in Article I, may otherwise deal with the Trust with the same
rights it would have if it were not a Trustee or such other agent.
SECTION 806. COMPENSATION; INDEMNITY; FEES.
The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable
compensation for all services rendered by them hereunder (which
compensation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to
reimburse the Trustees upon request for all reasonable expenses,
disbursements and advances incurred or made by the Trustees in
accordance with any provision of this Trust Agreement (including
the reasonable compensation and the expenses and
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disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to such Trustee's
negligence, bad faith or willful misconduct (or, in the case of the
Administrative Trustees or the Delaware Trustee, any such expense,
disbursement or advance as may be attributable to its, his or her
gross negligence, bad faith or willful misconduct); and
(c) to indemnify each of the Trustees or any predecessor
Trustee for, and to hold the Trustees harmless against, any loss,
damage, claims, liability, penalty or expense incurred without
negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this Trust
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, except any
such expense, disbursement or advance as may be attributable to
such Trustee's negligence, bad faith or willful misconduct (or, in
the case of the Administrative Trustees or the Delaware Trustee,
any such expense, disbursement or advance as may be attributable to
its, his or her gross negligence, bad faith or willful misconduct).
No Trustee may claim any Lien or charge on Trust Property as
a result of any amount due pursuant to this Section 806.
SECTION 807. CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY
OF TRUSTEES.
(a) There shall at all times be a Property Trustee hereunder
with respect to the Trust Securities. The Property Trustee shall
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. If any such Person publishes reports of condition at
least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this
Section 807, the combined capital and surplus of such Person shall
be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. If at any time
the Property Trustee with respect to the Trust Securities shall
cease to be eligible in accordance with the provisions of this
Section 807, it shall resign immediately in the manner and with the
effect hereinafter specified in this Article VIII.
(b) There shall at all times be one or more Administrative
Trustees hereunder with respect to the Trust Securities. Each
Administrative Trustee shall be either a natural person who is at
least 21 years of age or a legal entity that shall act through one
or more persons authorized to bind that entity.
(c) There shall at all times be a Delaware Trustee with
respect to the Trust Securities. The Delaware Trustee shall either
be (i) a natural person who is at least 21 years of age and a
resident of the State of Delaware; or (ii) a legal entity with its
principal place of business in the State of Delaware and that
otherwise meets the requirements of applicable Delaware law that
shall act through one or more persons authorized to bind such
entity.
SECTION 808. CONFLICTING INTERESTS.
If the Property Trustee has or shall acquire a conflicting
interest within the meaning of the Trust Indenture Act, the
Property Trustee shall either eliminate such interest or resign, to
the extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act and this Trust Agreement.
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SECTION 809. CO-TRUSTEES AND SEPARATE TRUSTEE.
(a) Unless an Event of Default shall have occurred and be
continuing, at any time or times, for the purpose of meeting the
legal requirements of the Trust Indenture Act or of any
jurisdiction in which any part of the Trust Property may at the
time be located, the Depositor shall have power to appoint, and
upon the written request of the Property Trustee, the Depositor
shall for such purpose join with the Property Trustee in the
execution, delivery and performance of all instruments and
agreements necessary or proper to appoint, one or more Persons
approved by the Property Trustee either to act as co-trustee,
jointly with the Property Trustee, of all or any part of such Trust
Property, or to the extent required by law to act as separate
trustee of any such property, in either case with such powers as
may be provided in the instrument of appointment, and to vest in
such Person or Persons in the capacity aforesaid, any property,
title, right or power deemed necessary or desirable, subject to the
other provisions of this Section 809. If the Depositor does not
join in such appointment within 15 days after the receipt by it of
a request so to do, or in case a Debenture Event of Default has
occurred and is continuing, the Property Trustee alone shall have
power to make such appointment. Any co-trustee or separate trustee
appointed pursuant to this Section 809 shall either be (i) a
natural person who is at least 21 years of age and a resident of
the United States; or (ii) a legal entity with its principal place
of business in the United States that shall act through one or more
persons authorized to bind such entity.
(b) Should any written instrument from the Depositor be
required by any co-trustee or separate trustee so appointed for
more fully confirming to such co-trustee or separate trustee such
property, title, right, or power, any and all such instruments
shall, on request, be executed, acknowledged, and delivered by the
Depositor.
(c) Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to
the following terms, namely:
(i) The Trust Securities shall be executed and delivered
and all rights, powers, duties and obligations hereunder in respect
of the custody of securities, cash and other personal property held
by, or required to be deposited or pledged with, the Trustees
specified hereunder, shall be exercised, solely by such Trustees
and not by such co-trustee or separate trustee.
(ii) The rights, powers, duties and obligations hereby
conferred or imposed upon the Property Trustee in respect of any
property covered by such appointment shall be conferred or imposed
upon and exercised or performed by the Property Trustee or by the
Property Trustee and such co-trustee or separate trustee jointly,
as shall be provided in the instrument appointing such co-trustee
or separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the
Property Trustee shall be incompetent or unqualified to perform
such act, in which event such rights, powers, duties and
obligations shall be exercised and performed by such co-trustee or
separate trustee.
(iii) The Property Trustee at any time, by an
instrument in writing executed by it, with the written concurrence
of the Depositor, may accept the resignation of or remove any
co-trustee or separate trustee appointed under this Section 809,
and, in case a Debenture Event of Default has occurred and is
continuing, the Property Trustee shall have the power to accept the
resignation of, or remove, any such co-trustee or separate trustee
without the concurrence of the Depositor. Upon the written request
of the Property Trustee, the Depositor shall join with the Property
Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to effectuate such
resignation or
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removal. A successor to any co-trustee or separate
trustee so resigned or removed may be appointed in the manner
provided in this Section 809.
(iv) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property
Trustee or any other trustee hereunder.
(v) The Property Trustee shall not be liable by reason
of any act of a co-trustee or separate trustee.
(vi) Any Act of Holders delivered to the Property Trustee
shall be deemed to have been delivered to each such co-trustee and
separate trustee.
SECTION 810. RESIGNATION AND REMOVAL; APPOINTMENT OF
SUCCESSOR.
(a) No resignation or removal of any Trustee (the "Relevant
Trustee") and no appointment of a successor Trustee pursuant to
this Article VIII shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the
applicable requirements of Section 811.
(b) Subject to the immediately preceding paragraph, the
Relevant Trustee may resign at any time with respect to the Trust
Securities by giving written notice thereof to the Securityholders.
If the instrument of acceptance by the successor Trustee required
by Section 811 shall not have been delivered to the Relevant
Trustee within 30 days after the giving of such notice of
resignation, the Relevant Trustee may petition, at the expense of
the Depositor, any court of competent jurisdiction for the
appointment of a successor Relevant Trustee with respect to the
Trust Securities.
(c) Unless a Debenture Event of Default shall have occurred
and be continuing, any Trustee may be removed at any time by Act of
the Common Securityholder. If a Debenture Event of Default shall
have occurred and be continuing, the Property Trustee or the
Delaware Trustee, or both of them, may be removed at such time by
Act of the Holders of a majority in Liquidation Amount of the
Preferred Securities, delivered to the Relevant Trustee (in its
individual capacity and on behalf of the Trust). An Administrative
Trustee may be removed by the Common Securityholder at any time.
(d) If any Trustee shall resign, be removed or become
incapable of acting as Trustee, or if a vacancy shall occur in the
office of any Trustee for any cause, at a time when no Debenture
Event of Default shall have occurred and be continuing, the Common
Securityholder, by Act of the Common Securityholder delivered to
the retiring Trustee, shall promptly appoint a successor Trustee or
Trustees with respect to the Trust Securities and the Trust, and
the successor Trustee shall comply with the applicable requirements
of Section 811. If the Property Trustee or the Delaware Trustee
shall resign, be removed or become incapable of continuing to act
as the Property Trustee or the Delaware Trustee, as the case may
be, at a time when a Debenture Event of Default shall have occurred
and is continuing, the Preferred Securityholders, by Act of the
Securityholders of a majority in Liquidation Amount of the
Preferred Securities then Outstanding delivered to the retiring
Relevant Trustee, shall promptly appoint a successor Relevant
Trustee or Trustees with respect to the Trust Securities and the
Trust, and such successor Trustee shall comply with the applicable
requirements of Section 811. If an Administrative Trustee shall
resign, be removed or become incapable of acting as Administrative
Trustee, at a time when a Debenture Event of Default shall have
occurred and be continuing, the Common Securityholder, by Act of
the Common Securityholder delivered to an Administrative Trustee,
shall promptly appoint a successor Administrative Trustee or
Administrative Trustees with respect to the Trust Securities and
the Trust, and
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such successor Administrative Trustee or Administrative Trustees
shall comply with the applicable requirements of Section 811. If no
successor Relevant Trustee with respect to the Trust Securities shall
have been so appointed by the Common Securityholder or the Preferred
Securityholders and accepted appointment in the manner required by
Section 811, any Securityholder who has been a Securityholder of
Trust Securities on behalf of himself and all others similarly
situated may petition a court of competent jurisdiction for the
appointment Trustee with respect to the Trust Securities.
(e) The Property Trustee shall give notice of each
resignation and each removal of a Trustee and each appointment of
a successor Trustee to all Securityholders in the manner provided
in Section 1008 and shall give notice to the Depositor. Each
notice shall include the name of the successor Relevant Trustee and
the address of its Corporate Trust office if it is the Property
Trustee.
(f) Notwithstanding the foregoing or any other provision of
this Trust Agreement, in the event any Administrative Trustee or a
Delaware Trustee who is a natural person dies or becomes, in the
opinion of the Depositor, incompetent or incapacitated, the vacancy
created by such death, incompetence or incapacity may be filled by
(a) the unanimous act of remaining Administrative Trustees if there
are at least two of them; or (b) otherwise by the Depositor (with
the successor in each case being a Person who satisfies the
eligibility requirement for Administrative Trustees set forth in
Section 807).
SECTION 811. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor
Relevant Trustee with respect to the Trust Securities and the
Trust, the retiring Relevant Trustee and each successor Relevant
Trustee with respect to the Trust Securities shall execute and
deliver an instrument hereto wherein each successor Relevant
Trustee shall accept such appointment and which shall contain such
provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the
rights, powers, trusts and duties of the retiring Relevant Trustee
with respect to the Trust Securities and the Trust and upon the
execution and delivery of such instrument the resignation or
removal of the retiring Relevant Trustee shall become effective to
the extent provided therein and each such successor Relevant
Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the
retiring Relevant Trustee with respect to the Trust Securities and
the Trust; but, on request of the Trust or any successor Relevant
Trustee such retiring Relevant Trustee shall duly assign, transfer
and deliver to such successor Relevant Trustee all Trust Property,
all proceeds thereof and money held by such retiring Relevant
Trustee hereunder with respect to the Trust Securities and the
Trust.
(b) Upon request of any such successor Relevant Trustee, the
Trust shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Relevant
Trustee all such rights, powers and trusts referred to in the
immediately preceding paragraph, as the case may be.
(c) No successor Relevant Trustee shall accept its
appointment unless at the time of such acceptance such successor
Relevant Trustee shall be qualified and eligible under this Article
VIII.
SECTION 812. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION
TO BUSINESS.
Any Person into which the Property Trustee, the Delaware
Trustee or any Administrative Trustee may be merged or converted or
with which it may be consolidated, or any Person resulting from any
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merger, conversion or consolidation to which such Relevant Trustee
shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of such Relevant
Trustee, shall be the successor of such Relevant Trustee hereunder,
provided such Person shall be otherwise qualified and eligible
under this Article VIII, without the execution or filing of any
paper or any further act on the part of any of the parties hereto.
SECTION 813. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
DEPOSITOR OR TRUST.
If and when the Property Trustee or the Delaware Trustee shall
be or become a creditor of the Depositor or the Trust (or any other
obligor upon the Debentures or the Trust Securities), the Property
Trustee or the Delaware Trustee, as the case may be, shall be
subject to and shall take all actions necessary in order to comply
with the provisions of the Trust Indenture Act regarding the
collection of claims against the Depositor or Trust (or any such
other obligor).
SECTION 814. REPORTS BY PROPERTY TRUSTEE.
(a) Not later than July 15 of each year commencing with July
15, 1997, the Property Trustee shall transmit to all
Securityholders in accordance with Section 1008, and to the
Depositor, a brief report dated as of such May 15 with respect to:
(i) its eligibility under Section 807 or, in lieu
thereof, if to the best of its knowledge it has continued to be
eligible under said Section, a written statement to such effect;
and
(ii) any change in the property and funds in its
possession as Property Trustee since the date of its last report
and any action taken by the Property Trustee in the performance of
its duties hereunder which it has not previously reported and which
in its opinion materially affects the Trust Securities.
(b) In addition the Property Trustee shall transmit to
Securityholders such reports concerning the Property Trustee and
its actions under this Trust Agreement as may be required pursuant
to the Trust Indenture Act at the times and in the manner provided
pursuant thereto.
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with The
Nasdaq Stock Market's National Market, and each national securities
exchange or other organization upon which the Trust Securities are
listed, and also with the Commission and the Depositor.
SECTION 815. REPORTS TO THE PROPERTY TRUSTEE.
The Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such documents, reports
and information as required by Section 314 of the Trust Indenture
Act (if any) and the compliance certificate required by
Section 314(a) 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 816. EVIDENCE OF COMPLIANCE WITH CONDITIONS
PRECEDENT.
Each of the Depositor and the Administrative Trustees on
behalf of the Trust shall provide to the Property Trustee such
evidence of compliance with any conditions precedent, if any,
provided for in this
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Trust 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) of
the Trust Indenture Act shall be given in the form of an Officers'
Certificate.
SECTION 817. NUMBER OF TRUSTEES.
(a) The number of Trustees shall be five, provided that the
Holder of all of the Common Securities by written instrument may
increase or decrease the number of Administrative Trustees. The
Property Trustee and the Delaware Trustee may be the same Person.
(b) If a Trustee ceases to hold office for any reason and the
number of Administrative Trustees is not reduced pursuant to
Section 817(a), or if the number of Trustees is increased pursuant
to Section 817(a), a vacancy shall occur. The vacancy shall be
filled with a Trustee appointed in accordance with Section 810.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number
of Administrative Trustees shall occur, until such vacancy is
filled by the appointment of an Administrative Trustee in
accordance with Section 810, the Administrative Trustees in office,
regardless of their number (and notwithstanding any other provision
of this Agreement), shall have all the powers granted to the
Administrative Trustees and shall discharge all the duties imposed
upon the Administrative Trustees by this Trust Agreement.
SECTION 818. DELEGATION OF POWER.
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural
person over the age of 21 his or her power for the purpose of
executing any documents contemplated in Section 207(a); and
(b) The Administrative Trustees shall have power to delegate
from time to time to such of their number or to the Depositor the
doing of such things and the execution of such instruments either
in the name of the Trust or the names of the Administrative
Trustees or otherwise as the Administrative Trustees may deem
expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set
forth herein.
SECTION 819. VOTING.
Except as otherwise provided in this Trust Agreement, the
consent or approval of the Administrative Trustees shall require
consent or approval by not less than a majority of the
Administrative Trustees, unless there are only two, in which case
both must consent.
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ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
SECTION 901. TERMINATION UPON EXPIRATION DATE.
Unless earlier dissolved, the Trust shall automatically
dissolve on March 31, 2052 (the "Expiration Date") subject to
distribution of the Trust Property in accordance with Section 904.
SECTION 902. EARLY TERMINATION.
The first to occur of any of the following events is an "Early
Termination Event:"
(a) the occurrence of a Bankruptcy Event in respect of, or
the dissolution or liquidation of, the Depositor;
(b) delivery of written direction to the Property Trustee by
the Depositor at any time (which direction is wholly optional and
within the discretion of the Depositor) to dissolve the Trust and
distribute the Debentures to Securityholders in exchange for the
Preferred Securities in accordance with Section 904;
(c) the redemption of all of the Preferred Securities in
connection with the redemption of all of the Debentures; and
(d) an order for dissolution of the Trust shall have been
entered by a court of competent jurisdiction.
SECTION 903. TERMINATION.
The respective obligations and responsibilities of the
Trustees and the Trust created and continued hereby shall terminate
upon the latest to occur of the following: (a) the distribution by
the Property Trustee to Securityholders upon the liquidation of the
Trust pursuant to Section 904, or upon the redemption of all of the
Trust Securities pursuant to Section 402, of all amounts required
to be distributed hereunder upon the final payment of the Trust
Securities; (b) the payment of any expenses owed by the Trust;
(c) the discharge of all administrative duties of the
Administrative Trustees, including the performance of any tax
reporting obligations with respect to the Trust or the
Securityholders; and (d) the filing of a Certificate of
Cancellation by the Administrative Trustee under the Business Trust
Act.
SECTION 904. LIQUIDATION.
(a) If an Early Termination Event specified in clause (a),
(b), or (d) of Section 902 occurs or upon the Expiration Date, the
Trust shall be liquidated by the Trustees as expeditiously as the
Trustees determine to be possible by distributing, after
satisfaction of liabilities to creditors of the Trust as provided
by applicable law, to each Securityholder a Like Amount of
Debentures, subject to Section 904(d). Notice of liquidation shall
be given by the Property Trustee by first-class mail, postage
prepaid, mailed not later than 30 nor more than 60 days prior to
the Liquidation Date to each Holder of Trust Securities at such
Holder's address appearing in the Securities Register. All notices
of liquidation shall:
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<PAGE> 44
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the
Trust Securities shall no longer be deemed to be Outstanding and
any Trust Securities Certificates not surrendered for exchange
shall be deemed to represent a Like Amount of Debentures; and
(iii) provide such information with respect to the
mechanics by which Holders may exchange Trust Securities
Certificates for Debentures, or, if Section 904(d) applies, receive
a Liquidation Distribution, as the Administrative Trustees or the
Property Trustee shall deem appropriate.
(b) Except where Section 902(c) or 904(d) applies, in order
to effect the liquidation of the Trust and distribution of the
Debentures to Securityholders, the Property Trustee shall establish
a record date for such distribution (which shall be not more than
45 days prior to the Liquidation Date) and, either itself acting as
exchange agent or through the appointment of a separate exchange
agent, shall establish such procedures as it shall deem appropriate
to effect the distribution of Debentures in exchange for the
Outstanding Trust Securities Certificates.
(c) Except where Section 902(c) or 904(d) applies, after the
Liquidation Date, (i) the Trust Securities shall no longer be
deemed to be outstanding; (ii) certificates representing a Like
Amount of Debentures shall be issued to holders of Trust Securities
Certificates upon surrender of such certificates to the
Administrative Trustees or their agent for exchange; (iii) the
Depositor shall use its reasonable efforts to have the Debentures
listed on The Nasdaq Stock Market's National Market or on such
other securities exchange or other organization as the Preferred
Securities are then listed or traded; (iv) any Trust Securities
Certificates not so surrendered for exchange shall be deemed to
represent a Like Amount of Debentures, accruing interest at the
rate provided for in the Debentures from the last Distribution Date
on which a Distribution was made on such Trust Securities
Certificates until such certificates are so surrendered (and until
such certificates are so surrendered, no payments of interest or
principal shall be made to holders of Trust Securities Certificates
with respect to such Debentures); and (v) all rights of
Securityholders holding Trust Securities shall cease, except the
right of such Securityholders to receive Debentures upon surrender
of Trust Securities Certificates.
(d) In the event that, notwithstanding the other provisions
of this Section 904, whether because of an order for dissolution
entered by a court of competent jurisdiction or otherwise,
distribution of the Debentures in the manner provided herein is
determined by the Property Trustee not to be practical, the Trust
Property shall be liquidated, and the Trust shall be dissolved,
wound-up or terminated, by the Property Trustee in such manner as
the Property Trustee determines. In such event, on the date of the
dissolution, winding-up or other termination of the Trust,
Securityholders shall be entitled to receive out of the assets of
the Trust available for distribution to Securityholders, after
satisfaction of liabilities to creditors of the Trust as provided
by applicable law, an amount equal to the Liquidation Amount per
Trust Security plus accumulated and unpaid Distributions thereon to
the date of payment (such amount being the "Liquidation
Distribution"). If, upon any such dissolution, winding-up or
termination, the Liquidation Distribution can be paid only in part
because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then, subject to the next
succeeding sentence, the amounts payable by the Trust on the Trust
Securities shall be paid on a pro rata basis (based upon
Liquidation Amounts). The holder of the Common Securities shall be
entitled to receive Liquidation Distributions upon any such
dissolution, winding-up or termination pro rata (determined as
aforesaid) with Holders of Preferred Securities, except that, if a
Debenture Event of Default has occurred and is continuing, the
Preferred Securities shall have a priority over the Common
Securities.
39
<PAGE> 45
SECTION 905. MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR
REPLACEMENTS OF THE TRUST.
The Trust may not merge with or into, consolidate, amalgamate,
or be replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to any corporation or other
Person, except pursuant to this Section 905. At the request of the
Depositor, with the consent of the Administrative Trustees and
without the consent of the holders of the Preferred Securities, the
Property Trustee or the Delaware Trustee, the Trust may merge with
or into, consolidate, amalgamate, be replaced by or convey,
transfer or lease its properties and assets substantially as an
entirety to a trust organized as such under the laws of any state;
provided, that (i) such successor entity either (a) expressly
assumes all of the obligations of the Trust with respect to the
Preferred Securities; or (b) substitutes for the Preferred
Securities other securities having substantially the same terms as
the Preferred Securities (the "Successor Securities") so long as
the Successor Securities rank the same as the Preferred Securities
rank in priority with respect to distributions and payments upon
liquidation, redemption and otherwise; (ii) the Depositor expressly
appoints a trustee of such successor entity possessing
substantially the same powers and duties as the Property Trustee as
the holder of the Debentures; (iii) the Successor Securities are
listed or traded, or any Successor Securities shall be listed or
traded upon notification of issuance, on any national securities
exchange or other organization on which the Preferred Securities
are then listed, if any; (iv) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the
holders of the Preferred Securities (including any Successor
Securities) in any material respect; (v) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or
lease, the Depositor has received an Opinion of Counsel to the
effect that (a) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the
Preferred Securities (including any Successor Securities) in any
material respect; and (b) following such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, neither
the Trust nor such successor entity shall be required to register
as an "investment company" under the Investment Company Act; and
(vi) the Depositor owns all of the Common Securities of such
successor entity and guarantees the obligations of such successor
entity under the Successor Securities at least to the extent
provided by the Guarantee. Notwithstanding the foregoing, the
Trust shall not, except with the consent of holders of 100% in
Liquidation Amount of the Preferred Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey,
transfer or lease its properties and assets substantially as an
entirety to any other Person or permit any other Person to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger or replacement would cause the
Trust or the successor entity to be classified as other than a
grantor trust for United States federal income tax purposes.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 1001. LIMITATION OF RIGHTS OF SECURITYHOLDERS.
The death or incapacity of any Person having an interest,
beneficial or otherwise, in Trust Securities shall not operate to
terminate this Trust Agreement, nor entitle the legal
representatives or heirs of such Person or any Securityholder for
such Person, to claim an accounting, take any action or bring any
proceeding in any court for a partition or winding-up of the
arrangements contemplated hereby, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
40
<PAGE> 46
SECTION 1002. AMENDMENT.
(a) This Trust Agreement may be amended from time to time by
the Trustees and the Depositor, without the consent of any
Securityholders, (i) as provided in Section 811 with respect to
acceptance of appointment by a successor Trustee; (ii) to cure any
ambiguity, correct or supplement any provision herein or therein
which may be inconsistent with any other provision herein or
therein, or to make any other provisions with respect to matters or
questions arising under this Trust Agreement, that shall not be
inconsistent with the other provisions of this Trust Agreement; or
(iii) to modify, eliminate or add to any provisions of this Trust
Agreement to such extent as shall be necessary to ensure that the
Trust shall be classified for United States federal income tax
purposes as a grantor trust at all times that any Trust Securities
are outstanding or to ensure that the Trust shall not be required
to register as an "investment company" under the Investment Company
Act; provided, however, that in the case of clause (ii), such
action shall not adversely affect in any material respect the
interests of any Securityholder, and any amendments of this Trust
Agreement shall become effective when notice thereof is given to
the Securityholders.
(b) Except as provided in Section 601(c) or Section 1002(c)
hereof, any provision of this Trust Agreement may be amended by the
Trustees and the Depositor (i) with the consent of Trust
Securityholders representing not less than a majority (based upon
Liquidation Amounts) of the Trust Securities then Outstanding; and
(ii) upon receipt by the Trustees of an Opinion of Counsel to the
effect that such amendment or the exercise of any power granted to
the Trustees in accordance with such amendment shall not affect the
Trust's status as a grantor trust for United States federal income
tax purposes or the Trust's exemption from status of an "investment
company" under the Investment Company Act.
(c) In addition to and notwithstanding any other provision in
this Trust Agreement, without the consent of each affected
Securityholder (such consent being obtained in accordance with
Section 603 or 606 hereof), this Trust Agreement may not be amended
to (i) change the amount or timing of any Distribution on the Trust
Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Trust Securities
as of a specified date; or (ii) restrict the right of a
Securityholder to institute suit for the enforcement of any such
payment on or after such date; notwithstanding any other provision
herein, without the unanimous consent of the Securityholders (such
consent being obtained in accordance with Section 603 or 606
hereof), this paragraph (c) of this Section 1002 may not be
amended.
(d) Notwithstanding any other provisions of this Trust
Agreement, no Trustee shall enter into or consent to any amendment
to this Trust Agreement which would cause the Trust to fail or
cease to qualify for the exemption from status of an "investment
company" under the Investment Company Act or to fail or cease to be
classified as a grantor trust for United States federal income tax
purposes.
(e) Notwithstanding anything in this Trust Agreement to the
contrary, without the consent of the Depositor, this Trust
Agreement may not be amended in a manner which imposes any
additional obligation on the Depositor.
(f) In the event that any amendment to this Trust Agreement
is made, the Administrative Trustees shall promptly provide to the
Depositor a copy of such amendment.
41
<PAGE> 47
(g) Neither the Property Trustee nor the Delaware Trustee
shall be required to enter into any amendment to this Trust
Agreement which affects its own rights, duties or immunities under
this Trust Agreement. The Property Trustee shall be entitled to
receive an Opinion of Counsel and an Officers' Certificate stating
that any amendment to this Trust Agreement is in compliance with
this Trust Agreement.
SECTION 1003. SEPARABILITY.
In case any provision in this Trust Agreement or in the Trust
Securities Certificates shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 1004. GOVERNING LAW.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF
THE SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO
THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE
(WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES).
SECTION 1005. PAYMENTS DUE ON NON-BUSINESS DAY.
If the date fixed for any payment on any Trust Security shall
be a day that is not a Business Day, then such payment need not be
made on such date but may be made on the next succeeding day which
is a Business Day, with the same force and effect as though made on
the date fixed for such payment, and no distribution shall
accumulate thereon for the period after such date.
SECTION 1006. SUCCESSORS.
This Trust Agreement shall be binding upon and shall inure to
the benefit of any successor to the Depositor, the Trust or the
Relevant Trustee(s), including any successor by operation of law.
Except in connection with a consolidation, merger or sale involving
the Depositor that is permitted under Article XII of the Indenture
and pursuant to which the assignee agrees in writing to perform the
Depositor's obligations hereunder, the Depositor shall not assign
its obligations hereunder.
SECTION 1007. HEADINGS.
The Article and Section headings are for convenience only and
shall not affect the construction of this Trust Agreement.
SECTION 1008. REPORTS, NOTICES AND DEMANDS.
Any report, notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be
given or served to or upon any Securityholder or the Depositor may
be given or served in writing by deposit thereof, first-class
postage prepaid, in the United States mail, hand delivery or
facsimile transmission, in each case, addressed, (a) in the case of
a Preferred Securityholder, to such Preferred Securityholder as
such Securityholder's name and address may appear on the Securities
Register; and (b) in the case of the Common Securityholder or the
Depositor, to 1st
42
<PAGE> 48
Source Corporation, 100 North Michigan Street, South Bend, Indiana
46601, Attention: Chief Financial Officer, facsimile no.: (219)
235-2414. Any notice to Preferred Securityholders shall also be given
to such owners as have, within two years preceding the giving of such
notice, filed their names and addresses with the Property Trustee for
that purpose. Such notice, demand or other communication to or upon
a Securityholder shall be deemed to have been sufficiently given or
made, for all purposes, upon hand delivery, mailing or transmission.
Any notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be
given or served to or upon the Trust, the Property Trustee or the
Administrative Trustees shall be given in writing addressed (until
another address is published by the Trust) as follows: (a) with
respect to the Property Trustee to State Street Bank and Trust
Company, Two International Place, 4th Floor, Boston, Massachusetts
02110, Attention: Corporate Trust Department; (b) with respect to
the Delaware Trustee, to Wilmington Trust Company, Rodney Square
North, 1100 North Market Street, Wilmington, Delaware 19890-0001,
Attention: Corporate Trust Administration; and (c) with respect to
the Administrative Trustees, to them at the address above for
notices to the Depositor, marked "Attention: Administrative
Trustees of 1st Source Capital Trust, c/o Chief Financial Officer,
1st Source Corporation." Such notice, demand or other communication
to or upon the Trust or the Property Trustee shall be deemed to have
been sufficiently given or made only upon actual receipt of the writing
by the Trust or the Property Trustee.
SECTION 1009. AGREEMENT NOT TO PETITION.
Each of the Trustees and the Depositor agree for the benefit
of the Securityholders that, until at least one year and 1 day
after the Trust has been terminated in accordance with Article IX,
they shall not file, or join in the filing of, a petition against
the Trust under any bankruptcy, insolvency, reorganization or other
similar law (including, without limitation, the United States
Bankruptcy Code of 1978, as amended) (collectively, "Bankruptcy
Laws") or otherwise join in the commencement of any proceeding
against the Trust under any Bankruptcy Law. In the event the
Depositor takes action in violation of this Section 1009, the
Property Trustee agrees, for the benefit of Securityholders, that
at the expense of the Depositor (which expense shall be paid prior
to the filing), it shall file an answer with the bankruptcy court
or otherwise properly contest the filing of such petition by the
Depositor against the Trust or the commencement of such action and
raise the defense that the Depositor has agreed in writing not to
take such action and should be stopped and precluded therefrom.
The provisions of this Section 1009 shall survive the termination
of this Trust Agreement.
SECTION 1010. TRUST INDENTURE ACT; CONFLICT WITH TRUST
INDENTURE ACT.
(a) This Trust Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this Trust
Agreement and shall, to the extent applicable, be governed by such
provisions.
(b) The Property Trustee shall be the only Trustee which is
a trustee for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts
with another provision hereof which is required to be included in
this Trust Agreement by any of the provisions of the Trust
Indenture Act, such required provision shall control. If any
provision of this Trust Agreement modifies or excludes any
43
<PAGE> 49
provision of the Trust Indenture Act which may be so modified or
excluded, the latter provision shall be deemed to apply to this
Trust Agreement as so modified or to be excluded, as the case may
be.
(d) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the Securities as equity
securities representing undivided beneficial interests in the
assets of the Trust.
SECTION 1011. ACCEPTANCE OF TERMS OF TRUST AGREEMENT,
GUARANTEE AND INDENTURE.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST
THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL
OWNER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT,
SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER
AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY
OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND
AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE
GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF
THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND
PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND
EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH
OTHERS.
1ST SOURCE CORPORATION
as Depositor
By:----------------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY,
as Property Trustee
By:----------------------------------------
Name:
Title:
44
<PAGE> 50
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By:----------------------------------------
Name:
Title:
-------------------------------------------
Christopher J. Murphy III,
as Administrative Trustee
-------------------------------------------
Wellington D. Jones III,
as Administrative Trustee
-------------------------------------------
Larry E. Lentych,
as Administrative Trustee
45
<PAGE> 51
EXHIBIT A
RESTATED CERTIFICATE OF TRUST
OF
1ST SOURCE CAPITAL TRUST
THIS RESTATED CERTIFICATE OF TRUST OF 1ST SOURCE CAPITAL TRUST (the
"Trust"), dated February 27, 1997, is being duly executed and
filed by WILMINGTON TRUST COMPANY, a Delaware banking corporation,
as trustee to restate the original Certificate of Trust which
was filed on February 20, 1997 with the Secretary of State of the
State of Delaware under the Delaware Business Trust Act (12 Del. C.
Section 3801 et seq.).
1. NAME. The name of the business trust formed hereby is 1ST
SOURCE CAPITAL TRUST I.
2. DELAWARE TRUSTEE. The name and business address of the
trustee of the Trust in the State of Delaware is Wilmington
Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-0001, Attention: Corporate Trust
Administration.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective
on February 27, 1997.
IN WITNESS WHEREOF, the undersigned, being a trustee
of the Trust, has executed this Restated Certificate of Trust as of
the date first above written.
WILMINGTON TRUST COMPANY,
as trustee
By:----------------------------------------
Name:--------------------------------------
Title:-------------------------------------
A-1
<PAGE> 52
EXHIBIT B
[Intentionally Omitted]
A-2
<PAGE> 53
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE
CERTIFICATE NUMBER 1 NUMBER OF COMMON SECURITIES: -------
CERTIFICATE EVIDENCING COMMON SECURITIES
OF
1ST SOURCE CAPITAL TRUST I
COMMON SECURITIES
(LIQUIDATION AMOUNT $25.00 PER COMMON SECURITY)
1ST SOURCE CAPITAL TRUST I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby
certifies that 1st Source Corporation (the "Holder") is the
registered owner of -------------------------------------------
(-------) common securities of the Trust representing undivided
beneficial interests in the assets of the Trust and designated the
- ----% Common Securities (liquidation amount $25.00 per Common
Security) (the "Common Securities"). In accordance with Section
510 of the Trust Agreement (as defined below), the Common
Securities are not transferable and any attempted transfer hereof
shall be void. The designations, rights, privileges, restrictions,
preferences, and other terms and provisions of the Common
Securities are set forth in, and this certificate and the Common
Securities represented hereby are issued and shall in all respects
be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust dated as of -------------, 1997, as
the same may be amended from time to time (the "Trust Agreement"),
including the designation of the terms of the Common Securities as
set forth therein. The Trust shall furnish a copy of the Trust
Agreement to the Holder without charge upon written request to the
Trust at its principal place of business or registered office.
Upon receive of this certificate, the Holder is bound by the
Trust Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the
Trust has executed this certificate this ---- day of
- --------------------, 1997.
1ST SOURCE CAPITAL TRUST I
By --------------------------------------
Name:
Title:
C-1
<PAGE> 54
EXHIBIT D
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT AS TO EXPENSES AND LIABILITIES (this "Agreement")
dated as of -------------, 1997, between 1ST SOURCE CORPORATION, an
Indiana corporation ("the Company"), and 1ST SOURCE CAPITAL TRUST I,
a Delaware business trust (the "Trust").
RECITALS
WHEREAS, the Trust intends to issue its common securities (the
"Common Securities") to, and receive Debentures from, the Company
and to issue and sell ------------------------- ----% Cumulative
Trust Preferred Securities (the "Preferred Securities") with such
powers, preferences and special rights and restrictions as are set
forth in the Amended and Restated Trust Agreement of the Trust
dated as of -------------, 1997, as the same may be amended from
time to time (the "Trust Agreement");
WHEREAS, the Company shall directly or indirectly own all of
the Common Securities of the Trust and shall issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each
holder of the Preferred Securities, which purchase the Company
hereby agrees shall benefit the Company and which purchase the
Company acknowledges shall be made in reliance upon the execution
and delivery of this Agreement, the Company, including in its
capacity as holder of the Common Securities, and the Trust hereby
agree as follows:
ARTICLE I
SECTION 1.1. GUARANTEE BY THE COMPANY.
Subject to the terms and conditions hereof, the Company,
including in its capacity as holder of the Common Securities,
hereby irrevocably and unconditionally guarantees to each person or
entity to whom the Trust is now or hereafter becomes indebted or
liable (the "Beneficiaries") the full payment when and as due, of
any and all Obligations (as hereinafter defined) to such
Beneficiaries. As used herein, "Obligations" means any costs,
expenses or liabilities of the Trust other than obligations of the
Trust to pay to holders of any Preferred Securities or other
similar interests in the Trust the amounts due such holders
pursuant to the terms of the Preferred Securities or such other
similar interests, as the case may be. This Agreement is intended
to be for the benefit of, and to be enforceable by, all such
Beneficiaries, whether or not such Beneficiaries have received
notice hereof.
SECTION 1.2. TERM OF AGREEMENT.
This Agreement shall terminate and be of no further force and
effect upon the later of (a) the date on which full payment has
been made of all amounts payable to all holders of all the
Preferred Securities (whether upon redemption, liquidation,
exchange or otherwise); and (b) the date on which there are no
Beneficiaries remaining; provided, however, that this Agreement
shall continue to be effective or shall be reinstated, as the case
may be, if at any time any holder of Preferred Securities or any
Beneficiary
D-1
<PAGE> 55
must restore payment of any sums paid under the Preferred Securities,
under any obligation, under the Preferred Securities Guarantee
Agreement dated the date hereof by the Company and State Street Bank
and Trust Company, as guarantee trustee, or under this Agreement for
any reason whatsoever. This Agreement is continuing, irrevocable,
unconditional and absolute.
SECTION 1.3. WAIVER OF NOTICE.
The Company hereby waives notice of acceptance of this
Agreement and of any obligation to which it applies or may apply,
and the Company hereby waives presentment, demand for payment,
protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 1.4. NO IMPAIRMENT.
The obligations, covenants, agreements and duties of the
Company under this 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 extension of time for the payment by the Trust of all
or any portion of the obligations or for the performance of any
other obligation under, arising out of, or in connection with, the
obligations;
(b) any failure, omission, delay or lack of diligence on the
part of the Beneficiaries to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Beneficiaries with
respect to the obligations or any action on the part of the Trust
granting indulgence or extension of any kind; or
(c) 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 Trust or any of the assets of
the Trust.
There shall be no obligation of the Beneficiaries to give notice
to, or obtain the consent of, the Company with respect to the
happening of any of the foregoing.
SECTION 1.5. ENFORCEMENT.
A Beneficiary may enforce this Agreement directly against the
Company, and the Company waives any right or remedy to require that
any action be brought against the Trust or any other person or
entity before proceeding against the Company.
ARTICLE II
SECTION 2.1. BINDING EFFECT.
All guarantees and agreements contained in this Agreement
shall bind the successors, assigns, receivers, trustees and
representatives of the Company and shall inure to the benefit of
the Beneficiaries.
D-2
<PAGE> 56
SECTION 2.2. AMENDMENT.
So long as there remains any Beneficiary or any Preferred
Securities of any series are outstanding, this Agreement shall not
be modified or amended in any manner adverse to such Beneficiary or
to the holders of the Preferred Securities.
SECTION 2.3. NOTICES.
Any notice, request or other communication required or
permitted to be given hereunder shall be given in writing by
delivering the same by facsimile transmission (confirmed by mail),
telex, or by registered or certified mail, addressed as follows
(and if so given, shall be deemed given when mailed or upon receipt
of an answerback, if sent by telex):
1st Source Capital Trust I
c/o 1st Source Corporation
100 North Michigan Street
South Bend, Indiana 46601
Facsimile No.: (219) 235-2414
Attention: -----------------------------
1st Source Corporation
100 North Michigan Street
South Bend, Indiana 46601
Facsimile No.: (219) 235-2414
Attention: -----------------------------
SECTION 2.4. This agreement shall be governed by and
construed and interpreted in accordance with the laws of the State
of Indiana (without regard to conflict of laws principles).
THIS AGREEMENT is executed as of the day and year first above
written.
1ST SOURCE CORPORATION
By:----------------------------------------
Name:
Title:
1ST SOURCE CAPITAL TRUST I
By:----------------------------------------
Name:
Title: Administrative Trustee
D-3
<PAGE> 57
EXHIBIT E
Certificate Number Number of Preferred Securities --------
P-
Certificate Evidencing Preferred Securities
of
1st Source Capital Trust I
----% Cumulative Trust Preferred Securities
(liquidation amount $25 per Preferred Security)
CUSIP NO. -------
1st Source Capital Trust I, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies
that ---------------- (the "Holder") is the registered owner of
- ----- preferred securities of the Trust representing undivided
beneficial interests in the assets of the Trust and designated the
- ----% Cumulative Trust Preferred Securities (liquidation amount $25
per Preferred Security) (the "Preferred Securities"). The
Preferred Securities are transferable on the books and records of
the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for
transfer as provided in Section 504 of the Trust Agreement (as
defined herein). The designations, rights, privileges,
restrictions, preferences, and other terms and provisions of the
Preferred Securities are set forth in, and this certificate and the
Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and
Restated Trust Agreement of the Trust dated as of -------------,
1997, as the same may be amended from time to time (the "Trust
Agreement"), including the designation of the terms of Preferred
Securities as set forth therein. The Holder is entitled to the
benefits of the Preferred Securities Guarantee Agreement entered
into by 1st Source Corporation, an Indiana corporation, and State
Street Bank and Trust Company, as guarantee trustee, dated as of
- -------------, 1997 (the "Guarantee"), to the extent provided
therein. The Trust shall furnish a copy of the Trust Agreement and
the Guarantee to the Holder without charge upon written request to
the Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the
Trust Agreement and is entitled to the benefits thereunder.
Unless the Certificate of Authentication has been manually
executed by the Authentication Agent, this certificate is not valid
or effective.
IN WITNESS WHEREOF, the Administrative Trustees of the Trust
have executed this certificate as of the date hereof.
E-1
<PAGE> 58
Dated: 1ST SOURCE CAPITAL TRUST I
CERTIFICATE OF AUTHENTICATION
This is one of the ----% By_________________________________
Cumulative Trust Preferred Securities Trustee
referred to in the within-mentioned
Amended and Restated Trust Agreement.
By_________________________________
STATE STREET BANK & TRUST COMPANY, Trustee
as Authentication Agent and Registrar
By_________________________________
Trustee
By ------------------------------------
Authorized Signature
E-2
<PAGE> 59
[FORM ON REVERSE OF CERTIFICATE]
The Trust will furnish without charge to any registered owner of
Preferred Securities who so requests, a copy of the Trust Agreement
and the Guarantee. Any such request should be in writing and
addressed to 1st Source Capital Trust I, c/o 1st Source Corporation,
100 North Michigan Street, South Bend, Indiana 46601 or to the
Registrar named on the face of this Certificate.
The following abbreviations, when used in the inscription on the
face of this certificate, shall be construed as though they were
written out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
TOD - transfer on death direction in event of owner's death,
to person named on face and subject to TOD rules referenced
UNIF GIFT MIN ACT - ...........Custodian..........
(Cust) (Minor)
under Uniform Gifts to Minors
Act.............................
(State)
UNIF TRF MIN ACT - .....Custodian (until age)......
(Cust)
........under Uniform Transfers
(Minor)
to Minors Act..................
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, ------------------ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------
- ------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- --------------------------------------------------------- Preferred Securities
represented by the within Certificate, and do hereby irrevocably constitute
and appoint
- --------------------------------------------------------------------- Attorney
to transfer the said Preferred Securities on the books of the within
named Corporation with full power of substitution in the premises.
Dated,--------------------------------
-----------------------------------------------------------
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND
WITH THE NAME AS WRITTEN UPON THE FACE OF THE
CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERNATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
SIGNATURE(S) GUARANTEED:
- -------------------------------------------------------------------
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND
CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED MEDALLION SIGNATURE
GUARANTEE PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.
E-3
<PAGE> 1
==============================================================================
FIXED RATE PREFERRED SECURITIES GUARANTEE AGREEMENT
BY AND BETWEEN
1ST SOURCE CORPORATION
AND
STATE STREET BANK AND TRUST COMPANY
--------------------, 1997
==============================================================================
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page No.
<C> <S> <C>
ARTICLE I DEFINITIONS AND INTERPRETATION . . . . . . . 1
Section 1.1. Definitions and Interpretation . . . . . . . 1
ARTICLE II TRUST INDENTURE ACT. . . . . . . . . . . . . 4
Section 2.1. Trust Indenture Act; Application . . . . . . . . 4
Section 2.2. Lists of Holders of Securities . . . . . . . . . 4
Section 2.3. Reports by the Preferred Guarantee
Trustee. . . . . . . . . . . . . . . . . . . 5
Section 2.4. Periodic Reports to Preferred Guarantee
Trustee. . . . . . . . . . . . . . . . . . . 5
Section 2.5. Evidence of Compliance with Conditions
Precedent. . . . . . . . . . . . . . . . . . 5
Section 2.6. Events of Default; Waiver. . . . . . . . . . . . 5
Section 2.7. Event of Default; Notice . . . . . . . . . . . . 5
Section 2.8. Conflicting Interests. . . . . . . . . . . . . . 6
ARTICLE III POWERS, DUTIES AND RIGHTS OF PREFERRED
GUARANTEE TRUSTEE. . . . . . . . . . . . . . 6
Section 3.1. Powers and Duties of the Preferred
Guarantee Trustee. . . . . . . . . . . . . . 6
Section 3.2. Certain Rights of Preferred Guarantee
Trustee. . . . . . . . . . . . . . . . . . . 7
Section 3.3. Not Responsible for Recitals or Issuance of
Guarantee. . . . . . . . . . . . . . . . . . 9
ARTICLE IV PREFERRED GUARANTEE TRUSTEE. . . . . . . . . 9
Section 4.1. Preferred Guarantee Trustee; Eligibility . . . . 9
Section 4.2. Appointment, Removal and Resignation of
Preferred Guarantee Trustees . . . . . . . . 9
ARTICLE V GUARANTEE. . . . . . . . . . . . . . . . . . 10
Section 5.1. Guarantee. . . . . . . . . . . . . . . . . . . . 10
Section 5.2. Waiver of Notice and Demand. . . . . . . . . . . 10
Section 5.3. Obligations not Affected . . . . . . . . . . . . 11
Section 5.4. Rights of Holders. . . . . . . . . . . . . . . . 12
Section 5.5. Guarantee of Payment.. . . . . . . . . . . . . . 12
Section 5.6. Subrogation. . . . . . . . . . . . . . . . . . . 12
Section 5.7. Independent Obligations. . . . . . . . . . . . . 12
ARTICLE VI LIMITATION OF TRANSACTIONS;
SUBORDINATION. . . . . . . . . . . . . . . . 12
Section 6.1. Limitation of Transactions . . . . . . . . . . . 12
Section 6.2. Ranking. . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VII TERMINATION. . . . . . . . . . . . . . . . . 13
Section 7.1. Termination. . . . . . . . . . . . . . . . . . . 13
ARTICLE VIII INDEMNIFICATION. . . . . . . . . . . . . . . 13
Section 8.1. Exculpation. . . . . . . . . . . . . . . . . . . 13
Section 8.2. Indemnification. . . . . . . . . . . . . . . . . 14
i
<PAGE> 3
ARTICLE IX MISCELLANEOUS. . . . . . . . . . . . . . . . 14
Section 9.1. Successors and Assigns . . . . . . . . . . . . . 14
Section 9.2. Amendments . . . . . . . . . . . . . . . . . . . 14
Section 9.3. Notices. . . . . . . . . . . . . . . . . . . . . 14
Section 9.4. Benefit. . . . . . . . . . . . . . . . . . . . . 15
Section 9.5. Governing Law. . . . . . . . . . . . . . . . . . 15
</TABLE>
ii
<PAGE> 4
<TABLE>
CROSS REFERENCE TABLE
<S> <C>
Section of Trust Section of
Indenture Act of Guarantee
1939, as amended Agreement
---------------- ---------
310(a) 4.1(a)
310(b) 4.1(c), 2.8
310(c) Not Applicable
311(a) 2.2(b)
311(b) 2.2(b)
311(c) Not Applicable
312(a) 2.2(a)
312(b) 2.2(b)
313 2.3
314(a) 2.4
314(b) Not Applicable
314(c) 2.5
314(d) Not Applicable
314(e) 1.1, 2.5, 3.2
314(f) 2.1, 3.2
315(a) 3.1(d)
315(b) 2.7
315(c) 3.1
315(d) 3.1(d)
316(a) 1.1, 2.6, 5.4
316(b) 5.3
317(a) 3.1
317(b) Not Applicable
318(a) 2.1(a)
318(b) 2.1
318(c) 2.1(b)
Note: This Cross-Reference Table does not
constitute part of this Agreement and shall not
affect the interpretation of any of its terms or
provisions.
iii
<PAGE> 5
FIXED RATE PREFERRED SECURITIES GUARANTEE AGREEMENT
THIS FIXED RATE PREFERRED SECURITIES GUARANTEE AGREEMENT (this
"Preferred Securities Guarantee"), dated as of ----------------, 1997
is executed and delivered by 1ST SOURCE CORPORATION, an Indiana
corporation (the "Guarantor"), and STATE STREET BANK AND TRUST
COMPANY, a trust company organized and existing under the laws of
the Commonwealth of Massachusetts, 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 1st Source Capital Trust I, a Delaware statutory business
trust (the "Trust").
RECITALS
WHEREAS, pursuant to an Amended and Restated Trust Agreement
(the "Trust Agreement"), dated as of ----------------, 1997, among
the trustees of the Trust named therein, the Guarantor, as
depositor, and the holders from time to time of undivided
beneficial interests in the assets of the Trust, the Trust is
issuing on the date hereof ---------- preferred securities, having
an aggregate liquidation amount of $----------, designated the
- ----% Cumulative Trust Preferred Securities (the "Preferred
Securities");
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.
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.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINITIONS AND INTERPRETATION.
In this Preferred Securities Guarantee, unless the context
otherwise requires:
(a) 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;
(b) terms defined in the Trust Agreement as at the date of
execution of this Preferred Securities Guarantee have the same
meaning when used in this Preferred Securities Guarantee;
(c) a term defined anywhere in this Preferred Securities
Guarantee has the same meaning throughout;
(d) 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;
<PAGE> 6
(e) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this
Preferred Securities Guarantee, unless otherwise specified;
(f) 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
(g) 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 any day other than a day on which federal
or state banking institutions in New York, New York are authorized
or required by law, executive order or regulation to close or a day
on which the Corporate Trust Office of the Preferred Guarantee
Trustee is closed for business.
"Corporate Trust Office" means the office of the Preferred
Guarantee Trustee at which the corporate trust business of the
Preferred Guarantee Trustee shall, at any particular time, be
principally administered, which office at the date of execution of
this Agreement is located at Two International Place, 4th Floor,
Boston, Massachusetts 02110, Attention: Corporate Trust Department.
"Covered Person" means any Holder or beneficial owner of
Preferred Securities.
"Debentures" means the ---% Subordinated Debentures due March
31, 2027, of the Debenture Issuer held by the Property Trustee of
the Trust.
"Debenture Issuer" means the Guarantor.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Preferred Securities
Guarantee.
"Guarantor" means 1st Source Corporation, an Indiana
corporation.
"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 Trust: (i) any
accrued and unpaid Distributions (as defined in the Trust
Agreement) that are required to be paid on such Preferred
Securities, to the extent the Trust 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 Trust has funds available therefor, with
respect to any Preferred Securities called for redemption by the
Trust, and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Trust (other than in connection
with the distribution of Debentures to the Holders in exchange for
Preferred Securities as provided in the Trust Agreement), 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 Trust shall have funds available
therefor (the "Liquidation Distribution"), and (b) the amount of
assets of the Trust remaining available for distribution to Holders
in liquidation of the Trust.
"Holder" shall mean any holder, as registered on the books and
records of the Trust, of any Preferred Securities; provided,
however, that, in determining whether the holders of the requisite
2
<PAGE> 7
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 ----------------,
1997 among the Debenture Issuer and State Street Bank and Trust
Company, as trustee, and any indenture supplemental thereto
pursuant to which the Debentures of the Debenture Issuer are to
be issued to the Property Trustee of the Trust.
"Liquidation Distribution" has the meaning provided therefor
in the definition of Guarantee Payments.
"Majority in liquidation amount of the Preferred Securities"
means the holders 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
of the 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 shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definition
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as
to whether or not such covenant or condition has been complied
with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint
stock company, limited liability company, trust, unincorporated
association, or government or any agency or political subdivision
thereof, or any other entity of whatever nature.
"Preferred Guarantee Trustee" means State Street Bank and
Trust Company, 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.
"Redemption Price" has the meaning provided therefor in the
definition of Guarantee Payments.
3
<PAGE> 8
"Responsible Officer" means, with respect to the Preferred
Guarantee Trustee, any officer within the Corporate Trust Office of
the Preferred Guarantee Trustee, including any vice-president, any
assistant vice-president, any assistant secretary, the treasurer,
any assistant treasurer or other officer of the Corporate Trust
Office of the Preferred 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 Preferred Guarantee Trustee" means a successor
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,
as amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION.
(a) 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.
(b) 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.
(a) In the event the Preferred Guarantee Trustee is not also
the Transfer Agent, 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 of the Preferred Securities ("List of
Holders") as of such date, (i) within 1 Business Day after
January 1 and June 30 of each year, 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 15 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.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the
Trust Indenture Act.
4
<PAGE> 9
SECTION 2.3. REPORTS BY THE PREFERRED GUARANTEE TRUSTEE.
On or before July 15 of each year, the Preferred Guarantee
Trustee shall provide to the Holders of the Preferred Securities
such reports as are required by Section 313 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 requirements of Section 313(d) of the Trust
Indenture Act.
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 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 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.
(a) 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 of the Preferred
Securities, 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.
(b) 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, or of which
a Responsible Officer of the Preferred Guarantee Trustee charged
with the administration of the Trust Agreement shall have obtained
actual knowledge.
5
<PAGE> 10
SECTION 2.8. CONFLICTING INTERESTS.
The Trust Agreement 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.
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders of the
Preferred Securities, and the Preferred Guarantee Trustee shall not
transfer this Preferred Securities Guarantee to any Person except
a Holder of Preferred Securities exercising his or her rights
pursuant to Section 5.4(b) 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.
(b) 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 of
the Preferred Securities.
(c) 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.
(d) 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:
(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 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
6
<PAGE> 11
(B) 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;
(ii) 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;
(iii) 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
(iv) 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 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.
(a) Subject to the provisions of Section 3.1:
(i) 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;
(ii) any direction or act of the Guarantor contemplated
by this Preferred Securities Guarantee shall be sufficiently
evidenced by an Officers' Certificate;
(iii) 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;
7
<PAGE> 12
(iv) 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);
(v) the Preferred Guarantee Trustee may consult with
counsel, and the written 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;
(vi) the Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by
this Preferred Securities 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;
(vii) 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;
(viii) 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;
(ix) any action taken by the Preferred Guarantee Trustee
or its agents hereunder shall bind the Holders of the Preferred
Securities, 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;
(x) 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.
8
<PAGE> 13
(b) 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
GUARANTEE.
The Recitals contained in this 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.
(a) There shall at all times be a Preferred Guarantee Trustee
which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) 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 $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.
(b) 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).
(c) 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.
SECTION 4.2. APPOINTMENT, REMOVAL AND RESIGNATION OF PREFERRED
GUARANTEE TRUSTEES.
(a) Subject to Section 4.2(b), the Preferred Guarantee
Trustee may be appointed or removed without cause at any time by
the Guarantor.
9
<PAGE> 14
(b) 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.
(c) 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.
(d) 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 to the Guarantor of an
instrument of resignation, the resigning Preferred Guarantee
Trustee 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.
(e) No Preferred Guarantee Trustee shall be liable for the
acts or omissions to act of any Successor Preferred Guarantee
Trustee.
(f) 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 accrued to the date of such
termination, removal or resignation.
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 the Trust), as and when due, regardless
of any defense, right of set-off or counterclaim that the Trust 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 Trust to pay such
amounts to the Holders.
SECTION 5.2. WAIVER OF NOTICE AND DEMAND.
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 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.
10
<PAGE> 15
SECTION 5.3. OBLIGATIONS NOT AFFECTED.
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:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Trust of any express or
implied agreement, covenant, term or condition relating to the
Preferred Securities to be performed or observed by the Trust;
(b) the extension of time for the payment by the Trust 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 (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);
(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 Preferred Securities, or any action on the part of the
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 Trust or any of the assets of
the Trust;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) any failure or omission to receive any regulatory
approval or consent required in connection with the Preferred
Securities (or the common equity securities issued by the Trust),
including the failure to receive any approval of the Board of
Governors of the Federal Reserve System required for the redemption
of the Preferred Securities;
(g) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(h) 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.
11
<PAGE> 16
SECTION 5.4. RIGHTS OF HOLDERS.
(a) 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.
(b) Any Holder of Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce its rights
under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Trust, the Preferred
Guarantee Trustee or any other Person.
SECTION 5.5. GUARANTEE OF PAYMENT.
This Preferred Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 5.6. SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of
the Holders of Preferred Securities against the Trust 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.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Trust 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 (h), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. LIMITATION OF TRANSACTIONS.
So long as any Preferred Securities remain outstanding, if
there shall have occurred an Event of Default under this Preferred
Securities Guarantee, an Event of Default under the Trust Agreement
or during an Extended Interest Payment Period (as defined in the
Indenture), then (a) the Guarantor shall not declare or pay any
dividend on, make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to,
any of its capital stock (other than (i) dividends or distributions
in common stock of the Guarantor or any declaration of a non-cash
dividend in connection with the implementation of a shareholders'
rights plan, or the issuance of stock under any such plan in
12
<PAGE> 17
the future, or the redemption or repurchase of any such rights pursuant
thereto, and (ii) purchases of common stock of the Guarantor
related to the rights under any of the Guarantor's benefit plans
for its directors, officers or employees) and (b) the Guarantor
shall not make any payment of interest or principal on or repay,
repurchase or redeem any debt securities issued by the Guarantor
which rank pari passu with or junior to the Debentures.
SECTION 6.2 RANKING.
This Preferred Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate
and junior in right of payment to all other liabilities of the
Guarantor, (ii) pari passu with the most senior preferred
securities or preference stock now or hereafter issued by the
Guarantor and with any guarantee now or hereafter entered into by
the Guarantor in respect of any preferred securities or preference
stock of any Affiliate of the Guarantor, and (iii) senior to the
Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1. TERMINATION.
This Preferred Securities Guarantee shall terminate upon
(i) full payment of the Redemption Price of all Preferred
Securities, (ii) upon full payment of the amounts payable in
accordance with the Trust Agreement upon liquidation of the Trust,
or (iii) upon distribution of the Debentures to the Holders of the
Preferred Securities. Notwithstanding the foregoing, this
Preferred Securities Guarantee shall continue to be effective or
shall be reinstated, as the case may be, if at any time any Holder
of Preferred Securities must restore payment of any sums paid under
the Preferred Securities or under this Preferred Securities
Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered
Person for any loss, damage or claim incurred by reason of any act
or omission 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.
(b) 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 and who has been selected with reasonable care by
or on behalf of the
13
<PAGE> 18
Guarantor, including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits, losses, or any other
facts pertinent to the existence and amount of assets from which Distributions
to Holders of Preferred Securities might properly be paid.
SECTION 8.2. INDEMNIFICATION.
The Guarantor agrees to indemnify each Indemnified Person for,
and to hold each Indemnified Person harmless against, any loss,
liability 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.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. SUCCESSORS AND ASSIGNS.
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.
Except with respect to any changes that do not materially
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 of the Preferred Securities. The
provisions of Article VI of the Trust Agreement with respect to
meetings of Holders of the Preferred Securities apply to the giving
of such approval.
SECTION 9.3. NOTICES.
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 registered
or certified mail, as follows:
(a) 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 of the Preferred Securities):
State Street Bank and Trust Company
Two International Place, 4th Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Department
14
<PAGE> 19
(b) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may
give notice of to the Holders of the Preferred Securities):
1st Source Corporation
100 North Michigan Street
South Bend, Indiana 46601
Attention: Chief Financial Officer
(c) If given to any Holder of Preferred Securities, at the
address set forth on the books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by
first class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a
changed address of which no notice was given, such notice or other
document shall be deemed to have been delivered on the date of such
refusal or inability to deliver.
SECTION 9.4. BENEFIT.
This Preferred Securities Guarantee is solely for the benefit
of the Holders of the Preferred Securities and, subject to
Section 3.1(a), is not separately transferable from the Preferred
Securities.
SECTION 9.5. GOVERNING LAW.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF INDIANA.
This Preferred Securities Guarantee is executed as of the day
and year first above written.
1ST SOURCE CORPORATION
as Guarantor
By:-----------------------------------
Name:---------------------------------
Title:--------------------------------
STATE STREET BANK AND TRUST COMPANY,
as Preferred Guarantee Trustee
By:-----------------------------------
Name:---------------------------------
Title:--------------------------------
15
</TABLE>
<PAGE> 1
==============================================================================
[FORM OF INDENTURE]
1ST SOURCE CORPORATION
AND
STATE STREET BANK AND TRUST COMPANY,
AS TRUSTEE
INDENTURE
FLOATING RATE SUBORDINATED DEBENTURES DUE 2027
Dated as of --------------, 1997.
==============================================================================
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
----
<S> <C>
ARTICLE I. DEFINITIONS 1
Section 1.1. Definitions of Terms 1
ARTICLE II. ISSUE, DESCRIPTION, TERMS, CONDITIONS,
REGISTRATION AND EXCHANGE OF THE DEBENTURES 8
Section 2.1. Designation and Principal Amount 8
Section 2.2. Maturity 8
Section 2.3. Form and Payment 9
Section 2.4. [Intentionally Omitted] 10
Section 2.5. Interest 10
Section 2.6. Execution and Authentications 10
Section 2.7. Registration of Transfer and Exchange 11
Section 2.8. Temporary Debentures 12
Section 2.9. Mutilated, Destroyed, Lost or Stolen Debentures 12
Section 2.10. Cancellation 13
Section 2.11. Benefit of Indenture 13
Section 2.12. Authentication Agent 13
ARTICLE III. REDEMPTION OF DEBENTURES 14
Section 3.1. Redemption 14
Section 3.2. Special Event Redemption 14
Section 3.3. Optional Redemption by Company 14
Section 3.4. Notice of Redemption 15
Section 3.5. Payment Upon Redemption 16
Section 3.6. No Sinking Fund 16
ARTICLE IV. EXTENSION OF INTEREST PAYMENT PERIOD 16
Section 4.1. Extension of Interest Payment Period 16
Section 4.2. Notice of Extension 17
Section 4.3. Limitation on Transactions 17
ARTICLE V. PARTICULAR COVENANTS OF THE COMPANY 18
Section 5.1. Payment of Principal and Interest 18
Section 5.2. Maintenance of Agency 18
Section 5.3. Paying Agents 18
Section 5.4. Appointment to Fill Vacancy in Office of Trustee 19
Section 5.5. Compliance with Consolidation Provisions 19
Section 5.6. Limitation on Transactions 19
Section 5.7. Covenants as to the Trust 20
Section 5.8. Covenants as to Purchases 20
ARTICLE VI. DEBENTUREHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE 20
i
<PAGE> 3
Section 6.1. Company to Furnish Trustee Names and Addresses
of Debentureholders 20
Section 6.2. Preservation of Information Communications with
Debentureholders 21
Section 6.3. Reports by the Company 21
Section 6.4. Reports by the Trustee 21
ARTICLE VII. REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
ON EVENT OF DEFAULT 22
Section 7.1. Events of Default 22
Section 7.2. Collection of Indebtedness and Suits
for Enforcement by Trust 23
Section 7.3. Application of Moneys Collected 24
Section 7.4. Limitation on Suits 25
Section 7.5. Rights and Remedies Cumulative; Delay or
Omission not Waiver 25
Section 7.6. Control by Debentureholders 26
Section 7.7. Undertaking to Pay Costs 26
ARTICLE VIII. FORM OF DEBENTURE AND ORIGINAL ISSUE 27
Section 8.1. Form of Debenture 27
Section 8.2. Original Issue of Debentures 27
ARTICLE IX. CONCERNING THE TRUSTEE 27
Section 9.1. Certain Duties and Responsibilities Trustee 27
Section 9.2. Notice of Defaults 28
Section 9.3. Certain Rights of Trustee 28
Section 9.4. Trustee Not Responsible for Recitals, etc. 30
Section 9.5. May Hold Debentures 30
Section 9.6. Moneys Held in Trust 30
Section 9.7. Compensation and Reimbursement 30
Section 9.8. Reliance on Officers' Certificate 31
Section 9.9. Disqualification: Conflicting Interests 31
Section 9.10. Corporate Trustee Required; Eligibility 31
Section 9.11. Resignation and Removal; Appointment of
Successor 31
Section 9.12. Acceptance of Appointment by Successor 32
Section 9.13. Merger, Conversion, Consolidation or Succession
to Business 33
Section 9.14. Preferential Collection of Claims Against the
Company 33
ARTICLE X. CONCERNING THE DEBENTUREHOLDERS 33
Section 10.1. Evidence of Action by Holders 33
Section 10.2. Proof of Execution by Debentureholders 34
Section 10.3. Who May be Deemed Owners 34
Section 10.4. Certain Debentures Owned by Company Disregarded 34
Section 10.5. Actions Binding on Future Debentureholders 35
ARTICLE XI. SUPPLEMENTAL INDENTURES 35
Section 11.1. Supplemental Indentures Without the Consent of 35
Debentureholders 35
Section 11.2. Supplemental Indentures with Consent of
Debentureholders 36
Section 11.3. Effect of Supplemental Indentures 36
Section 11.4. Debentures Affected by Supplemental Indentures 37
ii
<PAGE> 4
Section 11.5. Execution of Supplemental Indentures 37
ARTICLE XII. SUCCESSOR CORPORATION 37
Section 12.1. Company May Consolidate, etc 37
Section 12.2. Successor Corporation Substituted 38
Section 12.3. Evidence of Consolidation, etc. to Trustee 38
ARTICLE XIII. SATISFACTION AND DISCHARGE 38
Section 13.1. Satisfaction and Discharge of Indenture 39
Section 13.2. Discharge of Obligations 39
Section 13.3. Deposited Moneys to be Held in Trust 39
Section 13.4. Payment of Monies Held by Paying Agents 40
Section 13.5. Repayment to Company 40
ARTICLE XIV. IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS 40
Section 14.1. No Recourse 40
ARTICLE XV. MISCELLANEOUS PROVISIONS 41
Section 15.1. Effect on Successors and Assigns 41
Section 15.2. Actions by Successor 41
Section 15.3. Surrender of Company Powers 41
Section 15.4. Notices 41
Section 15.5. Governing Law 41
Section 15.6. Treatment of Debentures as Debt 41
Section 15.7. Compliance Certificates and Opinions 41
Section 15.8. Payments on Business Days 42
Section 15.9. Conflict with Trust Indenture Act 42
Section 15.10. Counterparts 42
Section 15.11. Separability 42
Section 15.12. Assignment 42
Section 15.13. Acknowledgment of Rights 43
ARTICLE XVI. SUBORDINATION OF DEBENTURES 43
Section 16.1. Agreement to Subordinate 43
Section 16.2. Default on Senior Debt, Subordinated Debt or
Additional Senior Obligations 43
Section 16.3. Liquidation; Dissolution; Bankruptcy 44
Section 16.4. Subrogation 45
Section 16.5. Trustee to Effectuate Subordination 45
Section 16.6. Notice by the Company 46
Section 16.7. Rights of the Trustee; Holders of Senior
Indebtedness 46
Section 16.8. Subordination may not be Impaired 48
</TABLE>
iii
<PAGE> 5
<TABLE>
CROSS REFERENCE TABLE
<CAPTION>
SECTION OF TRUST
INDENTURE ACT OF SECTION OF
1939, AS AMENDED INDENTURE
---------------- ---------
<S> <C>
310(a) 9.10
310(b) 9.9, 9.11
310(c) Not Applicable
311(a) 9.14
311(b) 9.14
311(c) Not Applicable
312(a) 6.1, 6.2(a)
312(b) 6.2(c)
312(c) 6.2(c)
313(a) 6.4(a)
313(b) 6.4(b)
313(c) 6.4(a), 6.4(b)
313(d) 6.4(c)
314(a) 6.3(a)
314(b) Not Applicable
314(c) 15.7
314(d) Not Applicable
314(e) 15.7
314(f) Not Applicable
315(a) 9.1(a), 9.3
315(b) 9.2
315(c) 9.1(a)
315(d) 9.1(b)
315(e) 7.7
316(a) 1.1, 7.6
316(b) 7.4(b)
316(c) 10.1(b)
317(a) 7.2
317(b) 5.3
318(a) 15.9
Note: This Cross-Reference Table does not
constitute part of this Indenture and shall
not affect the interpretation of any of its
terms or provisions.
</TABLE>
iv
<PAGE> 6
INDENTURE
INDENTURE, dated as of -------------, 1997, between 1ST
SOURCE CORPORATION, an Indiana corporation (the "Company") and
STATE STREET BANK AND TRUST COMPANY, a trust company duly
organized and existing under the laws of the Commonwealth of
Massachusetts, as trustee (the "Trustee");
RECITALS
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the execution and delivery of this Indenture to
provide for the issuance of securities to be known as its
Floating Rate Subordinated Debentures due 2027 (hereinafter
referred to as the "Debentures"), the form and substance of such
Debentures and the terms, provisions and conditions thereof to be
set forth as provided in this Indenture;
WHEREAS, 1st Source Capital Trust II, a Delaware statutory
business trust (the "Trust"), has offered to the public
$--------- aggregate liquidation amount of its Preferred
Securities (as defined herein) and proposes to invest the
proceeds from such offering, together with the proceeds of the
issuance and sale by the Trust to the Company of
$--------- million aggregate liquidation amount of its Common
Securities (as defined herein), in $---------- million aggregate
principal amount of the Debentures; and
WHEREAS, the Company has requested that the Trustee execute
and deliver this Indenture; and
WHEREAS, all requirements necessary to make this Indenture a
valid instrument in accordance with its terms, and to make the
Debentures, when executed by the Company and authenticated and
delivered by the Trustee, the valid obligations of the Company,
have been performed, and the execution and delivery of this
Indenture have been duly authorized in all respects:
WHEREAS, to provide the terms and conditions upon which the
Debentures are to be authenticated, issued and delivered, the
Company has duly authorized the execution of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been
done.
NOW, THEREFORE, in consideration of the premises and the
purchase of the Debentures by the holders thereof, it is mutually
covenanted and agreed as follows for the equal and ratable
benefit of the holders of the Debentures:
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions of Terms.
The terms defined in this Section 1.1 (except as in this
Indenture otherwise expressly provided or unless the context
otherwise requires) for all purposes of this Indenture and of any
indenture supplemental hereto shall have the respective meanings
specified in this Section 1.1 and shall include the plural as
well as the singular. All other terms used in this Indenture
that are defined in the Trust Indenture Act, or that are by
reference in the Trust Indenture Act defined in the Securities
Act (except as herein otherwise expressly provided or unless the
context otherwise requires), shall have the meanings
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assigned to such terms in the Trust Indenture Act and in the Securities Act
as in force at the date of the execution of this instrument. All
accounting terms used herein and not expressly defined shall have
the meanings assigned to such terms in accordance with Generally
Accepted Accounting Principles.
"3-Month Treasury" shall have the meaning set forth in
Section 2.5.
"Accelerated Maturity Date" means if the Company elects to
accelerate the Maturity Date in accordance with Section 2.2(c),
the date selected by the Company which is prior to the Scheduled
Maturity Date, but is after March 31, 2002.
"Additional Interest" shall have the meaning set forth in
Section 2.5.
"Additional Senior Obligations" means all indebtedness of
the Company whether incurred on or prior to the date of this
Indenture or thereafter incurred, for claims in respect of
derivative products such as interest and foreign exchange rate
contracts, commodity contracts and similar arrangements;
provided, however, that Additional Senior Obligations does not
include claims in respect of Senior Debt or Subordinated Debt or
obligations which, by their terms, are expressly stated to be not
superior in right of payment to the Debentures or to rank pari
passu in right of payment with the Debentures. For purposes of
this definition, "claim" shall have the meaning assigned thereto
in Section 101(4) of the United States Bankruptcy Code of 1978,
as amended.
"Administrative Trustees" shall have the meaning set forth
in the Trust Agreement.
"Affiliate" means, with respect to a specified Person,
(a) any Person directly or indirectly owning, controlling or
holding with power to vote 10% or more of the outstanding voting
securities or other ownership interests of the specified Person;
(b) any Person 10% or more of whose outstanding voting securities
or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person;
(c) any Person directly or indirectly controlling, controlled by,
or under common control with the specified Person; (d) a
partnership in which the specified Person is a general partner;
(e) any officer or director of the specified Person; and (f) if
the specified Person is an individual, any entity of which the
specified Person is an officer, director or general partner.
"Authenticating Agent" means an authenticating agent with
respect to the Debentures appointed by the Trustee pursuant to
Section 2.12.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar
federal or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the
Company or any duly authorized committee of such Board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have
been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification.
"Business Day" means, with respect to the Debentures, any
day other than a Saturday or a Sunday or a day on which federal
or state banking institutions in the Borough of Manhattan, The City
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of New York, are authorized or required by law, executive order
or regulation to close, or a day on which the Corporate Trust
Office of the Trustee or the Property Trustee is closed for business.
"Capital Treatment Event" means the receipt by the Trust of
an Opinion of Counsel, rendered by a law firm having a recognized
banking law practice, to the effect that, as a result of any
amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the
United States or any political subdivision thereof or therein, or
as a result of any official administrative pronouncement or
judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or such
proposed change, pronouncement or decision is announced on or
after the date of issuance of the Preferred Securities under the
Trust Agreement, there is more than an insubstantial risk of
impairment of the Company's ability to treat the aggregate
liquidation amount of the Preferred Securities (or any
substantial portion thereof) as Tier 1 capital (or the then
equivalent thereof) for purposes of the capital adequacy
guidelines of the Federal Reserve, as then in effect and
appicable to the Company.
"Certificate" means a certificate signed by the principal
executive officer, the principal financial officer, the principal
accounting officer, the treasurer or any vice president of the
Company. The Certificate need not comply with the provisions of
Section 15.7.
"Change in 1940 Act Law" shall have the meaning set forth in
the definition of "Investment Company Event."
"Commission" means the Securities and Exchange Commission.
"Common Securities" means undivided beneficial interests in
the assets of the Trust which rank pari passu with the Preferred
Securities; provided, however, that upon the occurrence of an
Event of Default, the rights of holders of Common Securities to
payment in respect of (i) distributions, and (ii) payments upon
liquidation, redemption and otherwise are subordinated to the
rights of holders of Preferred Securities.
"Company" means 1st Source Corporation, a corporation duly
organized and existing under the laws of the State of Indiana,
and, subject to the provisions of Article XII, shall also include
its successors and assigns.
"Compounded Interest" shall have the meaning set forth in
Section 4.1.
"Corporate Trust Office" means the office of the Trustee at
which, at any particular time, its corporate trust business shall
be principally administered, which office at the date hereof is
located at Two International Place, 4th Floor, Boston
Massachusetts 02110, Attention: Corporate Trust Department.
"Custodian" means any receiver, trustee, assignee,
liquidator, or similar official under any Bankruptcy Law.
"Debentures" shall have the meaning set forth in the
Recitals hereto.
"Debentureholder," "holder of Debentures," "registered
holder," or other similar term, means the Person or Persons in
whose name or names a particular Debenture shall be registered on
the books of the Company or the Trustee kept for that purpose in
accordance with the terms of this Indenture.
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"Debenture Register" shall have the meaning set forth in
Section 2.7(b).
"Debt" means with respect to any Person, whether recourse is
to all or a portion of the assets of such Person and whether or
not contingent, (i) every obligation of such Person for money
borrowed; (ii) every obligation of such Person evidenced by
bonds, debentures, notes or other similar instruments, including
obligations incurred in connection with the acquisition of
property, assets or businesses; (iii) every reimbursement
obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account
of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services
(but excluding trade accounts payable or accrued liabilities
arising in the ordinary course of business); (v) every capital
lease obligation of such Person; and (vi) and every obligation of
the type referred to in clauses (i) through (v) of another Person
and all dividends of another Person the payment of which, in
either case, such Person has guaranteed or is responsible or
liable, directly or indirectly, as obligor or otherwise.
"Default" means any event, act or condition that with notice
or lapse of time, or both, would constitute an Event of Default.
"Deferred Interest" shall have the meaning set forth in
Section 4.1.
"Dissolution Event" means that as a result of the occurrence
and continuation of a Special Event, the Trust is to be dissolved
in accordance with the Trust Agreement and the Debentures held by
the Property Trustee are to be distributed to the holders of the
Trust Securities issued by the Trust pro rata in accordance with
the Trust Agreement.
"Distribution Period" shall have the meaning set forth in
Section 2.5.
"Event of Default" means, with respect to the Debentures,
any event specified in Section 7.1, which has continued for the
period of time, if any, and after the giving of the notice, if
any, therein designated.
"Exchange Act," means the Securities Exchange Act of 1934,
as amended, as in effect at the date of execution of this
instrument.
"Extended Interest Payment Period" shall have the meaning
set forth in Section 4.1.
"Extended Maturity Date" means if the Company elects to
extend the Maturity Date in accordance with Section 2.2(b), the
date selected by the Company which is after the Scheduled
Maturity Date but before March 31, 2046.
"Federal Reserve" means the Board of Governors of the
Federal Reserve System.
"Generally Accepted Accounting Principles" means such
accounting principles as are generally accepted at the time of
any computation required hereunder.
"Governmental Obligations" means securities that are
(i) direct obligations of the United States of America for the
payment of which its full faith and credit is pledged; or
(ii) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a
full faith and credit obligation by the United
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<PAGE> 10
States of America that, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depositary
receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any such
Governmental Obligation or a specific payment of principal of or
interest on any such Governmental Obligation held by such
custodian for the account of the holder of such depositary
receipt; provided, however, that (except as required by law) such
custodian is not authorized to make any deduction from the amount
payable to the holder of such depositary receipt from any amount
received by the custodian in respect of the Governmental
Obligation or the specific payment of principal of or interest on
the Governmental Obligation evidenced by such depositary receipt.
"Herein," "hereof," and "hereunder," and other words of
similar import, refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Indenture" means this instrument as originally executed or
as it may from time to time be supplemented or amended by one or
more indentures supplemental hereto entered into in accordance
with the terms hereof.
"Interest Payment Date," when used with respect to any
installment of interest on the Debentures, means the date
specified in the Debenture or in a Board Resolution or in an
indenture supplemental hereto with respect to the Debentures as
the fixed date on which an installment of interest with respect
to the Debentures is due and payable.
"Investment Company Act" means the Investment Company Act of
1940, as amended, as in effect at the date of execution of this
instrument.
"Investment Company Event" means the receipt by the Trust of
an Opinion of Counsel, rendered by a law firm having a recognized
tax and securities law practice, to the effect that, as a result
of the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), the Trust is or shall be
considered an "investment company" that is required to be
registered under the Investment Company Act, which Change in 1940
Act Law becomes effective on or after the date of original
issuance of the Preferred Securities under the Trust Agreement.
"Maturity Date" means the date on which the Debentures
mature and on which the principal shall be due and payable
together with all accrued and unpaid interest thereon including
Compounded Interest and Additional Interest, if any.
"Ministerial Action" shall have the meaning set forth in
Section 3.2.
"Officers' Certificate" means a certificate signed by the
President or a Vice President and by the Treasurer or an
Assistant Treasurer or the Controller or an Assistant Controller
or the Secretary or an Assistant Secretary of the Company that is
delivered to the Trustee in accordance with the terms hereof.
Each such certificate shall include the statements provided for
in Section 15.7, if and to the extent required by the provisions
thereof.
"Opinion of Counsel" means an opinion in writing of legal
counsel, who may be an employee of or counsel for the Company,
that is delivered to the Trustee in accordance with the terms
hereof. Each such opinion shall include the statements provided
for in Section 15.7, if and to the extent required by the
provisions thereof.
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"Outstanding," when used with reference to the Debentures,
means, subject to the provisions of Section 10.4, as of any
particular time, all Debentures theretofore authenticated and
delivered by the Trustee under this Indenture, except
(a) Debentures theretofore canceled by the Trustee or any paying
agent, or delivered to the Trustee or any paying agent for
cancellation or that have previously been canceled;
(b) Debentures or portions thereof for the payment or redemption
of which moneys or Governmental Obligations in the necessary
amount shall have been deposited in trust with the Trustee or
with any paying agent (other than the Company) or shall have been
set aside and segregated in trust by the Company (if the Company
shall act as its own paying agent); provided, however, that if
such Debentures or portions of such Debentures are to be redeemed
prior to the maturity thereof, notice of such redemption shall
have been given as in Article III provided, or provision
satisfactory to the Trustee shall have been made for giving such
notice; and (c) Debentures in lieu of or in substitution for
which other Debentures shall have been authenticated and
delivered pursuant to the terms of Section 2.7.
"Person" means any individual, corporation, partnership,
joint-venture, joint-stock company, unincorporated organization
or government or any agency or political subdivision thereof.
"Predecessor Debenture" means every previous Debenture
evidencing all or a portion of the same debt as that evidenced by
such particular Debenture; and, for the purposes of this
definition, any Debenture authenticated and delivered under
Section 2.9 in lieu of a lost, destroyed or stolen Debenture
shall be deemed to evidence the same debt as the lost, destroyed
or stolen Debenture.
"Preferred Securities" means undivided beneficial interests
in the assets of the Trust which rank pari passu with Common
Securities issued by the Trust; provided, however, that upon the
occurrence of an Event of Default, the rights of holders of
Common Securities to payment in respect of distributions and
payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of Preferred Securities.
"Preferred Securities Guarantee" means any guarantee that
the Company may enter into with the Trustee or other Persons that
operate directly or indirectly for the benefit of holders of
Preferred Securities.
"Property Trustee" has the meaning set forth in the Trust
Agreement.
"Responsible Officer" when used with respect to the Trustee
means the Chairman of the Board of Directors, the President, any
Vice President, the Secretary, the Treasurer, any trust officer,
any corporate trust officer or any other officer or assistant
officer of the Trustee customarily performing functions similar
to those performed by the Persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is
referred because of his or her knowledge of and familiarity with
the particular subject.
"Scheduled Maturity Date" means March 31, 2027.
"Securities Act," means the Securities Act of 1933, as
amended, as in effect at the date of execution of this
instrument.
"Senior Debt" means the principal of (and premium, if any)
and interest, if any (including interest accruing on or after the
filing of any petition in bankruptcy or for reorganization
relating to the Company whether or not such claim for
post-petition interest is allowed in such proceeding), on Debt, whether
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incurred on or prior to the date of this Indenture or thereafter incurred,
unless, in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, it is provided that such obligations are not superior
in right of payment to the Debentures or to other Debt which is pari passu
with, or subordinated to, the Debentures; provided, however, that
Senior Debt shall not be deemed to include (i) any Debt of the
Company which when incurred and without respect to any election
under section 1111(b) of the United States Bankruptcy Code of
1978, as amended, was without recourse to the Company; (ii) any
Debt of the Company to any of its subsidiaries; (iii) Debt to any
employee of the Company; (iv) Debt which by its terms is
subordinated to trade accounts payable or accrued liabilities
arising in the ordinary course of business to the extent that
payments made to the holders of such Debt by the holders of the
Debentures as a result of the subordination provisions of this
Indenture would be greater than they otherwise would have been as
a result of any obligation of such holders to pay amounts over to
the obligees on such trade accounts payable or accrued
liabilities arising in the ordinary course of business as a
result of subordination provisions to which such Debt is subject;
and (v) Debt which constitutes Subordinated Debt.
"Senior Indebtedness" shall have the meaning set forth in
Section 16.2.
"Special Event" means a Tax Event, a Capital Treatment Event
or an Investment Company Event.
"Subordinated Debt" means the principal of (and premium, if
any) and interest, if any (including interest accruing on or
after the filing of any petition in bankruptcy or for
reorganization relating to the Company whether or not such claim
for post-petition interest is allowed in such proceeding), on
Debt, whether incurred on or prior to the date of this Indenture
or thereafter incurred, which is by its terms expressly provided
to be junior and subordinate to other Debt of the Company (other
than the Debentures).
"Subsidiary" means, with respect to any Person, (i) any
corporation at least a majority of whose outstanding Voting Stock
shall at the time be owned, directly or indirectly, by such
Person or by one or more of its Subsidiaries or by such Person
and one or more of its Subsidiaries; (ii) any general
partnership, joint venture, trust or similar entity, at least a
majority of whose outstanding partnership or similar interests
shall at the time be owned by such Person, or by one or more of
its Subsidiaries, or by such Person and one or more of its
Subsidiaries; and (iii) any limited partnership of which such
Person or any of its Subsidiaries is a general partner.
"Tax Event" means the receipt by the Trust of an Opinion of
Counsel, rendered by a law firm having a recognized tax and
securities practice, to the effect that, as a result of any
amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the
United States or any political subdivision or taxing authority
thereof or therein, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date
of issuance of the Preferred Securities under the Trust
Agreement, there is more than an insubstantial risk that (i) the
Trust is, or shall be within 90 days after the date of such
Opinion of Counsel, subject to United States federal income tax
with respect to income received or accrued on the Debentures;
(ii) interest payable by the Company on the Debentures is not, or
within 90 days after the date of such Opinion of Counsel, shall
not be, deductible by the Company, in whole or in part, for
United States federal income tax purposes; or (iii) the Trust is,
or shall be within 90 days after the date of such Opinion of
Counsel, subject to more than a de minimis amount of other taxes,
duties, assessments or other governmental charges. The Trust or
the Company shall request and receive such Opinion of
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Counsel with regard to such matters within a reasonable period of time
after the Trust or the Company shall have become aware of any of
the events described in clauses (i) through (iii) above.
"Trust" means 1st Source Capital Trust, a Delaware statutory
business trust.
"Trust Agreement" means the Amended and Restated Trust
Agreement, dated -------------, 1997, of the Trust.
"Trustee" means State Street Bank and Trust Company and,
subject to the provisions of Article IX, shall also include its
successors and assigns, and, if at any time there is more than
one Person acting in such capacity hereunder, "Trustee" shall
mean each such Person.
"Trust Indenture Act," means the Trust Indenture Act of
1939, as amended, subject to the provisions of Sections 11.1,
11.2, and 12.1, as in effect at the date of execution of this
instrument.
"Trust Securities" means the Common Securities and Preferred
Securities, collectively.
"Voting Stock," as applied to stock of any Person, means
shares, interests, participations or other equivalents in the
equity interest (however designated) in such Person having
ordinary voting power for the election of a majority of the
directors (or the equivalent) of such Person, other than shares,
interests, participations or other equivalents having such power
only by reason of the occurrence of a contingency.
ARTICLE II.
ISSUE, DESCRIPTION, TERMS, CONDITIONS
REGISTRATION AND EXCHANGE OF THE DEBENTURES
Section 2.1. Designation and Principal Amount.
There is hereby authorized Debentures designated the
"Floating Rate Subordinated Debentures due 2027," limited in
aggregate principal amount to $--------------, which amount shall
be as set forth in any written order of the Company for the
authentication and delivery of Debentures pursuant to
Section 2.6.
Section 2.2. Maturity.
(a) The Maturity Date shall be either:
(i) the Scheduled Maturity Date; or
(ii) if the Company elects to extend the
Maturity Date beyond the Scheduled Maturity Date
in accordance with Section 2.2(b), the Extended
Maturity Date; or
(iii) if the Company elects to accelerate
the Maturity Date to be a date prior to the
Scheduled Maturity Date in accordance with Section
2.2(c), the Accelerated Maturity Date.
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(b) the Company may at any time before the day which
is 90 days before the Scheduled Maturity Date, elect to
extend the Maturity Date to the Extended Maturity Date,
provided that the Company has received the prior
approval of the Federal Reserve if then required under
applicable capital guidelines or policies of the
Federal Reserve and further provided that the following
conditions in this Section 2.2(b) are satisfied both at
the date the Company gives notice in accordance with
Section 2.2(d) of its election to extend the Maturity
Date and at the Scheduled Maturity Date:
(i) the Company is not in bankruptcy,
otherwise insolvent or in liquidation;
(ii) the Company is not in default in the
payment of interest or principal on the
Debentures; and
(iii) the Trust is not in arrears on
payments of Distributions on the Trust Securities
issued by it and no deferred Distributions are
accumulated.
(c) the Company may at any time before the day which
is 90 days before the Scheduled Maturity Date and after
March 31, 2002, elect to shorten the Maturity Date only
once to the Accelerated Maturity Date provided that the
Company has received the prior approval of the Federal
Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve.
(d) if the Company elects to extend the Maturity Date
in accordance with Section 2.2(b), the Company shall
give notice to the registered holders of the
Debentures, the Property Trustee and the Trust of the
extension of the Maturity Date and the Extended
Maturity Date at least 90 days and no more than 180
days before the Scheduled Maturity Date.
(e) if the Company elects to accelerate the Maturity
Date in accordance with Section 2.2(c), the Company
shall give notice to the registered holders of the
Debentures, the Property Trustee and the Trust of the
extension of the Maturity Date and the Accelerated
Maturity Date at least 90 days and no more than 180
days before the Accelerated Maturity Date.
Section 2.3. Form and Payment.
The Debentures shall be issued in fully registered
certificated form without interest coupons. Principal and
interest on the Debentures issued in certificated form shall be
payable, the transfer of such Debentures shall be registrable and
such Debentures shall be exchangeable for Debentures bearing
identical terms and provisions at the office or agency of the
Trustee; provided, however, that payment of interest may be made
at the option of the Company by check mailed to the holder at
such address as shall appear in the Debenture Register or by wire
transfer to an account maintained by the holder as specified in
the Debenture Register, provided that the holder provides proper
transfer instructions by the regular record date.
Notwithstanding the foregoing, so long as the holder of any
Debentures is the Property Trustee, the payment of the principal
of and interest (including Compounded Interest and Additional
Interest, if any) on such Debentures held by the Property Trustee
shall be made at such place and to such account as may be
designated by the Property Trustee.
Section 2.4. [Intentionally Omitted].
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Section 2.5. Interest.
(a) Each Debenture shall bear interest at a rate per annum
determined by reference to 3-Month Treasury, determined as
described below, plus ----% during any period beginning on, and
including, the date of the original issuance, and ending on, but
excluding, the first Interest Payment Date, and each successive
period beginning on, and including, an Interest Payment Date, and
ending on, but excluding, the next succeeding Interest Payment
Date (a "Distribution Period") applied to the principal amount
thereof, until the principal thereof becomes due and payable, and
on any overdue principal and (without duplication) on any overdue
installment of interest at the same rate per annum compounded
quarterly; provided, however, that said interest rate for the
first Distribution Period shall be ----%. Interest shall be payable
(subject to the provisions of Article IV) quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year
(each, an "Interest Payment Date," commencing on June 30, 1997),
to the Person in whose name such Debenture or any Predecessor
Debenture is registered, at the close of business on the regular
record date for such interest installment, which shall be the
fifteenth day of the last month of the calendar quarter.
(b) The amount of interest payable for any period shall be
computed on the basis of a 360-day year of twelve 30-day months.
The amount of interest payable for any period shorter than a full
quarterly period for which interest is computed shall be computed
on the basis of the number of days elapsed in a 360-day year of
twelve 30-day months. In the event that any date on which
interest is payable on the Debentures is not a Business Day, then
payment of interest payable on such date shall be made on the
next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay) with the
same force and effect as if made on the date such payment was
originally payable.
(c) If, at any time while the Property Trustee is the
holder of any Debentures, the Trust or the Property Trustee is
required to pay any taxes, duties, assessments or governmental
charges of whatever nature (other than withholding taxes) imposed
by the United States, or any other taxing authority, then, in any
case, the Company shall pay as additional interest ("Additional
Interest") on the Debentures held by the Property Trustee, such
additional amounts as shall be required so that the net amounts
received and retained by the Trust and the Property Trustee after
paying such taxes, duties, assessments or other governmental
charges shall be equal to the amounts the Trust and the Property
Trustee would have received had no such taxes, duties,
assessments or other government charges been imposed.
(d) "3-Month Treasury" means the yield on United States of
America Treasury constant maturities, adjusted to a constant
maturity of three (3) months, reported by the Federal Reserve.
3-Month Treasury, with respect to any Distribution Period, will be
determined by the Property Trustee as follows:
(i) On the second Business Day preceding the
commencement of such Distribution Period (each a
"Determination Date"), 3-Month Treasury will be the current
yield for United States of America Treasury constant
maturities, adjusted to a constant maturity of three (3)
months, which appears on the applicable Federal Reserve
Statistical Release Series H.15 (519) which includes data
for such Determination Date, or as then currently furnished
or made available by the Federal Reserve if such Series is
no longer published.
(ii) If, with respect to any Determination Date, the
Property Trustee is required but unable to determine 3-Month
Treasury in the manner provided in paragraph (i), 3-Month
Treasury for such Distribution Period will be 3-Month
Treasury as determined on the previous Determination Date.
(e) The Property Trustee will notify the Company, the Trustee
and any securities exchange or interdealer quotation system on which
the Preferred Securities are listed, of the Distribution Rate and
the Distribution Date for each Distribution Period, in each case as
soon as practicable after the determination thereof but in no event
later than the seventh Business Day of the relevant Distribution
Period. Failure to notify the Company, the Trustee or any securities
exchange or interdealer quotation system, or any defect in said notice,
shall not affect the obligation of the Company to make payment on the
Debentures at the applicable Distribution Rate. Any error in the
calculation of the Distribution Rate by the Property Trustee may be
corrected at any time by notice delivered as above provided.
(f) Subject to the corrective rights set forth above, all
certificates, communications, opinions, determinations, calculations,
quotations and decisions given, expressed, made or obtained for the
purposes of the provisions relating to the payment and calculation of
Distributions on the Debentures and the Preferred Securities and the
Debentures by the Trustee or the Property Trustee will (in the absence
of willful default, bad faith and manifest error) be binding on the Trust,
the Company, and all of the holders of the Preferred Securities, and no
liability will (in the absence of willful default, bad faith or manifest
error) attach to the Trustee or the Property Trustee in connection with
the exercise or non-exercise by either of them or their respective powers,
duties and discretion.
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Section 2.6. Execution and Authentications.
(a) The Debentures shall be signed on behalf of the Company
by its Chief Executive Officer, President or one of its Vice
Presidents, under its corporate seal attested by its Secretary or
one of its Assistant Secretaries. Signatures may be in the form
of a manual or facsimile signature. The Company may use the
facsimile signature of any Person who shall have been a Chief
Executive Officer, President or Vice President thereof, or of any
Person who shall have been a Secretary or Assistant Secretary
thereof, notwithstanding the fact that at the time the Debentures
shall be authenticated and delivered or disposed of such Person
shall have ceased to be the Chief Executive Officer, President or
a Vice President, or the Secretary or an Assistant Secretary, of
the Company. The seal of the Company may be in the form of a
facsimile of such seal and may be impressed, affixed, imprinted
or otherwise reproduced on the Debentures. The Debentures may
contain such notations, legends or endorsements required by law,
stock exchange rule or usage. Each Debenture shall be dated the
date of its authentication by the Trustee.
(b) A Debenture shall not be valid until authenticated
manually by an authorized signatory of the Trustee, or by an
Authenticating Agent. Such signature shall be conclusive
evidence that the Debenture so authenticated has been duly
authenticated and delivered hereunder and that the holder is
entitled to the benefits of this Indenture.
(c) At any time and from time to time after the execution
and delivery of this Indenture, the Company may deliver
Debentures executed by the Company to the Trustee for
authentication, together with a written order of the Company for
the authentication and delivery of such Debentures signed by its
Chief Executive Officer, President or any Vice President and its
Treasurer or any Assistant Treasurer, and the Trustee in
accordance with such written order shall authenticate and deliver
such Debentures.
(d) In authenticating such Debentures and accepting the
additional responsibilities under this Indenture in relation to
such Debentures, the Trustee shall be entitled to receive, and
(subject to Section 9.1) shall be fully protected in relying
upon, an Opinion of Counsel stating that the form and terms
thereof have been established in conformity with the provisions
of this Indenture.
(e) The Trustee shall not be required to authenticate such
Debentures if the issue of such Debentures pursuant to this
Indenture shall affect the Trustee's own rights, duties or
immunities under the Debentures and this Indenture or otherwise
in a manner that is not reasonably acceptable to the Trustee.
Section 2.7. Registration of Transfer and Exchange.
(a) Debentures may be exchanged upon presentation thereof
at the office or agency of the Company designated for such
purpose, or at the office of the Debenture Registrar, for other
Debentures and for a like aggregate principal amount, upon
payment of a sum sufficient to cover any tax or other
governmental charge in relation thereto, all as provided in this
Section 2.7. In respect of any Debentures so surrendered for
exchange, the Company shall execute, the Trustee shall
authenticate and such office or agency shall deliver in exchange
therefor the Debenture or Debentures that the Debentureholder
making the exchange shall be entitled to receive, bearing numbers
not contemporaneously outstanding.
(b) The Company shall keep, or cause to be kept, at its
office or agency designated for such purpose, or at the office of
the Debenture Registrar, or such other location designated by the Company
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a register or registers (herein referred to as the
"Debenture Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall register the
Debentures and the transfers of Debentures as in this Article II
provided and which at all reasonable times shall be open for
inspection by the Trustee. The registrar for the purpose of
registering Debentures and transfer of Debentures as herein
provided shall initially be the Trustee and thereafter as may be
appointed by the Company as authorized by Board Resolution (the
"Debenture Registrar"). Upon surrender for transfer of any
Debenture at the office or agency of the Company designated for
such purpose, the Company shall execute, the Trustee shall
authenticate and such office or agency shall deliver in the name
of the transferee or transferees a new Debenture or Debentures
for a like aggregate principal amount. All Debentures presented
or surrendered for exchange or registration of transfer, as
provided in this Section 2.7, shall be accompanied (if so
required by the Company or the Debenture Registrar) by a written
instrument or instruments of transfer, in form satisfactory to
the Company or the Debenture Registrar, duly executed by the
registered holder or by such holder's duly authorized attorney in
writing.
(c) No service charge shall be made for any exchange or
registration of transfer of Debentures, or issue of new
Debentures in case of partial redemption, but the Company may
require payment of a sum sufficient to cover any tax or other
governmental charge in relation thereto, other than exchanges
pursuant to Section 2.8, the second paragraph of Section 3.5 and
Section 11.4 not involving any transfer.
(d) The Company shall not be required (i) to issue,
exchange or register the transfer of any Debentures during a
period beginning at the opening of business 15 days before the
day of the mailing of a notice of redemption of less than all the
Outstanding Debentures and ending at the close of business on the
day of such mailing; nor (ii) to register the transfer of or
exchange any Debentures or portions thereof called for
redemption.
Section 2.8. Temporary Debentures.
Pending the preparation of definitive Debentures, the
Company may execute, and the Trustee shall authenticate and
deliver, temporary Debentures (printed, lithographed, or
typewritten). Such temporary Debentures shall be substantially
in the form of the definitive Debentures in lieu of which they
are issued, but with such omissions, insertions and variations as
may be appropriate for temporary Debentures, all as may be
determined by the Company. Every temporary Debenture shall be
executed by the Company and be authenticated by the Trustee upon
the same conditions and in substantially the same manner, and
with like effect, as the definitive Debentures. Without
unnecessary delay the Company shall execute and shall furnish
definitive Debentures and thereupon any or all temporary
Debentures may be surrendered in exchange therefor (without
charge to the holders), at the office or agency of the Company
designated for the purpose, and the Trustee shall authenticate
and such office or agency shall deliver in exchange for such
temporary Debentures an equal aggregate principal amount of
definitive Debentures, unless the Company advises the Trustee to
the effect that definitive Debentures need not be executed and
furnished until further notice from the Company. Until so
exchanged, the temporary Debentures shall be entitled to the same
benefits under this Indenture as definitive Debentures
authenticated and delivered hereunder.
Section 2.9. Mutilated, Destroyed, Lost or Stolen Debentures.
(a) In case any temporary or definitive Debenture shall
become mutilated or be destroyed, lost or stolen, the Company
(subject to the next succeeding sentence) shall execute, and upon
the Company's request the Trustee (subject as aforesaid) shall
authenticate and deliver, a new Debenture bearing a
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number not contemporaneously outstanding, in exchange and substitution for
the mutilated Debenture, or in lieu of and in substitution for
the Debenture so destroyed, lost or stolen. In every case the
applicant for a substituted Debenture shall furnish to the
Company and the Trustee such security or indemnity as may be
required by them to save each of them harmless, and, in every
case of destruction, loss or theft, the applicant shall also
furnish to the Company and the Trustee evidence to their
satisfaction of the destruction, loss or theft of the applicant's
Debenture and of the ownership thereof. The Trustee may
authenticate any such substituted Debenture and deliver the same
upon the written request or authorization of the Chairman,
President or any Vice-President and the Treasurer or any
Assistant Treasurer of the Company. Upon the issuance of any
substituted Debenture, the Company may require the payment of a
sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee) connected
therewith. In case any Debenture that has matured or is about to
mature shall become mutilated or be destroyed, lost or stolen,
the Company may, instead of issuing a substitute Debenture, pay
or authorize the payment of the same (without surrender thereof
except in the case of a mutilated Debenture) if the applicant for
such payment shall furnish to the Company and the Trustee such
security or indemnity as they may require to save them harmless,
and, in case of destruction, loss or theft, evidence to the
satisfaction of the Company and the Trustee of the destruction,
loss or theft of such Debenture and of the ownership thereof.
(b) Every replacement Debenture issued pursuant to the
provisions of this Section 2.9 shall constitute an additional
contractual obligation of the Company whether or not the
mutilated, destroyed, lost or stolen Debenture shall be found at
any time, or be enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately
with any and all other Debentures duly issued hereunder. All
Debentures shall be held and owned upon the express condition
that the foregoing provisions are exclusive with respect to the
replacement or payment of mutilated, destroyed, lost or stolen
Debentures, and shall preclude (to the extent lawful) any and all
other rights or remedies, notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other
securities without their surrender.
Section 2.10. Cancellation.
All Debentures surrendered for the purpose of payment,
redemption, exchange or registration of transfer shall, if
surrendered to the Company or any paying agent, be delivered to
the Trustee for cancellation, or, if surrendered to the Trustee,
shall be canceled by it, and no Debentures shall be issued in
lieu thereof except as expressly required or permitted by any of
the provisions of this Indenture. On request of the Company at
the time of such surrender, the Trustee shall deliver to the
Company canceled Debentures held by the Trustee. In the absence
of such request the Trustee may dispose of canceled Debentures in
accordance with its standard procedures and deliver a certificate
of disposition to the Company. If the Company shall otherwise
acquire any of the Debentures, however, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness
represented by such Debentures unless and until the same are
delivered to the Trustee for cancellation.
Section 2.11. Benefit of Indenture.
Nothing in this Indenture or in the Debentures, express or
implied, shall give or be construed to give to any Person, other
than the parties hereto and the holders of the Debentures (and,
with respect to the provisions of Article XVI, the holders of
Senior Indebtedness) any legal or equitable right, remedy or
claim under or in respect of this Indenture, or under any
covenant, condition or provision herein contained; all such
covenants, conditions and provisions being for the sole benefit
of the parties hereto
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and of the holders of the Debentures (and, with respect to the
provisions of Article XVI, the holders of Senior Indebtedness).
Section 2.12. Authentication Agent.
(a) So long as any of the Debentures remain Outstanding
there may be an Authenticating Agent for any or all such
Debentures, which the Trustee shall have the right to appoint.
Said Authenticating Agent shall be authorized to act on behalf of
the Trustee to authenticate Debentures issued upon exchange,
transfer or partial redemption thereof, and Debentures so
authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. All references in this
Indenture to the authentication of Debentures by the Trustee
shall be deemed to include authentication by an Authenticating
Agent. Each Authenticating Agent shall be acceptable to the
Company and shall be a corporation that has a combined capital
and surplus, as most recently reported or determined by it,
sufficient under the laws of any jurisdiction under which it is
organized or in which it is doing business to conduct a trust
business, and that is otherwise authorized under such laws to
conduct such business and is subject to supervision or
examination by federal or state authorities. If at any time any
Authenticating Agent shall cease to be eligible in accordance
with these provisions, it shall resign immediately.
(b) Any Authenticating Agent may at any time resign by
giving written notice of resignation to the Trustee and to the
Company. The Trustee may at any time (and upon request by the
Company shall) terminate the agency of any Authenticating Agent
by giving written notice of termination to such Authenticating
Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee
may appoint an eligible successor Authenticating Agent acceptable
to the Company. Any successor Authenticating Agent, upon
acceptance of its appointment hereunder, shall become vested with
all the rights, powers and duties of its predecessor hereunder as
if originally named as an Authenticating Agent pursuant hereto.
ARTICLE III.
REDEMPTION OF DEBENTURES
Section 3.1. Redemption.
Subject to the Company having received prior approval of the
Federal Reserve, if then required under the applicable capital
guidelines or policies of the Federal Reserve, the Company may
redeem the Debentures issued hereunder on and after the dates set
forth in and in accordance with the terms of this Article III.
Section 3.2. Special Event Redemption.
Subject to the Company having received the prior approval of
the Federal Reserve, if then required under the applicable
capital guidelines or policies of the Federal Reserve, if a
Special Event has occurred and is continuing, then,
notwithstanding Section 3.3(a) but subject to Section 3.3(b), the
Company shall have the right upon not less than 30 days nor more
than 60 days notice to the holders of the Debentures to redeem
the Debentures, in whole but not in part, for cash within 180
days following the occurrence of such Special Event (the "180-Day
Period") at a redemption price equal to 100% of the principal
amount to be redeemed plus any accrued and unpaid interest
thereon to the date of such
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redemption (the "Redemption Price"), provided that if at the time there is
available to the Company the opportunity to eliminate, within the 180-Day
Period, a Tax Event by taking some ministerial action (a "Ministerial
Action"), such as filing a form or making an election, or pursuing some
other similar reasonable measure which has no adverse effect on
the Company, the Trust or the holders of the Trust Securities
issued by the Trust, the Company shall pursue such Ministerial
Action in lieu of redemption, and, provided further, that the
Company shall have no right to redeem the Debentures while it is
pursuing any Ministerial Action pursuant to its obligations
hereunder, and, provided further, that, if it is determined that
the taking of a Ministerial Action would not eliminate the Tax
Event within the 180-Day Period, the Company's right to redeem
the Debentures shall be restored and it shall have no further
obligations to pursue the Ministerial Action. The Redemption
Price shall be paid prior to 12:00 noon, New York time, on the
date of such redemption or such earlier time as the Company
determines, provided that the Company shall deposit with the
Trustee an amount sufficient to pay the Redemption Price by 10:00
a.m., New York time, on the date such Redemption Price is to be
paid.
Section 3.3. Optional Redemption by Company.
(a) Subject to the provisions of Section 3.3(b), except as
otherwise may be specified in this Indenture, the Company shall
have the right to redeem the Debentures, in whole or in part,
from time to time, on or after March 31, 2002, at a Redemption
Price equal to 100% of the principal amount to be redeemed plus
any accrued and unpaid interest thereon to the date of such
redemption. Any redemption pursuant to this Section 3.3(a) shall
be made upon not less than 30 days nor more than 60 days notice
to the holder of the Debentures, at the Redemption Price. If the
Debentures are only partially redeemed pursuant to this
Section 3.3, the Debentures shall be redeemed pro rata or by lot
or in such other manner as the Trustee shall deem appropriate and
fair in its discretion. The Redemption Price shall be paid prior
to 12:00 noon, New York time, on the date of such redemption or
at such earlier time as the Company determines provided that the
Company shall deposit with the Trustee an amount sufficient to
pay the Redemption Price by 10:00 a.m., New York time, on the
date such Redemption Price is to be paid.
(b) If a partial redemption of the Debentures would result
in the delisting of the Preferred Securities issued by the Trust
from The Nasdaq Stock Market's National Market or any comparable
level or successor listing or any national securities exchange or
other organization on which the Preferred Securities are then
listed or quoted, the Company shall not be permitted to effect
such partial redemption and may only redeem the Debentures in
whole.
Section 3.4. Notice of Redemption.
(a) In case the Company shall desire to exercise such right
to redeem all or, as the case may be, a portion of the Debentures
in accordance with the right reserved so to do, the Company
shall, or shall cause the Trustee to upon receipt of 45 days'
written notice from the Company (which notice shall, in the event
of a partial redemption, include a representation to the effect
that such partial redemption shall not result in the delisting of
the Preferred Securities as described in Section 3.3(b) above),
give notice of such redemption to holders of the Debentures to be
redeemed by mailing, first class postage prepaid, a notice of
such redemption not less than 30 days and not more than 60 days
before the date fixed for redemption to such holders at their
last addresses as they shall appear upon the Debenture Register
unless a shorter period is specified in the Debentures to be
redeemed. Any notice that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given,
whether or not the registered holder receives the notice. In any
case, failure duly to give such notice to the holder of any
Debenture
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designated for redemption in whole or in part, or any defect in the notice,
shall not affect the validity of the proceedings for the redemption of any
other Debentures. In the case of any redemption of Debentures prior to the
expiration of any restriction on such redemption provided in the terms of such
Debentures or elsewhere in this Indenture, the Company shall
furnish the Trustee with an Officers' Certificate evidencing
compliance with any such restriction. Each such notice of
redemption shall specify the date fixed for redemption and the
Redemption Price and shall state that payment of the Redemption
Price shall be made at the Corporate Trust Office, upon
presentation and surrender of such Debentures, that interest
accrued to the date fixed for redemption shall be paid as
specified in said notice and that from and after said date
interest shall cease to accrue. If less than all the Debentures
are to be redeemed, the notice to the holders of the Debentures
shall specify the particular Debentures to be redeemed. If the
Debentures are to be redeemed in part only, the notice shall
state the portion of the principal amount thereof to be redeemed
and shall state that on and after the redemption date, upon
surrender of such Debenture, a new Debenture or Debentures in
principal amount equal to the unredeemed portion thereof shall be
issued.
(b) If less than all the Debentures are to be redeemed, the
Company shall give the Trustee at least 45 days' notice in
advance of the date fixed for redemption as to the aggregate
principal amount of Debentures to be redeemed, and thereupon the
Trustee shall select, by lot or in such other manner as it shall
deem appropriate and fair in its discretion, the portion or
portions (equal to $25 or any integral multiple thereof) of the
Debentures to be redeemed and shall thereafter promptly notify
the Company in writing of the numbers of the Debentures to be
redeemed, in whole or in part. The Company may, if and whenever
it shall so elect pursuant to the terms hereof, by delivery of
instructions signed on its behalf by its President or any Vice
President, instruct the Trustee or any paying agent to call all
or any part of the Debentures for redemption and to give notice
of redemption in the manner set forth in this Section 3.4, such
notice to be in the name of the Company or its own name as the
Trustee or such paying agent may deem advisable. In any case in
which notice of redemption is to be given by the Trustee or any
such paying agent, the Company shall deliver or cause to be
delivered to, or permit to remain with, the Trustee or such
paying agent, as the case may be, such Debenture Register,
transfer books or other records, or suitable copies or extracts
therefrom, sufficient to enable the Trustee or such paying agent
to give any notice by mail that may be required under the
provisions of this Section 3.4.
Section 3.5. Payment Upon Redemption.
(a) If the giving of notice of redemption shall have been
completed as above provided, the Debentures or portions of
Debentures to be redeemed specified in such notice shall become
due and payable on the date and at the place stated in such
notice at the applicable Redemption Price, and interest on such
Debentures or portions of Debentures shall cease to accrue on and
after the date fixed for redemption, unless the Company shall
default in the payment of such Redemption Price with respect to
any such Debenture or portion thereof. On presentation and
surrender of such Debentures on or after the date fixed for
redemption at the place of payment specified in the notice, said
Debentures shall be paid and redeemed at the Redemption Price
(but if the date fixed for redemption is an interest payment
date, the interest installment payable on such date shall be
payable to the registered holder at the close of business on the
applicable record date pursuant to Section 3.3).
(b) Upon presentation of any Debenture that is to be
redeemed in part only, the Company shall execute and the Trustee
shall authenticate and the office or agency where the Debenture
is presented shall deliver to the holder thereof, at the expense
of the Company, a new Debenture of authorized denomination in
principal amount equal to the unredeemed portion of the Debenture
so presented.
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Section 3.6. No Sinking Fund.
The Debentures are not entitled to the benefit of any
sinking fund.
ARTICLE IV.
EXTENSION OF INTEREST PAYMENT PERIOD
Section 4.1. Extension of Interest Payment Period.
So long as no Event of Default has occurred and is
continuing, the Company shall have the right, at any time and
from time to time during the term of the Debentures, to defer
payments of interest by extending the interest payment period of
such Debentures for a period not exceeding 20 consecutive
quarters (the "Extended Interest Payment Period"), during which
Extended Interest Payment Period no interest shall be due and
payable; provided that no Extended Interest Payment Period may
extend beyond the Maturity Date. Interest, the payment of which
has been deferred because of the extension of the interest
payment period pursuant to this Section 4.1, shall bear interest
thereon at the Coupon Rate compounded quarterly for each quarter
of the Extended Interest Payment Period ("Compounded Interest").
At the end of the Extended Interest Payment Period, the Company
shall calculate (and deliver such calculation to the Trustee) and
pay all interest accrued and unpaid on the Debentures, including
any Additional Interest and Compounded Interest (together,
"Deferred Interest") that shall be payable to the holders of the
Debentures in whose names the Debentures are registered in the
Debenture Register on the first record date after the end of the
Extended Interest Payment Period. Before the termination of any
Extended Interest Payment Period, the Company may further extend
such period, provided that such period together with all such
further extensions thereof shall not exceed 20 consecutive
quarters, or extend beyond the Maturity Date of the Debentures.
Upon the termination of any Extended Interest Payment Period and
upon the payment of all Deferred Interest then due, the Company
may commence a new Extended Interest Payment Period, subject to
the foregoing requirements. No interest shall be due and payable
during an Extended Interest Payment Period, except at the end
thereof, but the Company may prepay at any time all or any
portion of the interest accrued during an Extended Interest
Payment Period.
Section 4.2. Notice of Extension.
(a) If the Property Trustee is the only registered holder
of the Debentures at the time the Company selects an Extended
Interest Payment Period, the Company shall give written notice to
the Administrative Trustees, the Property Trustee and the Trustee
of its selection of such Extended Interest Payment Period two
Business Days before the earlier of (i) the next succeeding date
on which Distributions on the Trust Securities issued by the
Trust are payable; or (ii) the date the Trust is required to give
notice of the record date, or the date such Distributions are
payable, to The Nasdaq Stock Market's National Market or other
applicable self-regulatory organization or to holders of the
Preferred Securities issued by the Trust, but in any event at
least one Business Day before such record date.
(b) If the Property Trustee is not the only holder of the
Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give the holders of the
Debentures and the Trustee written notice of its selection of
such Extended Interest Payment Period at least two Business Days
before the earlier of (i) the next succeeding Interest Payment
Date; or (ii) the date the Company is required to give notice of
the record or payment date of such interest payment to The Nasdaq
Stock Market's National Market or other applicable
self-regulatory organization or to holders of the Debentures.
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(c) The quarter in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 4.2 shall be counted as one
of the 20 quarters permitted in the maximum Extended Interest
Payment Period permitted under Section 4.1.
Section 4.3. Limitation on Transactions.
If (i) the Company shall exercise its right to defer payment
of interest as provided in Section 4.1; or (ii) there shall have
occurred any Event of Default, then (a) the Company shall not
declare or pay any dividend on, make any distributions with
respect to, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock (other than
(i) dividends or distributions in common stock of the Company, or
any declaration of a non-cash dividend in connection with the
implementation of a shareholders' rights plan, or the issuance of
stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, and
(ii) purchases of common stock of the Company related to the
rights under any of the Company's benefit plans for its
directors, officers or employees); (b) the Company shall not make
any payment of interest, principal or premium, if any, or repay,
repurchase or redeem any debt securities issued by the Company
which rank pari passu with or junior to the Debentures; provided,
however, that notwithstanding the foregoing the Company may make
payments pursuant to its obligations under the Preferred
Securities Guarantee; and (c) the Company shall not redeem,
purchase or acquire less than all of the outstanding Debentures
or any of the Preferred Securities.
ARTICLE V.
PARTICULAR COVENANTS OF THE COMPANY
Section 5.1. Payment of Principal and Interest.
The Company shall duly and punctually pay or cause to be
paid the principal of and interest on the Debentures at the time
and place and in the manner provided herein.
Section 5.2. Maintenance of Agency.
So long as any of the Debentures remain Outstanding, the
Company shall maintain an office or agency at such location or
locations as may be designated as provided in this Section 5.2,
where (i) Debentures may be presented for payment;
(ii) Debentures may be presented as hereinabove authorized for
registration of transfer and exchange; and (iii) notices and
demands to or upon the Company in respect of the Debentures and
this Indenture may be given or served, such designation to
continue with respect to such office or agency until the Company
shall, by written notice signed by its President or a Vice
President and delivered to the Trustee, designate some other
office or agency for such purposes or any of them. If at any
time the Company shall fail to maintain any such required office
or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all
such presentations, notices and demands. The Company shall give
the Trustee prompt written notice of any such designation or
rescission thereof.
Section 5.3. Paying Agents.
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(a) The Property Trustee shall act as the Paying Agent. If
the Company shall appoint one or more paying agents for the
Debentures, other than the Trustee, the Company shall cause each
such paying agent to execute and deliver to the Trustee an
instrument in which such agent shall agree with the Trustee,
subject to the provisions of this Section 5.3:
(i) that it shall hold all sums held by it as such
agent for the payment of the principal of or interest on the
Debentures (whether such sums have been paid to it by the
Company or by any other obligor of such Debentures) in trust
for the benefit of the Persons entitled thereto;
(ii) that it shall give the Trustee notice of any
failure by the Company (or by any other obligor of such
Debentures) to make any payment of the principal of or
interest on the Debentures when the same shall be due and
payable;
(iii) that it shall, at any time during the
continuance of any failure referred to in the preceding
paragraph (a)(ii) above, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in
trust by such paying agent; and
(iv) that it shall perform all other duties of paying
agent as set forth in this Indenture.
(b) If the Company shall act as its own paying agent with
respect to the Debentures, it shall on or before each due date of
the principal of or interest on such Debentures, set aside,
segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay such principal or
interest so becoming due on Debentures until such sums shall be
paid to such Persons or otherwise disposed of as herein provided
and shall promptly notify the Trustee of such action, or any
failure (by it or any other obligor on such Debentures) to take
such action. Whenever the Company shall have one or more paying
agents for the Debentures, it shall, prior to each due date of
the principal of or interest on any Debentures, deposit with the
paying agent a sum sufficient to pay the principal or interest so
becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal or interest, and (unless such
paying agent is the Trustee) the Company shall promptly notify
the Trustee of this action or failure so to act.
(c) Notwithstanding anything in this Section 5.3 to the
contrary, (i) the agreement to hold sums in trust as provided in
this Section 5.3 is subject to the provisions of Section 13.3 and
13.4; and (ii) the Company may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for
any other purpose, pay, or direct any paying agent to pay, to the
Trustee all sums held in trust by the Company or such paying
agent, such sums to be held by the Trustee upon the same terms
and conditions as those upon which such sums were held by the
Company or such paying agent; and, upon such payment by any
paying agent to the Trustee, such paying agent shall be released
from all further liability with respect to such money.
Section 5.4. Appointment to Fill Vacancy in Office of Trustee.
The Company, whenever necessary to avoid or fill a vacancy
in the office of Trustee, shall appoint, in the manner provided
in Section 9.10, a Trustee, so that there shall at all times be a
Trustee hereunder.
Section 5.5. Compliance with Consolidation Provisions.
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The Company shall not, while any of the Debentures remain
outstanding, consolidate with, or merge into, or merge into
itself, or sell or convey all or substantially all of its
property to any other company unless the provisions of
Article XII hereof are complied with.
Section 5.6. Limitation on Transactions.
If Debentures are issued to the Trust or a trustee of the
Trust in connection with the issuance of Trust Securities by the
Trust and (i) there shall have occurred any event that would
constitute an Event of Default; (ii) the Company shall be in
default with respect to its payment of any obligations under the
Preferred Securities Guarantee relating to the Trust; or
(iii) the Company shall have given notice of its election to
defer payments of interest on such Debentures by extending the
interest payment period as provided in this Indenture and such
period, or any extension thereof, shall be continuing, then
(a) the Company shall not declare or pay any dividend on, make
any distributions with respect to, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of its capital
stock (other than (i) dividends or distributions in common stock
of the Company, or any declaration of a non-cash dividend in
connection with the implementation of a shareholders' rights
plan, or the issuance of stock under any such plan in the future,
or the redemption or repurchase of any such rights pursuant
thereto, and (ii) purchases of common stock of the Company
related to the rights under any of the Company's benefit plans
for its directors, officers or employees); (b) the Company shall
not make any payment of interest, principal or premium, if any,
or repay, repurchase or redeem any debt securities issued by the
Company which rank pari passu with or junior to the Debentures;
provided, however, that the Company may make payments pursuant to
its obligations under the Preferred Securities Guarantee; and
(c) the Company shall not redeem, purchase or acquire less than
all of the outstanding Debentures or any of the Preferred
Securities.
Section 5.7. Covenants as to the Trust.
For so long as such Trust Securities of the Trust remain
outstanding, the Company shall (i) maintain 100% direct or
indirect ownership of the Common Securities of the Trust;
provided, however, that any permitted successor of the Company
under this Indenture may succeed to the Company's ownership of
the Common Securities; (ii) not voluntarily terminate, wind up or
liquidate the Trust, except upon prior approval of the Federal
Reserve if then so required under applicable capital guidelines
or policies of the Federal Reserve and use its reasonable efforts
to cause the Trust (a) to remain a business trust, except in
connection with a distribution of Debentures, the redemption of
all of the Trust Securities of the Trust or certain mergers,
consolidations or amalgamations, each as permitted by the Trust
Agreement; and (b) to otherwise continue not to be treated as an
association taxable as a corporation or partnership for United
States federal income tax purposes; and (iii) use its reasonable
efforts to cause each holder of Trust Securities to be treated as
owning an individual beneficial interest in the Debentures. In
connection with the distribution of the Debentures to the holders
of the Preferred Securities issued by the Trust upon a
Dissolution Event, the Company shall use its best efforts to list
such Debentures on The Nasdaq Stock Market's National Market or
on such other exchange as the Preferred Securities are then
listed.
Section 5.8. Covenants as to Purchases.
Prior to March 31, 2002, the Company shall not purchase any
Debentures, in whole or in part, from the Trust.
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ARTICLE VI.
DEBENTUREHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
Section 6.1. Company to Furnish Trustee Names and Addresses of
Debentureholders.
The Company shall furnish or cause to be furnished to the
Trustee (a) on a monthly basis on each regular record date (as
described in Section 2.5) a list, in such form as the Trustee may
reasonably require, of the names and addresses of the holders of
the Debentures as of such regular record date, provided that the
Company shall not be obligated to furnish or cause to furnish
such list at any time that the list shall not differ in any
respect from the most recent list furnished to the Trustee by the
Company (in the event the Company fails to provide such list on a
monthly basis, the Trustee shall be entitled to rely on the most
recent list provided by the Company); and (b) at such other times
as the Trustee may request in writing within 30 days after the
receipt by the Company 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; provided, however, that, in either
case, no such list need be furnished if the Trustee shall be the
Debenture Registrar.
Section 6.2. Preservation of Information Communications with
Debentureholders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and
addresses of the holders of Debentures contained in the most
recent list furnished to it as provided in Section 6.1 and as to
the names and addresses of holders of Debentures received by the
Trustee in its capacity as registrar for the Debentures (if
acting in such capacity).
(b) The Trustee may destroy any list furnished to it as
provided in Section 6.1 upon receipt of a new list so furnished.
(c) Debentureholders may communicate as provided in Section
312(b) of the Trust Indenture Act with other Debentureholders
with respect to their rights under this Indenture or under the
Debentures.
Section 6.3. Reports by the Company.
(a) The Company covenants and agrees to file with the
Trustee, within 15 days after the Company is required to file the
same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) that the Company may
be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company is not
required to file information, documents or reports pursuant to
either of such sections, then to file with the Trustee and the
Commission, in accordance with the rules and regulations
prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports
that may be required pursuant to Section 13 of the Exchange Act
in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in
such rules and regulations.
(b) The Company covenants and agrees to file with the
Trustee and the Commission, in accordance with the rules and
regulations prescribed from to time by the Commission, such
additional information, documents and reports with respect to
compliance by the Company with the conditions and
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covenants provided for in this Indenture as may be required from time to
time by such rules and regulations.
(c) The Company covenants and agrees to transmit by mail,
first class postage prepaid, or reputable over-night delivery
service that provides for evidence of receipt, to the
Debentureholders, as their names and addresses appear upon the
Debenture Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to
subsections (a) and (b) of this Section 6.3 as may be required by
rules and regulations prescribed from time to time by the
Commission.
Section 6.4. Reports by the Trustee.
(a) On or before July 15 in each year in which any of the
Debentures are Outstanding, the Trustee shall transmit by mail,
first class postage prepaid, to the Debentureholders, as their
names and addresses appear upon the Debenture Register, a brief
report dated as of the preceding May 15, if and to the extent
required under Section 313(a) of the Trust Indenture Act.
(b) The Trustee shall comply with Section 313(b) and 313(c)
of the Trust Indenture Act.
(c) A copy of each such report shall, at the time of such
transmission to Debentureholders, be filed by the Trustee with
the Company, with each stock exchange upon which any Debentures
are listed (if so listed) and also with the Commission. The
Company agrees to notify the Trustee when any Debentures become
listed on any stock exchange.
ARTICLE VII.
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
ON EVENT OF DEFAULT
Section 7.1. Events of Default.
(a) Whenever used herein with respect to the Debentures,
"Event of Default" means any one or more of the following events
that has occurred and is continuing:
(i) the Company defaults in the payment of any
installment of interest upon any of the Debentures, as and
when the same shall become due and payable, and continuance
of such default for a period of 30 days; provided, however,
that a valid extension of an interest payment period by the
Company in accordance with the terms of this Indenture shall
not constitute a default in the payment of interest for this
purpose;
(ii) the Company defaults in the payment of the
principal on the Debentures as and when the same shall
become due and payable whether at maturity, upon redemption,
by declaration or otherwise; provided, however, that a valid
extension of the maturity of such Debentures in accordance
with the terms of this Indenture shall not constitute a
default in the payment of principal;
(iii) the Company fails to observe or perform any other
of its covenants or agreements with respect to the
Debentures for a period of 90 days after the date on which
written notice of
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such failure, requiring the same to be remedied and stating that such
notice is a "Notice of Default" hereunder, shall have been given to the
Company by the Trustee, by registered or certified mail, or to the
Company and the Trustee by the holders of at least 25% in
principal amount of the Debentures at the time Outstanding;
(iv) the Company pursuant to or within the meaning of
any Bankruptcy Law (i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it
in an involuntary case; (iii) consents to the appointment of
a Custodian of it or for all or substantially all of its
property; or (iv) makes a general assignment for the benefit
of its creditors;
(v) a court of competent jurisdiction enters an order
under any Bankruptcy Law that (i) is for relief against the
Company in an involuntary case; (ii) appoints a Custodian of
the Company for all or substantially all of its property; or
(iii) orders the liquidation of the Company, and the order
or decree remains unstayed and in effect for 90 days; or
(vi) the Trust shall have voluntarily or involuntarily
dissolved, wound-up its business or otherwise terminated its
existence except in connection with (i) the distribution of
Debentures to holders of Trust Securities in liquidation of
their interests in the Trust; (ii) the redemption of all of
the outstanding Trust Securities of the Trust; or
(iii) certain mergers, consolidations or amalgamations, each
as permitted by the Trust Agreement.
(b) In each and every such case referred to in items (i)
through (vi) of Section 7.1(a), unless the principal of all the
Debentures shall have already become due and payable, either the
Trustee or the holders of not less than 25% in aggregate
principal amount of the Debentures then Outstanding hereunder, by
notice in writing to the Company (and to the Trustee if given by
such Debentureholders) may declare the principal of all the
Debentures to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due
and payable, notwithstanding anything contained in this Indenture
or in the Debentures.
(c) At any time after the principal of the Debentures shall
have been so declared due and payable, and before any judgment or
decree for the payment of the moneys due shall have been obtained
or entered as hereinafter provided, the holders of a majority in
aggregate principal amount of the Debentures then Outstanding
hereunder, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if:
(i) the Company has paid or deposited with the Trustee a sum
sufficient to pay all matured installments of interest upon all
the Debentures and the principal of any and all Debentures that
shall have become due otherwise than by acceleration (with
interest upon such principal, and upon overdue installments of
interest, at the rate per annum expressed in the Debentures to
the date of such payment or deposit) and the amount payable to
the Trustee under Section 9.6; and (ii) any and all Events of
Default under this Indenture, other than the nonpayment of
principal on Debentures that shall not have become due by their
terms, shall have been remedied or waived as provided in Section
7.6. No such rescission and annulment shall extend to or shall
affect any subsequent default or impair any right consequent
thereon.
(d) In case the Trustee shall have proceeded to enforce any
right with respect to Debentures under this Indenture and such
proceedings shall have been discontinued or abandoned because of
such rescission or annulment or for any other reason or shall
have been determined adversely to the Trustee, then and in every
such case the Company and the Trustee shall be restored
respectively to their former
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positions and rights hereunder, and all rights, remedies and powers of the
Company and the Trustee shall continue as though no such proceedings had been
taken.
Section 7.2. Collection of Indebtedness and Suits for Enforcement by
Trustee.
(a) The Company covenants that (1) in case it shall default
in the payment of any installment of interest on any of the
Debentures, and such default shall have continued for a period of
90 Business Days; or (2) in case it shall default in the payment
of the principal of any of the Debentures when the same shall
have become due and payable, whether upon maturity of the
Debentures or upon redemption or upon declaration or otherwise,
then, upon demand of the Trustee, the Company shall pay to the
Trustee, for the benefit of the holders of the Debentures, the
whole amount that then shall have been become due and payable on
all such Debentures for principal or interest, or both, as the
case may be, with interest upon the overdue principal and (if the
Debentures are held by the Trust or a trustee of the Trust,
without duplication of any other amounts paid by the Trust or
trustee in respect thereof) upon overdue installments of interest
at the rate per annum expressed in the Debentures; and, in
addition thereto, such further amount as shall be sufficient to
cover the costs and expenses of collection, and the amount
payable to the Trustee under Section 9.7.
(b) If the Company shall fail to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as trustee of
an express trust, shall be entitled and empowered to institute
any action or proceedings at law or in equity for the collection
of the sums so due and unpaid, and may prosecute any such action
or proceeding to judgment or final decree, and may enforce any
such judgment or final decree against the Company or other
obligor upon the Debentures and collect the moneys adjudged or
decreed to be payable in the manner provided by law out of the
property of the Company or other obligor upon the Debentures,
wherever situated.
(c) In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, readjustment, arrangement,
composition or judicial proceedings affecting the Company or the
creditors or property of either, the Trustee shall have power to
intervene in such proceedings and take any action therein that
may be permitted by the court and shall (except as may be
otherwise provided by law) be entitled to file such proofs of
claim and other papers and documents as may be necessary or
advisable in order to have the claims of the Trustee and of the
holders of the Debentures allowed for the entire amount due and
payable by the Company under this Indenture at the date of
institution of such proceedings and for any additional amount
that may become due and payable by the Company after such date,
and to collect and receive any moneys or other property payable
or deliverable on any such claim, and to distribute the same
after the deduction of the amount payable to the Trustee under
Section 9.7; and any receiver, assignee or trustee in bankruptcy
or reorganization is hereby authorized by each of the holders of
the Debentures to make such payments to the Trustee, and, in the
event that the Trustee shall consent to the making of such
payments directly to such Debentureholders, to pay to the Trustee
any amount due it under Section 9.7.
(d) All rights of action and of asserting claims under this
Indenture, or under any of the terms established with respect to
Debentures, may be enforced by the Trustee without the possession
of any of such Debentures, or the production thereof at any trial
or other proceeding relative thereto, and any such suit or
proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment
shall, after provision for payment to the Trustee of any amounts
due under Section 9.7, be for the ratable benefit of the holders
of the Debentures. In case of an Event of Default hereunder, the
Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate
judicial proceedings as the Trustee shall deem most effectual to
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protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific
enforcement of any covenant or agreement contained in this
Indenture or in aid of the exercise of any power granted in this
Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law. Nothing
contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any
Debentureholder any plan of reorganization, arrangement,
adjustment or composition affecting the Debentures or the rights
of any holder thereof or to authorize the Trustee to vote in
respect of the claim of any Debentureholder in any such
proceeding.
Section 7.3. Application of Moneys Collected.
Any moneys collected by the Trustee pursuant to this Article
VII with respect to the Debentures shall be applied in the
following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such moneys on account of
principal or interest, upon presentation of the Debentures, and
notation thereon the payment, if only partially paid, and upon
surrender thereof if fully paid:
FIRST: To the payment of costs and expenses of
collection and of all amounts payable to the Trustee under
Section 9.7;
SECOND: To the payment of all Senior Indebtedness of
the Company if and to the extent required by Article XVI;
and
THIRD: To the payment of the amounts then due and
unpaid upon the Debentures for principal and interest, in
respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of
any kind, according to the amounts due and payable on such
Debentures for principal and interest, respectively.
Section 7.4. Limitation on Suits.
(a) No holder of any Debenture shall have any right by
virtue or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon
or under or with respect to this Indenture or for the appointment
of a receiver or trustee, or for any other remedy hereunder,
unless (i) such holder previously shall have given to the Trustee
written notice of an Event of Default and of the continuance
thereof with respect to the Debentures specifying such Event of
Default, as hereinbefore provided; (ii) the holders of not less
than 25% in aggregate principal amount of the Debentures then
Outstanding shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as
trustee hereunder; (iii) such holder or holders shall have
offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be
incurred therein or thereby; and (iv) the Trustee for 60 days
after its receipt of such notice, request and offer of indemnity,
shall have failed to institute any such action, suit or
proceeding; and (v) during such 60 day period, the holders of a
majority in principal amount of the Debentures do not give the
Trustee a direction inconsistent with the request.
(b) Notwithstanding anything contained herein to the
contrary or any other provisions of this Indenture, the right of
any holder of the Debentures to receive payment of the principal
of and interest on the Debentures, as therein provided, on or
after the respective due dates expressed in such Debenture (or in
the case of redemption, on the redemption date), or to institute
suit for the enforcement of any such payment on or after such
respective dates or redemption date, shall not be impaired or
affected without
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the consent of such holder and by accepting a Debenture hereunder it is
expressly understood, intended and covenanted by the taker and holder of every
Debenture with every other such taker and holder and the Trustee, that no one
or more holders of Debentures shall have any right in any manner
whatsoever by virtue or by availing of any provision of this
Indenture to affect, disturb or prejudice the rights of the
holders of any other of such Debentures, or to obtain or seek to
obtain priority over or preference to any other such holder, or
to enforce any right under this Indenture, except in the manner
herein provided and for the equal, ratable and common benefit of
all holders of Debentures. For the protection and enforcement of
the provisions of this Section 7.4, each and every
Debentureholder and the Trustee shall be entitled to such relief
as can be given either at law or in equity.
Section 7.5. Rights and Remedies Cumulative; Delay or Omission
not Waiver.
(a) Except as otherwise provided in Section 2.9, all powers
and remedies given by this Article VII to the Trustee or to the
Debentureholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any other powers and remedies
available to the Trustee or the holders of the Debentures, by
judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this
Indenture or otherwise established with respect to such
Debentures.
(b) No delay or omission of the Trustee or of any holder of
any of the Debentures to exercise any right or power accruing
upon any Event of Default occurring and continuing as aforesaid
shall impair any such right or power, or shall be construed to be
a waiver of any such default or on acquiescence therein; and,
subject to the provisions of Section 7.4, every power and remedy
given by this Article VII or by law to the Trustee or the
Debentureholders may be exercised from time to time, and as often
as shall be deemed expedient, by the Trustee or by the
Debentureholders.
Section 7.6. Control by Debentureholders.
The holders of a majority in aggregate principal amount of
the Debentures at the time Outstanding, determined in accordance
with Section 10.4, shall have the right to direct the time,
method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power
conferred on the Trustee; provided, however, that such direction
shall not be in conflict with any rule of law or with this
Indenture. Subject to the provisions of Section 9.1, the Trustee
shall have the right to decline to follow any such direction if
the Trustee in good faith shall, by a Responsible Officer or
Officers of the Trustee, determine that the proceeding so
directed would involve the Trustee in personal liability. The
holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding affected thereby, determined
in accordance with Section 10.4, may on behalf of the holders of
all of the Debentures waive any past default in the performance
of any of the covenants contained herein and its consequences,
except (i) a default in the payment of the principal of or
interest on, any of the Debentures as and when the same shall
become due by the terms of such Debentures otherwise than by
acceleration (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and
principal has been deposited with the Trustee (in accordance with
Section 7.1(c)); (ii) a default in the covenants contained in
Section 5.6; or (iii) in respect of a covenant or provision
hereof which cannot be modified or amended without the consent of
the holder of each Outstanding Debenture affected; provided,
however, that if the Debentures are held by the Trust or a
trustee of the Trust, such waiver or modification to such waiver
shall not be effective until the holders of a majority in
liquidation preference of Trust Securities of the Trust shall
have consented to such waiver or modification to such waiver;
provided further, that if the consent of the holder of each
Outstanding
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Debenture is required, such waiver shall not be effective until each holder of
the Trust Securities of the Trust shall have consented to such waiver. Upon
any such waiver, the default covered thereby shall be deemed to be cured for
all purposes of this Indenture and the Company, the Trustee and the
holders of the Debentures shall be restored to their former
positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other default or impair any
right consequent thereon.
Section 7.7. Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any
Debentures by such holder's acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action
taken or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good
faith of the claims or defenses made by such party litigant; but
the provisions of this Section 7.8 shall not apply to any suit
instituted by the Trustee, to any suit instituted by any
Debentureholder, or group of Debentureholders holding more than
10% in aggregate principal amount of the Outstanding Debentures,
or to any suit instituted by any Debentureholder for the
enforcement of the payment of the principal of or interest on the
Debentures, on or after the respective due dates expressed in
such Debenture or established pursuant to this Indenture.
ARTICLE VIII.
FORM OF DEBENTURE AND ORIGINAL ISSUE
Section 8.1. Form of Debenture.
The Debenture and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in
the forms contained as Exhibit A attached hereto and incorporated
herein by reference.
Section 8.2. Original Issue of Debentures.
Debentures in the aggregate principal amount of $----------
may, upon execution of this Indenture, be executed by the Company
and delivered to the Trustee for authentication. If the
Underwriters exercise their Option and there is an Option Closing
Date (as such terms are defined in the Underwriting Agreement,
dated ---------, 1997, by and among the Company, the Trust and
Stifel Nicolaus & Company, Incorporated, for itself and as
representative of the Underwriters) then, on such Option Closing
Date, Debentures in the additional aggregate principal amount of
$-------- may be executed by the Company and delivered to the
Trustee for authentication. In either such event, the Trustee
shall thereupon authenticate and deliver said Debentures to or
upon the written order of the Company, signed by its Chairman,
its Vice Chairman, its President, or any Vice President and its
Treasurer or an Assistant Treasurer, without any further action
by the Company.
ARTICLE IX.
CONCERNING THE TRUSTEE
Section 9.1. Certain Duties and Responsibilities of Trustee.
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(a) The Trustee, prior to the occurrence of an Event of
Default and after the curing of all Events of Default that may
have occurred, shall undertake to perform with respect to the
Debentures such duties and only such duties as are specifically
set forth in this Indenture, and no implied covenants shall be
read into this Indenture against the Trustee. In case an Event
of Default has occurred that has not been cured or waived, the
Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) No provision of this Indenture shall be construed to
relieve the 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 an Event of Default and
after the curing or waiving of all such Events of Default
that may have occurred:
(i) the duties and obligations of the Trustee
shall with respect to the Debentures be determined
solely by the express provisions of this Indenture, and
the Trustee shall not be liable with respect to the
Debentures except for the performance of such duties
and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations
shall be read into this Indenture against the Trustee;
and
(ii) in the absence of bad faith on the part
of the Trustee, the Trustee may with respect to the
Debentures 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 Trustee and conforming to the
requirements of this Indenture; but in the case of any
such certificates or opinions that by any provision
hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to
the requirements of this Indenture;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the
pertinent facts;
(3) the 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 principal amount of the Debentures at the
time Outstanding relating to the time, method and place of
conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the
Trustee under this Indenture with respect to the Debentures;
and
(4) none of the provisions contained in this Indenture
shall require the 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 there is reasonable ground for
believing that the repayment of such funds or liability is
not reasonably assured to it under the terms of this
Indenture or adequate indemnity against such risk is not
reasonably assured to it.
Section 9.2. Notice of Defaults.
Within 90 days after actual knowledge by a Responsible
Officer of the Trustee of the occurrence of any default hereunder
with respect to the Securities, the Trustee shall transmit by
mail to all holders
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of the Debentures, as their names and addresses appear in the Debenture
Register, notice of such default, unless such default shall have been cured or
waived; provided, however, that, except in the case default in the
payment of the principal or interest (including any Additional
Interest) on any Debenture, the 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 the directors
and/or Responsible Officers of the Trustee determines in good
faith that the withholding of such notice is in the interests of
the holders of such Debentures; and provided, further, that in
the case of any default of the character specified in section
7.1(a)(iii), no such notice to holders of Debentures need be sent
until at least 30 days after the occurrence thereof. For the
purposes of this Section 9.2, the term "default" means any event
which is, or after notice or lapse of time or both, would become,
an Event of Default with respect to the Debentures.
Section 9.3. Certain Rights of Trustee.
Except as otherwise provided in Section 9.1:
(a) The Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond, security or other paper or document
believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) Any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Board
Resolution or an instrument signed in the name of the Company by
the President or any Vice President and by the Secretary or an
Assistant Secretary or the Treasurer or an Assistant Treasurer
thereof (unless other evidence in respect thereof is specifically
prescribed herein);
(c) The Trustee shall not be deemed to have knowledge of a
default or an Event of Default, other than an Event of Default
specified in Section 7.1(a)(i); or (ii), unless and until it
receives written notification of such Event of Default from the
Company or by holders of at least 25% of the aggregate principal
amount of the Debentures at the time Outstanding;
(d) The Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any
action taken or suffered or omitted hereunder in good faith and
in reliance thereon;
(e) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Debentureholders,
pursuant to the provisions of this Indenture, unless such
Debentureholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby; nothing contained herein
shall, however, relieve the Trustee of the obligation, upon the
occurrence of an Event of Default (that has not been cured or
waived) to exercise with respect to the Debentures such of the
rights and powers vested in it by this Indenture, and to use the
same degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct of
his own affairs;
(f) The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred
upon it by this Indenture;
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(g) The 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, consent, order, approval, bond, security, or other
papers or documents, unless requested in writing so to do by the
holders of not less than a majority in principal amount of the
Outstanding Debentures (determined as provided in Section 10.4);
provided, however, that if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the
opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such costs,
expenses or liabilities as a condition to so proceeding. The
reasonable expense of every such examination shall be paid by the
Company or, if paid by the Trustee, shall be repaid by the
Company upon demand; and
(h) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by
or through agents or attorneys and the 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.
Section 9.4. Trustee Not Responsible for Recitals, etc.
(a) The Recitals contained herein and in the Debentures
shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same.
(b) The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Debentures.
(c) The Trustee shall not be accountable for the use or
application by the Company of any of the Debentures or of the
proceeds of such Debentures, or for the use or application of any
moneys paid over by the Trustee in accordance with any provision
of this Indenture, or for the use or application of any moneys
received by any paying agent other than the Trustee.
Section 9.5. May Hold Debentures.
The Trustee or any paying agent or registrar for the
Debentures, in its individual or any other capacity, may become
the owner or pledgee of Debentures with the same rights it would
have if it were not Trustee, paying agent or Debenture Registrar.
Section 9.6. Moneys Held in Trust.
Subject to the provisions of Section 13.5, all moneys
received by the Trustee shall, until used or applied as herein
provided, be held in trust for the purposes for which they were
received, but need not be segregated from other funds except to
the extent required by law. The Trustee shall be under no
liability for interest on any moneys received by it hereunder
except such as it may agree with the Company to pay thereon.
Section 9.7. Compensation and Reimbursement.
(a) The Company covenants and agrees to pay to the Trustee,
and the Trustee shall be entitled to, such reasonable
compensation (which shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust),
as the Company and the Trustee may from time to time
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agree in writing, for all services rendered by it in the execution of the
trusts hereby created and in the exercise and performance of any
of the powers and duties hereunder of the Trustee, and, except as
otherwise expressly provided herein, the Company shall pay or
reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the
Trustee in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the expenses
and disbursements of its counsel and of all Persons not regularly
in its employ) except any such expense, disbursement or advance
as may arise from its negligence or bad faith. The Company also
covenants to indemnify the Trustee (and its officers, agents,
directors and employees) for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad
faith on the part of the Trustee and arising out of or in
connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any
claim of liability in the premises.
(b) The obligations of the Company under this Section 9.7
to compensate and indemnify the Trustee and to pay or reimburse
the Trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder. Such additional
indebtedness shall be secured by a lien prior to that of the
Debentures upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of
the holders of particular Debentures.
Section 9.8. Reliance on Officers' Certificate.
Except as otherwise provided in Section 9.1, whenever in the
administration of the provisions of this Indenture the Trustee
shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering or omitting to take any
action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of
negligence or bad faith on the part of the Trustee, be deemed to
be conclusively proved and established by an Officers'
Certificate delivered to the Trustee and such certificate, in the
absence of negligence or bad faith on the part of the Trustee,
shall be full warrant to the Trustee for any action taken,
suffered or omitted to be taken by it under the provisions of
this Indenture upon the faith thereof.
Section 9.9. Disqualification: Conflicting Interests.
If the Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Trustee and the Company shall in all respects
comply with the provisions of Section 310(b) of the Trust
Indenture Act.
Section 9.10. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee with respect to the
Debentures issued hereunder which shall at all times 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 other Person
permitted to act as trustee by the Commission, authorized under
such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $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 aforesaid supervising or examining authority,
then for the purposes of this Section 9.10, 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. The Company may not, nor may
any Person directly or indirectly controlling, controlled by, or
under common control with the Company, serve as Trustee. In case
at any
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time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 9.10, the Trustee shall
resign immediately in the manner and with the effect specified in
Section 9.11.
Section 9.11. Resignation and Removal; Appointment of Successor.
(a) The Trustee or any successor hereafter appointed, may
at any time resign by giving written notice thereof to the
Company and by transmitting notice of resignation by mail, first
class postage prepaid, to the Debentureholders, as their names
and addresses appear upon the Debenture Register. Upon receiving
such notice of resignation, the Company shall promptly appoint a
successor trustee with respect to Debentures by written
instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor trustee. If no
successor trustee shall have been so appointed and have accepted
appointment within 30 days after the mailing of such notice of
resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee
with respect to Debentures, or any Debentureholder who has been a
bona fide holder of a Debenture or Debentures for at least six
months may, subject to the provisions of Section 9.9, on behalf
of himself and all others similarly situated, petition any such
court for the appointment of a successor trustee. Such court may
thereupon after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any one of the following shall
occur
(i) the Trustee shall fail to comply with the
provisions of Section 9.9 after written request therefor by
the Company or by any Debentureholder who has been a bona
fide holder of a Debenture or Debentures for at least six
months; or
(ii) the Trustee shall cease to be eligible in
accordance with the provisions of Section 9.10 and shall
fail to resign after written request therefor by the Company
or by any such Debentureholder; or
(iii) the Trustee shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or commence a
voluntary bankruptcy proceeding, or a receiver of the
Trustee or of its property shall be appointed or consented
to, or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any
such case, the Company may remove the Trustee with respect
to all Debentures and appoint a successor trustee by written
instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered
to the Trustee so removed and one copy to the successor
trustee, or, subject to the provisions of Section 9.9,
unless the Trustee's duty to resign is stayed as provided
herein, any Debentureholder who has been a bona fide holder
of a Debenture or Debentures for at least six months may, on
behalf of that holder and all others similarly situated,
petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor trustee.
Such court may thereupon after such notice, if any, as it
may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount
of the Debentures at the time Outstanding may at any time remove
the Trustee by so notifying the Trustee and the Company and may
appoint a successor Trustee with the consent of the Company.
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(d) Any resignation or removal of the Trustee and
appointment of a successor trustee with respect to the Debentures
pursuant to any of the provisions of this Section 9.11 shall
become effective upon acceptance of appointment by the successor
trustee as provided in Section 9.12.
(e) Any successor trustee appointed pursuant to this
Section 9.11 may be appointed with respect to the Debentures, and
at any time there shall be only one Trustee with respect to the
Debentures.
Section 9.12. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
trustee with respect to the Debentures, every successor trustee
so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of
the retiring Trustee; but, on the request of the Company or the
successor trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to
such successor trustee all the rights, powers, and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to
such successor trustee all property and money held by such
retiring Trustee hereunder.
(b) Upon request of any successor trustee, the Company
shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor trustee all
such rights, powers and trusts referred to in paragraph (a) of
this Section 9.12.
(c) No successor trustee shall accept its appointment
unless at the time of such acceptance such successor trustee
shall be qualified and eligible under this Article IX.
(d) Upon acceptance of appointment by a successor trustee
as provided in this Section 9.12, the Company shall transmit
notice of the succession of such trustee hereunder by mail, first
class postage prepaid, to the Debentureholders, as their names
and addresses appear upon the Debenture Register. If the Company
fails to transmit such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall
cause such notice to be transmitted at the expense of the
Company.
Section 9.13. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any
corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be qualified under the
provisions of Section 9.9 and eligible under the provisions of
Section 9.10, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding. In case any Debentures
shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such
authentication and deliver the Debentures so authenticated with
the same effect as if such successor Trustee had itself
authenticated such Debentures.
Section 9.14. Preferential Collection of Claims Against the Company.
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The Trustee shall comply with Section 311(a) of the Trust
Indenture Act, excluding any creditor relationship described in
Section 311(b) of the Trust Indenture Act. A Trustee who has
resigned or been removed shall be subject to Section 311(a) of
the Trust Indenture Act to the extent included therein.
ARTICLE X.
CONCERNING THE DEBENTUREHOLDERS
Section 10.1. Evidence of Action by Holders.
(a) Whenever in this Indenture it is provided that the
holders of a majority or specified percentage in aggregate
principal amount of the Debentures may take any action (including
the making of any demand or request, the giving of any notice,
consent or waiver or the taking of any other action), the fact
that at the time of taking any such action the holders of such
majority or specified percentage have joined therein may be
evidenced by any instrument or any number of instruments of
similar tenor executed by such holders of Debentures in Person or
by agent or proxy appointed in writing.
(b) If the Company shall solicit from the Debentureholders
any request, demand, authorization, direction, notice, consent,
waiver or other action, the Company may, at its option, as
evidenced by an Officers' Certificate, fix in advance a record
date for the determination of Debentureholders entitled to give
such request, demand, authorization, direction, notice, consent,
waiver or other action, but the Company shall have no obligation
to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action
may be given before or after the record date, but only the
Debentureholders of record at the close of business on the record
date shall be deemed to be Debentureholders for the purposes of
determining whether Debentureholders of the requisite proportion
of Outstanding Debentures have authorized or agreed or consented
to such request, demand, authorization, direction, notice,
consent, waiver or other action, and for that purpose the
Outstanding Debentures shall be computed as of the record date;
provided, however, that no such authorization, agreement or
consent by such Debentureholders on the record date shall be
deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than six months after the
record date.
Section 10.2. Proof of Execution by Debentureholders.
Subject to the provisions of Section 9.1, proof of the
execution of any instrument by a Debentureholder (such proof
shall not require notarization) or his agent or proxy and proof
of the holding by any Person of any of the Debentures shall be
sufficient if made in the following manner:
(a) The fact and date of the execution by any such Person
of any instrument may be proved in any reasonable manner
acceptable to the Trustee.
(b) The ownership of Debentures shall be proved by the
Debenture Register of such Debentures or by a certificate of the
Debenture Registrar thereof.
(c) The Trustee may require such additional proof of any
matter referred to in this Section 10.2 as it shall deem
necessary.
Section 10.3. Who May be Deemed Owners.
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Prior to the due presentment for registration of transfer of
any Debenture, the Company, the Trustee, any paying agent, any
Authenticating Agent and any Debenture Registrar may deem and
treat the Person in whose name such Debenture shall be registered
upon the books of the Company as the absolute owner of such
Debenture (whether or not such Debenture shall be overdue and
notwithstanding any notice of ownership or writing thereon made
by anyone other than the Debenture Registrar) for the purpose of
receiving payment of or on account of the principal of and
interest on such Debenture (subject to Section 2.3) and for all
other purposes; and neither the Company nor the Trustee nor any
paying agent nor any Authenticating Agent nor any Debenture
Registrar shall be affected by any notice to the contrary.
Section 10.4. Certain Debentures Owned by Company Disregarded.
In determining whether the holders of the requisite
aggregate principal amount of Debentures have concurred in any
direction, consent or waiver under this Indenture, the Debentures
that are owned by the Company or any other obligor on the
Debentures or by any Person directly or indirectly controlling or
controlled by or under common control with the Company or any
other obligor on the Debentures shall be disregarded and deemed
not to be Outstanding for the purpose of any such determination,
except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or
waiver, only Debentures that the Trustee actually knows are so
owned shall be so disregarded. The Debentures so owned that have
been pledged in good faith may be regarded as Outstanding for the
purposes of this Section 10.4, if the pledgee shall establish to
the satisfaction of the Trustee the pledgee's right so to act
with respect to such Debentures and that the pledgee is not a
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company or any
such other obligor. In case of a dispute as to such right, any
decision by the Trustee taken upon the advice of counsel shall be
full protection to the Trustee.
Section 10.5. Actions Binding on Future Debentureholders.
At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 10.1, of the taking of any action
by the holders of the majority or percentage in aggregate
principal amount of the Debentures specified in this Indenture in
connection with such action, any holder of a Debenture that is
shown by the evidence to be included in the Debentures the
holders of which have consented to such action may, by filing
written notice with the Trustee, and upon proof of holding as
provided in Section 10.2, revoke such action so far as concerns
such Debenture. Except as aforesaid any such action taken by the
holder of any Debenture shall be conclusive and binding upon such
holder and upon all future holders and owners of such Debenture,
and of any Debenture issued in exchange therefor, on registration
of transfer thereof or in place thereof, irrespective of whether
or not any notation in regard thereto is made upon such
Debenture. Any action taken by the holders of the majority or
percentage in aggregate principal amount of the Debentures
specified in this Indenture in connection with such action shall
be conclusively binding upon the Company, the Trustee and the
holders of all the Debentures.
ARTICLE XI.
SUPPLEMENTAL INDENTURES
Section 11.1. Supplemental Indentures Without the Consent of
Debentureholders.
In addition to any supplemental indenture otherwise
authorized by this Indenture, the Company and the Trustee may
from time to time and at any time enter into an indenture or
indentures supplemental
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hereto (which shall conform to the provisions of the Trust Indenture Act as
provisions of the Trust Indenture Act as then in effect), without
the consent of the Debentureholders, for one or more of the following
purposes:
(a) to cure any ambiguity, defect, or inconsistency herein,
in the Debentures;
(b) to comply with Article X;
(c) to provide for uncertificated Debentures in addition to
or in place of certificated Debentures;
(d) to add to the covenants of the Company for the benefit
of the holders of all or any of the Debentures or to surrender
any right or power herein conferred upon the Company;
(e) to add to, delete from, or revise the conditions,
limitations, and restrictions on the authorized amount, terms, or
purposes of issue, authentication, and delivery of Debentures, as
herein set forth;
(f) to make any change that does not adversely affect the
rights of any Debentureholder in any material respect;
(g) to provide for the issuance of and establish the form
and terms and conditions of the Debentures, to establish the form
of any certifications required to be furnished pursuant to the
terms of this Indenture or of the Debentures, or to add to the
rights of the holders of the Debentures; or
(h) qualify or maintain the qualification of this Indenture
under the Trust Indenture Act.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, and to make any
further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to
enter into any such supplemental indenture that affects the
Trustee's own rights, duties or immunities under this Indenture
or otherwise. Any supplemental indenture authorized by the
provisions of this Section 11.1 may be executed by the Company
and the Trustee without the consent of the holders of any of the
Debentures at the time Outstanding, notwithstanding any of the
provisions of Section 11.2.
Section 11.2. Supplemental Indentures with Consent of Debentureholders.
With the consent (evidenced as provided in Section 10.1) of
the holders of not less than a majority in aggregate principal
amount of the Debentures at the time Outstanding, the Company,
when authorized by Board Resolutions, and the Trustee may from
time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as then in effect) for the
purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner not covered
by Section 11.1 the rights of the holders of the Debentures under
this Indenture; provided, however, that no such supplemental
indenture shall without the consent of the holders of each
Debenture then Outstanding and affected thereby, (i) extend the
fixed maturity of any Debentures, reduce the principal amount
thereof, or reduce the rate or extend the time of payment of
interest thereon, without the consent of the holder of each
Debenture so affected; or (ii) reduce the aforesaid percentage of
Debentures, the holders of which are required to consent to any
such supplemental indenture; provided further, that if the
Debentures are held by the Trust or a trustee of the Trust, such
supplemental indenture shall not be effective until the holders
of a majority in liquidation preference of Trust Securities of the
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Trust shall have consented to such supplemental indenture;
provided further, that if the consent of the holder of each
Outstanding Debenture is required, such supplemental indenture
shall not be effective until each holder of the Trust Securities
of the Trust shall have consented to such supplemental indenture.
It shall not be necessary for the consent of the Debentureholders
affected thereby under this Section 11.2 to approve the
particular form of any proposed supplemental indenture, but it
shall be sufficient if such consent shall approve the substance
thereof.
Section 11.3. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture pursuant to
the provisions of this Article XI, this Indenture shall be and be
deemed to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties and
immunities under this Indenture of the Trustee, the Company and
the holders of Debentures shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of
any such supplemental indenture shall be and be deemed to be part
of the terms and conditions of this Indenture for any and all
purposes.
Section 11.4. Debentures Affected by Supplemental
Indentures.
Debentures affected by a supplemental indenture,
authenticated and delivered after the execution of such
supplemental indenture pursuant to the provisions of this Article
XI, may bear a notation in form approved by the Company, provided
such form meets the requirements of any exchange upon which the
Debentures may be listed, as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new
Debentures so modified as to conform, in the opinion of the Board
of Directors of the Company, to any modification of this
Indenture contained in any such supplemental indenture may be
prepared by the Company, authenticated by the Trustee and
delivered in exchange for the Debentures then Outstanding.
Section 11.5. Execution of Supplemental Indentures.
(a) Upon the request of the Company, accompanied by their
Board Resolutions authorizing the execution of any such
supplemental indenture, and upon the filing with the Trustee of
evidence of the consent of Debentureholders required to consent
thereto as aforesaid, the Trustee shall join with the Company in
the execution of such supplemental indenture unless such
supplemental indenture affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion but shall not be obligated to
enter into such supplemental indenture. The Trustee, subject to
the provisions of Sections 9.1, may receive an Opinion of Counsel
as conclusive evidence that any supplemental indenture executed
pursuant to this Article XI is authorized or permitted by, and
conforms to, the terms of this Article XI and that it is proper
for the Trustee under the provisions of this Article XI to join
in the execution thereof.
(b) Promptly after the execution by the Company and the
Trustee of any supplemental indenture pursuant to the provisions
of this Section 11.5, the Trustee shall transmit by mail, first
class postage prepaid, a notice, setting forth in general terms
the substance of such supplemental indenture, to the
Debentureholders as their names and addresses appear upon the
Debenture Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
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ARTICLE XII.
SUCCESSOR CORPORATION
Section 12.1. Company May Consolidate, etc.
Nothing contained in this Indenture or in any of the
Debentures shall prevent any consolidation or merger of the
Company with or into any other corporation or corporations
(whether or not affiliated with the Company, as the case may be),
or successive consolidations or mergers in which the Company, as
the case may be, or its successor or successors shall be a party
or parties, or shall prevent any sale, conveyance, transfer or
other disposition of the property of the Company, as the case may
be, or its successor or successors as an entirety, or
substantially as an entirety, to any other corporation (whether
or not affiliated with the Company, as the case may be, or its
successor or successors) authorized to acquire and operate the
same; provided, however, the Company hereby covenants and agrees
that, (i) upon any such consolidation, merger, sale, conveyance,
transfer or other disposition, the due and punctual payment, in
the case of the Company, of the principal of and interest on all
of the Debentures, according to their tenor and the due and
punctual performance and observance of all the covenants and
conditions of this Indenture to be kept or performed by the
Company as the case may be, shall be expressly assumed, by
supplemental indenture (which shall conform to the provisions of
the Trust Indenture Act, as then in effect) satisfactory in form
to the Trustee executed and delivered to the Trustee by the
entity formed by such consolidation, or into which the Company,
as the case may be, shall have been merged, or by the entity
which shall have acquired such property; (ii) in case the
Company consolidates with or merges into another Person or
conveys or transfers its properties and assets substantially then
as an entirety to any Person, the successor Person is organized
under the laws of the United States or any state or the District
of Columbia; and (iii) immediately after giving effect thereto,
an Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have
occurred and be continuing.
Section 12.2. Successor Corporation Substituted.
(a) In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition and upon the assumption
by the successor corporation, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the
Trustee, of, in the case of the Company, the due and punctual
payment of the principal of and interest on all of the Debentures
Outstanding and the due and punctual performance of all of the
covenants and conditions of this Indenture to be performed by the
Company, as the case may be, such successor corporation shall
succeed to and be substituted for the Company, with the same
effect as if it had been named as the Company herein, and
thereupon the predecessor corporation shall be relieved of all
obligations and covenants under this Indenture and the
Debentures.
(b) In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition such changes in
phraseology and form (but not in substance) may be made in the
Debentures thereafter to be issued as may be appropriate.
(c) Nothing contained in this Indenture or in any of the
Debentures shall prevent the Company from merging into itself or
acquiring by purchase or otherwise all or any part of the
property of any other Person (whether or not affiliated with the
Company).
Section 12.3. Evidence of Consolidation, etc. to Trustee.
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The Trustee, subject to the provisions of Section 9.1, may
receive an Opinion of Counsel as conclusive evidence that any
such consolidation, merger, sale, conveyance, transfer or other
disposition, and any such assumption, comply with the provisions
of this Article XII.
ARTICLE XIII.
SATISFACTION AND DISCHARGE
Section 13.1. Satisfaction and Discharge of Indenture.
If at any time: (a) the Company shall have delivered to the
Trustee for cancellation all Debentures theretofore authenticated
(other than any Debentures that shall have been destroyed, lost
or stolen and that shall have been replaced or paid as provided
in Section 2.9) and Debentures for whose payment money or
Governmental Obligations have theretofore been deposited in trust
or segregated and held in trust by the Company (and thereupon
repaid to the Company or discharged from such trust, as provided
in Section 13.5); or (b) all such Debentures not theretofore
delivered to the Trustee for cancellation shall have become due
and payable, or are by their terms to become due and payable
within one year or are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the
giving of notice of redemption, and the Company shall deposit or
cause to be deposited with the Trustee as trust funds the entire
amount in moneys or Governmental Obligations sufficient or a
combination thereof, sufficient in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay at
maturity or upon redemption all Debentures not theretofore
delivered to the Trustee for cancellation, including principal
and interest due or to become due to such date of maturity or
date fixed for redemption, as the case may be, and if the Company
shall also pay or cause to be paid all other sums payable
hereunder by the Company; then this Indenture shall thereupon
cease to be of further effect except for the provisions of
Sections 2.3, 2.7, 2.9, 5.1, 5.2, 5.3 and 9.10, that shall
survive until the date of maturity or redemption date, as the
case may be, and Sections 9.6 and 13.5, that shall survive to
such date and thereafter, and the Trustee, on demand of the
Company and at the cost and expense of the Company, shall execute
proper instruments acknowledging satisfaction of and discharging
this Indenture.
Section 13.2. Discharge of Obligations.
If at any time all Debentures not heretofore delivered to
the Trustee for cancellation or that have not become due and
payable as described in Section 13.1 shall have been paid by the
Company by depositing irrevocably with the Trustee as trust funds
moneys or an amount of Governmental Obligations sufficient in the
opinion of a nationally recognized certified public accounting
firm to pay at maturity or upon redemption all Debentures not
theretofore delivered to the Trustee for cancellation, including
principal and interest due or to become due to such date of
maturity or date fixed for redemption, as the case may be, and if
the Company shall also pay or cause to be paid all other sums
payable hereunder by the Company, then after the date such moneys
or Governmental Obligations, as the case may be, are deposited
with the Trustee, the obligations of the Company under this
Indenture shall cease to be of further effect except for the
provisions of Sections 2.3, 2.7, 2.9, 5.1, 5.2, 5.3, 9.6, 9.10
and 13.5 hereof that shall survive until such Debentures shall
mature and be paid. Thereafter, Sections 9.6 and 13.5 shall
survive.
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Section 13.3. Deposited Moneys to be Held in Trust.
All monies or Governmental Obligations deposited with the
Trustee pursuant to Sections 13.1 or 13.2 shall be held in trust
and shall be available for payment as due, either directly or
through any paying agent (including the Company acting as its own
paying agent), to the holders of the Debentures for the payment
or redemption of which such moneys or Governmental Obligations
have been deposited with the Trustee.
Section 13.4. Payment of Monies Held by Paying Agents.
In connection with the satisfaction and discharge of this
Indenture, all moneys or Governmental Obligations then held by
any paying agent under the provisions of this Indenture shall,
upon demand of the Company, be paid to the Trustee and thereupon
such paying agent shall be released from all further liability
with respect to such moneys or Governmental Obligations.
Section 13.5. Repayment to Company.
Any monies or Governmental Obligations deposited with any
paying agent or the Trustee, or then held by the Company in
trust, for payment of principal of or interest on the Debentures
that are not applied but remain unclaimed by the holders of such
Debentures for at least two years after the date upon which the
principal of or interest on such Debentures shall have
respectively become due and payable, shall be repaid to the
Company, as the case may be, on May 31 of each year or (if then
held by the Company) shall be discharged from such trust; and
thereupon the paying agent and the Trustee shall be released from
all further liability with respect to such moneys or Governmental
Obligations, and the holder of any of the Debentures entitled to
receive such payment shall thereafter, as an unsecured general
creditor, look only to the Company for the payment thereof.
ARTICLE XIV.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
Section 14.1. No Recourse.
No recourse under or upon any obligation, covenant or
agreement of this Indenture, or of the Debentures, or for any
claim based thereon or otherwise in respect thereof, shall be had
against any incorporator, stockholder, officer or director, past,
present or future as such, of the Company or of any predecessor
or successor corporation, either directly or through the Company
or any such predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being
expressly understood that this Indenture and the obligations
issued hereunder are solely corporate obligations, and that no
such personal liability whatever shall attach to, or is or shall
be incurred by, the incorporators, stockholders, officers or
directors as such, of the Company or of any predecessor or
successor corporation, or any of them, because of the creation of
the indebtedness hereby authorized,
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or under or by reason of the obligations, covenants or agreements contained in
this Indenture or in any of the Debentures or implied therefrom; and that any
and all such personal liability of every name and nature, either
at common law or in equity or by constitution or statute, of, and
any and all such rights and claims against, every such
incorporator, stockholder, officer or director as such, because
of the creation of the indebtedness hereby authorized, or under
or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Debentures or
implied therefrom, are hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this
Indenture and the issuance of such Debentures.
ARTICLE XV.
MISCELLANEOUS PROVISIONS
Section 15.1. Effect on Successors and Assigns.
All the covenants, stipulations, promises and agreements in
this Indenture contained by or on behalf of the Company shall
bind their respective successors and assigns, whether so
expressed or not.
Section 15.2. Actions by Successor.
Any act or proceeding by any provision of this Indenture
authorized or required to be done or performed by any board,
committee or officer of the Company shall and may be done and
performed with like force and effect by the corresponding board,
committee or officer of any corporation that shall at the time be
the lawful sole successor of the Company.
Section 15.3. Surrender of Company Powers.
The Company by instrument in writing executed by appropriate
authority of its Board of Directors and delivered to the Trustee
may surrender any of the powers reserved to the Company, and
thereupon such power so surrendered shall terminate both as to
the Company, as the case may be, and as to any successor
corporation.
Section 15.4. Notices.
Except as otherwise expressly provided herein any notice or
demand that by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the holders
of Debentures to or on the Company may be given or served by
being deposited first class postage prepaid in a post-office
letterbox addressed (until another address is filed in writing by
the Company with the Trustee), as follows: c/o 1st Source
Corporation, 100 North Michigan Avenue, South Bend, Indiana
46601, Attention: Chief Financial Officer. Any notice, election,
request or demand by the Company or any Debentureholder to or
upon the Trustee shall be deemed to have been sufficiently given
or made, for all purposes, if given or made in writing at the
Corporate Trust Office of the Trustee.
Section 15.5. Governing Law.
This Indenture and each Debenture shall be deemed to be a
contract made under the internal laws of the State of Indiana and
for all purposes shall be construed in accordance with the laws
of said State.
Section 15.6. Treatment of Debentures as Debt.
It is intended that the Debentures shall be treated as
indebtedness and not as equity for federal income tax purposes.
The provisions of this Indenture shall be interpreted to further
this intention.
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Section 15.7. Compliance Certificates and Opinions.
(a) Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent provided for in
this Indenture relating to the proposed action have been complied
with and an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent have been complied
with, except that in the case of any such application or demand
as to which the furnishing of such documents is specifically
required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or
opinion need be furnished.
(b) Each certificate or opinion of the Company provided for
in this Indenture and delivered to the Trustee with respect to
compliance with a condition or covenant in this Indenture shall
include (1) a statement that the Person making such certificate
or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in
such certificate or opinion are based; (3) a statement that, in
the opinion of such Person, he has made such examination or
investigation as, in the opinion of such Person, is necessary to
enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and (4) a
statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
Section 15.8. Payments on Business Days.
In any case where the date of maturity of interest or
principal of any Debenture or the date of redemption of any
Debenture shall not be a Business Day, then payment of interest
or principal may be made on the next succeeding Business Day with
the same force and effect as if made on the nominal date of
maturity or redemption, and no interest shall accrue for the
period after such nominal date.
Section 15.9. Conflict with Trust Indenture Act.
If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control.
Section 15.10. Counterparts.
This Indenture may be executed in any number of
counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same
instrument.
Section 15.11. Separability.
In case any one or more of the provisions contained in this
Indenture or in the Debentures shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any
other provisions of this Indenture or of the Debentures, but this
Indenture and the Debentures shall be construed as if such
invalid or illegal or unenforceable provision had never been
contained herein or therein.
Section 15.12. Assignment.
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The Company shall have the right at all times to assign any
of its respective rights or obligations under this Indenture to a
direct or indirect wholly owned Subsidiary of the Company,
provided that, in the event of any such assignment, the Company
shall remain liable for all such obligations. Subject to the
foregoing, this Indenture is binding upon and inures to the
benefit of the parties thereto and their respective successors
and assigns. This Indenture may not otherwise be assigned by the
parties thereto.
Section 15.13. Acknowledgment of Rights.
The Company acknowledges that, with respect to any
Debentures held by the Trust or a trustee of the Trust, if the
Property Trustee fails to enforce its rights under this Indenture
as the holder of the Debentures held as the assets of the Trust,
any holder of Preferred Securities may institute legal
proceedings directly against the Company to enforce such Property
Trustee's rights under this Indenture without first instituting
any legal proceedings against such Property Trustee or any other
person or entity. Notwithstanding the foregoing, if an Event of
Default has occurred and is continuing and such event is
attributable to the failure of the Company to pay interest or
principal on the Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption, on
the redemption date), the Company acknowledges that a holder of
Preferred Securities may directly institute a proceeding for
enforcement of payment to such holder of the principal of or
interest on the Debentures having a principal amount equal to the
aggregate liquidation amount of the Preferred Securities of such
holder on or after the respective due date specified in the
Debentures.
ARTICLE XVI.
SUBORDINATION OF DEBENTURES
Section 16.1. Agreement to Subordinate.
The Company covenants and agrees, and each holder of
Debentures issued hereunder by such holder's acceptance thereof
likewise covenants and agrees, that all Debentures shall be
issued subject to the provisions of this Article XVI; and each
holder of a Debenture, whether upon original issue or upon
transfer or assignment thereof, accepts and agrees to be bound by
such provisions. The payment by the Company of the principal of
and interest on all Debentures issued hereunder shall, to the
extent and in the manner hereinafter set forth, be subordinated
and junior in right of payment to the prior payment in full of
all Senior Debt, Subordinated Debt and Additional Senior
Obligations (collectively, "Senior Indebtedness") to the extent
provided herein, whether outstanding at the date of this
Indenture or thereafter incurred. No provision of this Article
XVI shall prevent the occurrence of any default or Event of
Default hereunder.
Section 16.2. Default on Senior Debt, Subordinated Debt or
Additional Senior Obligations.
In the event and during the continuation of any default by
the Company in the payment of principal, premium, interest or any
other payment due on any Senior Indebtedness of the Company, or
in the event that the maturity of any Senior Indebtedness of the
Company has been accelerated because of a default, then, in
either case, no payment shall be made by the Company with respect
to the principal (including redemption payments) of or interest
on the Debentures. In the event that, notwithstanding the
foregoing, any payment shall be received by the Trustee when such
payment is prohibited by the preceding sentence of this Section
16.2, such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to
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the trustee or trustees under any indenture pursuant to which any of
such Senior Indebtedness may have been issued, as their
respective interests may appear, but only to the extent that the
holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing
within 90 days of such payment of the amounts then due and owing
on the Senior Indebtedness and only the amounts specified in such
notice to the Trustee shall be paid to the holders of Senior
Indebtedness.
Section 16.3. Liquidation; Dissolution; Bankruptcy.
(a) Upon any payment by the Company or distribution of
assets of the Company of any kind or character, whether in cash,
property or securities, to creditors upon any dissolution or
winding-up or liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all
Senior Indebtedness of the Company shall first be paid in full,
or payment thereof provided for in money in accordance with its
terms, before any payment is made by the Company on account of
the principal or interest on the Debentures; and upon any such
dissolution or winding-up or liquidation or reorganization, any
payment by the Company, or distribution of assets of the Company
of any kind or character, whether in cash, property or
securities, to which the holders of the Debentures or the Trustee
would be entitled to receive from the Company, except for the
provisions of this Article XVI, shall be paid by the Company or
by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by
the holders of the Debentures or by the Trustee under this
Indenture if received by them or it, directly to the holders of
Senior Indebtedness of the Company (pro rata to such holders on
the basis of the respective amounts of Senior Indebtedness held
by such holders, as calculated by the Company) or their
representative or representatives, or to the trustee or trustees
under any indenture pursuant to which any instruments evidencing
such Senior Indebtedness may have been issued, as their
respective interests may appear, to the extent necessary to pay
such Senior Indebtedness in full, in money or money's worth,
after giving effect to any concurrent payment or distribution to
or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the holders of Debentures or
to the Trustee.
(b) In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, prohibited by
the foregoing, shall be received by the Trustee before all Senior
Indebtedness of the Company is paid in full, or provision is made
for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of such Senior
Indebtedness or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any
instruments evidencing such Senior Indebtedness may have been
issued, and their respective interests may appear, as calculated
by the Company, for application to the payment of all Senior
Indebtedness of the Company, as the case may be, remaining unpaid
to the extent necessary to pay such Senior Indebtedness in full
in money in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the benefit of the
holders of such Senior Indebtedness.
(c) For purposes of this Article XVI, the words "cash,
property or securities" shall not be deemed to include shares of
stock of the Company as reorganized or readjusted, or securities
of the Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article XVI
with respect to the Debentures to the payment of all Senior
Indebtedness of the Company, as the case may be, that may at the
time be outstanding, provided that (i) such Senior Indebtedness
is assumed by the new corporation, if any, resulting from any
such reorganization or readjustment; and (ii) the rights of the
holders of such Senior
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Indebtedness are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of the Company with, or the
merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer
of its property as an entirety, or substantially as an entirety,
to another corporation upon the terms and conditions provided for
in Article XII shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section
16.3 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the
conditions stated in Article XII. Nothing in Section 16.2 or in
this Section 16.3 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 9.7.
Section 16.4. Subrogation.
(a) Subject to the payment in full of all Senior
Indebtedness of the Company, the rights of the holders of the
Debentures shall be subrogated to the rights of the holders of
such Senior Indebtedness to receive payments or distributions of
cash, property or securities of the Company, as the case may be,
applicable to such Senior Indebtedness until the principal of and
interest on the Debentures shall be paid in full; and, for the
purposes of such subrogation, no payments or distributions to the
holders of such Senior Indebtedness of any cash, property or
securities to which the holders of the Debentures or the Trustee
would be entitled except for the provisions of this Article XVI,
and no payment over pursuant to the provisions of this Article
XVI to or for the benefit of the holders of such Senior
Indebtedness by holders of the Debentures or the Trustee, shall,
as between the Company, its creditors other than holders of
Senior Indebtedness of the Company, and the holders of the
Debentures, be deemed to be a payment by the Company to or on
account of such Senior Indebtedness. It is understood that the
provisions of this Article XVI are and are intended solely for
the purposes of defining the relative rights of the holders of
the Debentures, on the one hand, and the holders of such Senior
Indebtedness on the other hand.
(b) Nothing contained in this Article XVI or elsewhere in
this Indenture or in the Debentures is intended to or shall
impair, as between the Company, its creditors (other than the
holders of Senior Indebtedness of the Company), and the holders
of the Debentures, the obligation of the Company, which is
absolute and unconditional, to pay to the holders of the
Debentures the principal of and interest on the Debentures as and
when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative
rights of the holders of the Debentures and creditors of the
Company, as the case may be, other than the holders of Senior
Indebtedness of the Company, as the case may be, nor shall
anything herein or therein prevent the Trustee or the holder of
any Debenture from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the
rights, if any, under this Article XVI of the holders of such
Senior Indebtedness in respect of cash, property or securities of
the Company, as the case may be, received upon the exercise of
any such remedy.
(c) Upon any payment or distribution of assets of the
Company referred to in this Article XVI, the Trustee, subject to
the provisions of Article IX, and the holders of the Debentures
shall be entitled to conclusively rely upon any order or decree
made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization
proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person
making such payment or distribution, delivered to the Trustee or
to the holders of the Debentures, for the purposes of
ascertaining the Persons entitled to participate in such
distribution, the holders of Senior Indebtedness and other
indebtedness of the Company, as the case may be, the amount
thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to
this Article XVI.
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Section 16.5. Trustee to Effectuate Subordination.
Each holder of Debentures by such holder's acceptance
thereof authorizes and directs the Trustee on such holder's
behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article XVI and
appoints the Trustee such holder's attorney-in-fact for any and
all such purposes.
Section 16.6. Notice by the Company.
(a) The Company shall give prompt written notice to a
Responsible Officer of the Trustee of any fact known to the
Company that would prohibit the making of any payment of monies
to or by the Trustee in respect of the Debentures pursuant to the
provisions of this Article XVI. Notwithstanding the provisions
of this Article XVI or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment of monies
to or by the Trustee in respect of the Debentures pursuant to the
provisions of this Article XVI, unless and until a Responsible
Officer of the Trustee shall have received written notice thereof
from the Company or a holder or holders of Senior Indebtedness or
from any trustee therefor; and before the receipt of any such
written notice, the Trustee, subject to the provisions of Section
9.1, shall be entitled in all respects to assume that no such
facts exist; provided, however, that if the Trustee shall not
have received the notice provided for in this Section 16.6 at
least two Business Days prior to the date upon which by the terms
hereof any money may become payable for any purpose (including,
without limitation, the payment of the principal of or interest
on any Debenture), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and
authority to receive such money and to apply the same to the
purposes for which they were received, and shall not be affected
by any notice to the contrary that may be received by it within
two Business Days prior to such date.
(b) The Trustee, subject to the provisions of Section 9.1,
shall be entitled to conclusively rely on the delivery to it of a
written notice by a Person representing himself to be a holder of
Senior Indebtedness of the Company (or a trustee on behalf of
such holder) to establish that such notice has been given by a
holder of such Senior Indebtedness or a trustee on behalf of any
such holder or holders. In the event that the Trustee determines
in good faith that further evidence is required with respect to
the right of any Person as a holder of such Senior Indebtedness
to participate in any payment or distribution pursuant to this
Article XVI, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the
amount of such Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the
rights of such Person under this Article XVI, and, if such
evidence is not furnished, the Trustee may defer any payment to
such Person pending judicial determination as to the right of
such Person to receive such payment.
Section 16.7. Rights of the Trustee; Holders of Senior Indebtedness.
(a) The Trustee in its individual capacity shall be
entitled to all the rights set forth in this Article XVI in
respect of any Senior Indebtedness at any time held by it, to the
same extent as any other holder of Senior Indebtedness, and
nothing in this Indenture shall deprive the Trustee of any of its
rights as such holder. The Trustee's right to compensation and
reimbursement of expenses as set forth in Section 9.7 shall not
be subject to the subordination provisions of the Article XVI.
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(b) With respect to the holders of Senior Indebtedness of
the Company, the Trustee undertakes to perform or to observe only
such of its covenants and obligations as are specifically set
forth in this Article XVI, and no implied covenants or
obligations with respect to the holders of such Senior
Indebtedness shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary
duty to the holders of such Senior Indebtedness and, subject to
the provisions of Section 9.1, the Trustee shall not be liable to
any holder of such Senior Indebtedness if it shall pay over or
deliver to holders of Debentures, the Company or any other Person
money or assets to which any holder of such Senior Indebtedness
shall be entitled by virtue of this Article XVI or otherwise.
Section 16.8. Subordination may not be Impaired.
(a) No right of any present or future holder of any Senior
Indebtedness of the Company to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired
by any act or failure to act on the part of the Company or by any
act or failure to act, in good faith, by any such holder, or by
any noncompliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof
that any such holder may have or otherwise be charged with.
(b) Without in any way limiting the generality of the
foregoing paragraph, the holders of Senior Indebtedness of the
Company may, at any time and from time to time, without the
consent of or notice to the Trustee or the holders of the
Debentures, without incurring responsibility to the holders of
the Debentures and without impairing or releasing the
subordination provided in this Article XVI or the obligations
hereunder of the holders of the Debentures to the holders of such
Senior Indebtedness, do any one or more of the following: (i)
change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, such Senior Indebtedness, or
otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any
agreement under which such Senior Indebtedness is outstanding;
(ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Senior
Indebtedness; (iii) release any Person liable in any manner for
the collection of such Senior Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Company and any
other Person.
47
<PAGE> 53
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, all as of the day and
year first above written.
1ST SOURCE CORPORATION
By:------------------------------------
Name:----------------------------------
Title:---------------------------------
Attest:
- -----------------------------------
STATE STREET BANK AND TRUST COMPANY,
as trustee
By:------------------------------------
Name:----------------------------------
Title:---------------------------------
Attest:
- -----------------------------------
48
<PAGE> 54
STATE OF INDIANA )
) ss:
COUNTY OF ST. JOSEPH )
On this ------- day of -------------------------------,
199---, before me appeared ------------------------------, to me
personally known, who, being by me duly sworn, did say that he is
the ---------------------------- of 1ST SOURCE CORPORATION, and
that the seal affixed to said instrument is the corporate seal of
said corporation, and that said instrument was signed and sealed
in behalf of said corporation by authority of its board of
directors and said ------------------------------, acknowledged
said instrument to be the free act and deed of said corporation.
In testimony whereof I have hereunto set my hand and affixed
my official seal at my office in said county and state the day
and year last above written.
---------------------------------------
Notary Public
[seal] My term expires:-----------------------
COMMONWEALTH OF MASSACHUSETTS )
) ss:
COUNTY OF SUFFOLK )
On this ------- day of -------------------------------,
199---, before me appeared ------------------------------, to me
personally known, who, being by me duly sworn, did say that he is
the ---------------------------- of STATE STREET BANK AND TRUST
COMPANY, and that the seal affixed to said instrument is the
corporate seal of said corporation, and that said instrument was
signed and sealed in behalf of said corporation by authority of
its board of directors and said ------------------------------,
acknowledged said instrument to be the free act and deed of said
corporation.
In testimony whereof I have hereunto set my hand and affixed
my official seal at my office in said county and state the day
and year last above written.
---------------------------------------
Notary Public
[seal] My term expires:-----------------------
49
<PAGE> 55
EXHIBIT A
(FORM OF FACE OF DEBENTURE)
No.------------------------- $ ----------
CUSIP No. ------------------
1ST SOURCE CORPORATION
FLOATING RATE SUBORDINATED DEBENTURE
DUE MARCH 31, 2027
1st Source Corporation, an Indiana corporation (the
"Company," which term includes any successor corporation under
the Indenture hereinafter referred to), for value received,
hereby promises to pay to, State Street Bank and Trust Company,
as Property Trustee, or registered assigns, the principal sum of
($----------) on March 31, 2027 (the "Stated Maturity"), and to
pay interest on said principal sum from ----------, 1997, or from
the most recent interest payment date (each such date, an
"Interest Payment Date") to which interest has been paid or duly
provided for, quarterly (subject to deferral as set forth herein)
in arrears on March 31, June 30, September 30 and December 31 of
each year commencing June 30, 1997, at a rate per annum
determined by reference to 3-Month Treasury, determined as
described below, plus ----% during any period beginning on, and
including, the date of original issuance, and ending on, but
excluding, the first Interest Payment Date, and each successive
period beginning on, and including, an Interest Payment Date, and
ending on, but excluding, the next succeeding Interest Payment
Date (a "Distribution Period") applied to the principal amount
thereof, until the principal hereof shall have become due and
payable, and on any overdue principal and (without duplication)
on any overdue installment of interest at the same rate per annum
compounded quarterly; provided, however, that said interest rate
for the first Distribution Period shall be ----%. The amount of
interest payable on any Interest Payment Date shall be computed on
the basis of a 360-day year of twelve 30-day months. The amount of
interest for any partial period shall be computed on the basis of
the number of days elapsed in a 360-day year of twelve 30-day
months. In the event that any date on which interest is payable
on this Debenture is not a business day, then payment of interest
payable on such date shall be made on the next succeeding day
that is a business day (and without any interest or other payment
in respect of any such delay) with the same force and effect as
if made on such date. "3-Month Treasury" means the yield on
United States of America Treasury constant maturities, adjusted
to a constant maturity of three (3) months, reported by the
Federal Reserve. 3-Month Treasury, with respect to any
Distribution Period, will be determined by the Property Trustee
as follows: (i) On the second Business Day preceding the
commencement of such Distribution Period (each a "Determination
Date"), 3-Month Treasury will be the current yield for United
States of America Treasury constant maturities, adjusted to a
constant maturity of three (3) months, which appears on the
applicable Federal Reserve Statistical Release Series H.15 (519)
which includes data for such Determination Date, or as then
currently furnished or made available by the Federal Reserve if
such Series is no longer published; (ii) and if, with respect to
any Determination Date, the Property Trustee is required but unable
Exhibit A-1
<PAGE> 56
to determine 3-Month Treasury in the manner provided in
clause (i) above, 3-Month Treasury for such Distribution Period
will be 3-Month Treasury as determined on the previous
Determination Date. The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment
Date shall, as provided in the Indenture, be paid to the person
in whose name this Debenture (or one or more Predecessor
Debentures, as defined in said Indenture) is registered at the
close of business on the regular record date for such interest
installment, which shall be the fifteenth day of the last month
of the calendar quarter in which such Interest Payment Date
occurs unless otherwise provided in the Indenture. Any such
interest installment not punctually paid or duly provided for
shall forthwith cease to be payable to the registered holders on
such regular record date and may be paid to the Person in whose
name this Debenture (or one or more Predecessor Debentures) is
registered at the close of business on a special record date to
be fixed by the Trustee for the payment of such defaulted
interest, notice whereof shall be given to the registered holders
of the Debentures not less than 10 days prior to such special
record date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities
exchange on which the Debentures may be listed, and upon such
notice as may be required by such exchange, all as more fully
provided in the Indenture. The principal of and the interest on
this Debenture shall be payable at the office or agency of the
Trustee maintained for that purpose in any coin or currency of
the United States of America that at the time of payment is legal
tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of
the Company by check mailed to the registered holder at such
address as shall appear in the Debenture Register.
Notwithstanding the foregoing, so long as the holder of this
Debenture is the Property Trustee, the payment of the principal
of and interest on this Debenture shall be made at such place and
to such account as may be designated by the Trustee.
The Stated Maturity may be shortened at any time by the
Company to any date not earlier than March 31, 2002, subject to
the Company having received prior approval of the Federal Reserve
if then required under applicable capital guidelines or policies
of the Federal Reserve. Such date may also be extended at any
time at the election of the Company for one or more periods, but
in no event to a date later than March 31, 2046, subject to
certain limitations described in the Indenture.
The indebtedness evidenced by this Debenture is, to the
extent provided in the Indenture, subordinate and junior in right
of payment to the prior payment in full of all Senior
Indebtedness, and this Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each holder of
this Debenture, by accepting the same, (a) agrees to and shall be
bound by such provisions; (b) authorizes and directs the Trustee
on his or her behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination so
provided; and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each holder
hereof, by his or her acceptance hereof, hereby waives all notice
of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior
Indebtedness, whether now outstanding or hereafter incurred, and
waives reliance by each such holder upon said provisions.
This Debenture shall not be entitled to any benefit under
the Indenture hereinafter referred to, be valid or become
obligatory for any purpose until the Certificate of
Authentication hereon shall have been signed by or on behalf of
the Trustee.
The provisions of this Debenture are continued on the
reverse side hereof and such continued provisions shall for all
purposes have the same effect as though fully set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this instrument
to be executed.
Exhibit A-2
<PAGE> 57
Dated
1ST SOURCE CORPORATION
By:------------------------------------
Name:-----------------------------------
Title:----------------------------------
Attest:
By:---------------------------------
Name:-------------------------------
Title:------------------------------
Exhibit A-3
<PAGE> 58
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the
within-mentioned Indenture.
Dated:
STATE STREET BANK AND TRUST COMPANY, ---------------------------------
as Trustee or Authentication Agent
By----------------------------------- By-------------------------------
Authorized Signatory
Exhibit A-4
<PAGE> 59
[FORM OF REVERSE OF DEBENTURE]
FLOATING RATE SUBORDINATED DEBENTURE
(CONTINUED)
This Debenture is one of the subordinated debentures of the
Company (herein sometimes referred to as the "Debentures"),
specified in the Indenture, all issued or to be issued under and
pursuant to an Indenture dated as of ------------- (the
"Indenture") duly executed and delivered between the Company and
State Street Bank and Trust Company, as Trustee (the "Trustee"),
to which Indenture reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders
of the Debentures. The Debentures are limited in aggregate
principal amount as specified in the Indenture.
Because of the occurrence and continuation of a Special
Event, in certain circumstances, this Debenture may become due
and payable at the principal amount together with any interest
accrued thereon (the "Redemption Price"). The Redemption Price
shall be paid prior to 12:00 noon, Eastern Standard Time, time,
on the date of such redemption or at such earlier time as the
Company determines. The Company shall have the right to redeem
this Debenture at the option of the Company, without premium or
penalty, in whole or in part at any time on or after March 31,
2002 (an "Optional Redemption"), or at any time in certain
circumstances upon the occurrence of a Special Event, at a
Redemption Price equal to 100% of the principal amount plus any
accrued but unpaid interest, to the date of such redemption. Any
redemption pursuant to this paragraph shall be made upon not less
than 30 days nor more than 60 days notice, at the Redemption
Price. If the Debentures are only partially redeemed by the
Company pursuant to an Optional Redemption, the Debentures shall
be redeemed pro rata or by lot or by any other method utilized by
the Trustee.
In the event of redemption of this Debenture in part only, a
new Debenture or Debentures for the unredeemed portion hereof
shall be issued in the name of the holder hereof upon the
cancellation hereof.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of
the Debentures may be declared, and upon such declaration shall
become, due and payable, in the manner, with the effect and
subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a
majority in aggregate principal amount of the Debentures at the
time outstanding, as defined in the Indenture, to execute
supplemental indentures for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions
of the Indenture or of any supplemental indenture or of modifying
in any manner the rights of the holders of the Debentures;
provided, however, that no such supplemental indenture shall (i)
extend the fixed maturity of the Debentures except as provided in
the Indenture, or reduce the principal amount thereof, or reduce
the rate or extend the time of payment of interest thereon,
without the consent of the holder of each Debenture so affected;
or (ii) reduce the aforesaid percentage of Debentures, the
holders of which are required to consent to any such supplemental
indenture, without the consent of the holders of each Debenture
then outstanding and affected thereby. The Indenture also
contains provisions permitting the holders of a majority in
aggregate principal amount of the Debentures at the time
outstanding, on behalf of all of the holders of the Debentures,
to waive any past default in the performance of any of the
covenants contained in the Indenture, or established pursuant to
the Indenture, and its consequences,
Exhibit A-5
<PAGE> 60
except a default in the payment of the principal of or interest on any of the
Debentures. Any such consent or waiver by the registered holder of this
Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such holder and upon all future
holders and owners of this Debenture and of any Debenture issued
in exchange herefor or in place hereof (whether by registration
of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of
this Debenture or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal and interest on this Debenture at the time
and place and at the rate and in the money herein prescribed.
The Company shall have the right at any time during the term
of the Debentures and from time to time to extend the interest
payment period of such Debentures for up to 20 consecutive
quarters (each, an "Extended Interest Payment Period"), at the
end of which period the Company shall pay all interest then
accrued and unpaid (together with interest thereon at the rate
specified for the Debentures to the extent that payment of such
interest is enforceable under applicable law). Before the
termination of any such Extended Interest Payment Period, the
Company may further extend such Extended Interest Payment Period,
provided that such Extended Interest Payment Period together with
all such further extensions thereof shall not exceed 20
consecutive quarters. At the termination of any such Extended
Interest Payment Period and upon the payment of all accrued and
unpaid interest and any additional amounts then due, the Company
may commence a new Extended Interest Payment Period.
As provided in the Indenture and subject to certain
limitations therein set forth, this Debenture is transferable by
the registered holder hereof on the Debenture Register of the
Company, upon surrender of this Debenture for registration of
transfer at the office or agency of the Trustee accompanied by a
written instrument or instruments of transfer in form
satisfactory to the Company or the Trustee duly executed by the
registered holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Debentures of authorized
denominations and for the same aggregate principal amount shall
be issued to the designated transferee or transferees. No
service charge shall be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax
or other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of
this Debenture, the Company, the Trustee, any paying agent and
the Debenture Registrar may deem and treat the registered holder
hereof as the absolute owner hereof (whether or not this
Debenture shall be overdue and notwithstanding any notice of
ownership or writing hereon made by anyone other than the
Debenture Registrar) for the purpose of receiving payment of or
on account of the principal hereof and interest due hereon and
for all other purposes, and neither the Company nor the Trustee
nor any paying agent nor any Debentures Registrar shall be
affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of
or the interest on this Debenture, or for any claim based hereon,
or otherwise in respect hereof, or based on or in respect of the
Indenture, against any incorporator, stockholder, officer or
director, past, present or future, as such, of the Company or of
any predecessor or successor corporation, whether by virtue of
any constitution, statute or rule of law, or by the enforcement
of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration
for the issuance hereof, expressly waived and released.
Exhibit A-6
<PAGE> 61
The Debentures are issuable only in registered form without
coupons in denominations of $25 and any integral multiple
thereof.
All terms used in this Debenture that are defined in the
Indenture shall have the meanings assigned to them in the
Indenture.
Exhibit A-7
<PAGE> 1
CERTIFICATE OF TRUST
OF
1ST SOURCE CAPITAL TRUST II
THIS CERTIFICATE OF TRUST OF 1ST SOURCE CAPITAL TRUST II (the
"Trust"), dated as of February 27, 1997, is being duly executed and
filed by WILMINGTON TRUST COMPANY, a Delaware banking corporation,
Christopher J. Murphy III, Wellington D. Jones III and Larry E.
Lentych, each an individual, as trustees, to form a business trust
under the Delaware Business Trust Act (12 Del. C. Section 3801 et
seq.).
1. NAME. The name of the business trust formed hereby is 1ST
SOURCE CAPITAL TRUST II.
2. DELAWARE TRUSTEE. The name and business address of the
trustee of the Trust in the State of Delaware is Wilmington
Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-0001, Attention: Corporate Trust
Administration.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective
on February 27, 1997.
IN WITNESS WHEREOF, the undersigned, being the sole trustees
of the Trust, have executed this Certificate of Trust as of the
date first above written.
WILMINGTON TRUST COMPANY,
as trustee
By: /s/
-------------------------------------------
Name:------------------------------------------
Title:-----------------------------------------
/s/ Christopher J. Murphy III
-----------------------------------------------
Christopher J. Murphy III
as Trustee
/s/ Wellington D. Jones III
-----------------------------------------------
Wellington D. Jones III
as Trustee
/s/ Larry E. Lentych
-----------------------------------------------
Larry E. Lentych
as Trustee
<PAGE> 1
TRUST AGREEMENT
This TRUST AGREEMENT, dated as of February 27, 1997 (this
"Trust Agreement"), among (i) 1st Source Corporation, an Indiana
corporation (the "Depositor"), (ii) Wilmington Trust Company, a
Delaware banking corporation, as trustee, and (iii) Christopher J.
Murphy III, Wellington D. Jones III and Larry E. Lentych, each an
individual, as trustees (each of such trustees in (ii) and (iii) a
"Trustee" and collectively, the "Trustees"). The Depositor and the
Trustees hereby agree as follows:
1. The trust created hereby (the "Trust") shall be known as
"1st Source Capital Trust II" in which name the Trustees, or the
Depositor to the extent provided herein, may engage in the
transactions contemplated hereby, make and execute contracts, and
sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets
over the Trustees the sum of $10.00. The Trustees hereby
acknowledge receipt of such amount in trust from the Depositor,
which amount shall constitute the initial trust estate. The
Trustees hereby declare that they will hold the trust estate in
trust for the Depositor. It is the intention of the parties hereto
that the Trust created hereby constitute a business trust under
Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. Section
3801, et seq. (the "Business Trust Act"), and that this document
constitutes the governing instrument of the Trust. The Trustees
are hereby authorized and directed to execute and file a
certificate of trust with the Delaware Secretary of State in
accordance with the provisions of the Business Trust Act.
3. The Depositor and the Trustees will enter into an amended
and restated Trust Agreement, satisfactory to each such party and
substantially in the form included as an exhibit to the 1933 Act
Registration Statement (as defined below), to provide for the
contemplated operation of the Trust created hereby and the issuance
of the Preferred Securities and Common Securities referred to
therein. Prior to the execution and delivery of such amended and
restated Trust Agreement, the Trustees shall not have any duty or
obligation hereunder or with respect to the trust estate, except as
otherwise required by applicable law or as may be necessary to
obtain prior to such execution and delivery of any licenses,
consents or approvals required by applicable law or otherwise.
4. The Depositor and the Trustees hereby authorize and
direct the Depositor, as the sponsor of the Trust, (i) to file with
the Securities and Exchange Commission (the "Commission") and
execute, in each case on behalf of the Trust, (a) the Registration
Statement on Form S-3 (the "1933 Act Registration Statement"),
including any pre-effective or post-effective amendments to the
1933 Act Registration Statement, relating to the registration under
the Securities Act of 1933, as amended, of the Preferred Securities
of the Trust and possibly certain other securities and (b) a
Registration Statement on Form 8-A (the "1934 Act Registration
Statement") (including all pre-effective and post-effective
amendments thereto) relating to the registration of the Preferred
Securities of the Trust under the Securities Exchange Act of 1934,
as amended; (ii) to file with The Nasdaq Stock Market's National
Market or a national stock exchange (each, an "Exchange") and
execute on behalf of the Trust one or more listing applications and
all other applications, statements, certificates, agreements and
other instruments as shall be necessary or desirable to cause the
Preferred Securities to be listed on any of the Exchanges; (iii) to
file and execute on behalf of the Trust such applications, reports,
surety bonds, irrevocable consents, appointments of attorney for
service of process and other papers and documents as shall be
necessary or desirable to register the Preferred Securities under
the securities or blue sky laws of such jurisdictions as the
Depositor, on behalf of the Trust, may deem necessary or desirable;
and (iv) to execute on behalf of the Trust that certain
Underwriting Agreement relating to the Preferred Securities, among
the Trust, the Depositor and the several Underwriters named
therein, substantially in
<PAGE> 2
the form included as an exhibit to the 1933 Act Registration
Statement. In the event that any filing referred to in clauses (i),
(ii) and (iii) above is required by the rules and regulations of the
Commission, an Exchange or state securities or blue sky laws, to be
executed on behalf of the Trust by one or more of the Trustees, each
of the Trustees, in its or his capacity as a Trustee of the Trust, is
hereby authorized and, to the extent so required, directed to join in
any such filing and to execute on behalf of the Trust any and all of
the foregoing, it being understood that Wilmington Trust Company in
its capacity as a Trustee of the Trust shall not be required to join
in any such filing or execute on behalf of the Trust any such document
unless required by the rules and regulations of the Commission, the
Exchange or state securities or blue sky laws. In connection with
the filings referred to above, the Depositor and Christopher J.
Murphy III, Wellington D. Jones III and Larry E. Lentych, each as
Trustees and not in their individual capacities, hereby constitutes
and appoints Christopher J. Murphy III, Wellington D. Jones III and
Larry E. Lentych, and each of them, as its true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for the Depositor or such Trustee or in the
Depositor's or such Trustees' name, place and stead, in any and all
capacities, to sign any and all amendments (including post-
effective amendments) to the 1933 Act Registration Statement and
the 1934 Act Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with
the Commission, the Exchange and administrators of the state
securities or blue sky laws, granting unto said attorneys-in-fact
and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as the
Depositor or such Trustee might or could to in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents
or any of them, or their respective substitute or substitutes,
shall do or cause to be done by virtue hereof.
5. This Trust Agreement may be executed in one or more
counterparts.
6. The number of Trustees initially shall be four and
thereafter the number of Trustees shall be such number as shall be
fixed from time to time by a written instrument signed by the
Depositor which may increase or decrease the number of Trustees;
provided, however, that to the extent required by the Business
Trust Act, one Trustee shall either be a natural person who is a
resident of the State of Delaware or, if not a natural person, an
entity which has its principal place of business in the State of
Delaware and otherwise meets the requirements of applicable
Delaware law. Subject to the foregoing, the Depositor is entitled
to appoint or remove without cause any Trustee at any time. The
Trustees may resign upon 30 days' prior notice to the Depositor.
7. This Trust Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware (without
regard to conflict of laws of principles).
[Signatures On Next Page]
2
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed as of the day and year first above
written.
1ST SOURCE CORPORATION
as Depositor
By: /s/ Christopher J. Murphy III
-----------------------------------------
Christopher J. Murphy III
President and Chief Executive Officer
WILMINGTON TRUST COMPANY
as Trustee
By: /s/
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
/s/ Christopher J. Murphy III
---------------------------------------------
Christopher J. Murphy III
as Trustee
/s/ Wellington D. Jones III
---------------------------------------------
Wellington D. Jones III
as Trustee
/s/ Larry E. Lentych
---------------------------------------------
Larry E. Lentych
as Trustee
3
<PAGE> 1
=================================================================
1ST SOURCE CAPITAL TRUST II
AMENDED AND RESTATED
TRUST AGREEMENT
among
1ST SOURCE CORPORATION, as Depositor
STATE STREET BANK AND TRUST COMPANY, as Property Trustee
WILMINGTON TRUST COMPANY, as Delaware Trustee,
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
Dated as of -------------, 1997
=================================================================
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<CAPTION>
PAGE
<S> <C>
ARTICLE I - DEFINED TERMS 1
Section 101. Definitions 1
ARTICLE II - ESTABLISHMENT OF THE TRUST 8
Section 201. Name 8
Section 202. Office of the Delaware Trustee;
Principal Place of Business 8
Section 203. Initial Contribution of Trust
Property; Organizational Expenses 9
Section 204. Issuance of the Preferred Securities 9
Section 205. Issuance of the Common Securities;
Subscription and Purchase of Debentures 9
Section 206. Declaration of Trust 10
Section 207. Authorization to Enter into Certain
Transactions 10
Section 208. Assets of Trust 13
Section 209. Title to Trust Property 13
ARTICLE III - PAYMENT ACCOUNT 13
Section 301. Payment Account 13
ARTICLE IV - DISTRIBUTIONS; REDEMPTION 14
Section 401. Distributions 14
Section 402. Redemption 14
Section 403. Subordination of Common Securities 16
Section 404. Payment Procedures 16
Section 405. Tax Returns and Reports 17
Section 406. Payment of Taxes, Duties, etc. of
the Trust 17
Section 407. Payments Under Indenture 17
ARTICLE V - TRUST SECURITIES CERTIFICATES 17
Section 501. Initial Ownership 17
Section 502. The Trust Securities Certificates 17
Section 503. Execution, Authentication and
Delivery of Trust Securities Certificates 18
Section 504. Registration of Transfer and
Exchange of Preferred Securities
Certificates 18
Section 505. Mutilated, Destroyed, Lost or Stolen
Trust Securities Certificates 19
Section 506. Persons Deemed Securityholders 19
Section 507. Access to List of Securityholders'
Names and Addresses 19
Section 508. Maintenance of Office or Agency 20
Section 509. Appointment of Paying Agent 20
Section 510. Ownership of Common Securities by
Depositor 21
Section 511. Preferred Securities Certificates 21
Section 512. [Intentionally Omitted] 21
Section 513. [Intentionally Omitted] 21
Section 514. Rights of Securityholders 21
i
<PAGE> 3
ARTICLE VI - ACTS OF SECURITYHOLDERS; MEETINGS; VOTING 22
Section 601. Limitations on Voting Rights 22
Section 602. Notice of Meetings 23
Section 603. Meetings of Preferred
Securityholders 23
Section 604. Voting Rights 23
Section 605. Proxies, etc. 23
Section 606. Securityholder Action by Written
Consent 24
Section 607. Record Date for Voting and Other
Purposes 24
Section 608. Acts of Securityholders 24
Section 609. Inspection of Records 25
ARTICLE VII - REPRESENTATIONS AND WARRANTIES 25
Section 701. Representations and Warranties of
the Bank and the Property Trustee 25
Section 702. Representations and Warranties of
the Delaware Bank and the Delaware Trustee 26
Section 703. Representations and Warranties of
Depositor 27
ARTICLE VIII - TRUSTEES 28
Section 801. Certain Duties and Responsibilities 28
Section 802. Certain Notices 29
Section 803. Certain Rights of Property Trustee 29
Section 804. Not Responsible for Recitals or
Issuance of Securities 31
Section 805. May Hold Securities 31
Section 806. Compensation; Indemnity; Fees 31
Section 807. Corporate Property Trustee Required;
Eligibility of Trustees 32
Section 808. Conflicting Interests 32
Section 809. Co-Trustees and Separate Trustee 32
Section 810. Resignation and Removal; Appointment
of Successor 34
Section 811. Acceptance of Appointment by
Successor 35
Section 812. Merger, Conversion, Consolidation or
Succession to Business 35
Section 813. Preferential Collection of Claims
Against Depositor or Trust 36
Section 814. Reports by Property Trustee 36
Section 815. Reports to the Property Trustee 36
Section 816. Evidence of Compliance with
Conditions Precedent 36
Section 817. Number of Trustees 37
Section 818. Delegation of Power 37
Section 819. Voting 37
ARTICLE IX - TERMINATION, LIQUIDATION AND MERGER 37
Section 901. Termination Upon Expiration Date 37
Section 902. Early Termination 38
Section 903. Termination 38
Section 904. Liquidation 38
Section 905. Mergers, Consolidations,
Amalgamations or Replacements of the Trust 39
ARTICLE X - MISCELLANEOUS PROVISIONS 40
Section 1001. Limitation of Rights of
Securityholders 40
Section 1002. Amendment 40
ii
<PAGE> 4
Section 1003. Separability 42
Section 1004. Governing law 42
Section 1005. Payments Due on Non-Business Day 42
Section 1006. Successors 42
Section 1007. Headings 42
Section 1008. Reports, Notices and Demands 42
Section 1009. Agreement Not to Petition 43
Section 1010. Trust Indenture Act; Conflict with
Trust Indenture Act 43
Section 1011. Acceptance of Terms of Trust
Agreement, Guarantee and Indenture 44
Exhibit A Certificate of Trust
Exhibit B [Intentionally Omitted]
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Expense Agreement
Exhibit E Form of Preferred Securities Certificate
</TABLE>
iii
<PAGE> 5
<TABLE>
CROSS-REFERENCE TABLE
<CAPTION>
Section of Section of
Trust Indenture Act Amended and Restated
of 1939, as amended Trust Agreement
- ------------------- ---------------
<S> <C>
310(a)(1) 807
310(a)(2) 807
310(a)(3) 807
310(a)(4) 207(a)(ii)
310(b) 808
311(a) 813
311(b) 813
312(a) 507
312(b) 507
312(c) 507
313(a) 814(a)
313(a)(4) 814(b)
313(b) 814(b)
313(c) 1008
313(d) 814(c)
314(a) 815
314(b) Not Applicable
314(c)(1) 816
314(c)(2) 816
314(c)(3) Not Applicable
314(d) Not Applicable
314(e) 101, 816
315(a) 801(a), 803(a)
315(b) 802, 1008
315(c) 801(a)
315(d) 801, 803
316(a)(2) Not Applicable
316(b) Not Applicable
316(c) 607
317(a)(1) Not Applicable
317(a)(2) Not Applicable
317(b) 509
318(a) 1010
Note: This Cross-Reference Table does not constitute part of
this Agreement and should not affect the interpretation of
any of its terms or provisions.
</TABLE>
iv
<PAGE> 6
AMENDED AND RESTATED TRUST AGREEMENT
AMENDED AND RESTATED TRUST AGREEMENT, dated as of
- ----------------, 1997 among (i) 1ST SOURCE CORPORATION, an
Indiana corporation (including any successors or assigns, the
"Depositor"), (ii) STATE STREET BANK AND TRUST COMPANY, a trust
company duly organized and existing under the laws of the
Commonwealth of Massachusetts, as property trustee (the "Property
Trustee" and, in its separate corporate capacity and not in its
capacity as Property Trustee, the "Bank"), (iii) WILMINGTON TRUST
COMPANY, a Delaware banking corporation duly organized and
existing under the laws of the State of Delaware, as Delaware
trustee (the "Delaware Trustee," and, in its separate corporate
capacity and not in its capacity as Delaware Trustee, the
"Delaware Bank") (iv) Christopher J. Murphy III, an individual,
Wellington D. Jones III, an individual, and Larry E. Lentych, an
individual, each of whose address is c/o 1st Source Corporation,
100 North Michigan Street, South Bend, Indiana 46601 (each an
"Administrative Trustee" and collectively the "Administrative
Trustees") (the Property Trustee, the Delaware Trustee and the
Administrative Trustees referred to collectively as the
"Trustees"), and (v) the several Holders (as hereinafter
defined).
RECITALS
WHEREAS, the Depositor, the Delaware Trustee, and
Christopher J. Murphy III, Wellington D. Jones III and Larry E.
Lentych, each as an Administrative Trustee, have heretofore duly
declared and established a business trust pursuant to the
Delaware Business Trust Act by the entering into of that certain
Trust Agreement, dated as of February 20, 1997 (the "Original
Trust Agreement"), and by the execution and filing by the
Delaware Trustee, the Depositor and the Administrative Trustees
with the Secretary of State of the State of Delaware of the
Certificate of Trust, filed on February 20, 1997, the form of
which is attached as Exhibit A; and
WHEREAS, the Depositor, the Delaware Trustee, the Property
Trustee and the Administrative Trustees desire to amend and
restate the Original Trust Agreement in its entirety as set forth
herein to provide for, among other things, (i) the issuance of
the Common Securities (as defined herein) by the Trust (as
defined herein) to the Depositor; (ii) the issuance and sale of
the Preferred Securities (as defined herein) by the Trust
pursuant to the Underwriting Agreement (as defined herein);
(iii) the acquisition by the Trust from the Depositor of all of
the right, title and interest in the Debentures (as defined
herein); and (iv) the appointment of the Trustees;
NOW THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, each party, for the benefit of the other parties
and for the benefit of the Securityholders (as defined herein),
hereby amends and restates the Original Trust Agreement in its
entirety and agrees as follows:
ARTICLE I
DEFINED TERMS
Section 101. Definitions.
For all purposes of this Trust Agreement, except as
otherwise expressly provided or unless the context otherwise
requires:
<PAGE> 7
(a) the terms defined in this Article I have the meanings
assigned to them in this Article I and include the plural as well
as the singular;
(b) all other terms used herein that are defined in the
Trust Indenture Act, either directly or by reference therein,
have the meanings assigned to them therein;
(c) unless the context otherwise requires, any reference to
an "Article" or a "Section" refers to an Article or a Section, as
the case may be, of this Trust Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Trust Agreement as a whole
and not to any particular Article, Section or other subdivision.
"3-Month Treasury" has the meaning specified in Section
401(e).
"Act" has the meaning specified in Section 608.
"Additional Amount" means, with respect to Trust Securities
of a given Liquidation Amount and/or a given period, the amount
of additional interest accrued on interest in arrears and paid by
the Depositor on a Like Amount of Debentures for such period.
"Additional Interest" has the meaning specified in Section
1.1 of the Indenture.
"Administrative Trustee" means each of Christopher J. Murphy
III, Wellington D. Jones III and Larry E. Lentych, solely in his
capacity as Administrative Trustee of the Trust formed and
continued hereunder and not in his individual capacity, or such
Administrative Trustee's successor in interest in such capacity,
or any successor trustee appointed as herein provided.
"Affiliate" means, with respect to a specified Person, (a)
any Person directly or indirectly owning, controlling or holding
with power to vote 10% or more of the outstanding voting
securities or other ownership interests of the specified Person,
any Person 10% or more of whose outstanding voting securities or
other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person;
(c) any Person directly or indirectly controlling, controlled by,
or under common control with the specified Person; (d) a
partnership in which the specified Person is a general partner;
(e) any officer or director of the specified Person; and (f) if
the specified Person is an individual, any entity of which the
specified Person is an officer, director or general partner.
"Authenticating Agent" means an authenticating agent with
respect to the Preferred Securities appointed by the Property
Trustee pursuant to Section 503.
"Bank" has the meaning specified in the Preamble to this
Trust Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having
jurisdiction in the premises adjudging such Person a bankrupt or
insolvent, or approving as properly filed a petition seeking
liquidation or reorganization of or in respect of such Person
under the United States Bankruptcy Code of 1978, as amended, or
any other similar applicable federal or state law, and the
continuance of any such decree or order unvacated and unstayed
for a period of 90 days; or the commencement of an involuntary
case under
2
<PAGE> 8
the United States Bankruptcy Code of 1978, as amended, in respect of
such Person, which shall continue undismissed for a period of 90
days or entry of an order for relief in such case; or the entry of a
decree or order of a court having jurisdiction in the premises for
the appointment on the ground of insolvency or bankruptcy of a
receiver, custodian, liquidator, trustee or assignee in bankruptcy
or insolvency of such Person or of its property, or for the winding
up or liquidation of its affairs, and such decree or order shall
have remained in force unvacated and unstayed for a period of 90
days; or
(b) the institution by such Person of proceedings to be
adjudicated a voluntary bankrupt, or the consent by such Person
to the filing of a bankruptcy proceeding against it, or the
filing by such Person of a petition or answer or consent seeking
liquidation or reorganization under the United States Bankruptcy
Code of 1978, as amended, or other similar applicable Federal or
State law, or the consent by such Person to the filing of any
such petition or to the appointment on the ground of insolvency
or bankruptcy of a receiver or custodian or liquidator or trustee
or assignee in bankruptcy or insolvency of such Person or of its
property, or shall make a general assignment for the benefit of
creditors.
"Bankruptcy Laws" has the meaning specified in Section 1009.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Depositor to have
been duly adopted by the Depositor's Board of Directors, or such
committee of the Board of Directors or officers of the Depositor
to which authority to act on behalf of the Board of Directors has
been delegated, and to be in full force and effect on the date of
such certification, and delivered to the appropriate Trustee.
"Business Day" means a day other than a Saturday or Sunday,
a day on which banking institutions in The City of New York are
authorized or required by law, executive order or regulation to
remain closed, or a day on which the Property Trustee's Corporate
Trust Office or the Corporate Trust Office of the Debenture
Trustee is closed for business.
"Certificate of Trust" means the certificate of trust filed
with the Secretary of State of the State of Delaware with respect
to the Trust, as amended or restated from time to time.
"Closing Date" means the date of execution and delivery of
this Trust Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission,
as from time to time constituted, created under the Exchange Act,
or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned
to it under the Trust Indenture Act, then the body performing
such duties at such time.
"Common Security" means an undivided beneficial interest in
the assets of the Trust, having a Liquidation Amount of $25 and
having the rights provided therefor in this Trust Agreement,
including the right to receive Distributions and a Liquidation
Distribution as provided herein.
"Common Securities Certificate" means a certificate
evidencing ownership of Common Securities, substantially in the
form attached as Exhibit C.
3
<PAGE> 9
"Corporate Trust Office" means the office at which, at any
particular time, the corporate trust business of the Property
Trustee or the Debenture Trustee, as the case may be, shall be
principally administered, which office at the date hereof, in
each such case, is located at Two International Place, 4th Floor,
Boston, Massachusetts 02110, Attention: Corporate Trust
Department.
"Debenture Event of Default" means an "Event of Default" as
defined in Section 7.1 of the Indenture.
"Debenture Redemption Date" means, with respect to any
Debentures to be redeemed under the Indenture, the date fixed for
redemption under the Indenture.
"Debenture Trustee" means State Street Bank and Trust
Company, a banking corporation organized under the laws of the
Commonwealth of Massachusetts and any successor thereto, as
trustee under the Indenture.
"Debentures" means the $---------- aggregate principal
amount of the Depositor's Floating Rate Subordinated Debentures
due 2027, issued pursuant to the Indenture.
"Definitive Preferred Securities Certificates" means the
Preferred Securities Certificates issued in certificated, fully
registered form as provided in Section 513.
"Delaware Bank" has the meaning specified in the Preamble to
this Trust Agreement.
"Delaware Business Trust Act" means Chapter 38 of Title 12
of the Delaware Code, 12 Delaware Code Sections 3801 et seq. as
it may be amended from time to time.
"Delaware Trustee" means the commercial bank or trust
company identified as the "Delaware Trustee" in the Preamble to
this Trust Agreement solely in its capacity as Delaware Trustee
of the Trust formed and continued hereunder and not in its
individual capacity, or its successor in interest in such
capacity, or any successor trustee appointed as herein provided.
"Depositor" has the meaning specified in the Preamble to
this Trust Agreement.
"Determination Date" has the meaning specified in Section
401(e)(i).
"Distribution Date" has the meaning specified in
Section 401(a).
"Distribution Period" has the meaning specified in Section
401(b).
"Distributions" means amounts payable in respect of the
Trust Securities as provided in Section 401.
"Event of Default" means any one of the following events
(whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or
governmental body):
(a) the occurrence of a Debenture Event of Default; or
4
<PAGE> 10
(b) default by the Trust or the Property Trustee in the
payment of any Distribution when it becomes due and payable, and
continuation of such default for a period of 30 days; or
(c) default by the Trust or the Property Trustee in the
payment of any Redemption Price of any Trust Security when it
becomes due and payable; or
(d) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Trustees in this
Trust Agreement (other than a covenant or warranty a default in
the performance of which or the breach of which is dealt with in
clause (b) or (c), above) and continuation of such default or
breach for a period of 60 days after there has been given, by
registered or certified mail, to the defaulting Trustee or
Trustees by the Holders of at least 25% in aggregate liquidation
preference of the Outstanding Preferred Securities a written
notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to
the Property Trustee and the failure by the Depositor to appoint
a successor Property Trustee within 60 days thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Expense Agreement" means the Agreement as to Expenses and
Liabilities between the Depositor and the Trust, substantially in
the form attached as Exhibit D, as amended from time to time.
"Expiration Date" has the meaning specified in Section 901.
"Extended Interest Payment Period" has the meaning specified
in Section 4.1 of the Indenture.
"Guarantee" means the Preferred Securities Guarantee
Agreement executed and delivered by the Depositor and State
Street Bank and Trust Company, as trustee, contemporaneously with
the execution and delivery of this Trust Agreement, for the
benefit of the holders of the Preferred Securities, as amended
from time to time.
"Indenture" means the Indenture, dated as of -------------,
1997, between the Depositor and the Debenture Trustee, as
trustee, as amended or supplemented from time to time pertaining
to the Floating Rate Debentures due 2027 of the Depositor.
"Investment Company Act," means the Investment Company Act
of 1940, as amended, as in effect at the date of execution of
this instrument.
"Lien" means any lien, pledge, charge, encumbrance,
mortgage, deed of trust, adverse ownership interest,
hypothecation, assignment, security interest or preference,
priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of
Trust Securities, Trust Securities having a Liquidation Amount
equal to the principal amount of Debentures to be
contemporaneously redeemed in accordance with the Indenture and
the proceeds of which shall be used to pay the Redemption Price
of such Trust Securities; and (b) with respect to a distribution
of Debentures to Holders of Trust Securities in connection with a
termination or liquidation of the Trust, Debentures having a
principal amount equal to the Liquidation Amount of the Trust
Securities of the Holder to whom such Debentures are distributed.
Each Debenture distributed pursuant to clause (b) above shall
carry with it
5
<PAGE> 11
accumulated interest in an amount equal to the accumulated and
unpaid interest then due on such Debentures.
"Liquidation Amount" means the stated amount of $25 per
Trust Security.
"Liquidation Date" means the date on which Debentures are to
be distributed to Holders of Trust Securities in connection with
a termination and liquidation of the Trust pursuant to
Section 904(a).
"Liquidation Distribution" has the meaning specified in
Section 904(d).
"Officers' Certificate" means a certificate signed by the
President or a Vice President and by the Treasurer or an
Assistant Treasurer or the Controller or an Assistant Controller
or the Secretary or an Assistant Secretary, of the Depositor, and
delivered to the appropriate Trustee. One of the officers
signing an Officers' Certificate given pursuant to Section 816
shall be the principal executive, financial or accounting officer
of the Depositor. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for
in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers'
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 Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion
as to whether or not such covenant or condition has been complied
with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means an opinion in writing of legal
counsel, who may be counsel for the Trust, the Property Trustee,
the Delaware Trustee or the Depositor, but not an employee of any
thereof, and who shall be reasonably acceptable to the Property
Trustee.
"Original Trust Agreement" has the meaning specified in the
Recitals to this Trust Agreement.
"Outstanding", when used with respect to Preferred
Securities, means, as of the date of determination, all Preferred
Securities theretofore executed and delivered under this Trust
Agreement, except:
(a) Preferred securities theretofore canceled by the
Property Trustee or delivered to the Property Trustee for
cancellation;
(b) Preferred Securities for whose payment or redemption
money in the necessary amount has been theretofore deposited with
the Property Trustee or any Paying Agent for the Holders of such
Preferred Securities; provided that, if such Preferred Securities
are to be redeemed, notice of such redemption has been duly given
pursuant to this Trust Agreement; and
6
<PAGE> 12
(c) Preferred Securities which have been paid or in
exchange for or in lieu of which other Preferred Securities have
been executed and delivered pursuant to Sections 504, 505, 511
and 513; provided, however, that in determining whether the
Holders of the requisite Liquidation Amount of the Outstanding
Preferred Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, any Trustee or any
Affiliate of the Depositor or any Trustee shall be disregarded
and deemed not to be Outstanding, except that (a) in determining
whether any Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or
waiver, only Preferred Securities that such Trustee knows to be
so owned shall be so disregarded; and (b) the foregoing shall not
apply at any time when all of the outstanding Preferred
Securities are owned by the Depositor, one or more of the
Trustees and/or any such Affiliate. Preferred Securities so
owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the
Administrative Trustees the pledgee's right so to the Depositor
or any Affiliate of the Depositor.
"Paying Agent" means any paying agent or co-paying agent
appointed pursuant to Section 509 and shall initially be the
Bank.
"Payment Account" means a segregated non-interest-bearing
corporate trust account maintained by the Property Trustee with
the Bank in its trust department for the benefit of the
Securityholders in which all amounts paid in respect of the
Debentures shall be held and from which the Property Trustee
shall make payments to the Securityholders in accordance with
Sections 401 and 402.
"Person" means any individual, corporation, partnership,
joint venture, trust, limited liability company or corporation,
unincorporated organization or government or any agency or
political subdivision thereof.
"Preferred Security" means an undivided beneficial interest
in the assets of the Trust, having a Liquidation Amount of $25
and having the rights provided therefor in this Trust Agreement,
including the right to receive Distributions and a Liquidation
Distribution as provided herein.
"Preferred Securities Certificate", means a certificate
evidencing ownership of Preferred Securities, substantially in
the form attached as Exhibit E.
"Property Trustee" means the commercial bank or trust
company identified as the "Property Trustee," in the Preamble to
this Trust Agreement solely in its capacity as Property Trustee
of the Trust heretofore formed and continued hereunder and not in
its individual capacity, or its successor in interest in such
capacity, or any successor property trustee appointed as herein
provided.
"Redemption Date" means, with respect to any Trust Security
to be redeemed, the date fixed for such redemption by or pursuant
to this Trust Agreement; provided that each Debenture Redemption
Date and the stated maturity of the Debentures shall be a
Redemption Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Trust
Security, the Liquidation Amount of such Trust Security, plus
accumulated and unpaid Distributions to the Redemption Date, paid
by the Depositor upon the concurrent redemption of a Like Amount
of Debentures, allocated on a pro rata basis (based on
Liquidation Amounts) among the Trust Securities.
7
<PAGE> 13
"Relevant Trustee" shall have the meaning specified in
Section 810.
"Securities Register" and "Securities Registrar" have the
respective meanings specified in Section 504.
"Securityholder" or "Holder" means a Person in whose name a
Trust Security or Securities is registered in the Securities
Register; any such Person is a beneficial owner within the
meaning of the Delaware Business Trust Act.
"Trust" means the Delaware business trust created and
continued hereby and identified on the cover page to this Trust
Agreement.
"Trust Agreement" means this Amended and Restated Trust
Agreement, as the same may be modified, amended or supplemented
in accordance with the applicable provisions hereof, including
all exhibits hereto, including, for all purposes of this Trust
Agreement and any such modification, amendment or supplement, the
provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such
modification, amendment or supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended, as in force at the date as of which this instrument
was executed; provided, however, that in the event the Trust
Indenture Act of 1939, as amended, is amended after such date,
"Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Debentures; (b) the rights of
the Property Trustee under the Guarantee; (c) any cash on deposit
in, or owing to, the Payment Account; and (d) all proceeds and
rights in respect of the foregoing and any other property and
assets for the time being held or deemed to be held by the
Property Trustee pursuant to the trusts of this Trust Agreement.
"Trust Security" means any one of the Common Securities or
the Preferred Securities.
"Trust Securities Certificate" means any one of the Common
Securities Certificates or the Preferred Securities Certificates.
"Trustees" means, collectively, the Property Trustee, the
Delaware Trustee and the Administrative Trustees.
"Underwriting Agreement" means the Underwriting Agreement,
dated as of ------------, 1997 among the Trust, the Depositor and
the Underwriters named therein.
ARTICLE II
ESTABLISHMENT OF THE TRUST
Section 201. Name.
The Trust created and continued hereby shall be known as
"1st Source Capital Trust II," as such name may be modified from
time to time by the Administrative Trustees following written
notice to the Holders of Trust Securities and the other Trustees,
in which name the Trustees may engage in the
8
<PAGE> 14
transactions contemplated hereby, make and execute contracts and
other instruments on behalf of the Trust and sue and be sued.
Section 202. Office of the Delaware Trustee; Principal
Place of Business.
The address of the Delaware Trustee in the State of Delaware
is c/o Wilmington Trust Company, Rodney Square North, 1100 North
Market Street, Wilmington, Delaware 19890-0001, Attention:
Corporate Trust Administration, or such other address in the
State of Delaware as the Delaware Trustee may designate by
written notice to the Securityholders and the Depositor. The
principal executive office of the Trust is c/o 1st Source
Corporation, 100 North Michigan Street, South Bend, Indiana
46601.
Section 203. Initial Contribution of Trust Property;
Organizational Expenses.
The Trustees acknowledge receipt in trust from the Depositor
in connection with the Original Trust Agreement of the sum of
$10, which constituted the initial Trust Property. The Depositor
shall pay organizational expenses of the Trust as they arise or
shall, upon request of any Trustee, promptly reimburse such
Trustee for any such expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the
payment of such expenses.
Section 204. Issuance of the Preferred Securities.
On ------, 1997, the Depositor and an Administrative
Trustee, on behalf of the Trust and pursuant to the Original
Trust Agreement, executed and delivered the Underwriting
Agreement. Contemporaneously with the execution and delivery of
this Trust Agreement, an Administrative Trustee, on behalf of the
Trust, shall execute in accordance with Section 502 and deliver
in accordance with the Underwriting Agreement, Preferred
Securities Certificates, registered in the name of the Persons
entitled thereto, in an aggregate amount of ---------------
Preferred Securities having an aggregate Liquidation Amount of
$---------- against receipt of the aggregate purchase price of
such Preferred Securities of $----------, which amount such
Administrative Trustee shall promptly deliver to the Property
Trustee. If the underwriters exercise their Option and there is
an Option Closing Date (as such terms are defined in the
Underwriting Agreement), then an Administrative Trustee, on
behalf of the Trust, shall execute in accordance with Section 502
and deliver in accordance with the Underwriting Agreement,
additional Preferred Securities Certificates, registered in the
name of the Persons entitled thereto, in an aggregate amount of
up to ----------- Preferred Securities having an aggregate
Liquidation Amount of up to $---------- against receipt of the
aggregate purchase price of such Preferred Securities of
$-----------, which amount such Administrative Trustee shall
promptly deliver to the Property Trustee.
Section 205. Issuance of the Common Securities; Subscription
and Purchase of Debentures.
(a) Contemporaneously with the execution and delivery of
this Trust Agreement, an Administrative Trustee, on behalf of the
Trust, shall execute in accordance with Section 502 and deliver
to the Depositor, Common Securities Certificates, registered in
the name of the Depositor, in an aggregate amount of Common
Securities having an aggregate Liquidation Amount of $----------
against payment by the Depositor of such amount.
Contemporaneously therewith, an Administrative Trustee, on behalf
of the Trust, shall subscribe to and purchase from the Depositor
Debentures, registered in the name of the Property Trustee on
behalf of the Trust and having an aggregate principal amount
9
<PAGE> 15
equal to $----------, and, in satisfaction of the purchase price
for such Debentures, the Property Trustee, on behalf of the
Trust, shall deliver to the Depositor the sum of $----------.
(b) If the underwriters exercise the Option and there is an
Option Closing Date, then an Administrative Trustee, on behalf of
the Trust, shall execute in accordance with Section 502 and
deliver to the Depositor, additional Common Securities
Certificates, registered in the name of the Depositor, in an
aggregate amount of Common Securities having an aggregate
Liquidation Amount of up to $---------- against payment by the
Depositor of such amount. Contemporaneously therewith, an
Administrative Trustee, on behalf of the Trust, shall subscribe
to and purchase from the Depositor, Debentures, registered in the
name of the Property Trustee and having an aggregate principal
amount of up to $----------, and, in satisfaction of the purchase
price of such Debentures, the Property Trustee, on behalf of the
Trust, shall deliver to the Depositor the amount received from
one of the Administrative Trustees pursuant to the last sentence
of Section 204.
Section 206. Declaration of Trust.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Trust Securities and use the proceeds from such
sale to acquire the Debentures; and (b) to engage in those
activities necessary, convenient or incidental thereto. The
Depositor hereby appoints the Trustees as trustees of the Trust,
to have all the rights, powers and duties to the extent set forth
herein, and the Trustees hereby accept such appointment. The
Property Trustee hereby declares that it shall hold the Trust
Property in trust upon and subject to the conditions set forth
herein for the benefit of the Securityholders. The
Administrative Trustees shall have all rights, powers and duties
set forth herein and in accordance with applicable law with
respect to accomplishing the purposes of the Trust. The Delaware
Trustee shall not be entitled to exercise any powers, nor shall
the Delaware Trustee have any of the duties and responsibilities,
of the Property Trustee or the Administrative Trustees set forth
herein. The Delaware Trustee shall be one of the Trustees of the
Trust for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Delaware Business Trust Act.
Section 207. Authorization to Enter into Certain
Transactions.
(a) The Trustees shall conduct the affairs of the Trust in
accordance with the terms of this Trust Agreement. Subject to
the limitations set forth in paragraph (b) of this Section 207
and Article VIII, and in accordance with the following provisions
(i) and (ii), the Administrative Trustees shall have the
authority to enter into all transactions and agreements
determined by the Administrative Trustees to be appropriate in
exercising the authority, express or implied, otherwise granted
to the Administrative Trustees under this Trust Agreement, and to
perform all acts in furtherance thereof, including without
limitation, the following:
(i) As among the Trustees, each Administrative
Trustee, acting singly or jointly, shall have the power and
authority to act on behalf of the Trust with respect to the
following matters:
(A) the issuance and sale of the Trust
Securities;
(B) to cause the Trust to enter into, and to
execute, deliver and perform on behalf of the Trust, the Expense
Agreement and such other agreements or documents as may be
necessary or desirable in connection with the purposes and
function of the Trust;
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(C) assisting in the registration of the
Preferred Securities under the Securities Act of 1933, as
amended, and under state securities or blue sky laws, and the
qualification of this Trust Agreement as a trust indenture under
the Trust Indenture Act;
(D) assisting in the listing of the Preferred
Securities upon The Nasdaq Stock Market's National Market or such
securities exchange or exchanges as shall be determined by the
Depositor and the registration of the Preferred Securities under
the Exchange Act, and the preparation and filing of all periodic
and other reports and other documents pursuant to the foregoing;
(E) the sending of notices (other than notices of
default) and other information regarding the Trust Securities and
the Debentures to the Securityholders in accordance with this
Trust Agreement;
(F) the appointment of a Paying Agent,
authenticating agent and Securities Registrar in accordance with
this Trust Agreement;
(G) to the extent provided in this Trust
Agreement, the winding up of the affairs of and liquidation of
the Trust and the preparation, execution and filing of the
certificate of cancellation with the Secretary of State of the
State of Delaware;
(H) to take all action that may be necessary or
appropriate for the preservation and the continuation of the
Trust's valid existence, rights, franchises and privileges as a
statutory business trust under the laws of the State of Delaware
and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the
Preferred Securities or to enable the Trust to effect the
purposes for which the Trust was created; and
(I) the taking of any action incidental to the
foregoing as the Administrative Trustees may from time to time
determine is necessary or advisable to give effect to the terms
of this Trust Agreement for the benefit of the Securityholders
(without consideration of the effect of any such action on any
particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall
have the power, duty and authority to act on behalf of the Trust
with respect to the following matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and any
other payments made in respect of the Debentures in the Payment
Account;
(D) the distribution of amounts owed to the
Securityholders in respect of the Trust Securities in accordance
with the terms of this Trust Agreement;
(E) the exercise of all of the rights, powers and
privileges of a holder of the Debentures;
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(F) the sending of notices of default and other
information regarding the Trust Securities and the Debentures to
the Securityholders in accordance with this Trust Agreement;
(G) the distribution of the Trust Property in
accordance with the terms of this Trust Agreement;
(H) to the extent provided in this Trust
Agreement, the winding up of the affairs of and liquidation of
the Trust;
(I) after an Event of Default, the taking of any
action incidental to the foregoing as the Property Trustee may
from time to time determine is necessary or advisable to give
effect to the terms of this Trust Agreement and protect and
conserve the Trust Property for the benefit of the
Securityholders (without consideration of the effect of any such
action on any particular Securityholder);
(J) registering transfers of the Trust Securities
in accordance with this Trust Agreement; and
(K) except as otherwise provided in this Section
207(a)(ii), the Property Trustee shall have none of the duties,
liabilities, powers or the authority of the Administrative
Trustees set forth in Section 207(a)(i).
(b) So long as this Trust Agreement remains in effect, the
Trust (or the Trustees acting on behalf of the Trust) shall not
undertake any business, activities or transaction except as
expressly provided herein or contemplated hereby. In particular,
the Trustees shall not (i) acquire any investments or engage in
any activities not authorized by this Trust Agreement; (ii) sell,
assign, transfer, exchange, mortgage, pledge, set-off or
otherwise dispose of any of the Trust Property or interests
therein, including to Securityholders, except as expressly
provided herein; (iii) take any action that would cause the Trust
to fail or cease to qualify as a "grantor trust" for United
States federal income tax purposes; (iv) incur any indebtedness
for borrowed money or issue any other debt; or (v) take or
consent to any action that would result in the placement of a
Lien on any of the Trust Property. The Administrative Trustees
shall defend all claims and demands of all Persons at any time
claiming any Lien on any of the Trust Property adverse to the
interest of the Trust or the Securityholders in their capacity as
Securityholders.
(c) In connection with the issue and sale of the Preferred
Securities, the Depositor shall have the right and responsibility
to assist the Trust with respect to, or effect on behalf of the
Trust, the following (and any actions taken by the Depositor in
furtherance of the following prior to the date of this Trust
Agreement are hereby ratified and confirmed in all respects):
(i) the preparation and filing by the Trust with the
Commission and the execution on behalf of the Trust of a
registration statement on the appropriate form in relation to the
Preferred Securities and the Debentures, including any amendments
thereto;
(ii) the determination of the states in which to take
appropriate action to qualify or, register for sale all or part
of the Preferred Securities and to do any and all such acts,
other than actions which must be taken by or on behalf of the
Trust, and advise the Trustees of actions they must take on
behalf of the Trust, and prepare for execution and filing any
documents to be executed and filed by the
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Trust or on behalf of the Trust, as the Depositor deems necessary or
advisable in order to comply with the applicable laws of any such
States;
(iii) the preparation for filing by the Trust and
execution on behalf of the Trust of an application to The Nasdaq
Stock Market's National Market or a national stock exchange or
other organizations for listing upon notice of issuance of any
Preferred Securities and to file or cause an Administrative
Trustee to file thereafter with such exchange or organization
such notifications and documents as may be necessary from time to
time;
(iv) the preparation for filing by the Trust with the
Commission and the execution on behalf of the Trust of a
registration statement on Form 8-A relating to the registration
of the Preferred Securities under Section 12(b) or 12(g) of the
Exchange Act, including any amendments thereto;
(v) the negotiation of the terms of, and the execution
and delivery of, the Underwriting Agreement providing for the
sale of the Preferred Securities; and
(vi) the taking of any other actions necessary or
desirable to carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct
the affairs of the Trust and to operate the Trust so that the
Trust shall not be deemed to be an "investment company" required
to be registered under the Investment Company Act, shall be
classified as a "grantor trust" and not as an association taxable
as a corporation for United States federal income tax purposes
and so that the Debentures shall be treated as indebtedness of
the Depositor for United States federal income tax purposes. In
this connection, subject to Section 1002, the Depositor and the
Administrative Trustees are authorized to take any action, not
inconsistent with applicable law or this Trust Agreement, that
each of the Depositor and the Administrative Trustees determines
in their discretion to be necessary or desirable for such
purposes.
Section 208. Assets of Trust.
The assets of the Trust shall consist of the Trust Property.
Section 209. Title to Trust Property.
Legal title to all Trust Property shall be vested at all
times in the Property Trustee (in its capacity as such) and shall
be held and administered by the Property Trustee for the benefit
of the Securityholders in accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
Section 301. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee
shall establish the Payment Account. The Property Trustee and
any agent of the Property Trustee shall have exclusive control
and sole right of withdrawal with respect to the Payment Account
for the purpose of making deposits and
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withdrawals from the Payment Account in accordance with this Trust
Agreement. All monies and other property deposited or held from
time to time in the Payment Account shall be held by the Property
Trustee in the Payment Account for the exclusive benefit of the
Securityholders and for distribution as herein provided, including
(and subject to) any priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment
Account, promptly upon receipt, all payments of principal of or
interest on, and any other payments or proceeds with respect to,
the Debentures. Amounts held in the Payment Account shall not be
invested by the Property Trustee pending distribution thereof.
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
Section 401. Distributions.
(a) Distributions on the Trust Securities shall be
cumulative, and shall accumulate whether or not there are funds
of the Trust available for the payment of Distributions.
Distributions shall accumulate from ----------------, 1997, and,
except during any Extended Interest Payment Period with respect
to the Debentures, shall be payable quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year,
commencing on June 30, 1997. If any date on which a Distribution
is otherwise payable on the Trust Securities is not a Business
Day, then the payment of such Distribution shall be made on the
next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) with the
same force and effect as if made on such date (each date on which
distributions are payable in accordance with this Section 401(a),
a "Distribution Date").
(b) The Trust Securities represent undivided beneficial
interests in the Trust Property, and, as a practical matter, the
Distributions on the Trust Securities shall be payable at a rate
per annum determined by reference to 3-Month Treasury, determined
as described below, plus ---- % during any period beginning on,
and including, the date of original issuance, and ending on, but
excluding, the first Interest Payment Date, and each successive
period beginning on, and including, an Interest Payment Date, and
ending on, but excluding, the next succeeding Interest Payment
Date (a "Distribution Period") applied to the principal amount
thereof, until the principal hereof shall have become due and
payable, and on any overdue principal and (without duplication)
on any overdue installment of interest at the same rate per annum
compounded quarterly; provided, however, that said interest rate
for the first Distribution Period shall be ----%. The amount of
Distributions payable for any full period shall be computed on
the basis of a 360-day year of twelve 30-day months. The amount
of Distributions for any partial period shall be computed on the
basis of the number of days elapsed in a 360-day year of twelve
30 day months. During any Extended Interest Payment Period with
respect to the Debentures, Distributions on the Preferred
Securities shall be deferred for a period equal to the Extended
Interest Payment Period. The amount of Distributions payable for
any period shall include the Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made by
the Property Trustee solely from the Payment Account and shall be
payable on each Distribution Date only to the extent that the
Trust has funds then on hand and immediately available by 12:30
p.m. on each Distribution Date in the Payment Account for the
payment of such Distributions.
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(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they
appear on the Securities Register for the Trust Securities on the
relevant record date, which shall be the 15th day of the month in
which the Distribution is payable.
(e) "3-Month Treasury" means the yield on United States of
America Treasury constant maturities, adjusted to a constant
maturity of three (3) months, reported by the Federal Reserve.
3-Month Treasury, with respect to any Distribution Period, will be
determined by the Property Trustee as follows:
(f) The Property Trustee will notify the Company, the Debenture
Trustee and any securities exchange or interdealer quotation system
on which the Preferred Securities are listed, of the Distribution Rate
and the Distribution Date for each Distribution Period, in each case
as soon as practicable after the determination thereof but in no
event later than the seventh Business Day of the relevant Distribution
Period. Failure to notify the Company, the Debenture Trustee or any
securities exchange or interdealer quotation system, or any defect in
said notice, shall not affect the obligation of the Company to make
payment on the Debentures at the applicable Distribution Rate. Any
error in the calculation of the Distribution Rate by the Property
Trustee may be corrected at any time by notice delivered as above
provided.
(g) Subject to the corrective rights set forth above, all
certificates, communications, opinions, determinations, calculations,
quotations and decisions given, expressed, made or obtained for the
purposes of the provisions relating to the payment and calculation of
Distributions on the Debentures and the Preferred Securities and the
Debentures by the Debenture Trustee or the Property Trustee will
(in the absence of willful default, bad faith and manifest error) be
binding on the Trust, the Company, and all of the holders of the
Preferred Securities, and no liability will (in the absence of willful
default, bad faith or manifest error) attach to the Debenture Trustee
or the Property Trustee in connection with the exercise or non-exercise
by either of them or their respective powers, duties and discretion.
(i) On the second Business Day preceding the
commencement of such Distribution Period (each a
"Determination Date"), 3-Month Treasury will be the current
yield for United States of America Treasury constant
maturities, adjusted to a constant maturity of three (3)
months, which appears on the applicable Federal Reserve
Statistical Release Series H.15 (519) which includes data
for such Determination Date, or as then currently furnished
or made available by the Federal Reserve if such Series is
no longer published.
(ii) If, with respect to any Determination Date, the
Property Trustee is required but unable to determine 3-Month
Treasury in the manner provided in paragraph (i), 3-Month
Treasury for such Distribution Period will be 3-Month
Treasury as determined on the previous Determination Date.
Section 402. Redemption.
(a) On each Debenture Redemption Date and on the stated
maturity of the Debentures, the Trust shall be required to redeem
a Like Amount of Trust Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property
Trustee by first-class mail, postage prepaid, mailed not less
than 30 nor more than 60 days prior to the Redemption Date to
each Holder of Trust Securities to be redeemed, at such Holder's
address appearing in the Securities Register. The Property
Trustee shall have no responsibility for the accuracy of any
CUSIP number contained in such notice. All notices of redemption
shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities
are to be redeemed, the identification and the aggregate
Liquidation Amount of the particular Trust Securities to be
redeemed; and
(v) that, on the Redemption Date, the Redemption Price
shall become due and payable upon each such Trust Security to be
redeemed and that Distributions thereon shall cease to accumulate
on and after said date.
(c) The Trust Securities redeemed on each Redemption Date
shall be redeemed at the Redemption Price with the proceeds from
the contemporaneous redemption of Debentures. Redemptions of the
Trust Securities shall be made and the Redemption Price shall be
payable on each Redemption Date
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only to the extent that the Trust has immediately available funds
then on hand and available in the Payment Account for the payment of
such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in
respect of any Preferred Securities, then, by 12:00 noon, New
York City time, on the Redemption Date, subject to
Section 402(c), the Property Trustee shall deposit with the
Paying Agent funds sufficient to pay the applicable Redemption
Price and shall give the Paying Agent irrevocable instructions
and authority to pay the Redemption Price to the Holders thereof
upon surrender of their Preferred Securities Certificates.
Notwithstanding the foregoing, Distributions payable on or prior
to the Redemption Date for any Trust Securities called for
redemption shall be payable to the Holders of such Trust
Securities as they appear on the Register for the Trust
Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been
given and funds deposited as required, then upon the date of such
deposit, all rights of Securityholders holding Trust Securities
so called for redemption shall cease, except the right of such
Securityholders to receive the Redemption Price and any
Distribution payable on or prior to the Redemption Date, but
without interest, and such Securities shall cease to be
Outstanding. In the event that any date on which any Redemption
Price is payable is not a Business Day, then payment of the
Redemption Price payable on such date shall be made on the next
succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay) with the same
force and effect as if made on such date. In the event that
payment of the Redemption Price in respect of any Trust
Securities called for redemption is improperly withheld or
refused and not paid either by the Trust or by the Depositor
pursuant to the Guarantee, Distributions on such Trust Securities
shall continue to accumulate, at the then applicable rate, from
the Redemption Date originally established by the Trust for such
Trust Securities to the date such Redemption Price is actually
paid, in which case the actual payment date shall be the date
fixed for redemption for purposes of calculating the Redemption
Price.
(e) Payment of the Redemption Price on the Trust Securities
shall be made to the record holders thereof as they appear on the
Securities Register for the Trust Securities on the relevant
record date, which shall be the date 15 days prior to the
relevant Redemption Date.
(f) Subject to Section 403(a), if less than all the
Outstanding Trust Securities are to be redeemed on a Redemption
Date, then the aggregate Liquidation Amount of Trust Securities
to be redeemed shall be allocated on a pro rata basis (based on
Liquidation Amounts) among the Common Securities and the
Preferred Securities. The particular Preferred Securities to be
redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Property Trustee from the outstanding
Preferred Securities not previously called for redemption, by
such method (including, without limitation, by lot) as the
Property Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions (equal to
$25 or an integral multiple of $25 in excess thereof) of the
Liquidation Amount of Preferred Securities of a denomination
larger than $25. The Property Trustee shall promptly notify the
Securities Registrar in writing of the Preferred Securities
selected for redemption and, in the case of any Preferred
Securities selected for partial redemption, the Liquidation
Amount thereof to be redeemed. For all purposes of this Trust
Agreement, unless the context otherwise requires, all provisions
relating to the redemption of Preferred Securities shall relate,
in the case of any Preferred Securities redeemed or to be
redeemed only in part, to the portion of the Liquidation Amount
of Preferred Securities which has been or is to be redeemed.
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Section 403. Subordination of Common Securities.
(a) Payment of Distributions (including Additional Amounts,
if applicable) on, and the Redemption Price of, the Trust
Securities, as applicable, shall be made, subject to
Section 402(f), pro rata among the Common Securities and the
Preferred Securities based on the Liquidation Amount of the Trust
Securities; provided, however, that if on any Distribution Date
or Redemption Date any Event of Default resulting from a
Debenture Event of Default shall have occurred and be continuing,
no payment of any Distribution (including Additional Amounts, if
applicable) on, or Redemption Price of, any Common Security, and
no other payment on account of the redemption, liquidation or
other acquisition of Common Securities, shall be made unless
payment in full in cash of all accumulated and unpaid
Distributions (including Additional Amounts, if applicable) on
all Outstanding Preferred Securities for all Distribution periods
terminating on or prior thereto, or in the case of payment of the
Redemption Price the full amount of such Redemption Price on all
Outstanding Preferred Securities then called for redemption,
shall have been made or provided for, and all funds immediately
available to the Property Trustee shall first be applied to the
payment in full in cash of all Distributions (including
Additional Amounts, if applicable) on, or the Redemption Price
of, Preferred Securities then due and payable.
(b) In the case of the occurrence of any Event of Default
resulting from a Debenture Event of Default, the Holder of Common
Securities shall be deemed to have waived any right to act with
respect to any such Event of Default under this Trust Agreement
until the effect of all such Events of Default with respect to
the Preferred Securities shall have been cured, waived or
otherwise eliminated. Until any such Event of Default under this
Trust Agreement with respect to the Preferred Securities shall
have been so cured, waived or otherwise eliminated, the Property
Trustee shall act solely on behalf of the Holders of the
Preferred Securities and not the Holder of the Common Securities,
and only the Holders of the Preferred Securities shall have the
right to direct the Property Trustee to act on their behalf.
Section 404. Payment Procedures.
Payments of Distributions (including Additional Amounts, if
applicable) in respect of the Preferred Securities shall be made
by check mailed to the address of the Person entitled thereto as
such address shall appear on the Securities Register. Payments
in respect of the Common Securities shall be made in such manner
as shall be mutually agreed between the Property Trustee and the
Common Securityholder.
Section 405. Tax Returns and Reports.
The Administrative Trustees shall prepare (or cause to be
prepared), at the Depositor's expense, and file all United States
federal, state and local tax and information returns and reports
required to be filed by or in respect of the Trust. In this
regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared and filed) the appropriate Internal
Revenue Service Form required to be filed in respect of the Trust
in each taxable year of the Trust; and (b) prepare and furnish
(or cause to be prepared and furnished) to each Securityholder
the appropriate Internal Revenue Service form required to be
furnished to such Securityholder or the information required to
be provided on such form. The Administrative Trustees shall
provide the Depositor with a copy of all such returns and reports
promptly after such filing or furnishing. The Property Trustee
shall comply with United States federal withholding and backup
withholding tax laws and information reporting requirements with
respect to any payments to Securityholders under the Trust
Securities.
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Section 406. Payment of Taxes, Duties, etc. of the Trust.
Upon receipt under the Debentures of Additional Interest (as
defined in Section 1.1 of the Indenture), the Property Trustee,
at the direction of an Administrative Trustee or the Depositor,
shall promptly pay any taxes, duties or governmental charges of
whatsoever nature (other than withholding taxes) imposed on the
Trust by the United States or any other taxing authority.
Section 407. Payments Under Indenture.
Any amount payable hereunder to any Holder of Preferred
Securities shall be reduced by the amount of any corresponding
payment such Holder has directly received under the Indenture
pursuant to Section 514(b) or (c) hereof.
ARTICLE V
TRUST SECURITIES CERTIFICATES
Section 501. Initial Ownership.
Upon the creation of the Trust and the contribution by the
Depositor pursuant to Section 203 and until the issuance of the
Trust Securities, and at any time during which no Trust
Securities are outstanding, the Depositor shall be the sole
beneficial owner of the Trust.
Section 502. The Trust Securities Certificates.
The Preferred Securities Certificates shall be issued in
minimum denominations of $25 Liquidation Amount and integral
multiples of $25 in excess thereof, and the Common Securities
Certificates shall be issued in denominations of $25 Liquidation
Amount and integral multiples thereof. The Trust Securities
Certificates shall be executed on behalf of the Trust by manual
or facsimile signature of at least one Administrative Trustee.
Trust Securities Certificates bearing the manual or facsimile
signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf
of the Trust, shall be validly issued and entitled to the
benefits of this Trust Agreement, notwithstanding that such
individuals or any of them shall have ceased to be so authorized
prior to the delivery of such Trust Securities Certificates or
did not hold such offices at the date of delivery of such Trust
Securities Certificates. A transferee of a Trust Securities
Certificate shall become a Securityholder, and shall be entitled
to the rights and subject to the obligations of a Securityholder
hereunder, upon due registration of such Trust Securities
Certificate in such transferee's name pursuant to Sections 504,
511 and 513.
Section 503. Execution, Authentication and Delivery of
Trust Securities Certificates.
(a) On the Closing Date and on the date on which the
Underwriter exercises the Option, as applicable (the "Option
Closing Date"), the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as
provided in Sections 204 and 205, to be executed on behalf of the
Trust by at least one of the Administrative Trustees and
delivered to or upon the written order of the Depositor, signed
by its Chief Executive Officer, President, any Vice President,
the Treasurer or any Assistant Treasurer without further
corporate action by the Depositor, in authorized denominations.
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(b) A Preferred Securities Certificate shall not be valid
until authenticated by the manual signature of an authorized
signatory of the Property Trustee. The signature shall be
conclusive evidence that the Preferred Securities Certificate has
been authenticated under this Trust Agreement. Each Preferred
Security Certificate shall be dated the date of its
authentication.
Upon the written order of the Trust signed by the
Administrative Trustee, the Property Trustee shall authenticate
and make available for delivery the Preferred Securities
Certificates.
The Property Trustee may appoint an Authenticating Agent
acceptable to the Trust to authenticate the Preferred Securities.
An Authenticating Agent may authenticate the Preferred Securities
whenever the Property Trustee may do so. Each reference in this
Trust Agreement to authentication by the Property Trustee
includes authentication by such agent. An Authenticating Agent
has the same rights as the Property Trustee to deal with the
Company or the Trust.
Section 504. Registration of Transfer and Exchange of
Preferred Securities Certificates.
(a) The Depositor shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 508, a register
or registers for the purpose of registering Trust Securities
Certificates and transfers and exchanges of Preferred Securities
Certificates (herein referred to as the "Securities Register") in
which the registrar designated by the Depositor (the "Securities
Registrar"), subject to such reasonable regulations as it may
prescribe, shall provide for the registration of Preferred
Securities Certificates and Common Securities Certificates
(subject to Section 510 in the case of the Common Securities
Certificates) and registration of transfers and exchanges of
Preferred Securities Certificates as herein provided. The
Property Trustee shall be the initial Securities Registrar.
(b) Upon surrender for registration of transfer of any
Preferred Securities Certificate at the office or agency
maintained pursuant to Section 508, the Administrative Trustees
or any one of them shall execute and deliver, in the name of the
designated transferee or transferees, one or more new Preferred
Securities Certificates in authorized denominations of a like
aggregate Liquidation Amount dated the date of execution by such
Administrative Trustee or Trustees. The Securities Registrar
shall not be required to register the transfer of any Preferred
Securities that have been called for redemption. At the option
of a Holder, Preferred Securities Certificates may be exchanged
for other Preferred Securities Certificates in authorized
denominations of the same class and of a like aggregate
Liquidation Amount upon surrender of the Preferred Securities
Certificates to be exchanged at the office or agency maintained
pursuant to Section 508.
(c) Every Preferred Securities Certificate presented or
surrendered for registration of transfer or exchange shall be
accompanied by a written instrument of transfer in form
satisfactory to the Property Trustee and the Securities Registrar
duly executed by the Holder or his attorney duly authorized in
writing. Each Preferred Securities Certificate surrendered for
registration of transfer or exchange shall be canceled and
subsequently disposed of by the Property Trustee in accordance
with its customary practice. The Trust shall not be required to
(i) issue, register the transfer of, or exchange any Preferred
Securities during a period beginning at the opening of business
15 calendar days before the date of mailing of a notice of
redemption of any Preferred Securities called for redemption and
ending at the close of business on the day of such mailing; or
(ii) register the transfer of or exchange any Preferred
Securities so selected for redemption, in whole or in part,
except the unredeemed portion of any such Preferred Securities
being redeemed in part.
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(d) No service charge shall be made for any registration of
transfer or exchange of Preferred Securities Certificates, but
the Securities Registrar may require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Preferred Securities
Certificates.
Section 505. Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates.
If (a) any mutilated Trust Securities certificate shall be
surrendered to the Securities Registrar, or if the Securities
Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Trust Securities Certificate;
and (b) there shall be delivered to the Securities Registrar and
the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the
absence of notice that such Trust Securities Certificate shall
have been acquired by a bona fide purchaser, the Administrative
Trustees, or any one of them, on behalf of the Trust shall
execute and make available for delivery, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Trust
Securities Certificate, a new Trust Securities Certificate of
like class, tenor and denomination. In connection with the
issuance of any new Trust Securities Certificate under this
Section 505, the Administrative Trustees or the Securities
Registrar may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Trust Securities Certificate
issued pursuant to this Section 505 shall constitute conclusive
evidence of an undivided beneficial interest in the assets of the
Trust, as if originally issued, whether or not the lost, stolen
or destroyed Trust Securities Certificate shall be found at any
time.
Section 506. Persons Deemed Securityholders.
The Trustees, the Paying Agent and the Securities Registrar
shall treat the Person in whose name any Trust Securities
Certificate shall be registered in the Securities Register as the
owner of such Trust Securities Certificate for the purpose of
receiving Distributions and for all other purposes whatsoever,
and neither the Trustees nor the Securities Registrar shall be
bound by any notice to the contrary.
Section 507. Access to List of Securityholders' Names and
Addresses.
At any time when the Property Trustee is not also acting as
the Securities Registrar, the Administrative Trustees or the
Depositor shall furnish or cause to be furnished to the Property
Trustee (a) semi-annually on or before January 15 and July 15 in
each year, a list, in such form as the Property Trustee may
reasonably require, of the names and addresses of the
Securityholders as of the most recent record date; and
(b) promptly after receipt by any Administrative Trustee or the
Depositor of a request therefor from the Property Trustee in
order to enable the Property Trustee to discharge its obligations
under this Trust Agreement, in each case to the extent such
information is in the possession or control of the Administrative
Trustees or the Depositor and is not identical to a previously
supplied list or has not otherwise been received by the Property
Trustee in its capacity as Securities Registrar. The rights of
Securityholders to communicate with other Securityholders with
respect to their rights under this Trust Agreement or under the
Trust Securities, and the corresponding rights of the Trustee
shall be as provided in the Trust Indenture Act. Each Holder, by
receiving and holding a Trust Securities Certificate, and each
owner shall be deemed to have agreed not to hold the Depositor,
the Property Trustee or the Administrative Trustees accountable
by reason of the disclosure of its name and address, regardless
of the source from which such information was derived.
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Section 508. Maintenance of Office or Agency.
The Administrative Trustees shall maintain in The City of
New York or other location designated by the Administrative
Trustees, an office or offices or agency or agencies where
Preferred Securities Certificates may be surrendered for
registration of transfer or exchange and where notices and
demands to or upon the Trustees in respect of the Trust
Securities Certificates may be served. The Administrative
Trustees initially designate the Corporate Trust Office of the
Property Trustee, Two International Place, 4th Floor, Boston,
Massachusetts 02110, as the principal corporate trust office for
such purposes. The Administrative Trustees shall give prompt
written notice to the Depositor and to the Securityholders of any
change in the location of the Securities Register or any such
office or agency.
Section 509. Appointment of Paying Agent.
The Property Trustee shall act as the Paying Agent. The
Paying Agent shall make Distributions to Securityholders from the
Payment Account and shall report the amounts of such
Distributions to the Property Trustee and the Administrative
Trustees. Any Paying Agent shall have the revocable power to
withdraw funds from the Payment Account for the purpose of making
the Distributions referred to above. The Administrative Trustees
may revoke such power and remove the Paying Agent if such
Trustees determine in their sole discretion that the Paying Agent
shall have failed to perform its obligations under this Trust
Agreement in any material respect. The Paying Agent shall
initially be the Property Trustee, and any co-paying agent chosen
by the Property Trustee, and acceptable to the Administrative
Trustees and the Depositor. Any Person acting as Paying Agent
shall be permitted to resign as Paying Agent upon 30 days'
written notice to the Administrative Trustees, the Property
Trustee and the Depositor. In the event that the Property
Trustee shall no longer be the Paying Agent or a successor Paying
Agent shall resign or its authority to act be revoked, the
Administrative Trustees shall appoint a successor that is
acceptable to the Property Trustee and the Depositor to act as
Paying Agent (which shall be a bank or trust company). The
Administrative Trustees shall cause such successor Paying Agent
or any additional Paying Agent appointed by the Administrative
Trustees to execute and deliver to the Trustees an instrument in
which such successor Paying Agent or additional Paying Agent
shall agree with the Trustees that as Paying Agent, such
successor Paying Agent or additional Paying Agent shall hold all
sums, if any, held by it for payment to the Securityholders in
trust for the benefit of the Securityholders entitled thereto
until such sums shall be paid to such Securityholders. The
Paying Agent shall return all unclaimed funds to the Property
Trustee and, upon removal of a Paying Agent, such Paying Agent
shall also return all funds in its possession to the Property
Trustee. The provisions of Sections 801, 803 and 806 shall apply
to the Property Trustee also in its role as Paying Agent, for so
long as the Property Trustee shall act as Paying Agent and, to
the extent applicable, to any other paying agent appointed
hereunder. Any reference in this Agreement to the Paying Agent
shall include any co-paying agent unless the context requires
otherwise.
Section 510. Ownership of Common Securities by
Depositor.
On the Closing Date, the Depositor shall acquire and retain
beneficial and record ownership of the Common Securities. To the
fullest extent permitted by law, any attempted transfer of the
Common Securities (other than a transfer in connection with a
merger or consolidation of the Depositor into another corporation
pursuant to Section 12.1 of the Indenture) shall be void. The
Administrative Trustees shall cause each Common Securities
Certificate issued to the Depositor to contain a legend stating
"THIS CERTIFICATE IS NOT TRANSFERABLE".
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Section 511. Preferred Securities Certificates.
(a) Each owner shall receive a Preferred Securities
Certificate representing such owner's interest in such Preferred
Securities. Upon the issuance of Definitive Preferred Securities
Certificates, the Trustees shall recognize the record holders of
the Definitive Preferred Securities Certificates as
Securityholders. The Definitive Preferred Securities Certificates
shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the
Administrative Trustees, as evidenced by the execution thereof by
the Administrative Trustees or any one of them.
(b) A single Common Securities Certificate representing the
Common Securities shall be issued to the Depositor in the form of
a definitive Common Securities Certificate.
Section 512. [Intentionally Omitted].
Section 513. [Intentionally Omitted].
Section 514. Rights of Securityholders.
(a) The legal title to the Trust Property is vested
exclusively in the Property Trustee (in its capacity as such) in
accordance with Section 209, and the Securityholders shall not
have any right or title therein other than the undivided
beneficial interest in the assets of the Trust conferred by their
Trust Securities and they shall have no right to call for any
partition or division of property, profits or rights of the Trust
except as described below. The Trust Securities shall be
personal property giving only the rights specifically set forth
therein and in this Trust Agreement. The Trust Securities shall
have no preemptive or similar rights. When issued and delivered
to Holders of the Preferred Securities against payment of the
purchase price therefor, the Preferred Securities shall be fully
paid and nonassessable interests in the Trust. The Holders of
the Preferred Securities, in their capacities as such, shall be
entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under
the General Corporation Law of the State of Delaware.
(b) For so long as any Preferred Securities remain
Outstanding, if, upon a Debenture Event of Default, the Debenture
Trustee fails or the holders of not less than 25% in principal
amount of the outstanding Debentures fail to declare the
principal of all of the Debentures to be immediately due and
payable, the Holders of at least 25% in Liquidation Amount of the
Preferred Securities then Outstanding shall have such right by a
notice in writing to the Depositor and the Debenture Trustee; and
upon any such declaration such principal amount of and the
accrued interest on all of the Debentures shall become
immediately due and payable, provided that the payment of
principal and interest on such Debentures shall remain
subordinated to the extent provided in the Indenture.
(c) For so long as any Preferred Securities remain
outstanding, if, upon a Debenture Event of Default arising from
the failure to pay interest or principal on the Debentures, the
Holders of any Preferred Securities then Outstanding shall, to
the fullest extent permitted by law, have the right to directly
institute proceedings for enforcement of payment to such Holders
of principal of or interest on the Debentures having a principal
amount equal to the Liquidation Amount of the Preferred
Securities of such Holders.
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ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
Section 601. Limitations on Voting Rights.
(a) Except as provided in this Section 601, in
Sections 514, 810 and 1002 and in the Indenture and as otherwise
required by law, no Holder of Preferred Securities shall have any
right to vote or in any manner otherwise control the
administration, operation and management of the Trust or the
obligations of the parties hereto, nor shall anything herein set
forth, or contained in the terms of the Trust Securities
Certificates, be construed so as to constitute the
Securityholders from time to time as partners or members of an
association.
(b) So long as any Debentures are held by the Property
Trustee, the Trustees shall not (i) direct the time, method and
place of conducting any proceeding for any remedy available to
the Debenture Trustee, or executing any trust or power conferred
on the Debenture Trustee with respect to such Debentures;
(ii) waive any past default which is waivable under Article VII
of the Indenture; (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due
and payable; or (iv) consent to any amendment, modification or
termination of the Indenture or the Debentures, where such
consent shall be required, without, in each case, obtaining the
prior approval of the Holders of at least a majority in
Liquidation Amount of all Outstanding Preferred Securities;
provided, however, that where a consent under the Indenture would
require the consent of each Holder of Outstanding Debentures
affected thereby, no such consent shall be given by the Property
Trustee without the prior written consent of each holder of
Preferred Securities. The Trustees shall not revoke any action
previously authorized or approved by a vote of the Holders of the
Outstanding Preferred Securities, except by a subsequent vote of
the Holders of the Outstanding Preferred Securities. The
Property Trustee shall notify each Holder of the Outstanding
Preferred Securities of any notice of default received from the
Debenture Trustee with respect to the Debentures. In addition to
obtaining the foregoing approvals of the Holders of the Preferred
Securities, prior to taking any of the foregoing actions, the
Trustees shall, at the expense of the Depositor, obtain an
Opinion of Counsel experienced in such matters to the effect that
the Trust shall continue to be classified as a grantor trust and
not as an association taxable as a corporation for United States
federal income tax purposes on account of such action.
(c) If any proposed amendment to the Trust Agreement
provides for, or the Trustees otherwise propose to effect,
(i) any action that would adversely affect in any material
respect the powers, preferences or special rights of the
Preferred Securities, whether by way of amendment to the Trust
Agreement or otherwise; or (ii) the dissolution, winding-up or
termination of the Trust, other than pursuant to the terms of
this Trust Agreement, then the Holders of Outstanding Preferred
Securities as a class shall be entitled to vote on such amendment
or proposal and such amendment or proposal shall not be effective
except with the approval of the Holders of at least a majority in
Liquidation Amount of the Outstanding Preferred Securities. No
amendment to this Trust Agreement may be made if, as a result of
such amendment, the Trust would cease to be classified as a
grantor trust or would be classified as an association taxable as
a corporation for United States federal income tax purposes.
Section 602. Notice of Meetings.
Notice of all meetings of the Preferred Securityholders,
stating the time, place and purpose of the meeting, shall be
given by the Property Trustee pursuant to Section 1008 to each
Preferred Securityholder of record, at his registered address, at
least 15 days and not more than 90 days before the
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meeting. At any such meeting, any business properly before the
meeting may be so considered whether or not stated in the notice of
the meeting. Any adjourned meeting may be held as adjourned without
further notice.
Section 603. Meetings of Preferred Securityholders.
(a) No annual meeting of Securityholders is required to be
held. The Administrative Trustees, however, shall call a meeting
of Securityholders to vote on any matter in respect of which
Preferred Securityholders are entitled to vote upon the written
request of the Preferred Securityholders of 25% of the
Outstanding Preferred Securities (based upon their aggregate
Liquidation Amount) and the Administrative Trustees or the
Property Trustee may, at any time in their discretion, call a
meeting of Preferred Securityholders to vote on any matters as to
which the Preferred Securityholders are entitled to vote.
(b) Preferred Securityholders of record of 50% of the
Outstanding Preferred Securities (based upon their aggregate
Liquidation Amount), present in person or by proxy, shall
constitute a quorum at any meeting of Securityholders.
(c) If a quorum is present at a meeting, an affirmative
vote by the Preferred Securityholders of record present, in
person or by proxy, holding more than a majority of the Preferred
Securities (based upon their aggregate Liquidation Amount) held
by the Preferred Securityholders of record present, either in
person or by proxy, at such meeting shall constitute the action
of the Securityholders, unless this Trust Agreement requires a
greater number of affirmative votes.
Section 604. Voting Rights.
Securityholders shall be entitled to one vote for each $25
of Liquidation Amount represented by their Trust Securities in
respect of any matter as to which such Securityholders are
entitled to vote.
Section 605. Proxies, etc.
At any meeting of Securityholders, any Securityholder
entitled to vote thereat may vote by proxy, provided that no
proxy, shall be voted at any meeting unless it shall have been
placed on file with the Administrative Trustees, or with such
other officer or agent of the Trust as the Administrative
Trustees may direct, for verification prior to the time at which
such vote shall be taken. When Trust Securities are held jointly
by several persons, any one of them may vote at any meeting in
person or by proxy in respect of such Trust Securities, but if
more than one of them shall be present at such meeting in person
or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be
received in respect of such Trust Securities. A proxy purporting
to be executed by or on behalf of a Securityholder shall be
deemed valid unless challenged at or prior to its exercise, and,
the burden of proving invalidity shall rest on the challenger.
No proxy shall be valid more than three years after its date of
execution.
Section 606. Securityholder Action by Written Consent.
Any action which may be taken by Securityholders at a
meeting may be taken without a meeting if Securityholders holding
more than a majority of all Outstanding Trust Securities (based
upon their aggregate Liquidation Amount) entitled to vote in
respect of such action (or such larger proportion thereof
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as shall be required by any express provision of this Trust
Agreement) shall consent to the action in writing (based upon
their aggregate Liquidation Amount).
Section 607. Record Date for Voting and Other
Purposes.
For the purposes of determining the Securityholders who are
entitled to notice of and to vote at any meeting or by written
consent, or to participate in any Distribution on the Trust
Securities in respect of which a record date is not otherwise
provided for in this Trust Agreement, or for the purpose of any
other action, the Administrative Trustees may from time to time
fix a date, not more than 90 days prior to the date of any
meeting of Securityholders or the payment of Distribution or
other action, as the case may be, as a record date for the
determination of the identity of the Securityholders of record
for such purposes.
Section 608. Acts of Securityholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this
Trust Agreement to be given, made or taken by Securityholders may
be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders in
person or by an agent duly appointed in writing; and, except as
otherwise expressly provided herein, such action shall become
effective when such instrument or instruments are delivered to an
Administrative Trustee. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Securityholders signing
such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Trust Agreement and (subject
to Section 801) conclusive in favor of the Trustees, if made in
the manner provided in this Section 608.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a
witness of such execution or by a certificate of a notary public
or other officer authorized by law to take acknowledgments of
deeds, certifying that the individual signing such instrument or
writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority. The fact and date
of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also be proved in
any other manner which any Trustee receiving the same deems
sufficient.
(c) The ownership of Preferred Securities shall be proved
by the Securities Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Securityholder of any Trust
Security shall bind every future Securityholder of the same Trust
Security and the Securityholder of every Trust Security issued
upon the registration of transfer thereof or in exchange therefor
or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustees or the Trust in reliance
thereon, whether or not notation of such action is made upon such
Trust Security.
(e) Without limiting the foregoing, a Securityholder
entitled hereunder to take any action hereunder with regard to
any particular Trust Security may do so with regard to all or any
part of the Liquidation Amount of such Trust Security or by one
or more duly appointed agents each of which may do so pursuant to
such appointment with regard to all or any part of such
liquidation amount.
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(f) A Securityholder may institute a legal proceeding
directly against the Depositor under the Guarantee to enforce its
rights under the Guarantee without first instituting a legal
proceeding against the Guarantee Trustee (as defined in the
Guarantee), the Trust or any Person.
Section 609. Inspection of Records.
Upon reasonable notice to the Administrative Trustees and
the Property Trustee, the records of the Trust shall be open to
inspection and copying by Securityholders and their authorized
representatives during normal business hours for any purpose
reasonably related to such Securityholder's interest as a
Securityholder.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 701. Representations and Warranties of the Bank and
the Property Trustee.
The Bank and the Property Trustee, each severally on behalf
of and as to itself, as of the date hereof, and each Successor
Property Trustee at the time of the Successor Property Trustee's
acceptance of its appointment as Property Trustee hereunder (the
term "Bank" being used to refer to such Successor Property
Trustee in its separate corporate capacity) hereby represents and
warrants (as applicable) for the benefit of the Depositor and the
Securityholders that:
(a) the Bank is a trust company duly organized, validly
existing and in good standing under the laws of the Commonwealth
of Massachusetts;
(b) the Bank has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this
Trust Agreement and has taken all necessary action to authorize
the execution, delivery and performance by it of this Trust
Agreement;
(c) this Trust Agreement has been duly authorized, executed
and delivered by the Property Trustee and constitutes the valid
and legally binding agreement of the Property Trustee enforceable
against it in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors, rights and to general equity principles;
(d) the execution, delivery and performance by the Property
Trustee of this Trust Agreement has been duly authorized by all
necessary corporate or other action on the part of the Property
Trustee and does not require any approval of stockholders of the
Bank and such execution, delivery and performance shall not
(i) violate the Bank's charter or by-laws; (ii) violate any
provision of, or constitute, with or without notice or lapse of
time, a default under, or result in the creation or imposition
of, any Lien on any properties included in the Trust Property
pursuant to the provisions of, any indenture, mortgage, credit
agreement, license or other agreement or instrument to which the
Property Trustee or the Bank is a party or by which it is bound;
or (iii) violate any law, governmental rule or regulation of the
United States or the Commonwealth of Massachusetts, as the case
may be, governing the banking or trust powers of the Bank or the
Property Trustee (as appropriate in context) or any order,
judgment or decree applicable to the Property Trustee or the
Bank;
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(e) neither the authorization, execution or delivery by the
Property Trustee of this Trust Agreement nor the consummation of
any of the transactions by the Property Trustee contemplated
herein or therein requires the consent or approval of, the giving
of notice to, the registration with or the taking of any other
action with respect to any governmental authority or agency under
any existing federal law governing the banking or trust powers of
the Bank or the Property Trustee, as the case may be, under the
laws of the United States or the Commonwealth of Massachusetts;
and
(f) there are no proceedings pending or, to the best of the
Property Trustee's knowledge, threatened against or affecting the
Bank or the Property Trustee in any court or before any
governmental authority, agency or arbitration board or tribunal
which, individually or in the aggregate, would materially and
adversely affect the Trust or would question the right, power and
authority of the Property Trustee to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
Section 702. Representations and Warranties of the Delaware
Bank and the Delaware Trustee.
The Delaware Bank and the Delaware Trustee, each severally
on behalf of and as to itself, as of the date hereof, and each
Successor Delaware Trustee at the time of the Successor Delaware
Trustee's acceptance of appointment as Delaware Trustee hereunder
(the term "Delaware Bank" being used to refer to such Successor
Delaware Trustee in its separate corporate capacity), hereby
represents and warrants (as applicable) for the benefit of the
Depositor and the Securityholders that:
(a) the Delaware Bank is a Delaware banking corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware;
(b) the Delaware Bank has full corporate power, authority
and legal right to execute, deliver and perform its obligations
under this Trust Agreement and has taken all necessary action to
authorize the execution, delivery and performance by it of this
Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed
and delivered by the Delaware Trustee and constitutes the valid
and legally binding agreement of the Delaware Trustee enforceable
against it in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors, rights and to general equity principles;
(d) the execution, delivery and performance by the Delaware
Trustee of this Trust Agreement has been duly authorized by all
necessary corporate or other action on the part of the Delaware
Trustee and does not require any approval of stockholders of the
Delaware Bank and such execution, delivery and performance shall
not (i) violate the Delaware Bank's charter or by-laws;
(ii) violate any provision of, or constitute, with or without
notice or lapse of time, a default under, or result in the
creation or imposition of, any Lien on any properties included in
the Trust Property pursuant to the provisions of, any indenture,
mortgage, credit agreement, license or other agreement or
instrument to which the Delaware Bank or the Delaware Trustee is
a party or by which it is bound; or (iii) violate any law,
governmental rule or regulation of the United States or the State
of Delaware, as the case may be, governing the banking or trust
powers of the Delaware Bank or the Delaware Trustee (as
appropriate in context) or any order, judgment or decree
applicable to the Delaware Bank or the Delaware Trustee;
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(e) neither the authorization, execution or delivery by the
Delaware Trustee of this Trust Agreement nor the consummation of
any of the transactions by the Delaware Trustee contemplated
herein or therein requires the consent or approval of, the giving
of notice to, the registration with or the taking of any other
action with respect to any governmental authority or agency under
any existing federal law governing the banking or trust powers of
the Delaware Bank or the Delaware Trustee, as the case may be,
under the laws of the United States or the State of Delaware; and
(f) there are no proceedings pending or, to the best of the
Delaware Trustee's knowledge, threatened against or affecting the
Delaware Bank or the Delaware Trustee in any court or before any
governmental authority, agency or arbitration board or tribunal
which, individually or in the aggregate, would materially and
adversely affect the Trust or would question the right, power and
authority of the Delaware Trustee to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
Section 703. Representations and Warranties of
Depositor.
The Depositor hereby represents and warrants for the benefit
of the Securityholders that:
(a) the Trust Securities Certificates issued on the Closing
Date or the Option Closing Date, if applicable, on behalf of the
Trust have been duly authorized and, shall have been, duly and
validly executed, issued and delivered by the Administrative
Trustees pursuant to the terms and provisions of, and in
accordance with the requirements of, this Trust Agreement and the
Securityholders shall be, as of such date, entitled to the
benefits of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges
payable by the Trust (or the Trustees on behalf of the Trust)
under the laws of the State of Delaware or any political
subdivision thereof in connection with the execution, delivery
and performance by the Bank, the Property Trustee or the Delaware
Trustee, as the case may be, of this Trust Agreement.
ARTICLE VIII
TRUSTEES
Section 801. Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Trustees shall
be as provided by this Trust Agreement and, in the case of the
Property Trustee, by the Trust Indenture Act. Notwithstanding
the foregoing, no provision of this Trust Agreement shall require
the Trustees to expend or risk their own funds or otherwise incur
any financial liability in the performance of any of their duties
hereunder, or in the exercise of any of their rights or powers,
if they shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it. No Administrative
Trustee nor the Delaware Trustee shall be liable for its act or
omissions hereunder except as a result of its own gross
negligence or willful misconduct. The Property Trustee's
liability shall be determined under the Trust Indenture Act.
Whether or not therein expressly so provided, every provision of
this Trust Agreement relating to the conduct or affecting the
liability of or affording protection to the Trustees shall be
subject to the provisions of this Section 801. To the extent
that, at law or in equity, the Delaware Trustee or an
Administrative Trustee has duties (including fiduciary duties)
and liabilities relating thereto to the Trust or to the
Securityholders, the Delaware Trustee or such
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Administrative Trustee shall not be liable to the Trust or to any
Securityholder for such Trustee's good faith reliance on the
provisions of this Trust Agreement. The provisions of this Trust
Agreement, to the extent that they restrict the duties and
liabilities of the Delaware Trustee or the Administrative Trustees
otherwise existing at law or in equity, are agreed by the Depositor
and the Securityholders to replace such other duties and liabilities
of the Delaware Trustee and the Administrative Trustees, as the case
may be.
(b) All payments made by the Property Trustee or a Paying
Agent in respect of the Trust Securities shall be made only from
the revenue and proceeds from the Trust Property and only to the
extent that there shall be sufficient revenue or proceeds from
the Trust Property to enable the Property Trustee or a Paying
Agent to make payments in accordance with the terms hereof. With
respect to the relationship of each Securityholder and the
Trustee, each Securityholder, by its acceptance of a Trust
Security, agrees that it shall look solely to the revenue and
proceeds from the Trust Property to the extent legally available
for distribution to it as herein provided and that the Trustees
are not personally liable to it for any amount distributable in
respect of any Trust Security or for any other liability in
respect of any Trust Security. This Section 801(b) does not
limit the liability of the Trustees expressly set forth elsewhere
in this Trust Agreement or, in the case of the Property Trustee,
in the Trust Indenture Act.
(c) No provision of this Trust Agreement shall be construed
to relieve the Property Trustee from liability for its own
negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(i) the Property Trustee shall not be liable for any
error of judgment made in good faith by an authorized officer of
the Property Trustee, unless it shall be proved that the Property
Trustee was negligent in ascertaining the pertinent facts;
(ii) the Property 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 Trust Securities
relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or
exercising any trust or power conferred upon the Property Trustee
under this Trust Agreement;
(iii) the Property Trustee's sole duty with respect
to the custody, safe keeping and physical preservation of the
Debentures and the Payment Account shall be to deal with such
Property in a similar manner as the Property Trustee deals with
similar property for its own account, subject to the protections
and limitations on liability afforded to the Property Trustee
under this Trust Agreement and the Trust Indenture Act;
(iv) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise
agree with the Depositor and money held by the Property Trustee
need not be segregated from other funds held by it except in
relation to the Payment Account maintained by the Property
Trustee pursuant to Section 301 and except to the extent
otherwise required by law; and
(v) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the
Depositor with their respective duties under this Trust
Agreement, nor shall the Property Trustee be liable for the
negligence, default or misconduct of the Administrative Trustees
or the Depositor.
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Section 802. Certain Notices.
(a) Within 5 Business Days after the occurrence of any
Event of Default actually known to the Property Trustee, the
Property Trustee shall transmit, in the manner and to the extent
provided in Section 1008, notice of such Event of Default to the
Securityholders, the Administrative Trustees and the Depositor,
unless such Event of Default shall have been cured or waived.
For purposes of this Section 802 the term "Event of Default"
means any event that is, or after notice or lapse of time or both
would become, an Event of Default.
(b) The Administrative Trustees shall transmit, to the
Securityholders in the manner and to the extent provided in
Section 1008, notice of the Depositor's election to begin or
further extend an Extended Interest Payment Period on the
Debentures (unless such election shall have been revoked) within
the time specified for transmitting such notice to the holders of
the Debentures pursuant to the Indenture as originally executed.
Section 803. Certain Rights of Property Trustee.
Subject to the provisions of Section 801:
(a) the Property Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any
resolution, Opinion of Counsel, certificate, written
representation of a Holder or transferee, certificate of auditors
or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond, debenture,
note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) if (i) in performing its duties under this Trust
Agreement the Property Trustee is required to decide between
alternative courses of action; or (ii) in construing any of the
provisions of this Trust Agreement the Property Trustee finds the
same ambiguous or inconsistent with other provisions contained
herein; or (iii) the Property Trustee is unsure of the
application of any provision of this Trust Agreement, then,
except as to any matter as to which the Preferred Securityholders
are entitled to vote under the terms of this Trust Agreement, the
Property Trustee shall deliver a notice to the Depositor
requesting written instructions of the Depositor as to the course
of action to be taken and the Property Trustee shall take such
action, or refrain from taking such action, as the Property
Trustee shall be instructed in writing to take, or to refrain
from taking, by the Depositor; provided, however, that if the
Property Trustee does not receive such instructions of the
Depositor within 10 Business Days after it has delivered such
notice, or such reasonably shorter period of time set forth in
such notice (which to the extent practicable shall not be less
than 2 Business Days), it may, but shall be under no duty to,
take or refrain from taking such action not inconsistent with
this Trust Agreement as it shall deem advisable and in the best
interests of the Securityholders, in which event the Property
Trustee shall have no liability except for its own bad faith,
negligence or willful misconduct;
(c) any direction or act of the Depositor or the
Administrative Trustees contemplated by this Trust Agreement
shall be sufficiently evidenced by an Officers' Certificate;
(d) whenever in the administration of this Trust Agreement,
the Property Trustee shall deem it desirable that a matter be
established before undertaking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad
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faith on its part, request and conclusively rely upon an Officer's
Certificate which, upon receipt of such request, shall be promptly
delivered by the Depositor or the Administrative Trustees;
(e) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including
any financing or continuation statement, any filing under tax or
securities laws or any filing under tax or securities laws) or
any rerecording, refiling or reregistration thereof;
(f) the Property Trustee may consult with counsel of its
choice (which counsel may be counsel to the Depositor or any of
its Affiliates) and the advice of such counsel 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
reliance thereon and, in accordance with such advice, such
counsel may be counsel to the Depositor or any of its Affiliates,
and may include any of its employees; the Property Trustee shall
have the right at any time to seek instructions concerning the
administration of this Trust Agreement from any court of
competent jurisdiction;
(g) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust
Agreement at the request or direction of any of the
Securityholders pursuant to this Trust Agreement, unless such
Securityholders shall have offered to the Property Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such
request or direction;
(h) the Property 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, consent, order, approval, bond, debenture, note or other
evidence of indebtedness or other paper or document, unless
requested in writing to do so by one or more Securityholders, but
the Property Trustee may make such further inquiry or
investigation into such facts or matters as it may see fit;
(i) the Property 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, provided that the
Property Trustee shall be responsible for its own negligence or
recklessness with respect to selection of any agent or attorney
appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement
the Property Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or
taking any other action hereunder the Property Trustee (i) may
request instructions from the Holders of the Trust Securities
which instructions may only be given by the Holders of the same
proportion in Liquidation Amount of the Trust Securities as would
be entitled to direct the Property Trustee under the terms of the
Trust Securities in respect of such remedy, right or action;
(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 acting in accordance with such
instructions; and
(k) except as otherwise expressly provided by this Trust
Agreement, the Property Trustee shall not be under any obligation
to take any action that is discretionary under the provisions of
this Trust Agreement. No provision of this Trust Agreement shall
be deemed to impose any duty or obligation on the Property
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
Property Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts,
or to
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exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee
shall be construed to be a duty.
Section 804. Not Responsible for Recitals or Issuance of
Securities.
The Recitals contained herein and in the Trust Securities
Certificates shall be taken as the statements of the Trust, and
the Trustees do not assume any responsibility for their
correctness. The Trustees shall not be accountable for the use
or application by the Depositor of the proceeds of the
Debentures.
Section 805. May Hold Securities.
Any Trustee or any other agent of any Trustee or the Trust,
in its individual or any other capacity, may become the owner or
pledgee of Trust Securities and, subject to Sections 808 and 813
and except as provided in the definition of the term
"Outstanding" in Article I, may otherwise deal with the Trust
with the same rights it would have if it were not a Trustee or
such other agent.
Section 806. Compensation; Indemnity; Fees.
The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable
compensation for all services rendered by them hereunder (which
compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to
reimburse the Trustees upon request for all reasonable expenses,
disbursements and advances incurred or made by the Trustees in
accordance with any provision of this Trust Agreement (including
the reasonable compensation and the expenses and disbursements of
its agents and counsel), except any such expense, disbursement or
advance as may be attributable to such Trustee's negligence, bad
faith or willful misconduct (or, in the case of the
Administrative Trustees or the Delaware Trustee, any such
expense, disbursement or advance as may be attributable to its,
his or her gross negligence, bad faith or willful misconduct);
and
(c) to indemnify each of the Trustees or any predecessor
Trustee for, and to hold the Trustees harmless against, any loss,
damage, claims, liability, penalty or expense incurred without
negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this Trust
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, except any
such expense, disbursement or advance as may be attributable to
such Trustee's negligence, bad faith or willful misconduct (or,
in the case of the Administrative Trustees or the Delaware
Trustee, any such expense, disbursement or advance as may be
attributable to its, his or her gross negligence, bad faith or
willful misconduct).
No Trustee may claim any Lien or charge on Trust Property as
a result of any amount due pursuant to this Section 806.
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Section 807. Corporate Property Trustee Required;
Eligibility of Trustees.
(a) There shall at all times be a Property Trustee
hereunder with respect to the Trust Securities. The Property
Trustee shall 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. If any such Person publishes
reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for
the purposes of this Section 807, the combined capital and
surplus of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition
so published. If at any time the Property Trustee with respect
to the Trust Securities shall cease to be eligible in accordance
with the provisions of this Section 807, it shall resign
immediately in the manner and with the effect hereinafter
specified in this Article VIII.
(b) There shall at all times be one or more Administrative
Trustees hereunder with respect to the Trust Securities. Each
Administrative Trustee shall be either a natural person who is at
least 21 years of age or a legal entity that shall act through
one or more persons authorized to bind that entity.
(c) There shall at all times be a Delaware Trustee with
respect to the Trust Securities. The Delaware Trustee shall
either be (i) a natural person who is at least 21 years of age
and a resident of the State of Delaware; or (ii) a legal entity
with its principal place of business in the State of Delaware and
that otherwise meets the requirements of applicable Delaware law
that shall act through one or more persons authorized to bind
such entity.
Section 808. Conflicting Interests.
If the Property Trustee has or shall acquire a conflicting
interest within the meaning of the Trust Indenture Act, the
Property Trustee shall either eliminate such interest or resign,
to the extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act and this Trust Agreement.
Section 809. Co-Trustees and Separate Trustee.
(a) Unless an Event of Default shall have occurred and be
continuing, at any time or times, for the purpose of meeting the
legal requirements of the Trust Indenture Act or of any
jurisdiction in which any part of the Trust Property may at the
time be located, the Depositor shall have power to appoint, and
upon the written request of the Property Trustee, the Depositor
shall for such purpose join with the Property Trustee in the
execution, delivery and performance of all instruments and
agreements necessary or proper to appoint, one or more Persons
approved by the Property Trustee either to act as co-trustee,
jointly with the Property Trustee, of all or any part of such
Trust Property, or to the extent required by law to act as
separate trustee of any such property, in either case with such
powers as may be provided in the instrument of appointment, and
to vest in such Person or Persons in the capacity aforesaid, any
property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section 809. If the
Depositor does not join in such appointment within 15 days after
the receipt by it of a request so to do, or in case a Debenture
Event of Default has occurred and is continuing, the Property
Trustee alone shall have power to make such appointment. Any
co-trustee or separate trustee appointed pursuant to this Section
809 shall either be (i) a natural person who is at least 21 years
of age and a resident of the United States; or (ii) a legal
entity with its principal place of business in the United States
that shall act through one or more persons authorized to bind
such entity.
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(b) Should any written instrument from the Depositor be
required by any co-trustee or separate trustee so appointed for
more fully confirming to such co-trustee or separate trustee such
property, title, right, or power, any and all such instruments
shall, on request, be executed, acknowledged, and delivered by
the Depositor.
(c) Every co-trustee or separate trustee shall, to the
extent permitted by law, but to such extent only, be appointed
subject to the following terms, namely:
(i) The Trust Securities shall be executed and
delivered and all rights, powers, duties and obligations
hereunder in respect of the custody of securities, cash and other
personal property held by, or required to be deposited or pledged
with, the Trustees specified hereunder, shall be exercised,
solely by such Trustees and not by such co-trustee or separate
trustee.
(ii) The rights, powers, duties and obligations hereby
conferred or imposed upon the Property Trustee in respect of any
property covered by such appointment shall be conferred or
imposed upon and exercised or performed by the Property Trustee
or by the Property Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument
appointing such co-trustee or separate trustee, except to the
extent that under any law of any jurisdiction in which any
particular act is to be performed, the Property Trustee shall be
incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised
and performed by such co-trustee or separate trustee.
(iii) The Property Trustee at any time, by an
instrument in writing executed by it, with the written
concurrence of the Depositor, may accept the resignation of or
remove any co-trustee or separate trustee appointed under this
Section 809, and, in case a Debenture Event of Default has
occurred and is continuing, the Property Trustee shall have the
power to accept the resignation of, or remove, any such
co-trustee or separate trustee without the concurrence of the
Depositor. Upon the written request of the Property Trustee, the
Depositor shall join with the Property Trustee in the execution,
delivery and performance of all instruments and agreements
necessary or proper to effectuate such resignation or removal. A
successor to any co-trustee or separate trustee so resigned or
removed may be appointed in the manner provided in this
Section 809.
(iv) No co-trustee or separate trustee hereunder shall
be personally liable by reason of any act or omission of the
Property Trustee or any other trustee hereunder.
(v) The Property Trustee shall not be liable by reason
of any act of a co-trustee or separate trustee.
(vi) Any Act of Holders delivered to the Property
Trustee shall be deemed to have been delivered to each such
co-trustee and separate trustee.
Section 810. Resignation and Removal; Appointment of
Successor.
(a) No resignation or removal of any Trustee (the "Relevant
Trustee") and no appointment of a successor Trustee pursuant to
this Article VIII shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the
applicable requirements of Section 811.
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(b) Subject to the immediately preceding paragraph, the
Relevant Trustee may resign at any time with respect to the Trust
Securities by giving written notice thereof to the
Securityholders. If the instrument of acceptance by the
successor Trustee required by Section 811 shall not have been
delivered to the Relevant Trustee within 30 days after the giving
of such notice of resignation, the Relevant Trustee may petition,
at the expense of the Depositor, any court of competent
jurisdiction for the appointment of a successor Relevant Trustee
with respect to the Trust Securities.
(c) Unless a Debenture Event of Default shall have occurred
and be continuing, any Trustee may be removed at any time by Act
of the Common Securityholder. If a Debenture Event of Default
shall have occurred and be continuing, the Property Trustee or
the Delaware Trustee, or both of them, may be removed at such
time by Act of the Holders of a majority in Liquidation Amount of
the Preferred Securities, delivered to the Relevant Trustee (in
its individual capacity and on behalf of the Trust). An
Administrative Trustee may be removed by the Common
Securityholder at any time.
(d) If any Trustee shall resign, be removed or become
incapable of acting as Trustee, or if a vacancy shall occur in
the office of any Trustee for any cause, at a time when no
Debenture Event of Default shall have occurred and be continuing,
the Common Securityholder, by Act of the Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a
successor Trustee or Trustees with respect to the Trust
Securities and the Trust, and the successor Trustee shall comply
with the applicable requirements of Section 811. If the Property
Trustee or the Delaware Trustee shall resign, be removed or
become incapable of continuing to act as the Property Trustee or
the Delaware Trustee, as the case may be, at a time when a
Debenture Event of Default shall have occurred and is continuing,
the Preferred Securityholders, by Act of the Securityholders of a
majority in Liquidation Amount of the Preferred Securities then
Outstanding delivered to the retiring Relevant Trustee, shall
promptly appoint a successor Relevant Trustee or Trustees with
respect to the Trust Securities and the Trust, and such successor
Trustee shall comply with the applicable requirements of
Section 811. If an Administrative Trustee shall resign, be
removed or become incapable of acting as Administrative Trustee,
at a time when a Debenture Event of Default shall have occurred
and be continuing, the Common Securityholder, by Act of the
Common Securityholder delivered to an Administrative Trustee,
shall promptly appoint a successor Administrative Trustee or
Administrative Trustees with respect to the Trust Securities and
the Trust, and such successor Administrative Trustee or
Administrative Trustees shall comply with the applicable
requirements of Section 811. If no successor Relevant Trustee
with respect to the Trust Securities shall have been so appointed
by the Common Securityholder or the Preferred Securityholders and
accepted appointment in the manner required by Section 811, any
Securityholder who has been a Securityholder of Trust Securities
on behalf of himself and all others similarly situated may
petition a court of competent jurisdiction for the appointment
Trustee with respect to the Trust Securities.
(e) The Property Trustee shall give notice of each
resignation and each removal of a Trustee and each appointment of
a successor Trustee to all Securityholders in the manner provided
in Section 1008 and shall give notice to the Depositor. Each
notice shall include the name of the successor Relevant Trustee
and the address of its Corporate Trust office if it is the
Property Trustee.
(f) Notwithstanding the foregoing or any other provision of
this Trust Agreement, in the event any Administrative Trustee or
a Delaware Trustee who is a natural person dies or becomes, in
the opinion of the Depositor, incompetent or incapacitated, the
vacancy created by such death, incompetence or incapacity may be
filled by (a) the unanimous act of remaining Administrative
Trustees if there are at least two of them; or (b) otherwise by
the Depositor (with the successor in each case being a Person who
satisfies the eligibility requirement for Administrative Trustees
set forth in Section 807).
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Section 811. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Relevant Trustee with respect to the Trust Securities and the
Trust, the retiring Relevant Trustee and each successor Relevant
Trustee with respect to the Trust Securities shall execute and
deliver an instrument hereto wherein each successor Relevant
Trustee shall accept such appointment and which shall contain
such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor Relevant Trustee
all the rights, powers, trusts and duties of the retiring
Relevant Trustee with respect to the Trust Securities and the
Trust and upon the execution and delivery of such instrument the
resignation or removal of the retiring Relevant Trustee shall
become effective to the extent provided therein and each such
successor Relevant Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Relevant Trustee with respect
to the Trust Securities and the Trust; but, on request of the
Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall duly assign, transfer and deliver to such successor
Relevant Trustee all Trust Property, all proceeds thereof and
money held by such retiring Relevant Trustee hereunder with
respect to the Trust Securities and the Trust.
(b) Upon request of any such successor Relevant Trustee,
the Trust shall execute any and all instruments for more fully
and certainly vesting in and confirming to such successor
Relevant Trustee all such rights, powers and trusts referred to
in the immediately preceding paragraph, as the case may be.
(c) No successor Relevant Trustee shall accept its
appointment unless at the time of such acceptance such successor
Relevant Trustee shall be qualified and eligible under this
Article VIII.
Section 812. Merger, Conversion, Consolidation or
Succession to Business.
Any Person into which the Property Trustee, the Delaware
Trustee or any Administrative Trustee may be merged or converted
or with which it may be consolidated, or any Person resulting
from any merger, conversion or consolidation to which such
Relevant Trustee shall be a party, or any corporation succeeding
to all or substantially all the corporate trust business of such
Relevant Trustee, shall be the successor of such Relevant Trustee
hereunder, provided such Person shall be otherwise qualified and
eligible under this Article VIII, without the execution or filing
of any paper or any further act on the part of any of the parties
hereto.
Section 813. Preferential Collection of Claims Against
Depositor or Trust.
If and when the Property Trustee or the Delaware Trustee
shall be or become a creditor of the Depositor or the Trust (or
any other obligor upon the Debentures or the Trust Securities),
the Property Trustee or the Delaware Trustee, as the case may be,
shall be subject to and shall take all actions necessary in order
to comply with the provisions of the Trust Indenture Act
regarding the collection of claims against the Depositor or Trust
(or any such other obligor).
Section 814. Reports by Property Trustee.
(a) Not later than July 15 of each year commencing with
July 15, 1997, the Property Trustee shall transmit to all
Securityholders in accordance with Section 1008, and to the
Depositor, a brief report dated as of such May 15 with respect
to:
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(i) its eligibility under Section 807 or, in lieu
thereof, if to the best of its knowledge it has continued to be
eligible under said Section, a written statement to such effect;
and
(ii) any change in the property and funds in its
possession as Property Trustee since the date of its last report
and any action taken by the Property Trustee in the performance
of its duties hereunder which it has not previously reported and
which in its opinion materially affects the Trust Securities.
(b) In addition the Property Trustee shall transmit to
Securityholders such reports concerning the Property Trustee and
its actions under this Trust Agreement as may be required
pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with
The Nasdaq Stock Market's National Market, and each national
securities exchange or other organization upon which the Trust
Securities are listed, and also with the Commission and the
Depositor.
Section 815. Reports to the Property Trustee.
The Depositor and the Administrative Trustees on behalf of
the Trust shall provide to the Property Trustee such documents,
reports and information as required by Section 314 of the Trust
Indenture Act (if any) and the compliance certificate required by
Section 314(a) 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 816. Evidence of Compliance with Conditions
Precedent.
Each of the Depositor and the Administrative Trustees on
behalf of the Trust shall provide to the Property Trustee such
evidence of compliance with any conditions precedent, if any,
provided for in this Trust 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) of the Trust Indenture Act shall be
given in the form of an Officers' Certificate.
Section 817. Number of Trustees.
(a) The number of Trustees shall be five, provided that the
Holder of all of the Common Securities by written instrument may
increase or decrease the number of Administrative Trustees. The
Property Trustee and the Delaware Trustee may be the same Person.
(b) If a Trustee ceases to hold office for any reason and
the number of Administrative Trustees is not reduced pursuant to
Section 817(a), or if the number of Trustees is increased
pursuant to Section 817(a), a vacancy shall occur. The vacancy
shall be filled with a Trustee appointed in accordance with
Section 810.
(c) The death, resignation, retirement, removal,
bankruptcy, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy
in the number of Administrative Trustees shall occur, until such
vacancy is filled by the appointment of an Administrative Trustee
in accordance with Section 810, the Administrative Trustees in
office, regardless of their number (and notwithstanding any other
provision of this Agreement), shall have all the powers
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granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Trust
Agreement.
Section 818. Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural
person over the age of 21 his or her power for the purpose of
executing any documents contemplated in Section 207(a); and
(b) The Administrative Trustees shall have power to
delegate from time to time to such of their number or to the
Depositor the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the
Administrative Trustees or otherwise as the Administrative
Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the
Trust, as set forth herein.
Section 819. Voting.
Except as otherwise provided in this Trust Agreement, the
consent or approval of the Administrative Trustees shall require
consent or approval by not less than a majority of the
Administrative Trustees, unless there are only two, in which case
both must consent.
ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
Section 901. Termination Upon Expiration Date.
Unless earlier dissolved, the Trust shall automatically
dissolve on March 31, 2052 (the "Expiration Date") subject to
distribution of the Trust Property in accordance with
Section 904.
Section 902. Early Termination.
The first to occur of any of the following events is an
"Early Termination Event:"
(a) the occurrence of a Bankruptcy Event in respect of, or
the dissolution or liquidation of, the Depositor;
(b) delivery of written direction to the Property Trustee
by the Depositor at any time (which direction is wholly optional
and within the discretion of the Depositor) to dissolve the Trust
and distribute the Debentures to Securityholders in exchange for
the Preferred Securities in accordance with Section 904;
(c) the redemption of all of the Preferred Securities in
connection with the redemption of all of the Debentures; and
(d) an order for dissolution of the Trust shall have been
entered by a court of competent jurisdiction.
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Section 903. Termination.
The respective obligations and responsibilities of the
Trustees and the Trust created and continued hereby shall
terminate upon the latest to occur of the following: (a) the
distribution by the Property Trustee to Securityholders upon the
liquidation of the Trust pursuant to Section 904, or upon the
redemption of all of the Trust Securities pursuant to
Section 402, of all amounts required to be distributed hereunder
upon the final payment of the Trust Securities; (b) the payment
of any expenses owed by the Trust; (c) the discharge of all
administrative duties of the Administrative Trustees, including
the performance of any tax reporting obligations with respect to
the Trust or the Securityholders; and (d) the filing of a
Certificate of Cancellation by the Administrative Trustee under
the Business Trust Act.
Section 904. Liquidation.
(a) If an Early Termination Event specified in clause (a),
(b), or (d) of Section 902 occurs or upon the Expiration Date,
the Trust shall be liquidated by the Trustees as expeditiously as
the Trustees determine to be possible by distributing, after
satisfaction of liabilities to creditors of the Trust as provided
by applicable law, to each Securityholder a Like Amount of
Debentures, subject to Section 904(d). Notice of liquidation
shall be given by the Property Trustee by first-class mail,
postage prepaid, mailed not later than 30 nor more than 60 days
prior to the Liquidation Date to each Holder of Trust Securities
at such Holder's address appearing in the Securities Register.
All notices of liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date,
the Trust Securities shall no longer be deemed to be Outstanding
and any Trust Securities Certificates not surrendered for
exchange shall be deemed to represent a Like Amount of
Debentures; and
(iii) provide such information with respect to the
mechanics by which Holders may exchange Trust Securities
Certificates for Debentures, or, if Section 904(d) applies,
receive a Liquidation Distribution, as the Administrative
Trustees or the Property Trustee shall deem appropriate.
(b) Except where Section 902(c) or 904(d) applies, in order
to effect the liquidation of the Trust and distribution of the
Debentures to Securityholders, the Property Trustee shall
establish a record date for such distribution (which shall be not
more than 45 days prior to the Liquidation Date) and, either
itself acting as exchange agent or through the appointment of a
separate exchange agent, shall establish such procedures as it
shall deem appropriate to effect the distribution of Debentures
in exchange for the Outstanding Trust Securities Certificates.
(c) Except where Section 902(c) or 904(d) applies, after
the Liquidation Date, (i) the Trust Securities shall no longer be
deemed to be outstanding; (ii) certificates representing a Like
Amount of Debentures shall be issued to holders of Trust
Securities Certificates upon surrender of such certificates to
the Administrative Trustees or their agent for exchange;
(iii) the Depositor shall use its reasonable efforts to have the
Debentures listed on The Nasdaq Stock Market's National Market or
on such other securities exchange or other organization as the
Preferred Securities are then listed or traded; (iv) any Trust
Securities Certificates not so surrendered for exchange shall be
deemed to represent a Like Amount of Debentures, accruing
interest at the rate provided for in the Debentures from the last
Distribution Date on which a Distribution was made on such Trust
Securities Certificates until such certificates are so
39
<PAGE> 45
surrendered (and until such certificates are so surrendered, no
payments of interest or principal shall be made to holders of
Trust Securities Certificates with respect to such Debentures);
and (v) all rights of Securityholders holding Trust Securities
shall cease, except the right of such Securityholders to receive
Debentures upon surrender of Trust Securities Certificates.
(d) In the event that, notwithstanding the other provisions
of this Section 904, whether because of an order for dissolution
entered by a court of competent jurisdiction or otherwise,
distribution of the Debentures in the manner provided herein is
determined by the Property Trustee not to be practical, the Trust
Property shall be liquidated, and the Trust shall be dissolved,
wound-up or terminated, by the Property Trustee in such manner as
the Property Trustee determines. In such event, on the date of
the dissolution, winding-up or other termination of the Trust,
Securityholders shall be entitled to receive out of the assets of
the Trust available for distribution to Securityholders, after
satisfaction of liabilities to creditors of the Trust as provided
by applicable law, an amount equal to the Liquidation Amount per
Trust Security plus accumulated and unpaid Distributions thereon
to the date of payment (such amount being the "Liquidation
Distribution"). If, upon any such dissolution, winding-up or
termination, the Liquidation Distribution can be paid only in
part because the Trust has insufficient assets available to pay
in full the aggregate Liquidation Distribution, then, subject to
the next succeeding sentence, the amounts payable by the Trust on
the Trust Securities shall be paid on a pro rata basis (based
upon Liquidation Amounts). The holder of the Common Securities
shall be entitled to receive Liquidation Distributions upon any
such dissolution, winding-up or termination pro rata (determined
as aforesaid) with Holders of Preferred Securities, except that,
if a Debenture Event of Default has occurred and is continuing,
the Preferred Securities shall have a priority over the Common
Securities.
Section 905. Mergers, Consolidations, Amalgamations or
Replacements of the Trust.
The Trust may not merge with or into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any
corporation or other Person, except pursuant to this Section 905.
At the request of the Depositor, with the consent of the
Administrative Trustees and without the consent of the holders of
the Preferred Securities, the Property Trustee or the Delaware
Trustee, the Trust may merge with or into, consolidate,
amalgamate, be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust
organized as such under the laws of any state; provided, that
(i) such successor entity either (a) expressly assumes all of the
obligations of the Trust with respect to the Preferred
Securities; or (b) substitutes for the Preferred Securities other
securities having substantially the same terms as the Preferred
Securities (the "Successor Securities") so long as the Successor
Securities rank the same as the Preferred Securities rank in
priority with respect to distributions and payments upon
liquidation, redemption and otherwise; (ii) the Depositor
expressly appoints a trustee of such successor entity possessing
substantially the same powers and duties as the Property Trustee
as the holder of the Debentures; (iii) the Successor Securities
are listed or traded, or any Successor Securities shall be listed
or traded upon notification of issuance, on any national
securities exchange or other organization on which the Preferred
Securities are then listed, if any; (iv) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and
privileges of the holders of the Preferred Securities (including
any Successor Securities) in any material respect; (v) prior to
such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Depositor has received an
Opinion of Counsel to the effect that (a) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and
privileges of the holders of the Preferred Securities (including
any Successor Securities) in any material respect; and
(b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor
such
40
<PAGE> 46
successor entity shall be required to register as an
"investment company" under the Investment Company Act; and
(vi) the Depositor owns all of the Common Securities of such
successor entity and guarantees the obligations of such successor
entity under the Successor Securities at least to the extent
provided by the Guarantee. Notwithstanding the foregoing, the
Trust shall not, except with the consent of holders of 100% in
Liquidation Amount of the Preferred Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey,
transfer or lease its properties and assets substantially as an
entirety to any other Person or permit any other Person to
consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger or replacement would
cause the Trust or the successor entity to be classified as other
than a grantor trust for United States federal income tax
purposes.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 1001. Limitation of Rights of Securityholders.
The death or incapacity of any Person having an interest,
beneficial or otherwise, in Trust Securities shall not operate to
terminate this Trust Agreement, nor entitle the legal
representatives or heirs of such Person or any Securityholder for
such Person, to claim an accounting, take any action or bring any
proceeding in any court for a partition or winding-up of the
arrangements contemplated hereby, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any
of them.
Section 1002. Amendment.
(a) This Trust Agreement may be amended from time to time
by the Trustees and the Depositor, without the consent of any
Securityholders, (i) as provided in Section 811 with respect to
acceptance of appointment by a successor Trustee; (ii) to cure
any ambiguity, correct or supplement any provision herein or
therein which may be inconsistent with any other provision herein
or therein, or to make any other provisions with respect to
matters or questions arising under this Trust Agreement, that
shall not be inconsistent with the other provisions of this Trust
Agreement; or (iii) to modify, eliminate or add to any provisions
of this Trust Agreement to such extent as shall be necessary to
ensure that the Trust shall be classified for United States
federal income tax purposes as a grantor trust at all times that
any Trust Securities are outstanding or to ensure that the Trust
shall not be required to register as an "investment company"
under the Investment Company Act; provided, however, that in the
case of clause (ii), such action shall not adversely affect in
any material respect the interests of any Securityholder, and any
amendments of this Trust Agreement shall become effective when
notice thereof is given to the Securityholders.
(b) Except as provided in Section 601(c) or Section 1002(c)
hereof, any provision of this Trust Agreement may be amended by
the Trustees and the Depositor (i) with the consent of Trust
Securityholders representing not less than a majority (based upon
Liquidation Amounts) of the Trust Securities then Outstanding;
and (ii) upon receipt by the Trustees of an Opinion of Counsel to
the effect that such amendment or the exercise of any power
granted to the Trustees in accordance with such amendment shall
not affect the Trust's status as a grantor trust for United
States federal income tax purposes or the Trust's exemption from
status of an "investment company" under the Investment Company
Act.
41
<PAGE> 47
(c) In addition to and notwithstanding any other provision
in this Trust Agreement, without the consent of each affected
Securityholder (such consent being obtained in accordance with
Section 603 or 606 hereof), this Trust Agreement may not be
amended to (i) change the amount or timing of any Distribution on
the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust
Securities as of a specified date; or (ii) restrict the right of
a Securityholder to institute suit for the enforcement of any
such payment on or after such date; notwithstanding any other
provision herein, without the unanimous consent of the
Securityholders (such consent being obtained in accordance with
Section 603 or 606 hereof), this paragraph (c) of this
Section 1002 may not be amended.
(d) Notwithstanding any other provisions of this Trust
Agreement, no Trustee shall enter into or consent to any
amendment to this Trust Agreement which would cause the Trust to
fail or cease to qualify for the exemption from status of an
"investment company" under the Investment Company Act or to fail
or cease to be classified as a grantor trust for United States
federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the
contrary, without the consent of the Depositor, this Trust
Agreement may not be amended in a manner which imposes any
additional obligation on the Depositor.
(f) In the event that any amendment to this Trust Agreement
is made, the Administrative Trustees shall promptly provide to
the Depositor a copy of such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee
shall be required to enter into any amendment to this Trust
Agreement which affects its own rights, duties or immunities
under this Trust Agreement. The Property Trustee shall be
entitled to receive an Opinion of Counsel and an Officers'
Certificate stating that any amendment to this Trust Agreement is
in compliance with this Trust Agreement.
Section 1003. Separability.
In case any provision in this Trust Agreement or in the
Trust Securities Certificates shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired
thereby.
Section 1004. Governing law.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH
OF THE SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT
TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF DELAWARE (WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES).
Section 1005. Payments Due on Non-Business Day.
If the date fixed for any payment on any Trust Security
shall be a day that is not a Business Day, then such payment need
not be made on such date but may be made on the next succeeding
day which is a Business Day, with the same force and effect as
though made on the date fixed for such payment, and no
distribution shall accumulate thereon for the period after such
date.
42
<PAGE> 48
Section 1006. Successors.
This Trust Agreement shall be binding upon and shall inure
to the benefit of any successor to the Depositor, the Trust or
the Relevant Trustee(s), including any successor by operation of
law. Except in connection with a consolidation, merger or sale
involving the Depositor that is permitted under Article XII of
the Indenture and pursuant to which the assignee agrees in
writing to perform the Depositor's obligations hereunder, the
Depositor shall not assign its obligations hereunder.
Section 1007. Headings.
The Article and Section headings are for convenience only
and shall not affect the construction of this Trust Agreement.
Section 1008. Reports, Notices and Demands.
Any report, notice, demand or other communication which by
any provision of this Trust Agreement is required or permitted to
be given or served to or upon any Securityholder or the Depositor
may be given or served in writing by deposit thereof, first-class
postage prepaid, in the United States mail, hand delivery or
facsimile transmission, in each case, addressed, (a) in the case
of a Preferred Securityholder, to such Preferred Securityholder
as such Securityholder's name and address may appear on the
Securities Register; and (b) in the case of the Common
Securityholder or the Depositor, to 1st Source Corporation, 100
North Michigan Street, South Bend, Indiana 46601, Attention:
Chief Financial Officer, facsimile no.: (219) 235-2414. Any
notice to Preferred Securityholders shall also be given to such
owners as have, within two years preceding the giving of such
notice, filed their names and addresses with the Property Trustee
for that purpose. Such notice, demand or other communication to
or upon a Securityholder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery,
mailing or transmission.
Any notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be
given or served to or upon the Trust, the Property Trustee or the
Administrative Trustees shall be given in writing addressed
(until another address is published by the Trust) as follows:
(a) with respect to the Property Trustee to State Street Bank and
Trust Company, Two International Place, 4th Floor, Boston,
Massachusetts 02110, Attention: Corporate Trust Department;
(b) with respect to the Delaware Trustee, to Wilmington Trust
Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-0001, Attention: Corporate Trust
Administration; and (c) with respect to the Administrative
Trustees, to them at the address above for notices to the
Depositor, marked "Attention: Administrative Trustees of 1st
Source Capital Trust, c/o Chief Financial Officer, 1st Source
Corporation." Such notice, demand or other communication to or
upon the Trust or the Property Trustee shall be deemed to have
been sufficiently given or made only upon actual receipt of the
writing by the Trust or the Property Trustee.
Section 1009. Agreement Not to Petition.
Each of the Trustees and the Depositor agree for the benefit
of the Securityholders that, until at least one year and 1 day
after the Trust has been terminated in accordance with
Article IX, they shall not file, or join in the filing of, a
petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including, without
limitation, the United States Bankruptcy Code of 1978, as
amended) (collectively, "Bankruptcy Laws") or otherwise join in
the commencement of any proceeding
43
<PAGE> 49
against the Trust under any Bankruptcy Law. In the event the
Depositor takes action in violation of this Section 1009, the
Property Trustee agrees, for the benefit of Securityholders, that at
the expense of the Depositor (which expense shall be paid prior to
the filing), it shall file an answer with the bankruptcy court or
otherwise properly contest the filing of such petition by the
Depositor against the Trust or the commencement of such action and
raise the defense that the Depositor has agreed in writing not to
take such action and should be stopped and precluded therefrom. The
provisions of this Section 1009 shall survive the termination of
this Trust Agreement.
Section 1010. Trust Indenture Act; Conflict with Trust
Indenture Act.
(a) This Trust Agreement is subject to the provisions of
the Trust Indenture Act that are required to be part of this
Trust Agreement and shall, to the extent applicable, be governed
by such provisions.
(b) The Property Trustee shall be the only Trustee which is
a trustee for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts
with another provision hereof which is required to be included in
this Trust Agreement by any of the provisions of the Trust
Indenture Act, such required provision shall control. If any
provision of this Trust Agreement modifies or excludes any
provision of the Trust Indenture Act which may be so modified or
excluded, the latter provision shall be deemed to apply to this
Trust Agreement as so modified or to be excluded, as the case may
be.
(d) The application of the Trust Indenture Act to this
Trust Agreement shall not affect the nature of the Securities as
equity securities representing undivided beneficial interests in
the assets of the Trust.
44
<PAGE> 50
Section 1011. Acceptance of Terms of Trust Agreement,
Guarantee and Indenture.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY
INTEREST THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY
BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION
OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE
SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER
TERMS OF THE GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE
THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS
THAT THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT SHALL BE
BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH
SECURITYHOLDER AND SUCH OTHERS.
1ST SOURCE CORPORATION
as Depositor
By:--------------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY,
as Property Trustee
By:--------------------------------------
Name:
Title:
45
<PAGE> 51
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By:--------------------------------------
Name:
Title:
-----------------------------------------
Christopher J. Murphy III,
as Administrative Trustee
-----------------------------------------
Wellington D. Jones III,
as Administrative Trustee
-----------------------------------------
Larry E. Lentych,
as Administrative Trustee
46
<PAGE> 52
EXHIBIT A
CERTIFICATE OF TRUST
OF
1ST SOURCE CAPITAL TRUST II
THIS CERTIFICATE OF TRUST OF 1ST SOURCE CAPITAL TRUST II (the
"Trust"), dated as of February 27, 1997, is being duly executed
and filed by WILMINGTON TRUST COMPANY, a Delaware banking
corporation, Christopher J. Murphy III, Wellington D. Jones III
and Larry E. Lentych, each an individual, as trustees, to form a
business trust under the Delaware Business Trust Act (12 Del. C.
Section 3801 et seq.).
1. NAME. The name of the business trust formed hereby is 1ST
SOURCE CAPITAL TRUST II.
2. DELAWARE TRUSTEE. The name and business address of the
trustee of the Trust in the State of Delaware is Wilmington
Trust Company, Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890-0001, Attention:
Corporate Trust Administration.
3. EFFECTIVE DATE. This Certificate of Trust shall be
effective on February 27, 1997.
IN WITNESS WHEREOF, the undersigned, being the sole trustees
of the Trust, have executed this Certificate of Trust as of the
date first above written.
WILMINGTON TRUST COMPANY,
as trustee
By:--------------------------------------
Name:------------------------------------
Title:-----------------------------------
-----------------------------------------
Christopher J. Murphy III
as Trustee
-----------------------------------------
Wellington D. Jones III
as Trustee
-----------------------------------------
Larry E. Lentych
as Trustee
A-1
<PAGE> 53
EXHIBIT B
[Intentionally Omitted]
A-2
<PAGE> 54
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number 1 Number of Common Securities: -------
Certificate Evidencing Common Securities
of
1st Source Capital Trust II
Common Securities
(liquidation amount $25.00 per Common Security)
1ST SOURCE CAPITAL TRUST II, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby
certifies that 1st Source Corporation (the "Holder") is the
registered owner of -------------------------------------------
(-------) common securities of the Trust representing undivided
beneficial interests in the assets of the Trust and designated
the Floating Rate Common Securities (liquidation amount $25.00
per Common Security) (the "Common Securities"). In accordance
with Section 510 of the Trust Agreement (as defined below), the
Common Securities are not transferable and any attempted transfer
hereof shall be void. The designations, rights, privileges,
restrictions, preferences, and other terms and provisions of the
Common Securities are set forth in, and this certificate and the
Common Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended
and Restated Trust Agreement of the Trust dated as of
- -------------, 1997, as the same may be amended from time to time
(the "Trust Agreement"), including the designation of the terms
of the Common Securities as set forth therein. The Trust shall
furnish a copy of the Trust Agreement to the Holder without
charge upon written request to the Trust at its principal place
of business or registered office.
Upon receive of this certificate, the Holder is bound by the
Trust Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of
the Trust has executed this certificate this ---- day of
- --------------------, 1997.
1ST SOURCE CAPITAL TRUST II
By ------------------------------------
Name:
Title:
C-1
<PAGE> 55
EXHIBIT D
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT AS TO EXPENSES AND LIABILITIES (this "Agreement")
dated as of -------------, 1997, between 1ST SOURCE CORPORATION,
an Indiana corporation ("the Company"), and 1ST SOURCE CAPITAL
TRUST II, a Delaware business trust (the "Trust").
RECITALS
WHEREAS, the Trust intends to issue its common securities
(the "Common Securities") to, and receive Debentures from, the
Company and to issue and sell ------------------------- Floating
Rate Cumulative Trust Preferred Securities (the "Preferred
Securities") with such powers, preferences and special rights and
restrictions as are set forth in the Amended and Restated Trust
Agreement of the Trust dated as of -------------, 1997, as the
same may be amended from time to time (the "Trust Agreement");
WHEREAS, the Company shall directly or indirectly own all of
the Common Securities of the Trust and shall issue the
Debentures;
NOW, THEREFORE, in consideration of the purchase by each
holder of the Preferred Securities, which purchase the Company
hereby agrees shall benefit the Company and which purchase the
Company acknowledges shall be made in reliance upon the execution
and delivery of this Agreement, the Company, including in its
capacity as holder of the Common Securities, and the Trust hereby
agree as follows:
ARTICLE I
Section 1.1. Guarantee by the Company.
Subject to the terms and conditions hereof, the Company,
including in its capacity as holder of the Common Securities,
hereby irrevocably and unconditionally guarantees to each person
or entity to whom the Trust is now or hereafter becomes indebted
or liable (the "Beneficiaries") the full payment when and as due,
of any and all Obligations (as hereinafter defined) to such
Beneficiaries. As used herein, "Obligations" means any costs,
expenses or liabilities of the Trust other than obligations of
the Trust to pay to holders of any Preferred Securities or other
similar interests in the Trust the amounts due such holders
pursuant to the terms of the Preferred Securities or such other
similar interests, as the case may be. This Agreement is
intended to be for the benefit of, and to be enforceable by, all
such Beneficiaries, whether or not such Beneficiaries have
received notice hereof.
Section 1.2. Term of Agreement.
This Agreement shall terminate and be of no further force
and effect upon the later of (a) the date on which full payment
has been made of all amounts payable to all holders of all the
Preferred Securities (whether upon redemption, liquidation,
exchange or otherwise); and (b) the date on which there are no
Beneficiaries remaining; provided, however, that this Agreement
shall continue to be effective or shall be reinstated, as the
case may be, if at any time any holder of Preferred Securities or
any Beneficiary
D-1
<PAGE> 56
must restore payment of any sums paid under the Preferred
Securities, under any obligation, under the Preferred
Securities Guarantee Agreement dated the date hereof by the
Company and State Street Bank and Trust Company, as guarantee
trustee, or under this Agreement for any reason whatsoever. This
Agreement is continuing, irrevocable, unconditional and absolute.
Section 1.3. Waiver of Notice.
The Company hereby waives notice of acceptance of this
Agreement and of any obligation to which it applies or may apply,
and the Company hereby waives presentment, demand for payment,
protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
Section 1.4. No Impairment.
The obligations, covenants, agreements and duties of the
Company under this 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 extension of time for the payment by the Trust of
all or any portion of the obligations or for the performance of
any other obligation under, arising out of, or in connection
with, the obligations;
(b) any failure, omission, delay or lack of diligence on
the part of the Beneficiaries to enforce, assert or exercise any
right, privilege, power or remedy conferred on the Beneficiaries
with respect to the obligations or any action on the part of the
Trust granting indulgence or extension of any kind; or
(c) 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 Trust or any of the assets of
the Trust.
There shall be no obligation of the Beneficiaries to give notice
to, or obtain the consent of, the Company with respect to the
happening of any of the foregoing.
Section 1.5. Enforcement.
A Beneficiary may enforce this Agreement directly against
the Company, and the Company waives any right or remedy to
require that any action be brought against the Trust or any other
person or entity before proceeding against the Company.
ARTICLE II
Section 2.1. Binding Effect.
All guarantees and agreements contained in this Agreement
shall bind the successors, assigns, receivers, trustees and
representatives of the Company and shall inure to the benefit of
the Beneficiaries.
D-2
<PAGE> 57
Section 2.2. Amendment.
So long as there remains any Beneficiary or any Preferred
Securities of any series are outstanding, this Agreement shall
not be modified or amended in any manner adverse to such
Beneficiary or to the holders of the Preferred Securities.
Section 2.3. Notices.
Any notice, request or other communication required or
permitted to be given hereunder shall be given in writing by
delivering the same by facsimile transmission (confirmed by
mail), telex, or by registered or certified mail, addressed as
follows (and if so given, shall be deemed given when mailed or
upon receipt of an answerback, if sent by telex):
1st Source Capital Trust
c/o 1st Source Corporation
100 North Michigan Street
South Bend, Indiana 46601
Facsimile No.: (219) 235-2414
Attention: ----------------------------
1st Source Corporation
100 North Michigan Street
South Bend, Indiana 46601
Facsimile No.: (219) 235-2414
Attention: ----------------------------
Section 2.4. This agreement shall be governed by and
construed and interpreted in accordance with the laws of the
State of Indiana (without regard to conflict of laws principles).
THIS AGREEMENT is executed as of the day and year first
above written.
1ST SOURCE CORPORATION
By:--------------------------------------
Name:
Title:
1ST SOURCE CAPITAL TRUST II
By:--------------------------------------
Name:
Title: Administrative Trustee
D-3
<PAGE> 58
EXHIBIT E
Certificate Number Number of Preferred Securities --------
P-
Certificate Evidencing Preferred Securities
of
1st Source Capital Trust II
Floating Rate Cumulative Trust Preferred Securities
(liquidation amount $25 per Preferred Security)
CUSIP NO. -------
1st Source Capital Trust II, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby
certifies that ---------------- (the "Holder") is the registered
owner of ----- preferred securities of the Trust representing
undivided beneficial interests in the assets of the Trust and
designated the Floating Rate Cumulative Trust Preferred
Securities (liquidation amount $25 per Preferred Security) (the
"Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate
duly endorsed and in proper form for transfer as provided in
Section 504 of the Trust Agreement (as defined herein). The
designations, rights, privileges, restrictions, preferences, and
other terms and provisions of the Preferred Securities are set
forth in, and this certificate and the Preferred Securities
represented hereby are issued and shall in all respects be
subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust dated as of -------------, 1997, as
the same may be amended from time to time (the "Trust
Agreement"), including the designation of the terms of Preferred
Securities as set forth therein. The Holder is entitled to the
benefits of the Preferred Securities Guarantee Agreement entered
into by 1st Source Corporation, an Indiana corporation, and State
Street Bank and Trust Company, as guarantee trustee, dated as of
- -------------, 1997 (the "Guarantee"), to the extent provided
therein. The Trust shall furnish a copy of the Trust Agreement
and the Guarantee to the Holder without charge upon written
request to the Trust at its principal place of business or
registered office.
Upon receipt of this certificate, the Holder is bound by the
Trust Agreement and is entitled to the benefits thereunder.
Unless the Certificate of Authentication has been manually
executed by the Authentication Agent, this certificate is not
valid or effective.
IN WITNESS WHEREOF, the Administrative Trustees of the Trust
have executed this certificate as of the date hereof.
E-1
<PAGE> 59
Dated: 1ST SOURCE CAPITAL TRUST II
CERTIFICATE OF AUTHENTICATION
This is one of the ----% By-------------------------------
Cumulative Trust Preferred Trustee
Securities referred to in the
within-mentioned Amended and
Restated Trust Agreement. By-------------------------------
Trustee
STATE STREET BANK & TRUST
COMPANY, as Authentication
Agent and Registrar By-------------------------------
Trustee
By------------------------------
Authorized Signature
E-2
<PAGE> 60
[FORM ON REVERSE OF CERTIFICATE]
The Trust will furnish without charge to any registered owner of
Preferred Securities who so requests, a copy of the Trust
Agreement and the Guarantee. Any such request should be in
writing and addressed to 1st Source Capital Trust II, c/o 1st Source
Corporation, 100 North Michigan Street, South Bend, Indiana 46601
or to the Registrar named on the face of this Certificate.
The following abbreviations, when used in the inscription on the
face of this certificate, shall be construed as though they were
written out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
TOD - transfer on death direction in event of owner's death,
to person named on face and subject to TOD rules referenced
UNIF GIFT MIN ACT - ..............Custodian...............
(Cust) (Minor)
under Uniform Gifts to Minors
Act...................................
(State)
UNIF TRF MIN ACT - ........Custodian (until age).........
(Cust)
.............under Uniform Transfers
(Minor)
to Minors Act.........................
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, ------------------ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------
- ------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- --------------------------------------------------------- Preferred Securities
represented by the within Certificate, and do hereby irrevocably constitute
and appoint
- --------------------------------------------------------------------- Attorney
to transfer the said Preferred Securities on the books of the within named
Corporation with full power of substitution in the premises.
Dated,------------------------------
------------------------------------------------------
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN UPON THE
FACE OF THE CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERNATION OR ENLARGEMENT OR ANY
CHANGE WHATEVER.
SIGNATURE(S) GUARANTEED:
- ------------------------------------------------------------------
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS
AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED MEDALLION
SIGNATURE GUARANTEE PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.
E-3
<PAGE> 1
===============================================================================
FLOATING RATE PREFERRED SECURITIES GUARANTEE AGREEMENT
by and between
1ST SOURCE CORPORATION
and
STATE STREET BANK AND TRUST COMPANY
--------------------, 1997
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
Page No.
ARTICLE I DEFINITIONS AND INTERPRETATION 1
Section 1.1. Definitions and Interpretation 1
ARTICLE II TRUST INDENTURE ACT 4
Section 2.1. Trust Indenture Act; Application 4
Section 2.2. Lists of Holders of Securities 4
Section 2.3. Reports by the Preferred Guarantee Trustee 5
Section 2.4. Periodic Reports to Preferred Guarantee Trustee 5
Section 2.5. Evidence of Compliance with Conditions Precedent 5
Section 2.6. Events of Default; Waiver 5
Section 2.7. Event of Default; Notice 5
Section 2.8. Conflicting Interests 6
ARTICLE III POWERS, DUTIES AND RIGHTS OF PREFERRED
GUARANTEE TRUSTEE 6
Section 3.1. Powers and Duties of the Preferred Guarantee Trustee 6
Section 3.2. Certain Rights of Preferred Guarantee Trustee 7
Section 3.3. Not Responsible for Recitals or Issuance of Guarantee 9
ARTICLE IV PREFERRED GUARANTEE TRUSTEE 9
Section 4.1. Preferred Guarantee Trustee; Eligibility 9
Section 4.2. Appointment, Removal and Resignation of Preferred
Guarantee Trustees 9
ARTICLE V GUARANTEE 10
Section 5.1. Guarantee 10
Section 5.2. Waiver of Notice and Demand 10
Section 5.3. Obligations not Affected 11
Section 5.4. Rights of Holders 12
Section 5.5. Guarantee of Payment 12
Section 5.6. Subrogation 12
Section 5.7. Independent Obligations 12
ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION 12
Section 6.1. Limitation of Transactions 12
Section 6.2. Ranking 13
ARTICLE VII TERMINATION 13
Section 7.1. Termination 13
ARTICLE VIII INDEMNIFICATION 13
Section 8.1. Exculpation 13
Section 8.2. Indemnification 14
i
<PAGE> 3
ARTICLE IX MISCELLANEOUS 14
Section 9.1. Successors and Assigns 14
Section 9.2. Amendments 14
Section 9.3. Notices 14
Section 9.4. Benefit 15
Section 9.5. Governing Law 15
ii
<PAGE> 4
CROSS REFERENCE TABLE
Section of Trust Section of
Indenture Act of Guarantee
1939, as amended Agreement
---------------- ---------
310(a) 4.1(a)
310(b) 4.1(c), 2.8
310(c) Not Applicable
311(a) 2.2(b)
311(b) 2.2(b)
311(c) Not Applicable
312(a) 2.2(a)
312(b) 2.2(b)
313 2.3
314(a) 2.4
314(b) Not Applicable
314(c) 2.5
314(d) Not Applicable
314(e) 1.1, 2.5, 3.2
314(f) 2.1, 3.2
315(a) 3.1(d)
315(b) 2.7
315(c) 3.1
315(d) 3.1(d)
316(a) 1.1, 2.6, 5.4
316(b) 5.3
317(a) 3.1
317(b) Not Applicable
318(a) 2.1(a)
318(b) 2.1
318(c) 2.1(b)
Note: This Cross-Reference Table does not constitute part of this
Agreement and shall not affect the interpretation of any of its
terms or provisions.
iii
<PAGE> 5
FLOATING RATE PREFERRED SECURITIES GUARANTEE AGREEMENT
THIS FLOATING RATE PREFERRED SECURITIES GUARANTEE AGREEMENT
(this "Preferred Securities Guarantee"), dated as of ----------------,
1997 is executed and delivered by 1ST SOURCE CORPORATION, an
Indiana corporation (the "Guarantor"), and STATE STREET BANK AND
TRUST COMPANY, a trust company organized and existing under the
laws of the Commonwealth of Massachusetts, 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 1st Source Capital Trust II, a Delaware
statutory business trust (the "Trust").
RECITALS
WHEREAS, pursuant to an Amended and Restated Trust Agreement
(the "Trust Agreement"), dated as of ----------------, 1997,
among the trustees of the Trust named therein, the Guarantor, as
depositor, and the holders from time to time of undivided
beneficial interests in the assets of the Trust, the Trust is
issuing on the date hereof ---------- preferred securities,
having an aggregate liquidation amount of $----------, designated
the Floating Rate Cumulative Trust Preferred Securities (the
"Preferred Securities");
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.
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.
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context
otherwise requires:
(a) 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;
(b) terms defined in the Trust Agreement as at the date of
execution of this Preferred Securities Guarantee have the same
meaning when used in this Preferred Securities Guarantee;
(c) a term defined anywhere in this Preferred Securities
Guarantee has the same meaning throughout;
(d) 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;
<PAGE> 6
(e) all references in this Preferred Securities Guarantee
to Articles and Sections are to Articles and Sections of this
Preferred Securities Guarantee, unless otherwise specified;
(f) 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
(g) 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 any day other than a day on which
federal or state banking institutions in New York, New York are
authorized or required by law, executive order or regulation to
close or a day on which the Corporate Trust Office of the
Preferred Guarantee Trustee is closed for business.
"Corporate Trust Office" means the office of the Preferred
Guarantee Trustee at which the corporate trust business of the
Preferred Guarantee Trustee shall, at any particular time, be
principally administered, which office at the date of execution
of this Agreement is located at Two International Place, 4th
Floor, Boston, Massachusetts 02110, Attention: Corporate Trust
Department.
"Covered Person" means any Holder or beneficial owner of
Preferred Securities.
"Debentures" means the Floating Rate Subordinated Debentures
due March 31, 2027, of the Debenture Issuer held by the Property
Trustee of the Trust.
"Debenture Issuer" means the Guarantor.
"Event of Default" means a default by the Guarantor on any
of its payment or other obligations under this Preferred
Securities Guarantee.
"Guarantor" means 1st Source Corporation, an Indiana
corporation.
"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 Trust: (i) any
accrued and unpaid Distributions (as defined in the Trust
Agreement) that are required to be paid on such Preferred
Securities, to the extent the Trust 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 Trust has funds available therefor,
with respect to any Preferred Securities called for redemption by
the Trust, and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Trust (other than in connection
with the distribution of Debentures to the Holders in exchange
for Preferred Securities as provided in the Trust Agreement), 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 Trust shall have funds
available therefor (the "Liquidation Distribution"), and (b) the
amount of assets of the Trust remaining available for
distribution to Holders in liquidation of the Trust.
"Holder" shall mean any holder, as registered on the books
and records of the Trust, of any Preferred Securities; provided,
however, that, in determining whether the holders of the requisite
2
<PAGE> 7
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
- ----------------, 1997 among the Debenture Issuer and State
Street Bank and Trust Company, as trustee, and any indenture
supplemental thereto pursuant to which the Debentures of the Debenture
Issuer are to be issued to the Property Trustee of the Trust.
"Liquidation Distribution" has the meaning provided therefor
in the definition of Guarantee Payments.
"Majority in liquidation amount of the Preferred Securities"
means the holders 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 of the 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 shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definition
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion
as to whether or not such covenant or condition has been complied
with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association,
joint stock company, limited liability company, trust,
unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever
nature.
"Preferred Guarantee Trustee" means State Street Bank and
Trust Company, 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.
"Redemption Price" has the meaning provided therefor in the
definition of Guarantee Payments.
3
<PAGE> 8
"Responsible Officer" means, with respect to the Preferred
Guarantee Trustee, any officer within the Corporate Trust Office
of the Preferred Guarantee Trustee, including any vice-president,
any assistant vice-president, any assistant secretary, the
treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Preferred 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 Preferred Guarantee Trustee" means a successor
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,
as amended.
ARTICLE II
TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act; Application.
(a) 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.
(b) 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.
(a) In the event the Preferred Guarantee Trustee is not
also the Transfer Agent, 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 of the Preferred Securities ("List
of Holders") as of such date, (i) within 1 Business Day after
January 1 and June 30 of each year, 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 15 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.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of
the Trust Indenture Act.
4
<PAGE> 9
Section 2.3. Reports by the Preferred Guarantee Trustee.
On or before July 15 of each year, the Preferred Guarantee
Trustee shall provide to the Holders of the Preferred Securities
such reports as are required by Section 313 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 requirements of Section 313(d)
of the Trust Indenture Act.
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 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 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.
(a) 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 of the Preferred
Securities, 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.
(b) 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, or of which
a Responsible Officer of the Preferred Guarantee Trustee charged
with the administration of the Trust Agreement shall have
obtained actual knowledge.
5
<PAGE> 10
Section 2.8. Conflicting Interests.
The Trust Agreement 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.
(a) This Preferred Securities Guarantee shall be held by
the Preferred Guarantee Trustee for the benefit of the Holders of
the Preferred Securities, and the Preferred Guarantee Trustee
shall not transfer this Preferred Securities Guarantee to any
Person except a Holder of Preferred Securities exercising his or
her rights pursuant to Section 5.4(b) 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.
(b) 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 of
the Preferred Securities.
(c) 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.
(d) 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:
(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 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
6
<PAGE> 11
(B) 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;
(ii) 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;
(iii) 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
(iv) 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 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.
(a) Subject to the provisions of Section 3.1:
(i) 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;
(ii) any direction or act of the Guarantor contemplated
by this Preferred Securities Guarantee shall be sufficiently
evidenced by an Officers' Certificate;
(iii) 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;
7
<PAGE> 12
(iv) 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);
(v) the Preferred Guarantee Trustee may consult with
counsel, and the written 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;
(vi) the Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it
by this Preferred Securities 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;
(vii) 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;
(viii) 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;
(ix) any action taken by the Preferred Guarantee
Trustee or its agents hereunder shall bind the Holders of the
Preferred Securities, 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;
(x) 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.
8
<PAGE> 13
(b) 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 Guarantee.
The Recitals contained in this 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.
(a) There shall at all times be a Preferred Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) 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
$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.
(b) 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).
(c) 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.
Section 4.2. Appointment, Removal and Resignation of Preferred
Guarantee Trustees.
(a) Subject to Section 4.2(b), the Preferred Guarantee
Trustee may be appointed or removed without cause at any time by
the Guarantor.
9
<PAGE> 14
(b) 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.
(c) 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.
(d) 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 to the Guarantor of an
instrument of resignation, the resigning Preferred Guarantee
Trustee 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.
(e) No Preferred Guarantee Trustee shall be liable for the
acts or omissions to act of any Successor Preferred Guarantee
Trustee.
(f) 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 accrued to the date of
such termination, removal or resignation.
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 the Trust), as and
when due, regardless of any defense, right of set-off or
counterclaim that the Trust 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 Trust to pay such amounts to the Holders.
Section 5.2. Waiver of Notice and Demand.
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 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.
10
<PAGE> 15
Section 5.3. Obligations not Affected.
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:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Trust of any
express or implied agreement, covenant, term or condition
relating to the Preferred Securities to be performed or observed
by the Trust;
(b) the extension of time for the payment by the Trust 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 (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);
(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 Preferred Securities, or any action on the part
of the 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 Trust or any of the assets of
the Trust;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) any failure or omission to receive any regulatory
approval or consent required in connection with the Preferred
Securities (or the common equity securities issued by the Trust),
including the failure to receive any approval of the Board of
Governors of the Federal Reserve System required for the
redemption of the Preferred Securities;
(g) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(h) 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.
11
<PAGE> 16
Section 5.4. Rights of Holders.
(a) 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.
(b) Any Holder of Preferred Securities may institute a
legal proceeding directly against the Guarantor to enforce its
rights under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Trust, the Preferred
Guarantee Trustee or any other Person.
Section 5.5. Guarantee of Payment.
This Preferred Securities Guarantee creates a guarantee of
payment and not of collection.
Section 5.6. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of
the Holders of Preferred Securities against the Trust 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.
The Guarantor acknowledges that its obligations hereunder
are independent of the obligations of the Trust 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 (h), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
Section 6.1. Limitation of Transactions.
So long as any Preferred Securities remain outstanding, if
there shall have occurred an Event of Default under this
Preferred Securities Guarantee, an Event of Default under the
Trust Agreement or during an Extended Interest Payment Period (as
defined in the Indenture), then (a) the Guarantor shall not
declare or pay any dividend on, make any distributions with
respect to, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock (other than
(i) dividends or distributions in common stock of the Guarantor
or any declaration of a non-cash dividend in connection with the
implementation of a shareholders' rights plan, or the issuance of
stock under any such plan in
12
<PAGE> 17
the future, or the redemption or repurchase of any such rights pursuant
thereto, and (ii) purchases of common stock of the Guarantor related to the
rights under any of the Guarantor's benefit plans for its
directors, officers or employees) and (b) the Guarantor shall not
make any payment of interest or principal on or repay, repurchase
or redeem any debt securities issued by the Guarantor which rank
pari passu with or junior to the Debentures.
Section 6.2 Ranking.
This Preferred Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank
(i) subordinate and junior in right of payment to all other
liabilities of the Guarantor, (ii) pari passu with the most
senior preferred securities or preference stock now or hereafter
issued by the Guarantor and with any guarantee now or hereafter
entered into by the Guarantor in respect of any preferred
securities or preference stock of any Affiliate of the Guarantor,
and (iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
Section 7.1. Termination.
This Preferred Securities Guarantee shall terminate upon
(i) full payment of the Redemption Price of all Preferred
Securities, (ii) upon full payment of the amounts payable in
accordance with the Trust Agreement upon liquidation of the
Trust, or (iii) upon distribution of the Debentures to the
Holders of the Preferred Securities. Notwithstanding the
foregoing, this Preferred Securities Guarantee shall continue to
be effective or shall be reinstated, as the case may be, if at
any time any Holder of Preferred Securities must restore payment
of any sums paid under the Preferred Securities or under this
Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by reason
of any act or omission 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.
(b) 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 and who has been selected with reasonable
care by or on behalf of the
13
<PAGE> 18
Guarantor, including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Preferred Securities might properly be paid.
Section 8.2. Indemnification.
The Guarantor agrees to indemnify each Indemnified Person
for, and to hold each Indemnified Person harmless against, any
loss, liability 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.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Successors and Assigns.
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.
Except with respect to any changes that do not materially
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 of the Preferred
Securities. The provisions of Article VI of the Trust Agreement
with respect to meetings of Holders of the Preferred Securities
apply to the giving of such approval.
Section 9.3. Notices.
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
registered or certified mail, as follows:
(a) 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 of the Preferred Securities):
State Street Bank and Trust Company
Two International Place, 4th Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Department
14
<PAGE> 19
(b) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor
may give notice of to the Holders of the Preferred Securities):
1st Source Corporation
100 North Michigan Street
South Bend, Indiana 46601
Attention: Chief Financial Officer
(c) If given to any Holder of Preferred Securities, at the
address set forth on the books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed
by first class mail, postage prepaid except that if a notice or
other document is refused delivery or cannot be delivered because
of a changed address of which no notice was given, such notice or
other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
Section 9.4. Benefit.
This Preferred Securities Guarantee is solely for the
benefit of the Holders of the Preferred Securities and, subject
to Section 3.1(a), is not separately transferable from the
Preferred Securities.
Section 9.5. Governing Law.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF INDIANA.
This Preferred Securities Guarantee is executed as of the
day and year first above written.
1ST SOURCE CORPORATION
as Guarantor
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
STATE STREET BANK AND TRUST COMPANY,
as Preferred Guarantee Trustee
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
15
<PAGE> 1
[Letterhead of Lewis, Rice & Fingersh]
February 28, 1997
1st Source Corporation
100 North Michigan Street
South Bend, Indiana 63105
Attention: Board of Directors
1st Source Capital Trust
c/o 1st Source Corporation
100 North Michigan Street
South Bend, Indiana 63105
Attention: Administrative Trustees
Gentlemen:
We have acted as counsel to 1st Source Corporation, an Indiana
corporation (the "Company"), 1st Source Capital Trust I, a Delaware
statutory business trust ("Trust I") and 1st Source Capital Trust
II, a Delaware statutory business trust ("Trust II") in connection
with the preparation of a Registration Statement on Form S-3 (the
"Registration Statement") to be filed by the Company, Trust I and
Trust II with the Securities and Exchange Commission (the "SEC")
for the purpose of registering under the Securities Act of 1933, as
amended, ---% cumulative trust preferred securities of Trust I (the
"---% Cumulative Trust Preferred Securities"), floating rate
cumulative trust preferred securities of Trust II (the "Floating
Rate Cumulative Trust Preferred Securities"), ---% subordinated
debentures of the Company (the "---% Subordinated Debentures"),
floating rate subordinated debentures of the Company (the "Floating
Rate Subordinated Debentures"), the guarantee of the Company with
respect to the ---% Cumulative Trust Preferred Securities (the
"Guarantee I") and the guarantee of the Company with respect to the
Floating Rate Cumulative Trust Preferred Securities (the "Guarantee
II") .
In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of
(i) the restated certificate of trust filed by Trust I with the
Secretary of State of the State of Delaware on February 27, 1997;
(ii) the certificate of trust filed by Trust II with the Secretary
of State of the State of Delaware on February 27, 1997; (iii) the
restated Trust Agreement, dated as of February 27, 1997, with
respect to Trust I; (iv) the Trust Agreement, dated as of February
27, 1997, with respect to Trust II; (v) the form of the Amended and
Restated Trust Agreement with respect to Trust I; (vi) the form of
the Amended and Restated Trust Agreement with respect to Trust II;
(vii) the form of the ---% Cumulative Trust Preferred Securities;
(viii) the form of the Floating Rate Cumulative Trust Preferred
Securities; (ix) the form of the Guarantee I between the Company
and State Street Bank and Trust Company ("State Street"), as
trustee; (x) the form of the Guarantee II between the Company and
State Street, as trustee; (xi) the form of the ---% Subordinated
Debentures; (xii) the form of the Floating Rate Subordinated
Debentures; (xiii) the form of the indenture between the Company
and State Street, as trustee, with respect to the ---% Subordinated
Debentures (the "Indenture I"); (xiv) the form of the indenture
between the Company and State Street, as trustee, with respect to
the Floating Rate Subordinated Debentures (the "Indenture II") in
each case in the form filed as an exhibit to the Registration
Statement. We have also examined originals or copies, certified,
or otherwise identified to our satisfaction, of such other
documents, certificates, and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
<PAGE> 2
In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us
as copies and the authenticity of the originals of such copies. In
examining documents executed by parties other than the Company,
Trust I or Trust II, we have assumed that such parties had the
power, corporate or otherwise, to enter into and perform all
obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or otherwise, and execution and
delivery by such parties of such documents and that, except as set
forth in paragraphs (1) and (2) below, such documents constitute
valid and binding obligations of such parties. In addition, we
have assumed that the Amended and Restated Trust Agreement with
respect to Trust I, the Amended and Restated Trust Agreement with
respect to Trust II, the ---% Cumulative Trust Preferred
Securities, the Floating Rate Cumulative Trust Preferred
Securities, the Guarantee I, the Guarantee II, the ---%
Subordinated Debentures, the Floating Rate Subordinated Debentures,
the Indenture I and the Indenture II, when executed, will be
executed in substantially the form reviewed by us. As to any facts
material to the opinions expressed herein which were not
independently established or verified, we have relied upon oral or
written statements and representations of officers, trustees, and
other representatives of the Company, Trust I, Trust II and others.
We are members of the bar of the states of Missouri and
Illinois, and we express no opinion as to the laws of any other
jurisdiction.
Based upon and subject to the foregoing and to other
qualifications and limitations set forth herein, we are of the
opinion that:
1. After the Indenture I has been duly executed and
delivered, the ---% Subordinated Debentures, when duly executed,
delivered, authenticated and issued in accordance with Indenture I
and delivered and paid for as contemplated by the Registration
Statement, will be valid and binding obligations of the Company,
entitled to the benefits of the Indenture I and enforceable against
the Company in accordance with their terms, except to the extent
that enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, or other similar laws now
or hereafter in effect relating to creditors' rights generally, and
(ii) general principles of equity regardless of whether
enforceability is considered in a proceeding at law or in equity.
2. After the Indenture II has been duly executed and
delivered, the Floating Rate Subordinated Debentures, when duly
executed, delivered, authenticated and issued in accordance with
Indenture II and delivered and paid for as contemplated by the
Registration Statement, will be valid and binding obligations of
the Company, entitled to the benefits of the Indenture II and
enforceable against the Company in accordance with their terms,
except to the extent that enforcement thereof may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium, or other
similar laws now or hereafter in effect relating to creditors'
rights generally, and (ii) general principles of equity regardless
of whether enforceability is considered in a proceeding at law or
in equity.
3. The Guarantee I, when duly executed and delivered by the
parties hereto, will be a valid and binding agreement of the
Company, enforceable against the Company in accordance with its
terms, except to the extent that enforcement thereof may be limited
by (i) bankruptcy, insolvency, reorganization, moratorium, or other
similar laws now or hereafter in effect relating to creditors'
rights generally, and (ii) general principles of equity regardless
of whether enforceability is considered in a proceeding at law or
in equity.
4. The Guarantee II, when duly executed and delivered by the
parties hereto, will be a valid and binding agreement of the
Company, enforceable against the Company in accordance with its
terms, except to the extent that enforcement thereof may be limited
by (i) bankruptcy, insolvency, reorganization, moratorium, or other
similar laws now or hereafter in effect relating to creditors'
rights
<PAGE> 3
generally, and (ii) general principles of equity regardless
of whether enforceability is considered in a proceeding at law or
in equity.
We hereby consent to the reference to us under the caption
"Validity of Securities" in the Prospectus forming a part of the
Registration Statement and to the inclusion of this legal opinion
as an Exhibit to the Registration Statement.
Very truly yours,
/s/ Lewis, Rice & Fingersh, L.C.
LEWIS, RICE & FINGERSH, L.C.
<PAGE> 1
[LETTERHEAD OF RICHARDS, LAYTON & FINGER]
February 28, 1997
1st Source Capital Trust I
1st Source Capital Trust II
c/o 1st Source Corporation
100 North Michigan Street
South Bend, Indiana 46601
RE: 1ST SOURCE CAPITAL TRUST I AND
------------------------------
1ST SOURCE CAPITAL TRUST II
---------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for 1st Source
Capital Trust I, a Delaware business trust ("Trust I"), and 1st
Source Capital Trust II, a Delaware business trust ("Trust II")
(Trust I and Trust II are hereinafter collectively referred to as
the "Trusts" and sometimes hereinafter individually referred to as
a "Trust"), in connection with the matters set forth herein. At
your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of
originals or copies of the following:
(a) The Certificate of Trust of Trust I, dated February 20,
1997, as amended and restated by the Restated Certificate of Trust
of Trust II, dated February 27, 1997, as filed in the office of the
Secretary of State of the State of Delaware (the "Secretary of
State") on February 20, 1997 and February 27, 1997, respectively;
(b) The Certificate of Trust of Trust II, dated February 27,
1997, as filed in the office of the Secretary of State on February
27, 1997;
(c) The Amended and Restated Trust Agreement of Trust I, dated as
of February 27, 1997, among 1st Source Corporation, an Indiana corporation
(the "Company"), and the trustees of the Trust named therein;
(d) The Trust Agreement of Trust II, dated as of February 27,
1997, among the Company and the trustees of the Trust named
therein;
(e) The Registration Statement (the "Registration Statement")
on Form S-3, including the prospectus with respect to the
Trusts (the "Prospectus") relating to the Preferred Securities
of the Trusts (each, a "Preferred Security" and collectively, the
"Preferred Securities"), as filed by the Company and the Trusts
with the Securities and Exchange Commission on February 28, 1997;
<PAGE> 2
1st Source Capital Trust
February 28, 1997
Page 2
(f) A form of Amended and Restated Trust Agreement for each
of the Trusts, to be entered into among the Company, the trustees
of the Trust named therein, and the holders, from time to time, of
undivided beneficial interests in such Trust (collectively, the
"Trust Agreements" and individually, a "Trust Agreement"), attached
as an exhibit to the Registration Statement; and
(g) A Certificate of Good Standing for each of the Trusts,
dated February 28, 1997, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed above, and we have
assumed that there exists no provision in any document that we have
not reviewed that bears upon or is inconsistent with the opinions
stated herein. We have conducted no independent factual
investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth
therein and the additional matters recited or assumed herein, all
of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed
(i) the authenticity of all documents submitted to us as authentic
originals, (ii) the conformity with the originals of all documents
submitted to us as copies or forms, and (iii) the genuineness of
all signatures.
For purposes of this opinion, we have assumed (i) that each of
the Trust Agreements constitutes the entire agreement among the
parties thereto with respect to the subject matter thereof,
including with respect to the creation, operation and termination
of the applicable Trust, and that the Trust Agreements and the
Certificates of Trust are in full force and effect and have not
been amended, (ii) except to the extent provided in paragraph 1
below, the due creation or due organization or due formation, as
the case may be, and valid existence in good standing of each party
to the documents examined by us under the laws of the jurisdiction
governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents
examined by us, (iv) that each of the parties to the documents
examined by us has the power and authority to execute and deliver,
and to perform its obligations under, such documents (v) the due
authorization, execution and delivery by all parties thereto of all
documents examined by us, (vi) the receipt by each Person to whom
2
<PAGE> 3
1st Source Capital Trust
February 28, 1997
Page 3
a Preferred Security is to be issued by the Trusts (collectively,
the "Preferred Security Holders") of a Preferred Security
Certificate for such Preferred Security and the payment for the
Preferred Security acquired by it, in accordance with the
applicable Trust Agreement and the applicable Prospectus, and (vii)
that the Preferred Securities are authenticated, issued and sold to
the Preferred Security Holders in accordance with the applicable
Trust Agreement and the applicable Prospectus. We have not
participated in the preparation of the Registration Statement and
assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we
have not considered and express no opinion on the laws of any other
jurisdiction, including federal laws and rules and regulations
relating thereto. Our opinions are rendered only with respect to
Delaware laws and rules, regulations and orders thereunder which
are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have
considered necessary or appropriate, and subject to the
assumptions, qualifications, limitations and exceptions set forth
herein, we are of the opinion that:
1. Each of the Trusts has been duly created and is validly
existing in good standing as a business trust under the Delaware
Business Trust Act, 12 Del. C. Section 3801, et seq.
------- -------
2. The Preferred Securities of each Trust will represent
valid and, subject to the qualifications set forth in paragraph 3
below, fully paid and nonassessable undivided beneficial interest
in the assets of the applicable Trust.
3. The Preferred Security Holders, as beneficial owners of
the applicable Trust, will be entitled to the same limitation of
personal liability extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State
of Delaware. We note that the Preferred Security Holders may be
obligated to make payments as set forth in the applicable Trust
Agreement.
We consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration
Statement. In addition, we hereby consent to the use of our name
under the heading "Validity of Securities" in the Prospectus. In
giving the foregoing consents, we do not thereby admit that we come
3
<PAGE> 4
1st Source Capital Trust
February 28, 1997
Page 4
within the category of Persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Securities and Exchange Commission
thereunder. Except as stated above, without our prior written
consent, this opinion may not be furnished or quoted to, or relied
upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger
4
<PAGE> 1
[Letterhead of Lewis, Rice & Fingersh]
February 28, 1997
1st Source Corporation
100 North Michigan Street
P.O. Box 1602
South Bend, IN 46601
RE: 1ST SOURCE CAPITAL TRUST I AND II
Ladies and Gentlemen:
We have acted as tax counsel to 1st Source Corporation, an
Indiana corporation (the "Company"), 1st Source Capital Trust I, a
statutory business trust created under the laws of Delaware ("1st
Capital I"), and to 1st Source Capital Trust II, a statutory
business trust created under the laws of Delaware ("1st Capital
II"), (1st Capital I and 1st Capital II collectively referred as
"1st Capital"), in connection with the following:
1. The proposed issuance by 1st Capital I of (i) fixed rate
preferred securities (the "Fixed Rate Preferred Securities")
pursuant to the terms of the 1st Source Capital Trust I Amended and
Restated Trust Agreement between the Company and State Street Bank
and Trust Company, as trustee (the "Fixed Rate Trust Agreement"),
to be offered in an underwritten public offering, (ii) fixed rate
subordinated debentures (the "Fixed Rate Debentures") of the
Company pursuant to the terms of an indenture from the Company to
State Street Bank and Trust Company, as trustee (the "Fixed Rate
Indenture"), to be sold by the Company to 1st Capital I, and (iii)
the Preferred Securities Guarantee Agreement of the Company with
respect to the Fixed Rate Preferred Securities (the "Fixed Rate
Guarantee") between the Company and State Street Bank and Trust
Company, as trustee.
2. The proposed issuance by 1st Capital II of (i) floating
rate preferred securities (the "Floating Rate Preferred
Securities") pursuant to the terms of the 1st Source Capital Trust
II Amended and Restated Trust Agreement between the Company and
State Street Bank and Trust Company, as trustee (the "Floating Rate
Trust Agreement"), to be offered in an underwritten public
offering, (ii) floating rate subordinated debentures (the "Floating
Rate Debentures") of the Company pursuant to the terms of an
indenture from the Company to State Street Bank and Trust Company,
as trustee (the "Floating Rate Indenture"), to be sold by the
Company to 1st Capital II, and (iii) the Preferred Securities
Guarantee Agreement of the Company with respect to the Floating
Rate Preferred Securities (the "Floating Rate Guarantee") between
the Company and State Street Bank and Trust Company, as trustee.
<PAGE> 2
(The Fixed Rate Preferred Securities, Debentures, Trust Agreement and
Guarantee and the Floating Rate Preferred Securities, Debentures, Trust
Agreement and Guarantee are hereinafter collectively referred to as the
"Preferred Securities," "Debentures," "Trust Agreements" and "Guarantees,"
respectively.)
The Preferred Securities and the Debentures are to be issued
as contemplated by the registration statement on Form S-3 (the
"Registration Statement") to be filed by the Company and the 1st
Capital to register the issuance of the Preferred Securities, the
Debentures and the Guarantees under the Securities Act of 1933, as
amended (the "Act").
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of documents, corporate records and
other instruments as we have deemed necessary or appropriate for
purposes of this opinion including (i) the Registration Statement,
(ii) the Forms of the Fixed Rate Indenture and the Floating Rate
Indenture attached as exhibits to the Registration Statement, (iii)
the Forms of the Debentures attached as exhibits to the
Registration Statement (iv) the Forms of Trust Agreements attached
as exhibits to the Registration Statement, (v) the Forms of
Guarantees attached as exhibits to the Registration Statement, and
(vi) the Forms of Preferred Security Certificates attached as
exhibits to the Registration Statement (collectively the
"Documents"). In such examination, we have assumed the
authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us
as certified or photostatic copies, the authenticity of the
originals of such latter documents, the genuineness of all
signatures and the correctness of all representations made therein.
We have further assumed that there are no agreements or
understandings contemplated therein other than those contained in
the Documents.
Based upon the foregoing, and assuming (i) the final
Documents will be substantially identical to the forms attached
as exhibits to the Registration Statement, and (ii) full compliance
with all the terms of the final Documents, we are of the opinion that
the statements contained in the preliminary prospectus constituting
part of the Registration Statement under the caption "Certain Federal
Income Tax Consequences," insofar as such statements constitute matters
of law or legal conclusions, as qualified therein, constitute an accurate
description, in general terms, of the indicated United States federal
income tax consequences to such holders.
The opinion expressed above is based on existing provisions of
the Internal Revenue Code of 1986, as amended (the "Code"),
existing Treasury regulations, published interpretations of the
Code and such Treasury regulations by the Internal Revenue Service,
and existing court decisions, any of which could be changed at any
time. Any such changes may or may not be retroactively applied.
We note that there is no authority directly on point dealing with
<PAGE> 3
securities such as the Preferred Securities or of transactions of
the type described herein. Further, you should be aware that
opinions of counsel are not binding on the Internal Revenue Service
or the courts. We express no opinion as to any matters not
specifically covered by the foregoing opinions or as to the effect
on the matters covered by this opinion of the laws of any other
jurisdiction. Additionally, we undertake no obligation to update
this opinion in the event there is either a change in the legal
authorities, in the facts (including the taking of any action by
any party to any of the transactions described in the Documents
relating to such transactions) or in the Documents on which this
opinion is based, or an inaccuracy in any of the representations or
warranties upon which we have relied in rendering this opinion.
This letter is not being delivered for the benefit of, nor may
it be relied upon by, the holders of the Debentures, the Guarantee
or the Preferred Securities or any other party to which it is not
specifically addressed or on which reliance is not expressly
permitted hereby.
We hereby consent to the filing of this opinion as Exhibit to
the Registration Statement and to reference to our firm under the
caption "Certain Federal Income Tax Consequences" and "Validity of
Securities" in the preliminary prospectus constituting a part of
the Registration Statement.
Very truly yours,
Lewis, Rice & Fingersh, L.C.
<PAGE> 1
<TABLE>
1ST SOURCE CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<CAPTION>
Year Ended December 31,
(In Thousands)
---------------------------------------------------------------------------------
INCLUDING INTEREST ON DEPOSITS 1996 1995 1994 1993 1992
- ------------------------------- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Earnings:
Earnings before income taxes $ 35,599 $ 32,043 $ 26,333 $ 23,866 $ 20,910
Fixed charges from below 73,429 64,946 47,709 44,578 50,227
-------- -------- -------- -------- --------
Earnings $109,028 $ 96,989 $ 74,042 $ 68,444 $ 71,137
======== ======== ======== ======== ========
Fixed Charges:
Interest Expense $ 73,429 $ 64,946 $ 47,709 $ 44,578 $ 50,227
======== ======== ======== ======== ========
Ratio of earnings to fixed charges 1.48% 1.49% 1.55% 1.54% 1.42%
======== ======== ======== ======== ========
<CAPTION>
EXCLUDING INTEREST ON DEPOSITS
- ------------------------------
<S> <C> <C> <C> <C> <C>
Earnings:
Earnings before income taxes $ 35,599 $ 32,043 $ 26,333 $ 23,866 $ 20,910
Fixed charges from below 9,215 8,761 5,697 4,825 4,905
-------- -------- -------- -------- --------
Earnings $ 44,814 $ 40,804 $ 32,030 $ 28,691 $ 25,815
======== ======== ======== ======== ========
Fixed Charges:
Interest Expense, excluding
interest on deposits $ 9,215 $ 8,761 $ 5,697 $ 4,825 $ 4,905
======== ======== ======== ======== ========
Ratio of earnings to fixed charges 4.86% 4.66% 5.62% 5.95% 5.26%
======== ======== ======== ======== ========
</TABLE>
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Prospectus
forming a part of the Registration Statement on Form S-3 filed by
1st Source Corporation, of our report dated January 13, 1997 (except for
Note A, for which the date is January 21, 1997) on our audits of the
consolidated financial statements and financial statement schedules of
1st Source Corporation and subsidiaries as of December 31, 1996 and 1995,
and for each of the three years in the period ended December 31, 1996.
We also consent to the reference to our firm under the caption "Experts"
in the Prospectus.
/s/ COOPERS & LYBRAND L.L.P.
-----------------------------------
COOPERS & LYBRAND L.L.P.
Mishawaka, Indiana
February __, 1997
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
----------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) __
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
John R. Towers, Esq. Senior Vice President and Corporate Secretary
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
---------------------
1ST SOURCE CORPORATION
(Exact name of obligor as specified in its charter)
INDIANA 35-1068133
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 NORTH MICHIGAN STREET, SOUTH BEND, INDIANA 46601
(Address of principal executive offices) (Zip Code)
--------------------
% SUBORDINATED DEBENTURES
(Title of indenture securities)
<PAGE> 2
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY
TO WHICH IT IS SUBJECT.
Department of Banking and Insurance of The Commonwealth
of Massachusetts, 100 Cambridge Street, Boston,
Massachusetts.
Board of Governors of the Federal Reserve System,
Washington, D.C., Federal Deposit Insurance Corporation,
Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee or of its
parent, State Street Boston Corporation.
(See note on page 2.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW
IN EFFECT.
A copy of the Articles of Association of the trustee, as
now in effect, is on file with the Securities and Exchange
Commission as Exhibit 1 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse
Shoe, Inc. (File No. 22-17940) and is incorporated herein
by reference thereto.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO
COMMENCE BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF
ASSOCIATION.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the
trustee to commence business was necessary or issued is
on file with the Securities and Exchange Commission as
Exhibit 2 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed
with the Registration Statement of Morse Shoe, Inc. (File
No. 22-17940) and is incorporated herein by reference
thereto.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE
CORPORATE TRUST POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN
THE DOCUMENTS SPECIFIED IN PARAGRAPH (1) OR (2), ABOVE.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and
Exchange Commission as Exhibit 3 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse
Shoe, Inc. (File No. 22-17940) and is incorporated
herein by reference thereto.
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR
INSTRUMENTS CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in effect,
is on file with the Securities and Exchange Commission as
Exhibit 4 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the
Registration Statement of Eastern Edison Company (File
No. 33-37823) and is incorporated herein by reference
thereto.
1
<PAGE> 3
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4, IF THE
OBLIGOR IS IN DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES
REQUIRED BY SECTION 321(b) OF THE ACT.
The consent of the trustee required by Section 321(b) of
the Act is annexed hereto as Exhibit 6 and made a part
hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING
OR EXAMINING AUTHORITY.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority is annexed hereto as
Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility which
relates to matters peculiarly within the knowledge of the obligor or any
underwriter for the obligor, the trustee has relied upon information
furnished to it by the obligor and the underwriters, and the trustee
disclaims responsibility for the accuracy or completeness of such
information.
The answer to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939,
as amended, the trustee, State Street Bank and Trust Company, a corporation duly
organized and existing under the laws of The Commonwealth of Massachusetts,
has duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 19th day of February, 1997.
STATE STREET BANK AND TRUST COMPANY
By: /s/ PAUL D. ALLEN
------------------------------------
PAUL D. ALLEN
VICE PRESIDENT
2
<PAGE> 4
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust
Indenture Act of 1939, as amended, in connection with the proposed issuance
by 1ST SOURCE CORPORATION of its % SUBORDINATED DEBENTURES, we hereby
consent that reports of examination by Federal, State, Territorial or
District authorities may be furnished by such authorities to the Securities
and Exchange Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ PAUL D. ALLEN
------------------------------------
PAUL D. ALLEN
VICE PRESIDENT
DATED: FEBRUARY 19, 1997
3
<PAGE> 5
<TABLE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company of
Boston, Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this
commonwealth and a member of the Federal Reserve System, at the close of
business September 30, 1996, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions of the
Federal Reserve Act and in accordance with a call made by the Commissioner of
Banks under General Laws, Chapter 172, Section 22(a).
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin .................................. 1,385,597
Interest-bearing balances ........................................................... 6,205,892
Securities..................................................................................... 8,693,549
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary ................................................. 5,707,012
Loans and lease financing receivables:
Loans and leases, net of unearned income ............ 4,352,939
Allowance for loan and lease losses ................. 71,421
Loans and leases, net of unearned income and allowances ............................. 4,281,518
Assets held in trading accounts ............................................................... 702,030
Premises and fixed assets ..................................................................... 364,550
Other real estate owned ....................................................................... 1,100
Investments in unconsolidated subsidiaries .................................................... 65,775
Customers' liability to this bank on acceptances outstanding .................................. 36,351
Intangible assets ............................................................................. 71,688
Other assets................................................................................... 835,647
-----------
Total assets ............................................................................. 28,350,709
===========
LIABILITIES
Deposits:
In domestic offices ............................................................. 8,283,786
Noninterest-bearing ....................... 6,040,773
Interest-bearing .......................... 2,243,013
In foreign offices and Edge subsidiary .............................................. 9,309,212
Noninterest-bearing ....................... 53,213
Interest-bearing .......................... 9,255,999
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary ................................................. 7,014,421
Demand notes issued to the U.S. Treasury and Trading Liabilities .............................. 698,705
Other borrowed money .......................................................................... 690,865
Bank's liability on acceptances executed and outstanding ...................................... 37,357
Other liabilities ............................................................................. 695,718
-----------
Total liabilities ............................................................................. 26,730,064
-----------
EQUITY CAPITAL
Common stock .................................................................................. 29,931
Surplus ....................................................................................... 277,023
Undivided profits ............................................................................. 1,311,920
Cumulative foreign currency translation adjustments .......................................... 1,771
-----------
Total equity capital .......................................................................... 1,620,645
-----------
Total liabilities and equity capital .......................................................... 28,350,709
===========
</TABLE>
4
<PAGE> 6
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true
and correct.
David A. Spina
Marshall N. Carter
Charles F. Kaye
5
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
----------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) __
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
John R. Towers, Esq. Senior Vice President and Corporate Secretary
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
---------------------
1ST SOURCE CAPITAL TRUST I
(Exact name of obligor as specified in its charter)
DELAWARE 35-2007326
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 NORTH MICHIGAN STREET, SOUTH BEND, INDIANA 46601
(Address of principal executive offices) (Zip Code)
--------------------
PREFERRED SECURITIES
(Title of indenture securities)
<PAGE> 2
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY
TO WHICH IT IS SUBJECT.
Department of Banking and Insurance of The Commonwealth
of Massachusetts, 100 Cambridge Street, Boston,
Massachusetts.
Board of Governors of the Federal Reserve System,
Washington, D.C., Federal Deposit Insurance Corporation,
Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee or of its
parent, State Street Boston Corporation.
(See note on page 2.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW
IN EFFECT.
A copy of the Articles of Association of the trustee, as
now in effect, is on file with the Securities and Exchange
Commission as Exhibit 1 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse
Shoe, Inc. (File No. 22-17940) and is incorporated herein
by reference thereto.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO
COMMENCE BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the
trustee to commence business was necessary or issued is on
file with the Securities and Exchange Commission as
Exhibit 2 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed
with the Registration Statement of Morse Shoe, Inc. (File
No. 22-17940) and is incorporated herein by reference
thereto.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE
CORPORATE TRUST POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED
IN THE DOCUMENTS SPECIFIED IN PARAGRAPH (1) OR (2), ABOVE.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and
Exchange Commission as Exhibit 3 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse
Shoe, Inc. (File No. 22-17940) and is incorporated herein
by reference thereto.
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR
INSTRUMENTS CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in effect,
is on file with the Securities and Exchange Commission as
Exhibit 4 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the
Registration Statement of Eastern Edison Company (File
No. 33-37823) and is incorporated herein by reference
thereto.
1
<PAGE> 3
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4, IF THE
OBLIGOR IS IN DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES
REQUIRED BY SECTION 321(b) OF THE ACT.
The consent of the trustee required by Section 321(b) of
the Act is annexed hereto as Exhibit 6 and made a part
hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING
OR EXAMINING AUTHORITY.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority is annexed hereto as
Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility which
relates to matters peculiarly within the knowledge of the obligor or any
underwriter for the obligor, the trustee has relied upon information
furnished to it by the obligor and the underwriters, and the trustee
disclaims responsibility for the accuracy or completeness of such
information.
The answer to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939,
as amended, the trustee, State Street Bank and Trust Company, a corporation duly
organized and existing under the laws of The Commonwealth of Massachusetts,
has duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 19th day of February, 1997.
STATE STREET BANK AND TRUST COMPANY
By: /s/ PAUL D. ALLEN
------------------------------------
PAUL D. ALLEN
VICE PRESIDENT
2
<PAGE> 4
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust
Indenture Act of 1939, as amended, in connection with the proposed issuance
by 1ST SOURCE CAPITAL TRUST I of its PREFERRED SECURITIES, we hereby consent
that reports of examination by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ PAUL D. ALLEN
--------------------------------
PAUL D. ALLEN
VICE PRESIDENT
DATED: FEBRUARY 19, 1997
3
<PAGE> 5
<TABLE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company of
Boston, Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this
commonwealth and a member of the Federal Reserve System, at the close of
business September 30, 1996, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions of the
Federal Reserve Act and in accordance with a call made by the Commissioner of
Banks under General Laws, Chapter 172, Section 22(a).
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin .................................. 1,385,597
Interest-bearing balances ........................................................... 6,205,892
Securities..................................................................................... 8,693,549
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary ................................................. 5,707,012
Loans and lease financing receivables:
Loans and leases, net of unearned income ............. 4,352,939
Allowance for loan and lease losses .................. 71,421
Loans and leases, net of unearned income and allowances ............................. 4,281,518
Assets held in trading accounts ............................................................... 702,030
Premises and fixed assets ..................................................................... 364,550
Other real estate owned ....................................................................... 1,100
Investments in unconsolidated subsidiaries .................................................... 65,775
Customers' liability to this bank on acceptances outstanding .................................. 36,351
Intangible assets ............................................................................. 71,688
Other assets................................................................................... 835,647
-----------
Total assets .................................................................................. 28,350,709
===========
LIABILITIES
Deposits:
In domestic offices ................................................................. 8,283,786
Noninterest-bearing ...................... 6,040,773
Interest-bearing ......................... 2,243,013
In foreign offices and Edge subsidiary .............................................. 9,309,212
Noninterest-bearing ...................... 53,213
Interest-bearing ......................... 9,255,999
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary ................................................. 7,014,421
Demand notes issued to the U.S. Treasury and Trading Liabilities .............................. 698,705
Other borrowed money .......................................................................... 690,865
Bank's liability on acceptances executed and outstanding ...................................... 37,357
Other liabilities ............................................................................. 695,718
-----------
Total liabilities ............................................................................. 26,730,064
-----------
EQUITY CAPITAL
Common stock .................................................................................. 29,931
Surplus ....................................................................................... 277,023
Undivided profits ............................................................................. 1,311,920
Cumulative foreign currency translation adjustments .......................................... 1,771
-----------
Total equity capital .......................................................................... 1,620,645
-----------
Total liabilities and equity capital .......................................................... 28,350,709
===========
</TABLE>
4
<PAGE> 6
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true
and correct.
David A. Spina
Marshall N. Carter
Charles F. Kaye
5
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
----------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) __
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
John R. Towers, Esq. Senior Vice President and Corporate Secretary
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
---------------------
1ST SOURCE CORPORATION
(Exact name of obligor as specified in its charter)
INDIANA 35-1068133
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 NORTH MICHIGAN STREET, SOUTH BEND, INDIANA 46601
(Address of principal executive offices) (Zip Code)
--------------------
GUARANTEE
(Title of indenture securities)
<PAGE> 2
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY
TO WHICH IT IS SUBJECT.
Department of Banking and Insurance of The Commonwealth
of Massachusetts, 100 Cambridge Street, Boston,
Massachusetts.
Board of Governors of the Federal Reserve System,
Washington, D.C., Federal Deposit Insurance Corporation,
Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee or of its
parent, State Street Boston Corporation.
(See note on page 2.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW
IN EFFECT.
A copy of the Articles of Association of the trustee, as
now in effect, is on file with the Securities and Exchange
Commission as Exhibit 1 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse
Shoe, Inc. (File No. 22-17940) and is incorporated herein
by reference thereto.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO
COMMENCE BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the
trustee to commence business was necessary or issued is on
file with the Securities and Exchange Commission as
Exhibit 2 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed
with the Registration Statement of Morse Shoe, Inc. (File
No. 22-17940) and is incorporated herein by reference
thereto.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE
CORPORATE TRUST POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN
THE DOCUMENTS SPECIFIED IN PARAGRAPH (1) OR (2), ABOVE.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and
Exchange Commission as Exhibit 3 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by
reference thereto.
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR
INSTRUMENTS CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in effect,
is on file with the Securities and Exchange Commission as
Exhibit 4 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the
Registration Statement of Eastern Edison Company (File
No. 33-37823) and is incorporated herein by reference
thereto.
1
<PAGE> 3
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4, IF THE
OBLIGOR IS IN DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES
REQUIRED BY SECTION 321(b) OF THE ACT.
The consent of the trustee required by Section 321(b) of
the Act is annexed hereto as Exhibit 6 and made a part
hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING
OR EXAMINING AUTHORITY.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority is annexed hereto as
Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility which
relates to matters peculiarly within the knowledge of the obligor or any
underwriter for the obligor, the trustee has relied upon information
furnished to it by the obligor and the underwriters, and the trustee
disclaims responsibility for the accuracy or completeness of such
information.
The answer to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939,
as amended, the trustee, State Street Bank and Trust Company, a corporation duly
organized and existing under the laws of The Commonwealth of Massachusetts,
has duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 19th day of February, 1997.
STATE STREET BANK AND TRUST COMPANY
By: /s/ PAUL D. ALLEN
--------------------------------
PAUL D. ALLEN
VICE PRESIDENT
2
<PAGE> 4
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust
Indenture Act of 1939, as amended, in connection with the proposed issuance
by 1ST SOURCE CORPORATION of its GUARANTEE, we hereby consent that reports
of examination by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ PAUL D. ALLEN
---------------------------------
PAUL D. ALLEN
VICE PRESIDENT
DATED: FEBRUARY 19, 1997
3
<PAGE> 5
<TABLE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company of
Boston, Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this
commonwealth and a member of the Federal Reserve System, at the close of
business September 30, 1996, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions of the
Federal Reserve Act and in accordance with a call made by the Commissioner of
Banks under General Laws, Chapter 172, Section 22(a).
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin .................................. 1,385,597
Interest-bearing balances ........................................................... 6,205,892
Securities .................................................................................... 8,693,549
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary ................................................. 5,707,012
Loans and lease financing receivables:
Loans and leases, net of unearned income ............ 4,352,939
Allowance for loan and lease losses ................. 71,421
Loans and leases, net of unearned income and allowances ............................. 4,281,518
Assets held in trading accounts ............................................................... 702,030
Premises and fixed assets ..................................................................... 364,550
Other real estate owned ....................................................................... 1,100
Investments in unconsolidated subsidiaries .................................................... 65,775
Customers' liability to this bank on acceptances outstanding .................................. 36,351
Intangible assets ............................................................................. 71,688
Other assets................................................................................... 835,647
-----------
Total assets .................................................................................. 28,350,709
===========
LIABILITIES
Deposits:
In domestic offices ................................................................... 8,283,786
Noninterest-bearing ......................... 6,040,773
Interest-bearing ............................ 2,243,013
In foreign offices and Edge subsidiary ............................................... 9,309,212
Noninterest-bearing ......................... 53,213
Interest-bearing ............................ 9,255,999
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary ................................................... 7,014,421
Demand notes issued to the U.S. Treasury and Trading Liabilities .............................. 698,705
Other borrowed money .......................................................................... 690,865
Bank's liability on acceptances executed and outstanding ...................................... 37,357
Other liabilities ............................................................................. 695,718
-----------
Total liabilities ............................................................................. 26,730,064
-----------
EQUITY CAPITAL
Common stock .................................................................................. 29,931
Surplus ....................................................................................... 277,023
Undivided profits ............................................................................. 1,311,920
Cumulative foreign currency translation adjustments .......................................... 1,771
-----------
Total equity capital .......................................................................... 1,620,645
-----------
Total liabilities and equity capital .......................................................... 28,350,709
===========
</TABLE>
4
<PAGE> 6
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true
and correct.
David A. Spina
Marshall N. Carter
Charles F. Kaye
5
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
----------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) __
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
John R. Towers, Esq. Senior Vice President and Corporate Secretary
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
---------------------
1ST SOURCE CORPORATION
(Exact name of obligor as specified in its charter)
INDIANA 35-1068133
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 NORTH MICHIGAN STREET, SOUTH BEND, INDIANA 46601
(Address of principal executive offices) (Zip Code)
--------------------
FLOATING RATE SUBORDINATED DEBENTURES
(Title of indenture securities)
<PAGE> 2
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY
TO WHICH IT IS SUBJECT.
Department of Banking and Insurance of The Commonwealth
of Massachusetts, 100 Cambridge Street, Boston,
Massachusetts.
Board of Governors of the Federal Reserve System,
Washington, D.C., Federal Deposit Insurance Corporation,
Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee or of its
parent, State Street Boston Corporation.
(See note on page 2.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW
IN EFFECT.
A copy of the Articles of Association of the trustee, as
now in effect, is on file with the Securities and Exchange
Commission as Exhibit 1 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse
Shoe, Inc. (File No. 22-17940) and is incorporated herein
by reference thereto.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO
COMMENCE BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF
ASSOCIATION.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the
trustee to commence business was necessary or issued is
on file with the Securities and Exchange Commission as
Exhibit 2 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed
with the Registration Statement of Morse Shoe, Inc. (File
No. 22-17940) and is incorporated herein by reference
thereto.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE
CORPORATE TRUST POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN
THE DOCUMENTS SPECIFIED IN PARAGRAPH (1) OR (2), ABOVE.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and
Exchange Commission as Exhibit 3 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse
Shoe, Inc. (File No. 22-17940) and is incorporated
herein by reference thereto.
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR
INSTRUMENTS CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in effect,
is on file with the Securities and Exchange Commission as
Exhibit 4 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the
Registration Statement of Eastern Edison Company (File
No. 33-37823) and is incorporated herein by reference
thereto.
1
<PAGE> 3
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4, IF THE
OBLIGOR IS IN DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES
REQUIRED BY SECTION 321(b) OF THE ACT.
The consent of the trustee required by Section 321(b) of
the Act is annexed hereto as Exhibit 6 and made a part
hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING
OR EXAMINING AUTHORITY.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority is annexed hereto as
Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility which
relates to matters peculiarly within the knowledge of the obligor or any
underwriter for the obligor, the trustee has relied upon information
furnished to it by the obligor and the underwriters, and the trustee
disclaims responsibility for the accuracy or completeness of such
information.
The answer to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939,
as amended, the trustee, State Street Bank and Trust Company, a corporation duly
organized and existing under the laws of The Commonwealth of Massachusetts,
has duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 19th day of February, 1997.
STATE STREET BANK AND TRUST COMPANY
By: /s/ PAUL D. ALLEN
------------------------------------
PAUL D. ALLEN
VICE PRESIDENT
2
<PAGE> 4
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust
Indenture Act of 1939, as amended, in connection with the proposed issuance
by 1ST SOURCE CORPORATION of its % SUBORDINATED DEBENTURES, we hereby
consent that reports of examination by Federal, State, Territorial or
District authorities may be furnished by such authorities to the Securities
and Exchange Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ PAUL D. ALLEN
------------------------------------
PAUL D. ALLEN
VICE PRESIDENT
DATED: FEBRUARY 19, 1997
3
<PAGE> 5
<TABLE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company of
Boston, Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this
commonwealth and a member of the Federal Reserve System, at the close of
business September 30, 1996, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions of the
Federal Reserve Act and in accordance with a call made by the Commissioner of
Banks under General Laws, Chapter 172, Section 22(a).
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin .................................. 1,385,597
Interest-bearing balances ........................................................... 6,205,892
Securities..................................................................................... 8,693,549
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary ................................................. 5,707,012
Loans and lease financing receivables:
Loans and leases, net of unearned income ............ 4,352,939
Allowance for loan and lease losses ................. 71,421
Loans and leases, net of unearned income and allowances ............................. 4,281,518
Assets held in trading accounts ............................................................... 702,030
Premises and fixed assets ..................................................................... 364,550
Other real estate owned ....................................................................... 1,100
Investments in unconsolidated subsidiaries .................................................... 65,775
Customers' liability to this bank on acceptances outstanding .................................. 36,351
Intangible assets ............................................................................. 71,688
Other assets................................................................................... 835,647
-----------
Total assets ............................................................................. 28,350,709
===========
LIABILITIES
Deposits:
In domestic offices ............................................................. 8,283,786
Noninterest-bearing ....................... 6,040,773
Interest-bearing .......................... 2,243,013
In foreign offices and Edge subsidiary .............................................. 9,309,212
Noninterest-bearing ....................... 53,213
Interest-bearing .......................... 9,255,999
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary ................................................. 7,014,421
Demand notes issued to the U.S. Treasury and Trading Liabilities .............................. 698,705
Other borrowed money .......................................................................... 690,865
Bank's liability on acceptances executed and outstanding ...................................... 37,357
Other liabilities ............................................................................. 695,718
-----------
Total liabilities ............................................................................. 26,730,064
-----------
EQUITY CAPITAL
Common stock .................................................................................. 29,931
Surplus ....................................................................................... 277,023
Undivided profits ............................................................................. 1,311,920
Cumulative foreign currency translation adjustments .......................................... 1,771
-----------
Total equity capital .......................................................................... 1,620,645
-----------
Total liabilities and equity capital .......................................................... 28,350,709
===========
</TABLE>
4
<PAGE> 6
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true
and correct.
David A. Spina
Marshall N. Carter
Charles F. Kaye
5
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
----------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) __
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
John R. Towers, Esq. Senior Vice President and Corporate Secretary
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
---------------------
1ST SOURCE CAPITAL TRUST II
(Exact name of obligor as specified in its charter)
DELAWARE 35-2007326
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 NORTH MICHIGAN STREET, SOUTH BEND, INDIANA 46601
(Address of principal executive offices) (Zip Code)
--------------------
PREFERRED SECURITIES
(Title of indenture securities)
<PAGE> 2
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY
TO WHICH IT IS SUBJECT.
Department of Banking and Insurance of The Commonwealth
of Massachusetts, 100 Cambridge Street, Boston,
Massachusetts.
Board of Governors of the Federal Reserve System,
Washington, D.C., Federal Deposit Insurance Corporation,
Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee or of its
parent, State Street Boston Corporation.
(See note on page 2.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW
IN EFFECT.
A copy of the Articles of Association of the trustee, as
now in effect, is on file with the Securities and Exchange
Commission as Exhibit 1 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse
Shoe, Inc. (File No. 22-17940) and is incorporated herein
by reference thereto.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO
COMMENCE BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the
trustee to commence business was necessary or issued is on
file with the Securities and Exchange Commission as
Exhibit 2 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed
with the Registration Statement of Morse Shoe, Inc. (File
No. 22-17940) and is incorporated herein by reference
thereto.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE
CORPORATE TRUST POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED
IN THE DOCUMENTS SPECIFIED IN PARAGRAPH (1) OR (2), ABOVE.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and
Exchange Commission as Exhibit 3 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse
Shoe, Inc. (File No. 22-17940) and is incorporated herein
by reference thereto.
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR
INSTRUMENTS CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in effect,
is on file with the Securities and Exchange Commission as
Exhibit 4 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the
Registration Statement of Eastern Edison Company (File
No. 33-37823) and is incorporated herein by reference
thereto.
1
<PAGE> 3
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4, IF THE
OBLIGOR IS IN DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES
REQUIRED BY SECTION 321(b) OF THE ACT.
The consent of the trustee required by Section 321(b) of
the Act is annexed hereto as Exhibit 6 and made a part
hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING
OR EXAMINING AUTHORITY.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority is annexed hereto as
Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility which
relates to matters peculiarly within the knowledge of the obligor or any
underwriter for the obligor, the trustee has relied upon information
furnished to it by the obligor and the underwriters, and the trustee
disclaims responsibility for the accuracy or completeness of such
information.
The answer to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939,
as amended, the trustee, State Street Bank and Trust Company, a corporation duly
organized and existing under the laws of The Commonwealth of Massachusetts,
has duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 19th day of February, 1997.
STATE STREET BANK AND TRUST COMPANY
By: /s/ PAUL D. ALLEN
------------------------------------
PAUL D. ALLEN
VICE PRESIDENT
2
<PAGE> 4
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust
Indenture Act of 1939, as amended, in connection with the proposed issuance
by 1ST SOURCE CAPITAL TRUST II of its PREFERRED SECURITIES, we hereby consent
that reports of examination by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ PAUL D. ALLEN
--------------------------------
PAUL D. ALLEN
VICE PRESIDENT
DATED: FEBRUARY 19, 1997
3
<PAGE> 5
<TABLE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company of
Boston, Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this
commonwealth and a member of the Federal Reserve System, at the close of
business September 30, 1996, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions of the
Federal Reserve Act and in accordance with a call made by the Commissioner of
Banks under General Laws, Chapter 172, Section 22(a).
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin .................................. 1,385,597
Interest-bearing balances ........................................................... 6,205,892
Securities..................................................................................... 8,693,549
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary ................................................. 5,707,012
Loans and lease financing receivables:
Loans and leases, net of unearned income ............. 4,352,939
Allowance for loan and lease losses .................. 71,421
Loans and leases, net of unearned income and allowances ............................. 4,281,518
Assets held in trading accounts ............................................................... 702,030
Premises and fixed assets ..................................................................... 364,550
Other real estate owned ....................................................................... 1,100
Investments in unconsolidated subsidiaries .................................................... 65,775
Customers' liability to this bank on acceptances outstanding .................................. 36,351
Intangible assets ............................................................................. 71,688
Other assets................................................................................... 835,647
-----------
Total assets .................................................................................. 28,350,709
===========
LIABILITIES
Deposits:
In domestic offices ................................................................. 8,283,786
Noninterest-bearing ...................... 6,040,773
Interest-bearing ......................... 2,243,013
In foreign offices and Edge subsidiary .............................................. 9,309,212
Noninterest-bearing ...................... 53,213
Interest-bearing ......................... 9,255,999
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary ................................................. 7,014,421
Demand notes issued to the U.S. Treasury and Trading Liabilities .............................. 698,705
Other borrowed money .......................................................................... 690,865
Bank's liability on acceptances executed and outstanding ...................................... 37,357
Other liabilities ............................................................................. 695,718
-----------
Total liabilities ............................................................................. 26,730,064
-----------
EQUITY CAPITAL
Common stock .................................................................................. 29,931
Surplus ....................................................................................... 277,023
Undivided profits ............................................................................. 1,311,920
Cumulative foreign currency translation adjustments .......................................... 1,771
-----------
Total equity capital .......................................................................... 1,620,645
-----------
Total liabilities and equity capital .......................................................... 28,350,709
===========
</TABLE>
4
<PAGE> 6
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true
and correct.
David A. Spina
Marshall N. Carter
Charles F. Kaye
5
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
----------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) __
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
John R. Towers, Esq. Senior Vice President and Corporate Secretary
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
---------------------
1ST SOURCE CORPORATION
(Exact name of obligor as specified in its charter)
INDIANA 35-1068133
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 NORTH MICHIGAN STREET, SOUTH BEND, INDIANA 46601
(Address of principal executive offices) (Zip Code)
--------------------
GUARANTEE
(Title of indenture securities)
<PAGE> 2
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY
TO WHICH IT IS SUBJECT.
Department of Banking and Insurance of The Commonwealth
of Massachusetts, 100 Cambridge Street, Boston,
Massachusetts.
Board of Governors of the Federal Reserve System,
Washington, D.C., Federal Deposit Insurance Corporation,
Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee or of its
parent, State Street Boston Corporation.
(See note on page 2.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW
IN EFFECT.
A copy of the Articles of Association of the trustee, as
now in effect, is on file with the Securities and Exchange
Commission as Exhibit 1 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse
Shoe, Inc. (File No. 22-17940) and is incorporated herein
by reference thereto.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO
COMMENCE BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the
trustee to commence business was necessary or issued is on
file with the Securities and Exchange Commission as
Exhibit 2 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed
with the Registration Statement of Morse Shoe, Inc. (File
No. 22-17940) and is incorporated herein by reference
thereto.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE
CORPORATE TRUST POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN
THE DOCUMENTS SPECIFIED IN PARAGRAPH (1) OR (2), ABOVE.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and
Exchange Commission as Exhibit 3 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by
reference thereto.
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR
INSTRUMENTS CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in effect,
is on file with the Securities and Exchange Commission as
Exhibit 4 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the
Registration Statement of Eastern Edison Company (File
No. 33-37823) and is incorporated herein by reference
thereto.
1
<PAGE> 3
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4, IF THE
OBLIGOR IS IN DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES
REQUIRED BY SECTION 321(b) OF THE ACT.
The consent of the trustee required by Section 321(b) of
the Act is annexed hereto as Exhibit 6 and made a part
hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING
OR EXAMINING AUTHORITY.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority is annexed hereto as
Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility which
relates to matters peculiarly within the knowledge of the obligor or any
underwriter for the obligor, the trustee has relied upon information
furnished to it by the obligor and the underwriters, and the trustee
disclaims responsibility for the accuracy or completeness of such
information.
The answer to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939,
as amended, the trustee, State Street Bank and Trust Company, a corporation duly
organized and existing under the laws of The Commonwealth of Massachusetts,
has duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 19th day of February, 1997.
STATE STREET BANK AND TRUST COMPANY
By: /s/ PAUL D. ALLEN
--------------------------------
PAUL D. ALLEN
VICE PRESIDENT
2
<PAGE> 4
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust
Indenture Act of 1939, as amended, in connection with the proposed issuance
by 1ST SOURCE CORPORATION of its GUARANTEE, we hereby consent that reports
of examination by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ PAUL D. ALLEN
---------------------------------
PAUL D. ALLEN
VICE PRESIDENT
DATED: FEBRUARY 19, 1997
3
<PAGE> 5
<TABLE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company of
Boston, Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this
commonwealth and a member of the Federal Reserve System, at the close of
business September 30, 1996, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions of the
Federal Reserve Act and in accordance with a call made by the Commissioner of
Banks under General Laws, Chapter 172, Section 22(a).
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin .................................. 1,385,597
Interest-bearing balances ........................................................... 6,205,892
Securities .................................................................................... 8,693,549
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary ................................................. 5,707,012
Loans and lease financing receivables:
Loans and leases, net of unearned income ............ 4,352,939
Allowance for loan and lease losses ................. 71,421
Loans and leases, net of unearned income and allowances ............................. 4,281,518
Assets held in trading accounts ............................................................... 702,030
Premises and fixed assets ..................................................................... 364,550
Other real estate owned ....................................................................... 1,100
Investments in unconsolidated subsidiaries .................................................... 65,775
Customers' liability to this bank on acceptances outstanding .................................. 36,351
Intangible assets ............................................................................. 71,688
Other assets................................................................................... 835,647
-----------
Total assets .................................................................................. 28,350,709
===========
LIABILITIES
Deposits:
In domestic offices ................................................................... 8,283,786
Noninterest-bearing ......................... 6,040,773
Interest-bearing ............................ 2,243,013
In foreign offices and Edge subsidiary ............................................... 9,309,212
Noninterest-bearing ......................... 53,213
Interest-bearing ............................ 9,255,999
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary ................................................... 7,014,421
Demand notes issued to the U.S. Treasury and Trading Liabilities .............................. 698,705
Other borrowed money .......................................................................... 690,865
Bank's liability on acceptances executed and outstanding ...................................... 37,357
Other liabilities ............................................................................. 695,718
-----------
Total liabilities ............................................................................. 26,730,064
-----------
EQUITY CAPITAL
Common stock .................................................................................. 29,931
Surplus ....................................................................................... 277,023
Undivided profits ............................................................................. 1,311,920
Cumulative foreign currency translation adjustments .......................................... 1,771
-----------
Total equity capital .......................................................................... 1,620,645
-----------
Total liabilities and equity capital .......................................................... 28,350,709
===========
</TABLE>
4
<PAGE> 6
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true
and correct.
David A. Spina
Marshall N. Carter
Charles F. Kaye
5
