<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 10, 1997.
REGISTRATION NO.
333-18655
REGISTRATION NO. 333-18655-01
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
IRWIN FINANCIAL CORPORATION IFC CAPITAL TRUST I
(EXACT NAME OF REGISTRANT AND CO-REGISTRANT AS SPECIFIED IN CHARTERS)
INDIANA 35-1286807 DELAWARE 35-6636128
(STATE OR OTHER (I.R.S. EMPLOYER (STATE OR OTHER (I.R.S. EMPLOYER
JURISDICTION OF IDENTIFICATION JURISDICTION OF IDENTIFICATION
INCORPORATION OR NO.) INCORPORATION OR NO.)
ORGANIZATION) ORGANIZATION)
500 WASHINGTON STREET 500 WASHINGTON STREET
COLUMBUS, INDIANA 47201 COLUMBUS, INDIANA 47201
(812) 376-1020 (812) 376-1020
(ADDRESS(ES), INCLUDING ZIP CODE(S), AND TELEPHONE NUMBER(S), INCLUDING AREA
CODE(S), OF REGISTRANT'S AND CO-REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
THOMAS D. WASHBURN
SENIOR VICE PRESIDENT
500 WASHINGTON STREET
COLUMBUS, INDIANA 47201
(812) 376-1020
(NAME(S), ADDRESS(ES), INCLUDING ZIP CODE(S), AND TELEPHONE NUMBER(S),
INCLUDING AREA CODE(S), OF AGENT(S) FOR SERVICE)
COPIES TO:
JENNIFER R. EVANS, ESQ. THOMAS C. ERB, ESQ.
VEDDER, PRICE, KAUFMAN & KAMMHOLZ LEWIS, RICE & FINGERSH, L.C.
222 NORTH LASALLE STREET 500 N. BROADWAY, SUITE 2000
CHICAGO, ILLINOIS 60601-1003 ST. LOUIS, MISSOURI 63102-2147
(312) 609-7500 (314) 444-7600
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. [_]
CALCULATION OF REGISTRATION FEE
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- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) OFFERING PRICE PER UNIT(1) AGGREGATE OFFERING PRICE(1) REGISTRATION FEE(2)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Preferred Securities of
IFC Capital Trust I.... 2,000,000 $25.00 $50,000,000 $15,152
Subordinated
Debentures(3) of
Irwin Financial
Corporation............ (3) -- -- --
Guarantees of Preferred
Securities(4).......... (4) -- -- --
</TABLE>
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(1) Includes 250,000 Preferred Securities which may be sold by IFC Capital I
to cover over-allotments.
(2) The registration fee is calculated in accordance with Rule 457(i) and (n).
$13,069 of the Registration Fee was previously paid.
(3) The Subordinated Debentures will be purchased by IFC Capital I with the
proceeds of the sale of the Preferred Securities. Such securities may
later be distributed for no additional consideration to the holders of the
Preferred Securities of IFC Capital I upon its dissolution and the
distribution of its assets.
(4) This Registration Statement is deemed to cover the Subordinated Debentures
of Irwin Financial Corporation, the rights of holders of Subordinated
Debentures of Irwin Financial Corporation under the Indenture, and the
rights of holders of the Preferred Securities under the Trust Agreement,
the Guarantee and the Expense Agreement entered into by Irwin Financial
Corporation. No separate consideration will be received for the Guarantee.
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.
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- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+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. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS SUBJECT TO COMPLETION, DATED JANUARY 10, 1997
1,750,000 PREFERRED SECURITIES
IFC CAPITAL TRUST I
% CUMULATIVE TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
LOGO GUARANTEED, AS DESCRIBED HEREIN, BY
IRWIN FINANCIAL CORPORATION
----------
$43,750,000 % SUBORDINATED DEBENTURES
OF
IRWIN FINANCIAL CORPORATION
----------
The % Cumulative Trust Preferred Securities (the "Preferred Securities")
offered hereby represent preferred undivided beneficial interests in the assets
of IFC Capital Trust I, a statutory business trust created under the laws of
the State of Delaware ("Capital Trust"). Irwin Financial Corporation, an
Indiana corporation
(continued on next page)
Application has been made to have the Preferred Securities approved for
quotation on the Nasdaq National MarketSM under the symbol "IRWNP."
----------
SEE "RISK FACTORS" COMMENCING ON PAGE 15 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 NONBANKING AFFILIATE
OF THE COMPANY (EXCEPT TO THE EXTENT THAT PREFERRED SECURITIES ARE GUARAN-
TEED 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 REPRESENTA-
TION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) COMMISSION(1) CAPITAL TRUST(2)(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Preferred Security........... $25.00 (2) $25.00
- --------------------------------------------------------------------------------
Total(4)......................... $43,750,000 (2) $43,750,000
</TABLE>
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- --------------------------------------------------------------------------------
(1) Capital Trust 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."
(2) 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."
(3) Before deducting expenses payable by the Company, estimated to be $200,000.
(4) Capital Trust has granted the Underwriters an option exercisable within 30
days from the date of this Prospectus to purchase up to 250,000 additional
Preferred Securities 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 Capital Trust will
be $50,000,000. See "Underwriting."
----------
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 on or about January , 1997.
STIFEL, NICOLAUS & COMPANY
INCORPORATED
January , 1997
<PAGE>
(continued from previous page)
(the "Company"), will own all the common securities (the "Common Securities"
and, together with the Preferred Securities, the "Trust Securities")
representing undivided beneficial interests in the assets of Capital Trust.
State Street Bank and Trust Company is the Property Trustee (as defined
herein) of Capital Trust. Capital Trust exists for the purpose of issuing the
Preferred Securities and investing the proceeds thereof in an equivalent
amount of % Subordinated Debentures (the "Subordinated Debentures") of the
Company. The Subordinated Debentures will mature on March 31, 2027, which date
may be (i) shortened to a date not earlier than March 31, 2002, or (ii)
extended to a date not later than March 31, 2046, in each case if certain
conditions are met (including, in the case of shortening the Stated Maturity
(as defined herein), the Company having received prior approval of the Board
of Governors of the Federal Reserve System ("Federal Reserve") to do so if
then required under applicable capital guidelines or policies of the Federal
Reserve). The Preferred Securities will have a preference under certain
circumstances with respect to cash distributions and amounts payable on
liquidation, redemption or otherwise over the Common Securities. See
"Description of the Preferred Securities--Subordination of Common Securities."
Holders of Preferred Securities are entitled to receive preferential
cumulative cash distributions, at the annual rate of % of the liquidation
amount of $25 per Preferred Security (the "Liquidation Amount"), accruing from
the date of original issuance and payable quarterly in arrears on the last day
of March, June, September and December of each year, commencing March 31, 1997
(the "Distributions"). The Company has the right, so long as no Debenture
Event of Default (as defined herein) has occurred and is continuing, to defer
payment of interest on the Subordinated Debentures at any time or from time to
time for a period not to exceed 20 consecutive quarters with respect to each
deferral period (each, an "Extended Interest Payment Period"); provided that
no Extended Interest Payment Period may 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
requirements set forth herein. If interest payments on the Subordinated
Debentures are so deferred, Distributions on the Preferred Securities will
also be deferred, and the Company will not be permitted, subject to certain
exceptions described herein, to declare or pay any cash distributions with
respect to its capital stock or debt securities that rank pari passu with or
junior to the Subordinated Debentures. DURING AN EXTENDED INTEREST PAYMENT
PERIOD, INTEREST ON THE SUBORDINATED DEBENTURES WILL CONTINUE TO ACCRUE (AND
THE AMOUNT OF DISTRIBUTIONS TO WHICH HOLDERS OF THE PREFERRED SECURITIES ARE
ENTITLED WILL ACCUMULATE) AT THE RATE OF % PER ANNUM, COMPOUNDED QUARTERLY,
AND HOLDERS OF THE PREFERRED SECURITIES WILL BE REQUIRED TO INCLUDE 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. 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 CAPITAL TRUST 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. 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 "--Dispositions of Preferred Securities."
The Company and Capital Trust believe that, taken together, the obligations
of the Company under the Guarantee, the Trust Agreement, the Subordinated
Debentures, the Indenture and the Expense Agreement (each as defined herein),
provide, in the aggregate, a full, irrevocable and unconditional guaranty, on
a subordinated basis, of all of the obligations of Capital Trust under the
Preferred Securities. See "Relationship Among the Preferred Securities, the
Subordinated Debentures and the Guarantee--Full and Unconditional Guarantee."
The Guarantee of the Company guarantees 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 Capital Trust, as described herein.
See "Description of the Guarantee--General." If the Company does not make
interest payments on the Subordinated Debentures held by Capital Trust,
Capital Trust will have insufficient funds to pay Distributions on
(continued on next page)
2
<PAGE>
(continued from previous page)
the Preferred Securities. The Guarantee does not cover payments of
Distributions when Capital Trust does not have sufficient funds to pay such
Distributions. In such event, a holder of Preferred Securities may institute a
legal proceeding directly against the Company pursuant to the terms of the
Indenture to enforce payments of amounts equal to such Distributions to such
holder. See "Description of the Subordinated Debentures--Enforcement of
Certain Rights by Holders of 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 (each as defined herein) of the Company. The
Subordinated Debentures are unsecured obligations of the Company and are
subordinated to all Senior Debt, Subordinated Debt and Additional Senior
Obligations of the Company.
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 or an Investment Company Event (each
as defined herein), 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. See
"Description of the Preferred Securities--Redemption or Exchange."
The Company has the right at any time to dissolve, wind-up or terminate
Capital Trust 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. In the event of the voluntary or
involuntary dissolution, winding up or termination of Capital Trust, after
satisfaction of liabilities to creditors of Capital Trust as required by
applicable law, the holders of Preferred Securities will be entitled to
receive a Liquidation Amount of $25 per Preferred Security, plus accumulated
and unpaid Distributions thereon to the date of payment, which may be in the
form of a distribution of such amount of a Subordinated Debenture having an
aggregate principal amount equal to the Liquidation Amount of such Preferred
Securities (and carrying with it accumulated interest in an amount equal to
the accumulated and unpaid Distributions then due on such Preferred
Securities), subject to certain exceptions. See "Description of the Preferred
Securities--Redemption or Exchange" and "--Liquidation Distribution Upon
Termination."
----------------
The Company will make available to the holders of the Preferred Securities
quarterly reports containing unaudited financial information and annual
reports containing financial statements audited by the Company's independent
auditors to the same extent provided to holders of the Company's Common Stock.
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 Secretary 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 STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME.
3
<PAGE>
[Map Showing Location of Irwin Financial Corporation
and Subsidiary Office Locations]
4
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus. Unless otherwise indicated,
the information in this Prospectus assumes that the Underwriters' over-
allotment option will not be exercised. Prospective investors should carefully
consider the information set forth under the heading "RISK FACTORS."
THE COMPANY
The Company is a diversified financial services company organized as an
Indiana bank holding company. The Company is engaged in several interrelated
lines of business, the most significant ones of which include: mortgage
banking, commercial banking, home equity lending and equipment leasing. The
principal executive office of the Company is 500 Washington Street, Columbus,
Indiana 47201 and its telephone number is (812) 376-1020.
As an interrelated group of specialized financial services companies, the
Company has implemented a business strategy which focuses on serving selected
markets and optimizing the productivity of its capital base. The four principal
components of the Company's strategy are:
. EMPHASIZE SPECIALIZED FINANCIAL SERVICES. The delivery of financial
services to consumer and commercial customers is the principal set of
skills which unites the activities of the Company. Having evolved from
a base in commercial banking, the core competencies of the Company's
employees are in financial services. The Company continually seeks
opportunities to leverage such core competencies. Diversification
opportunities are evaluated on the basis of whether the Company's
skills provide the requisite foundation for potential success in the
proposed new business.
. MANAGE AN INTERRELATED FINANCIAL SERVICES GROUP. The Company employs
functional reporting and decentralized management in the operation of
its businesses. Each of the Company's operating companies has its own
management team and sets individual performance targets, normally on
the basis of return on equity. This structure allows the senior
management of each line of business to focus their efforts on
understanding their customers and meeting the needs of the markets
they serve. The Company believes this approach promotes creativity,
responsiveness, motivation, and accountability among the managers of
each enterprise.
At the same time, the Company works actively to capture the synergies
available from operating companies as part of an interrelated group.
For example, the program through which Irwin Union Bank and Trust
Company (the "Bank") invests temporarily in mortgages held for sale
and originated by the Company's mortgage banking subsidiary, Inland
Mortgage Corporation ("Inland"), is combined with the results of
Inland to make up the "mortgage banking" line of business for
management and reporting purposes. This program--and similar ones
between the Bank and the Company's home equity lending and equipment
leasing subsidiaries--gives the Company a lower net cost of funds with
which to compete in geographically diverse markets and a reliable
source of financing for its growth.
. TARGET SELECTED MARKETS. The ability to focus on defensible market
segments where a sustainable competitive advantage can be created is
another important concept in the Company's strategy. In the financial
services marketplace, small competitors can be at a significant
disadvantage against large regional and national providers unless they
are able to identify a target market and differentiate their product
offering. In the strategic plans of each line of business, the Company
follows a discipline of defining, as clearly as possible, the market
served and the basis on which it differentiates its service and
product offerings to that market.
5
<PAGE>
. OPTIMIZE THE PRODUCTIVITY OF THE COMPANY'S CAPITAL BASE. As a bank
holding company, the Company is regulated with a focus on various
ratios of equity to assets, primarily for the consolidated corporation
and the Bank on a stand-alone basis. Therefore, the size of
shareholders' equity limits the amount of assets the Company can carry
on its balance sheet if it is to maintain an adequate cushion above
the minimum regulatory capital standards. Accordingly, the Company
seeks to balance growth between: (i) businesses that require it to
carry assets on its balance sheet (and are, therefore, capital-
intensive), and (ii) businesses that produce additional revenues and
profits without adding proportionately to asset size (less capital-
intensive opportunities).
The Company's activities are conducted principally through its subsidiaries,
Inland, the Bank, Irwin Home Equity Corporation ("Home Equity") and Affiliated
Capital Corp. ("Affiliated"). At September 30, 1996, the Company had
consolidated assets of $1.2 billion. The Company had total revenues of $143.5
million for the nine month period ended September 30, 1996. The following table
sets forth information illustrating the revenues earned by each of the
Company's four principal subsidiaries for the nine month period ended September
30, 1996:
<TABLE>
<CAPTION>
% OF
BUSINESS REVENUE TOTAL REVENUE
-------- -------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Mortgage banking.................................... $112,300 78%
Commercial banking.................................. 19,600 14%
Home equity lending................................. 7,000 5%
Equipment leasing................................... 3,200 2%
</TABLE>
As a result of its emphasis on mortgage banking, a much larger proportion of
the Company's revenues are derived from fee income (77% in the first nine
months of 1996) and a lesser proportion from net interest income (23% in the
first nine months of 1996). The Company has averaged 22.97% return on average
equity over the past five years. The compound annual growth rate on net income
and net income per share as shown in the table below was 31.8% and 31.2%,
respectively.
The following table sets forth certain financial information for the Company
and illustrates the financial strength and earnings capacity of the Company
over the last five years.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
----------------------- -----------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
----------- ---------- ----------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Net income.............. $ 15,519 $ 14,785 $ 20,083 $ 18,216 $ 15,588 $ 12,866 $ 6,651
Net income per share.... 1.33 1.29 1.75 1.55 1.33 1.12 0.59
Shareholders' equity.... 112,611 93,531 99,216 81,104 70,093 55,343 42,478
Mortgage originations... 3,803,631 2,419,012 3,559,310 2,812,962 4,273,933 3,441,347 1,926,841
Mortgage servicing port-
folio.................. 10,875,458 9,684,199 10,301,914 8,818,502 7,922,299 5,470,505 2,990,808
Return on average equi-
ty..................... 19.47% 22.92% 22.60% 23.91% 24.91% 26.51% 16.93%
Return on average as-
sets................... 1.80% 2.40% 2.28% 2.43% 2.15% 1.97% 1.30%
</TABLE>
PRINCIPAL OPERATING SUBSIDIARIES
Mortgage Banking. Inland originates, purchases and services conventional and
government agency backed (i.e., FHA and VA) residential mortgage loans. Inland
generates assets for sale in the secondary markets and services such assets for
investors. Substantially all mortgages are either insured by an agency of the
federal government, or in the case of a conventional mortgage, meet the
requirements for resale to the Federal National Mortgage Association or the
Federal Home Loan Mortgage Corporation. At September 30, 1996, Inland operated
101 production offices in 27 states and had an owned mortgage servicing
portfolio of $10.9 billion and
6
<PAGE>
capitalized mortgage servicing rights valued at $67.0 million. In the mortgage
banking business, the Company's strategy is to originate, package, distribute
and service financial assets rather than hold these assets to maturity.
Commercial Banking. The Bank, organized in 1871, is a full-service commercial
bank headquartered in Columbus, Indiana. It operates through 15 locations in
six south central Indiana counties. The Bank offers a wide variety of financial
products and services, including insurance agency services, retail brokerage
services and trust services, to individual, business, institutional, and
governmental customers. At September 30, 1996, the Bank held total assets,
loans and shareholders' equity of $451.2 million, $346.1 million and $32.6
million, respectively. Commercial banking is the Company's most capital-
intensive business. The Company has chosen to concentrate its banking efforts
in the non-metropolitan markets in southern Indiana where the Company believes
there is high name recognition of the Bank. The Bank's aim is to look and feel
like "the local bank" in these markets. The Bank differentiates its services by
being more responsive to the local customers than "out-of-town" banks, by a
long-term commitment to the communities it serves, and by its knowledge of
local market conditions.
Home Equity Lending. Home Equity was formed in 1994 and is located in San
Ramon, California. Home Equity originates and services home equity loans and
lines of credit nationwide via direct mail and telemarketing to a target market
of active debt users. The home equity lending program is designed to originate
loans which the Bank may choose to hold in its portfolio or sell into the
secondary market. To date, Home Equity has securitized $191.6 million of the
approximately $250.4 million in home equity loans and lines of credit
originated.
Equipment Leasing. Affiliated, acquired in 1990 and located in Northbrook,
Illinois, is engaged in the small-ticket equipment leasing and commercial
lending business. Affiliated offers non-recourse, non-operating, full payout
leases and commercial lines of credit to physicians and other health care
professionals. At present, all of the leases generated by Affiliated are held
either on its balance sheet or that of the Bank. In the future the Company may
consider using available off-balance sheet funding sources.
OWNERSHIP
As of December 31, 1996, the directors and executive officers of the Company
and their immediate families owned approximately 53.8% of the Company's Common
Stock and, as a result, exercise substantial control over the Company.
CAPITAL TRUST
Capital Trust is a statutory business trust formed under Delaware law
pursuant to (i) a trust agreement, dated as of December 20, 1996, executed by
the Company, as depositor, and the trustees of Capital Trust (together with the
Property Trustee, the "Trustees"), and (ii) a certificate of trust filed with
the Secretary of State of the State of Delaware on December 20, 1996. The
initial trust agreement will be amended and restated in its entirety (as so
amended and restated, the "Trust Agreement") substantially in the form filed as
an exhibit to the Registration Statement of which this Prospectus forms a part.
The Trust Agreement will be qualified as an indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). Upon issuance of the
Preferred Securities, the purchasers thereof will own all of the Preferred
Securities. The Company will acquire all of the Common Securities which will
represent an aggregate liquidation amount equal to at least 3% of the total
capital of Capital Trust. The Common Securities will rank pari passu, and
payments will be made thereon pro rata, with the Preferred Securities, except
that upon the occurrence and during the continuance of an Event of Default (as
defined herein) under the Trust Agreement resulting from a Debenture Event of
Default, the rights of the Company as holder of the Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption
or otherwise will be subordinated to the rights of the holders of the Preferred
Securities. See "Description of the Preferred Securities--Subordination of
Common Securities." Capital Trust exists for
7
<PAGE>
the exclusive purposes of (i) issuing the Trust Securities representing
undivided beneficial interests in the assets of Capital Trust, (ii) investing
the gross proceeds of the Trust Securities in the Subordinated Debentures
issued by the Company, and (iii) engaging in only those other activities
necessary, advisable, or incidental thereto. The Subordinated Debentures will
be the only assets of Capital Trust and payments under the Subordinated
Debentures will be the only revenue of Capital Trust. Capital Trust has a term
of 55 years, but may terminate earlier as provided in the Trust Agreement. The
principal executive office of Capital Trust is 500 Washington Street, Columbus,
Indiana 47201 and its telephone number is (812) 376-1020.
The number of the Trustees will, pursuant to the Trust Agreement, initially
be five. Three of the Trustees (the "Administrative Trustees") will be persons
who are employees or officers of, or who are affiliated with, the Company. The
fourth trustee will be a financial institution that is unaffiliated with the
Company, which trustee will serve as institutional trustee under the Trust
Agreement and as indenture trustee for the purposes of compliance with the
provisions of the Trust Indenture Act (the "Property Trustee"). State Street
Bank and Trust Company, a state chartered trust company organized under the
laws of the Commonwealth of Massachusetts, will be the Property Trustee until
removed or replaced by the holder of the Common Securities. For purposes of
compliance with the provisions of the Trust Indenture Act, State Street Bank
and Trust Company will also act as trustee (the "Guarantee Trustee") under the
Guarantee and as Debenture Trustee (as defined herein) under the Indenture. The
fifth trustee will be an entity that maintains its principal place of business
in the State of Delaware (the "Delaware Trustee"). Wilmington Trust Company, a
Delaware chartered trust company, will act as Delaware Trustee.
The Property Trustee will hold title to the Subordinated Debentures for the
benefit of the holders of the Trust Securities and in such capacity will have
the power to exercise all rights, powers and privileges under the Indenture.
The Property Trustee will also maintain exclusive control of a segregated non-
interest-bearing bank account (the "Property Account") to hold all payments
made in respect of the Subordinated Debentures for the benefit of the holders
of the Trust Securities. The Property Trustee will make payments of
Distributions and payments on liquidation, redemption and otherwise to the
holders of the Trust Securities out of funds from the Property Account. The
Guarantee Trustee will hold the Guarantee for the benefit of the holders of the
Preferred Securities. The Company, as the holder of all the Common Securities,
will have the right to appoint, remove or replace any Trustee and to increase
or decrease the number of the Trustees. The Company will pay all fees and
expenses related to Capital Trust and the offering of the Trust Securities.
The rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are set forth in the Trust
Agreement, the Delaware Business Trust Act (the "Trust Act") and the Trust
Indenture Act. See "Description of the Preferred Securities."
8
<PAGE>
THE OFFERING
Securities Offered............
1,750,000 Preferred Securities having a
Liquidation Amount of $25.00 per Preferred
Security. The Preferred Securities represent
preferred undivided beneficial interests in the
assets of Capital Trust, which will consist
solely of the Subordinated Debentures and
payments thereunder. Capital Trust has granted
the Underwriters an option, exercisable within
30 days after the date of this Prospectus, to
purchase up to an additional 250,000 Preferred
Securities at the initial offering price,
solely to cover over-allotments, if any.
Payment of Distributions...... The Distributions payable on each Preferred
Security will be fixed at a rate per annum of
% of the Liquidation Amount of $25 per
Preferred Security, will be cumulative, will
accrue from , 1997, the date of issuance of
the Preferred Securities, and will be payable
quarterly in arrears, on March 31, June 30,
September 30 and December 31 of each year,
commencing March 31, 1997. See "Description of
the Preferred Securities--Distributions--
Payment of Distributions."
Extension of Interest Payment The Company has the right, at any time, so long
Period........................ 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. 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--Extended Interest Payment
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
9
<PAGE>
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
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 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. See "Description of the
Subordinated Debentures--Redemption or
Exchange."
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 Capital Trust, 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. 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 Capital Trust, as described herein. The
Company and Capital Trust 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 guarantee,
on a subordinated basis, of all of the
obligations of Capital Trust 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, Capital Trust will not have
sufficient funds to make distributions on the
Preferred Securities; in which event, the
Guarantee will not apply to such Distributions
until Capital Trust has sufficient funds
available therefor. See "Description of the
Guarantee."
10
<PAGE>
Voting Rights................. The holders of the Preferred Securities 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
Capital Trust to purchase the Subordinated
Debentures issued by the Company. The Company
intends to add the net proceeds from the sale
of the Subordinated Debentures to its general
funds, to be used for general corporate
purposes, including the repayment of certain
short term borrowings of the Company. See "Use
of Proceeds."
The Nasdaq National MarketSM Application has been made to have the Preferred
Symbol........................ Securities approved for quotation on the Nasdaq
National MarketSM under the symbol "IRWNP."
11
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
---------------------- -------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
----------- --------- ----------- --------- --------- --------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED RESULTS OF
OPERATIONS
Interest income........ $ 64,849 $ 45,257 $ 64,161 $ 49,186 $ 49,066 $ 48,661 $ 40,305
Interest expense....... 29,363 18,649 28,568 17,633 16,688 19,228 20,672
Net interest income.... 35,486 26,608 35,593 31,553 32,378 29,433 19,633
Provision for loan
losses................ 2,774 2,140 3,073 1,727 1,577 1,910 1,054
Net interest income
after provision for
possible loan losses.. 32,712 24,468 32,520 29,826 30,801 27,523 18,579
Net gains on sale of
loans................. 25,427 11,258 21,006 2,219 14,225 10,337 2,876
Other noninterest
income................ 85,400 69,099 94,838 84,863 74,340 57,073 38,550
Noninterest expense.... 117,405 81,791 115,915 86,844 93,803 73,811 49,216
Income before income
tax expense........... 26,135 23,034 32,449 30,064 25,563 21,122 10,789
Income tax expense..... 10,616 8,249 12,366 11,848 9,975 8,256 4,138
----------- --------- ----------- --------- --------- --------- ---------
Net income............. $ 15,519 $ 14,785 $ 20,083 $ 18,216 $ 15,588 $ 12,866 $ 6,651
=========== ========= =========== ========= ========= ========= =========
PER SHARE DATA(1)
Net income
Primary................ $ 1.33 $ 1.29 $ 1.75 $ 1.55 $ 1.33 $ 1.12 $ 0.59
Fully diluted.......... 1.33 1.29 1.74 1.55 1.33 1.11 0.59
Cash dividends
declared.............. 0.18 0.17 0.22 0.18 0.15 0.10 0.08
Book value............. 9.91 8.27 8.76 7.21 6.03 4.82 3.77
Dividend payout ratio.. 13.17% 12.58% 12.36% 11.38% 11.12% 8.88% 13.52%
SELECTED BALANCE SHEET
DATA
Assets................. $ 1,161,735 $ 978,947 $ 1,038,307 $ 659,671 $ 881,864 $ 602,465 $ 598,024
Securities(2).......... 69,552 63,822 60,869 77,357 95,350 46,673 50,549
Total mortgage
servicing rights...... 66,606 40,544 48,535 18,834 11,505 10,156 8,045
Loans held for sale.... 318,282 352,941 378,658 154,964 370,755 218,080 264,740
Loans and leases....... 575,983 413,594 412,525 308,411 256,116 210,359 180,789
Allowance for loan and
lease losses.......... 6,111 4,463 4,620 3,863 3,293 3,220 2,282
Deposits............... 613,713 551,645 563,999 439,918 500,370 389,323 337,927
Shareholders' equity... 112,611 93,531 99,216 81,104 70,093 55,343 42,478
Long-term debt......... 19,515 21,525 21,575 24,029 17,781 12,302 6,848
SELECTED MORTGAGE DATA
Mortgage originations.. 3,803,631 2,419,012 3,559,310 2,812,962 4,273,933 3,441,347 1,926,841
Total mortgage loans
serviced.............. 10,875,458 9,684,199 10,301,914 8,818,502 7,922,299 5,470,505 2,990,808
PERFORMANCE RATIOS(3)
Return on average
equity................ 19.47% 22.92% 22.60% 23.91% 24.91% 26.51% 16.93%
Return on average
assets................ 1.80 2.40 2.28 2.43 2.15 1.97 1.30
Net interest margin.... 4.88 5.02 4.93 5.03 5.19 5.10 4.49
ASSET QUALITY RATIOS
Allowance for possible
loan losses to loans.. 1.06% 1.08% 1.12% 1.25% 1.29% 1.53% 1.26%
Nonperforming loans to
loans................. 0.61 0.61 0.58 0.90 1.38 1.68 0.54
Allowance for possible
loan losses to
nonperforming loans... 1.74 1.78 1.93 1.39 0.94 0.91 2.34
Nonperforming assets to
total loans........... 0.70 0.71 0.65 1.06 1.62 2.20 0.65
Net loan losses to
average loans(3)...... 0.29 0.59 0.57 0.41 0.65 0.50 0.41
Provision for loan
losses to average
loans(3).............. 0.75 0.82 0.83 0.62 0.68 0.98 0.63
CAPITAL RATIOS
Average equity to
average assets........ 9.24% 10.46% 10.07% 10.17% 8.62% 7.45% 7.67%
Tier 1 risk-based
capital ratio......... 12.16 13.45 13.80 18.31 14.97 15.59 12.56
Total risk-based
capital ratio......... 12.90 14.15 14.49 19.18 15.68 16.50 13.24
Leverage ratio......... 8.62 10.47 10.57 10.82 9.63 8.48 8.23
RATIO OF EARNINGS TO
FIXED CHARGES(4)
Including interest on
deposits.............. 1.89x 2.24x 2.14x 2.70x 2.53x 2.10x 1.52x
Excluding interest on
deposits.............. 2.64 3.80 3.37 4.53 3.99 3.20 2.72
</TABLE>
- --------
(1) Per share data has been adjusted to give retroactive effect to two-for-one
stock splits in 1996, 1993 and 1992 and a three-for-two stock split in
1991.
(2) Includes securities available for sale.
(3) Ratios for the nine-month periods are annualized.
(4) 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.
12
<PAGE>
USE OF PROCEEDS
Capital Trust 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 to reduce certain short-term borrowings of the Company having an
average maturity under one year and for which interest rates during 1996
ranged from approximately 5.5% to 8.25%. Following such repayment, additional
funds will be available to the Company for borrowing under such facilities,
which amounts may be used by the Company from time to time for general
corporate purposes.
ACCOUNTING TREATMENT
Capital Trust will be treated, for financial reporting purposes, as a
subsidiary of the Company and, accordingly, the accounts of Capital Trust 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 the 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.
All future reports of the Company filed under the Exchange Act will (a)
present the Trust Securities issued by Capital Trust 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 Capital Trust are the
Subordinated Debentures (including the outstanding principal amount, interest
rate and maturity date of such Subordinated Debentures), and (c) include in a
footnote to the financial statements disclosure that the Company owns all of
the Common Securities of Capital Trust, the sole assets of Capital Trust 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 Capital Trust under the Preferred Securities.
13
<PAGE>
CAPITALIZATION
The following table sets forth (i) the consolidated capitalization of the
Company at September 30, 1996, and (ii) the consolidated capitalization of the
Company giving effect to the issuance of the Preferred Securities hereby
offered by Capital Trust and application by the Company of the net proceeds
from the corresponding sale of the Subordinated Debentures to Capital Trust,
as if the sale of the Preferred Securities had been consummated on September
30, 1996, and assuming the Underwriters' over-allotment option was not
exercised.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
--------------------------
ACTUAL AS ADJUSTED
----------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
SHORT-TERM DEBT:
Total short-term debt payable..................... $ 359,513 $317,604
=========== ===========
LONG-TERM DEBT:
Total long-term debt payable...................... $ 19,515 $ 19,515
----------- -----------
GUARANTEED PREFERRED BENEFICIAL INTERESTS IN THE
COMPANY'S SUBORDINATED DEBENTURES:(1)
Guaranteed preferred beneficial interests in the
Company's subordinated debentures................ $ -- $ 43,750
Less expenses relating to the issuance of the
Preferred Securities............................. -- (1,841)
----------- -----------
Net proceeds received from the sale of
guaranteed preferred beneficial interests in
the Company's subordinated debentures.......... $ -- $ 41,909
----------- -----------
SHAREHOLDERS' EQUITY:
Preferred stock; no par value-- authorized 50,000
shares; none issued.............................. $ -- $ --
Common Stock; no par value-- authorized 40,000,000
shares; 11,701,040 shares, including 339,564 in
treasury......................................... 29,965 29,965
Unrealized loss on investment securities.......... (11) (11)
Retained earnings................................. 87,882 87,882
Treasury Stock.................................... (5,225) (5,225)
----------- -----------
Total shareholders' equity...................... 112,611 112,611
----------- -----------
Total capitalization............................ $ 132,126 $ 174,035
=========== ===========
CAPITAL RATIOS:
Shareholders' equity to total assets.............. 9.69% 9.69%
Leverage ratio(2)(3)(4)........................... 8.62% 11.50%
Risk-based capital ratios(3)(4)
Tier 1 capital to risk-weighted assets.......... 12.16% 16.22%
Total risk-based capital to risk-weighted
assets......................................... 12.90% 16.96%
</TABLE>
- --------
(1) Preferred Securities representing beneficial interests in an aggregate
principal amount of $43,750,000 of the % Subordinated Debentures of the
Company. The Subordinated Debentures will mature on March 31, 2027, which
date may be, if certain conditions are met, (a) shortened to a date not
earlier than March 31, 2002, or (b) extended to a date not later than
March 31, 2046.
(2) The leverage ratio is Tier 1 capital divided by the difference between
quarterly average total assets less intangibles.
(3) The capital ratios, as adjusted, are computed including the total
estimated net proceeds from the sale of the Preferred Securities, in a
manner consistent with Federal Reserve guidelines.
(4) Federal Reserve guidelines for calculation of Tier 1 capital limit the
amount of cumulative preferred stock which can be included in Tier 1
capital to 25% of total Tier 1 capital.
14
<PAGE>
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.
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 Capital Trust. It should be
recognized that other risks may be significant, presently or in the future.
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
September 30, 1996, the consolidated outstanding Senior Debt, Subordinated
Debt and Additional Senior Obligations of the Company was approximately $379.0
million. The right of the Company to participate in any distribution of assets
of any of its subsidiaries upon such subsidiary'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 that subsidiary, except to the extent that the
Company may itself be recognized as a creditor of that subsidiary. The
Subordinated Debentures, therefore, will be effectively subordinated to all
existing and future liabilities of the subsidiaries 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 Capital Trust 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
Capital Trust 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, 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 than the reclassification of any class
of the Company's capital stock into another class of capital stock), (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
15
<PAGE>
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 annual rate of %
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--
Extended Interest Payment 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) in respect of its pro rata share of the interest
accruing on the Subordinated Debentures held by Capital Trust 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 Capital Trust 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 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 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 Capital Trust 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) Capital Trust 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) Capital Trust
is, or will be within 90 days of the date of 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 the Company becomes aware of the possible
occurrence of any of the events described in clauses (i) through (iii) above.
"Investment Company Event" means the receipt by Capital Trust 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
16
<PAGE>
regulatory authority, Capital Trust 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 "Risk Factors--Proposed Tax Legislation" for a discussion of certain
legislative proposals 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 Capital
Trust is terminated and the Subordinated Debentures are distributed to holders
of the Preferred Securities) to a date no later than March 31, 2046, the 49th
anniversary of 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) Capital
Trust 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 Capital Trust, (i) any accrued and unpaid Distributions
required to be paid on the Preferred Securities, to the extent that Capital
Trust 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 Capital Trust has funds available therefor at
such time, and (iii) upon a voluntary or involuntary dissolution, winding-up
or liquidation of Capital Trust (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
Capital Trust has funds available therefor at such time, and (b) the amount of
assets of Capital Trust remaining available for distribution to holders of the
Preferred Securities in liquidation of Capital Trust. 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 Capital Trust,
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 Debentures, Capital Trust 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
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directly any other rights in respect of the Subordinated Debentures. See
"Description of the Subordinated Debentures--Enforcement of Certain Rights by
Holders of 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 Capital Trust 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 Capital Trust 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 Capital Trust 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 "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 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 (the "Democrat Letters"). Based upon
the Joint Statement and the Democrat Letters, it is expected that if the
Proposed Legislation were to be enacted, such legislation would not apply to
the Subordinated Debentures. There can be no assurances, however, that the
effective date guidance contained in the Joint Statement and the Democrat
Letters will be incorporated into the Proposed Legislation, if 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. There can, therefore, 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--Tax 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
Capital Trust and cause the Subordinated Debentures to be distributed to the
holders of the Preferred Securities in exchange therefor in liquidation of
Capital Trust. 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 Capital Trust, in which event Capital Trust will redeem the
Trust Securities on a pro rata basis to the same extent as the Subordinated
Debentures are
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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 or Investment Company Event Redemption."
Under current United States federal income tax law, a distribution of
Subordinated Debentures upon the dissolution of Capital Trust would not be a
taxable event to holders of the Preferred Securities. If, however, Capital
Trust is characterized as an association taxable as a corporation at the time
of the dissolution of Capital Trust, 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 Capital Trust 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 Capital Trust."
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 Capital Trust.
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 Capital Trust, the Company will use its
best efforts to list the Subordinated Debentures on the Nasdaq National Market
or such stock exchanges, if any, on which the Preferred Securities are then
listed.
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 Capital Trust 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 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.
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DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the Trust
Agreement. The Trust Agreement will be qualified as an indenture under the
Trust Indenture Act. The Property Trustee, State Street Bank and Trust
Company, will act as indenture trustee for the Preferred Securities under the
Trust Agreement for purposes of complying with the provisions of the Trust
Indenture Act. The terms of the Preferred Securities will include those stated
in the Trust Agreement and those made part of the Trust Agreement by the Trust
Indenture Act. The following summary of the material terms and provisions of
the Preferred Securities and the Trust Agreement does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
the Trust Agreement, the Trust Act, and the Trust Indenture Act. Wherever
particular defined terms of the Trust Agreement are referred to, but not
defined herein, such defined terms are incorporated herein by reference. The
form of the Trust Agreement has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part.
GENERAL
Pursuant to the terms of the Trust Agreement, the Trustees, on behalf of
Capital Trust, will issue the Trust Securities. All of the Common Securities
will be owned by the Company. The Preferred Securities will represent
preferred undivided beneficial interests in the assets of Capital Trust and
the holders thereof will be entitled to a preference in certain circumstances
with respect to Distributions and amounts payable on redemption or liquidation
over the Common Securities, as well as other benefits as described in the
Trust Agreement. The Trust Agreement does not permit the issuance by Capital
Trust of any securities other than the Trust Securities or the incurrence of
any indebtedness by Capital Trust.
The Preferred Securities will rank pari passu, and payments will be made
thereon pro rata, with the Common Securities, except as described under "--
Subordination of Common Securities." Legal title to the Subordinated
Debentures will be held by the Property Trustee in trust for the benefit of
the holders of the Trust Securities. The Guarantee executed by the Company for
the benefit of the holders of the Preferred Securities will be a guarantee on
a subordinated basis with respect to the Preferred Securities, but will not
guarantee payment of Distributions or amounts payable on redemption or
liquidation of such Preferred Securities when Capital Trust does not have
funds on hand available to make such payments. State Street Bank and Trust
Company, as Guarantee Trustee, will hold the Guarantee for the benefit of the
holders of the Preferred Securities. See "Description of the Guarantee."
DISTRIBUTIONS
PAYMENT OF DISTRIBUTIONS. Distributions on each Preferred Security will be
payable at the annual rate of % of the stated Liquidation Amount of $25,
payable quarterly in arrears on March 31, June 30, September 30 and December
31 of each year, to the holders of the Preferred Securities on the relevant
record dates (each date on which Distributions are payable in accordance with
the foregoing, a "Distribution Date"). The record date will be the 15th day of
the month in which the relevant Distribution Date occurs. Distributions will
accumulate from the date of original issuance. The first Distribution Date for
the Preferred Securities will be March 31, 1997. The amount of Distributions
payable for any period will be computed on the basis of a 360-day year of
twelve 30-day months. In the event that any date on which Distributions are
payable on the Preferred Securities is not a Business Day, then payment of the
Distributions payable on such date will be made on the next succeeding day
that is a Business Day (and without any additional Distributions, 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 due and payable. "Business
Day" means any day other than a Saturday or a Sunday, or a day on which
banking institutions in The City of New York are authorized or required by law
or executive order to remain closed or a day on which the corporate trust
office of the Property Trustee or the Debenture Trustee is closed for
business.
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EXTENDED INTEREST PAYMENT 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,
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 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 the reclassification of any class of the Company's
capital stock into another class of capital stock), (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.
SOURCE OF DISTRIBUTIONS. The funds of Capital Trust available for
distribution to holders of its Preferred Securities will be limited to
payments under the Subordinated Debentures in which Capital Trust 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. 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 Capital Trust 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 date will be the 15th day of the month in
which the relevant Distribution Date occurs. Subject to any applicable laws
and regulations and the provisions of the Trust Agreement, each such payment
will be made as described above under "--Distributions--Payment of
Distributions."
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 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 Capital Trust until after March 31,
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2002, except if a Tax Event or an Investment Company Event has occurred and is
continuing. 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 Capital Trust and,
after satisfaction of the liabilities of creditors of Capital Trust as
provided by applicable law, cause the Subordinated Debentures to be
distributed to the holders of Trust Securities in liquidation of Capital
Trust. See "--Liquidation Distribution Upon Termination."
TAX EVENT REDEMPTION OR INVESTMENT COMPANY EVENT REDEMPTION. If a Tax 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 or Investment Company Event.
In the event a Tax 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 Capital Trust and cause the Subordinated Debentures
to be distributed to holders of such Trust Securities in liquidation of
Capital Trust 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 Capital Trust
on the outstanding Trust Securities will not be reduced as a result of any
additional taxes, duties and other governmental charges to which Capital Trust
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 Capital Trust, 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 Debenture.
"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
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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 Capital Trust
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 Capital Trust, 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 Capital Trust has funds on hand
available for the payment of such Redemption Price. See "--Subordination of
Common Securities."
If Capital Trust gives a notice of redemption in respect of its Preferred
Securities, then the Property Trustee, to the extent funds are available, 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 Capital Trust, 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 Capital Trust 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."
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
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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 Capital Trust and cause the Subordinated Debentures to be
distributed to the holders of the Preferred Securities. Such right is subject,
however, 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, Capital Trust 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 Capital Trust
(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 "Description of the Preferred Securities--Redemption or
Exchange--Mandatory Redemption," or (iv) the entry of an order for the
dissolution of Capital Trust by a court of competent jurisdiction.
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If an early termination occurs as described in clause (i), (ii) or (iv) of
the preceding paragraph, Capital Trust will be liquidated by the Trustees as
expeditiously as the Trustees determine to be possible by distributing, after
satisfaction of liabilities to creditors of Capital Trust 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 Capital Trust available for
distribution to holders, after satisfaction of liabilities to creditors of
Capital Trust 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 Capital Trust has insufficient assets
available to pay in full the aggregate Liquidation Distribution, then the
amounts payable directly by Capital Trust 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 Capital Trust 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 Capital Trust." If the Company elects
neither to redeem the Subordinated Debentures prior to maturity nor to
liquidate Capital Trust 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 Capital Trust and thereby causes the
Subordinated Debentures to be distributed to holders of the Preferred
Securities in liquidation of Capital Trust, 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 Capital Trust 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
(ii) default by Capital Trust 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 Capital Trust 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
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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 Capital Trust. 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.
REMOVAL OF CAPITAL TRUST 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.
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 CAPITAL TRUST
Capital 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 as
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described below. Capital Trust 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
Capital 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 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 National MarketSM), 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 Capital Trust 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, Capital Trust 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 Capital Trust 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 Capital Trust
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
Capital Trust will 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 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 Capital Trust's status as a grantor trust
for United
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States federal income tax purposes or Capital Trust'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 Capital Trust 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 Capital Trust 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.
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 Capital Trust, but upon
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payment of any tax or other governmental charges that may be imposed in
connection with any transfer or exchange. Capital Trust 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 Capital Trust in such a way that Capital Trust 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 Capital Trust 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
Concurrently with the issuance of the Preferred Securities, Capital Trust
will invest the proceeds thereof, together with the consideration paid by the
Company for the Common Securities, in the Subordinated Debentures issued by
the Company. The Subordinated Debentures will be issued as unsecured debt
under the Indenture, to be dated as of January , 1997 ("Indenture"), between
the Company and State Street Bank and Trust Company, as trustee (the
"Debenture Trustee"). The Indenture will be qualified as an indenture under
the Trust Indenture Act. The following summary of the material terms and
provisions of the Subordinated Debentures and the Indenture does not purport
to be complete and is subject to, and is qualified in its entirety by
reference to, the Indenture and to the Trust Indenture Act. Wherever
particular defined terms of the Indenture are referred to, but not defined
herein, such defined terms are incorporated herein by reference. The form of
the Indenture has been filed as an exhibit to the Registration Statement of
which this Prospectus forms a part.
GENERAL
The Subordinated Debentures will be limited in aggregate principal amount to
approximately $45,103,093 (or $51,546,392 if the overallotment option
described under the heading "Underwriting" is exercised by the Underwriters),
such amount being the sum of the aggregate stated Liquidation Amount of the
Trust Securities.
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The Subordinated Debentures will bear interest at the annual rate of % of the
principal amount thereof, payable quarterly in arrears on the last calendar
day of each of March, June, September and December of each year (each, an
"Interest Payment Date") beginning March 31, 1997, to the Person (as defined
in the Indenture) in whose name each Subordinated Debenture is registered,
subject to certain exceptions, at the close of business on the Business Day
next preceding such Interest Payment Date. It is anticipated that, until the
liquidation, if any, of Capital Trust, the Subordinated Debentures will be
held in the name of the Property Trustee in trust for the benefit of the
holders of the Trust Securities. The amount of interest payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months. In
the event that any date on which interest is payable on the Subordinated
Debentures is not a Business Day, then payment of the interest payable on such
date will 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 the date such payment was originally due
and payable. Accrued interest that is not paid on the applicable Interest
Payment Date will bear additional interest on the amount thereof (to the
extent permitted by law) at the rate per annum of % thereof, compounded
quarterly. The term "interest," as used herein, includes quarterly interest
payments, interest on quarterly interest payments not paid on the applicable
Interest Payment Date and Additional Interest, as applicable.
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 (ii) Capital Trust 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 to the Debenture Trustee, Capital Trust 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 Capital Trust
until after March 31, 2002, except if a Tax 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 any Subsidiary Bank, upon any such Subsidiary 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 such Subsidiary Bank, except to the
extent that the Company may itself be recognized as a creditor of such
Subsidiary Bank. The Subordinated Debentures will, therefore, be effectively
subordinated to all existing and future liabilities of the Subsidiary Banks,
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.
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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 annual rate of %, 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 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 the reclassification of any class of the Company's capital
stock into another class of capital stock), (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. 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 one Business Day 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 the Trust is required to
give notice of the record date, or the date such Distributions are payable, to
the Nasdaq National Market(TM) (or other applicable self-regulatory
organization) or to holders of the Preferred Securities, but in any event at
least one Business Day prior to 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 Capital Trust 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 Capital
Trust after paying any such additional taxes, duties or other governmental
charges will not be less than the amounts Capital Trust 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 or an Investment Company Event,
in each case at a
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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 Capital Trust 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 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) Capital Trust 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) Capital Trust 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 the Company becomes aware of the possible
occurrence of any of the events described in clauses (i) through (iii) above.
"Investment Company Event" means the receipt by Capital Trust 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, Capital Trust 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 Capital Trust, the Subordinated Debentures may be distributed
to the holders of the Preferred Securities in liquidation of Capital Trust
after satisfaction of liabilities to creditors of Capital Trust 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
Capital Trust, the Company will use its best efforts to list the Subordinated
Debentures on the Nasdaq National Market(TM) 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
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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 the reclassification of any class of the Company's capital stock into
another class of capital stock), (2) make any payment of principal, interest
or 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
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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 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 September 30, 1996, the Company had consolidated Senior
Debt, Subordinated Debt and Additional Obligations of approximately $379.0
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 New York, New York, 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 New York, New York, and 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
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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. 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; provided that the Company maintains a transfer agent in
New York, New York. 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 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.
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
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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.
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, Capital Trust 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 no Person may 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, and (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
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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.
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 Capital Trust (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 Capital Trust, 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 Capital Trust, 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 Capital Trust 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
The Preferred Securities Guarantee Agreement (the "Guarantee") will be
executed and delivered by the Company concurrently with the issuance of the
Preferred Securities for the benefit of the holders of the Preferred
Securities. The Guarantee will be qualified as an indenture under the Trust
Indenture Act. The Guarantee Trustee will act as indenture trustee under the
Guarantee for purposes of complying with the provisions of the Trust Indenture
Act. The Guarantee Trustee, State Street Bank and Trust Company, will hold the
Guarantee for the benefit of the holders of the Preferred Securities. The
following summary of the material terms and provisions of the Guarantee does
not purport to be complete and is subject to, and qualified in its entirety by
reference to, all of the provisions of the Guarantee and the Trust Indenture
Act. Wherever particular defined terms of the Guarantee are referred to, but
not defined herein, such defined terms are incorporated herein by reference.
The form of the Guarantee has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part.
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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 below) to the holders of the Preferred Securities, as and
when due, regardless of any defense, right of set-off or counterclaim that
Capital Trust 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 Capital Trust (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 Capital Trust has
funds available therefor at such time, (ii) the Redemption Price with respect
to any Preferred Securities called for redemption to the extent that Capital
Trust has funds available therefor at such time, and (iii) upon a voluntary or
involuntary dissolution, winding up or liquidation of Capital Trust (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 Capital Trust has funds available therefor at such time, and (b)
the amount of assets of Capital Trust remaining available for distribution to
holders of Preferred Securities in liquidation of Capital Trust. 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 Capital Trust to pay such amounts to such
holders.
The Guarantee will not apply to any payment of Distributions except to the
extent Capital Trust has funds available therefor. If the Company does not
make interest payments on the Subordinated Debentures held by Capital Trust,
Capital Trust 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 or entity). The
Guarantee will not be discharged except by payment of the Guarantee Payments
in full to the extent not paid by Capital Trust 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 any Subsidiary Bank upon such Subsidiary Bank's
liquidation or reorganization or otherwise is subject to the prior claims of
creditors of that Subsidiary Bank, except to the extent the Company may itself
be recognized as a creditor of that Subsidiary 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.
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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
conferred upon the Guarantee Trustee under the Guarantee.
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 Capital Trust, 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 Capital Trust, 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
Capital Trust becomes indebted or liable, the full payment of any costs,
expenses or liabilities of Capital Trust, other than obligations of Capital
Trust to pay to the holders of the Preferred Securities or other similar
interests in Capital Trust 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 Capital Trust may proceed directly against
the Company under the Expense Agreement, regardless of whether such creditors
had notice of the Expense Agreement.
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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 Capital Trust 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 Capital Trust
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
unconditional guarantee of the obligations of Capital Trust under the
Preferred Securities. If and to the extent that the Company does not make
payments on the Subordinated Debentures, Capital Trust will not pay
Distributions or other amounts due on the Preferred Securities. The Guarantee
does not cover payment of Distributions when Capital Trust 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 Capital Trust (except the
obligations of Capital Trust to holders of the Preferred Securities), and (iv)
the Trust Agreement further provides that Capital Trust will not engage in any
activity that is not consistent with the limited purposes of Capital Trust.
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, Capital Trust 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 CAPITAL TRUST
The Preferred Securities evidence a preferred undivided beneficial interest
in the assets of Capital Trust. Capital Trust 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
40
<PAGE>
of Preferred Securities is entitled to receive Distributions from Capital
Trust (or from the Company under the Guarantee) if and to the extent Capital
Trust has funds available for the payment of such Distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding-up or liquidation of
Capital Trust involving the liquidation of the Subordinated Debentures, the
holders of the Preferred Securities will be entitled to receive, out of assets
held by Capital Trust, 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
Capital Trust (other than the obligations of Capital Trust 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.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following summary of the material United States federal income tax
considerations that may be relevant to the purchasers of Preferred Securities
represents the opinion of Vedder, Price, Kaufman & Kammholz, special counsel
to the Company and Capital Trust 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.
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<PAGE>
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 CAPITAL TRUST
With respect to the Preferred Securities, Vedder, Price, Kaufman & Kammholz,
special counsel to the Company and Capital Trust, has rendered its opinion
generally to the effect that, under then current law and assuming full
compliance with the terms of the Trust Agreement and Indenture, Capital Trust
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 original issue discount ("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 payments (so long as no Debenture Event of Default has
occurred and is continuing) 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 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,
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 CAPITAL TRUST
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 Capital Trust. Under current
United States
42
<PAGE>
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 Capital Trust would include the
period for which such holder held the Preferred Securities.
If, however, a Tax Event occurs which results in Capital Trust 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 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 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 "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 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 (the "Democrat Letters"). Based upon
the Joint Statement and the Democrat Letters, it is expected that if the
Proposed Legislation were to be enacted, such legislation would not apply to
the Subordinated Debentures. There can be no assurances, however, that the
effective date guidance contained in the Joint Statement and the Democrat
Letters will be incorporated into the Proposed Legislation, if 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
43
<PAGE>
Subordinated Debentures. There can, therefore, 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 or
Investment Company Event Redemptions."
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.
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.
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<PAGE>
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 Agreement, the form of
which is filed as an exhibit to the Registration Statement of which this
Prospectus forms a part, to purchase from Capital Trust the number of
Preferred Securities set forth opposite their respective names below. The
several Underwriters have agreed in the Underwriting Agreement, 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 Agreement provides
that, in certain circumstances, purchase commitments of the nondefaulting
Underwriters may be increased or the Underwriting Agreement may be terminated.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER PREFERRED SECURITIES
----------- --------------------
<S> <C>
Stifel, Nicolaus & Company, Incorporated.............. 1,402,000
Advest, Inc. ......................................... 29,000
Robert W. Baird & Co. Incorporated.................... 29,000
Dain Bosworth Incorporated............................ 29,000
EVEREN Securities, Inc. .............................. 29,000
Howe Barnes Investments, Inc. ........................ 29,000
McDonald & Company Securities, Inc. .................. 29,000
NatCity Investments, Inc. ............................ 29,000
Piper Jaffray Inc. ................................... 29,000
The Robinson-Humphrey Company, Inc. .................. 29,000
Roney & Co., LLC...................................... 29,000
Scott & Stringfellow, Inc. ........................... 29,000
Wheat, First Securities, Inc. ........................ 29,000
---------
Total................................................. 1,750,000
=========
</TABLE>
The Representative has advised Capital Trust 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 $.50 per Preferred Security. The
Underwriters may allow, and such dealers may reallow, a discount not in excess
of $.10 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 Agreement provides 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.
Capital Trust has granted the Underwriters an option to purchase up to an
additional 250,000 Preferred Securities at the initial public offering price.
Such option, which expires 30 days from the date of this Prospectus, may be
exercised solely to cover over-allotments. To the extent that the Underwriters
exercise such option, 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 such Underwriter is of the 1,750,000 Preferred
Securities initially purchased by the Underwriters.
To the extent that the Underwriters exercise their option to purchase
additional Preferred Securities, Capital Trust will issue and sell to the
Company additional Common Securities and the Company will issue and sell to
Capital Trust 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.
During a period of 30 days from the date of this Prospectus, neither Capital
Trust nor the Company will, subject to certain exceptions, without the prior
written consent of the Representative, directly or indirectly, sell,
45
<PAGE>
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).
Application has been made to have the Preferred Securities approved for
quotation on the Nasdaq National MarketSM. The Representative has advised
Capital Trust that it presently intends to make a market in the Preferred
Securities after the commencement of trading on the Nasdaq National MarketSM,
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 such a market 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.
Capital Trust 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.
Certain of the Underwriters engage in transactions with, and, from time to
time, have performed services for, the Company and its subsidiaries in the
ordinary course of business.
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
Capital Trust will be passed upon by Richards, Layton & Finger, special
Delaware counsel to the Company and Capital Trust. Certain legal matters for
the Company will be passed upon by Matthew F. Souza, General Counsel. Certain
legal matters for the Company and Capital Trust, including the validity of the
Guarantee and the Subordinated Debentures will be passed upon for the Company
and Capital Trust by Vedder, Price, Kaufman & Kammholz, Chicago, Illinois,
counsel to the Company and Capital Trust. Certain legal matters will be passed
upon for the Underwriters by Lewis, Rice & Fingersh, L.C., St. Louis,
Missouri. Vedder, Price, Kaufman & Kammholz, and Lewis, Rice & Fingersh, L.C.,
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 Vedder, Price, Kaufman &
Kammholz.
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, 1995 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.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, previously filed by the Company with the Securities
and Exchange Commission pursuant to Section 13 of the Exchange Act, are
incorporated herein by reference:
(a) the Company's Annual Report on Form 10-K for the year ended December
31, 1995; and
(b) the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996 and June 30, 1996 and the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1996, as amended by the Company's
Form 10-Q/A filed with the Commission on January 8, 1997.
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<PAGE>
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 THOMAS D. WASHBURN, SENIOR VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER, IRWIN FINANCIAL CORPORATION, 500 WASHINGTON STREET, COLUMBUS, INDIANA
47201. TELEPHONE REQUESTS MAY BE DIRECTED TO (812) 376-1909.
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 Capital Trust 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, Capital Trust, 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. Capital Trust is not currently subject to the
information reporting requirements of the Exchange Act and although Capital
Trust will become subject to such requirements upon the effectiveness of the
Registration Statement, it is not expected that Capital Trust 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 Capital Trust 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
Capital Trust will be owned by the Company, a reporting company under the
Exchange Act, (ii) Capital Trust has no independent operations but exists for
the sole purpose of issuing securities representing
47
<PAGE>
undivided beneficial interests in the assets of Capital Trust and investing
the proceeds thereof in Subordinated Debentures issued by the Company, 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 Capital Trust 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 Capital Trust
and the related Indenture, taken together, constitute, in the belief of the
Company and Capital Trust, a full and unconditional guarantee of payments due
on the Preferred Securities. See "Description of the Subordinated Debentures"
and "Description of the Guarantee."
48
<PAGE>
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary....................................................... 5
Selected Consolidated Financial Data..................................... 12
Use of Proceeds.......................................................... 13
Accounting Treatment..................................................... 13
Capitalization........................................................... 14
Risk Factors............................................................. 15
Description of the Preferred Securities.................................. 20
Description of the Subordinated Debentures............................... 29
Description of the Guarantee............................................. 37
Relationship Among the Preferred Securities, the Subordinated Debentures
and the Guarantee....................................................... 40
Certain Federal Income Tax Consequences.................................. 41
ERISA Considerations..................................................... 44
Underwriting............................................................. 45
Validity of Securities................................................... 46
Experts.................................................................. 46
Incorporation of Certain Documents by Reference.......................... 46
Available Information.................................................... 47
</TABLE>
---------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS 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 THE COMPANY, CAPITAL
TRUST 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 THE COMPANY 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 SOLICI-
TATION OF AN OFFER TO BUY ANY SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH
OFFER OR SOLICITATION IS UNLAWFUL.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1,750,000 PREFERRED SECURITIES
IFC CAPITAL TRUST I
% CUMULATIVE TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY) GUARANTEED, AS DESCRIBED
HEREIN, BY
LOGO
IRWIN FINANCIAL
CORPORATION
---------------
$43,750,000
% SUBORDINATED DEBENTURES OF
IRWIN FINANCIAL CORPORATION
---------------
Prospectus January , 1997
---------------
STIFEL, NICOLAUS & COMPANY
INCORPORATED
- -------------------------------------------------------------------------------
<PAGE>
IRWIN FINANCIAL CORPORATION
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............................................ $ 15,152
NASD Filing Fee................................................. 5,501
Nasdaq Listing Fee.............................................. 12,000
Blue Sky Qualification Fees and Expenses........................ 3,000
Accounting Fees and Expenses.................................... 40,000
Legal Fees and Expenses......................................... 80,000
Trustees' Fees and Expenses..................................... 12,850
Printing and Engraving Expenses................................. 27,100
Transfer and Registrar Fees..................................... 2,000
Miscellaneous................................................... 2,397
--------
Total....................................................... $200,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Indiana Business Corporation Law ("IBCL"), the provisions of which
govern the Registrant, empowers an Indiana corporation to indemnify present
and former directors, officers, employees, or agents or any person who may
have served at the request of the corporation as a director, officer,
employee, or agent of another corporation ("Eligible Persons") against
liability incurred in any proceeding, civil or criminal, in which the Eligible
person is made a party by reason of being or having been in any such capacity,
or arising out of his or her status as such, if the individual acted in good
faith and reasonably believed that (a) the individual was acting in the best
interests of the corporation, or (b) if the challenged action was taken other
than in the individual's official capacity as an officer, director, employee
or agent, the individual's conduct was at least not opposed to the
corporation's best interests, or (c) if in a criminal proceeding, either the
individual had reasonable cause to believe his or her conduct was lawful or no
reasonable cause to believe his or her conduct was unlawful.
The IBCL further empowers a corporation to pay or reimburse the reasonable
expenses incurred by an Eligible Person in connection with the defense of any
such claim, including counsel fees; and, unless limited by its Articles of
Incorporation, the corporation is required to indemnify an Eligible Person
against reasonable expenses if such individual is wholly successful in any
such proceeding, on the merits or otherwise. Under certain circumstances, a
corporation may pay or reimburse an Eligible Person for reasonable expenses
prior to final disposition of the matter. Unless a corporation's Articles of
Incorporation otherwise provide an Eligible Person may apply for
indemnification to a court which may order indemnification upon a
determination that the Eligible Person is entitled to mandatory
indemnification for reasonable expenses or that the Eligible Person is fairly
and reasonably entitled to indemnification in view of all the relevant
circumstances without regard to whether his or her actions satisfied the
appropriate standard of conduct.
Before a corporation may indemnify any Eligible Person against liability or
reasonable expenses under the IBCL, a quorum consisting of directors who are
not parties to the proceeding must (1) determine that indemnification is
permissible in the specific circumstances because the Eligible Person met the
requisite standard of conduct, (2) authorize the corporation to indemnify the
Eligible Person and (3) if appropriate, evaluate the reasonableness of
expenses for which indemnification is sought. If it is not possible to obtain
a quorum of uninvolved directors, the foregoing action may be taken by a
committee of two or more directors who are not parties to the proceeding,
special legal counsel selected by the Board or such a committee, or by the
stockholders of the corporation.
II-1
<PAGE>
In addition to the foregoing, the IBCL states that the indemnification it
provides shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any provision of the articles of
incorporation or bylaws, resolution of the board of directors or stockholders,
or any other authorization adopted after notice by a majority vote of all the
voting shares then issued and outstanding. The IBCL also empowers an Indiana
corporation to purchase and maintain insurance on behalf of an Eligible Person
against any liability asserted against or incurred by him in any capacity as
such, or arising out of his or her status as such, whether or not the
corporation would have had the power to indemnify him against such liability.
Reference is made to Article IX of the Amended Articles of Incorporation of
the Registrant concerning indemnification of directors, officers, employees
and agents.
The Registrant may obtain directors' and officers' liability insurance, the
effect of which will be to indemnify the directors and officers of the
corporation and its subsidiaries against certain losses caused by errors,
misleading statements, wrongful acts, omissions, neglector breach of duty by
them or any matter claimed against them in their capacities as directors and
officers.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<C> <S>
1* Form of Underwriting Agreement.
4.1 Form of Indenture.
4.2 Form of Subordinated Debenture (included as an exhibit to Exhibit 4.1).
4.3 Certificate of Trust of Capital Trust dated as of December 20, 1996.
4.4 Trust Agreement of Capital Trust dated as of December 20, 1996.
4.5 Form of Amended and Restated Trust Agreement of Capital Trust.
4.6 Form of Preferred Security Certificate of Capital Trust (included as an
exhibit to Exhibit 4.5).
4.7 Form of Preferred Securities Guarantee Agreement for Capital Trust.
4.8 Form of Agreement as to Expenses and Liabilities (included as an exhibit
to Exhibit 4.5).
5.1* Opinion of Vedder, Price, Kaufman & Kammholz as to the validity of the
issuance of the Subordinated Debentures.
5.2* Opinion of Richards, Layton & Finger, special Delaware counsel, as to
the legality of the Preferred Securities to be issued by Capital Trust.
8.1* Opinion of Vedder, Price, Kaufman & Kammholz 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 Vedder, Price, Kaufman & Kammholz (to be included in their
opinions filed herewith as Exhibits 5.1 and 8.1).
23.3* Consent of Richards, Layton & Finger (to be included in their opinion
filed herewith as Exhibit 5.2).
24 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.
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.
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.
</TABLE>
- --------
* Filed herewith.
(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.
II-2
<PAGE>
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 Company pursuant to the provisions described under
"Item 15--Indemnification of Directors and Officers" above, or otherwise,
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 Company of
expenses incurred or paid by a director, officer or controlling person of
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, 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.
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 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-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, COMPANY
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 COLUMBUS, INDIANA ON JANUARY 10, 1997.
IRWIN FINANCIAL CORPORATION
/s/ William I. Miller
By: _________________________________
WILLIAM I. MILLER, Chairman
PURSUANT TO THE REQUIREMENTS OF SECURITIES ACT OF 1933, IFC CAPITAL TRUST I
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 COLUMBUS, INDIANA ON JANUARY 10, 1997.
IFC CAPITAL TRUST I
/s/ Matthew F. Souza
By: _________________________________
MATTHEW F. SOUZA, Trustee
/s/ Marie C. Strack
By: _________________________________
MARIE C. STRACK, Trustee
/s/ Gregory F. Ehlinger
By: _________________________________
GREGORY F. EHLINGER, Trustee
II-4
<PAGE>
SIGNATURES
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints William I. Miller, John A. Nash and Thomas D.
Washburn 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, 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.
SIGNATURE TITLE DATE
(Chairman and
/s/ William I. Miller* Director, Principal January 10,
- ------------------------------------- Executive Officer) 1997
WILLIAM I. MILLER
/s/ Thomas D. Washburn (Senior Vice
- ------------------------------------- President, January 10,
THOMAS D. WASHBURN Principal Financial 1997
Officer)
/s/ Marie C. Strack (Vice President and
- ------------------------------------- Controller, January 10,
MARIE C. STRACK Principal 1997
Accounting Officer)
Director
/s/ Sally A. Dean* January 10,
- ------------------------------------- 1997
SALLY A. DEAN
Director
/s/ David W. Goodrich* January 10,
- ------------------------------------- 1997
DAVID W. GOODRICH
Director
/s/ John T. Hackett* January 10,
- ------------------------------------- 1997
JOHN T. HACKETT
Director
/s/ William H. Kling* January 10,
- ------------------------------------- 1997
WILLIAM H. KLING
Director
/s/ Brenda J. Lauderback* January 10,
- ------------------------------------- 1997
BRENDA J. LAUDERBACK
Director
/s/ John C. McGinty, Jr.* January 10,
- ------------------------------------- 1997
JOHN C. MCGINTY, JR.
Director
/s/ J. Irwin Miller* January 10,
- ------------------------------------- 1997
J. IRWIN MILLER
II-5
<PAGE>
SIGNATURE TITLE DATE
Director
/s/ John A. Nash* January 10,
- ------------------------------------- 1997
JOHN A. NASH
Director
/s/ Lance R. Odden* January 10,
- ------------------------------------- 1997
LANCE R. ODDEN
Director
/s/ James T. Sakai* January 10,
- ------------------------------------- 1997
JAMES T. SAKAI
Director
/s/ Theodore M. Solso* January 10,
- ------------------------------------- 1997
THEODORE M. SOLSO
*Signed pursuant to power of
attorney,
/s/ Thomas D. Washburn
By: ____________________________
THOMAS D. WASHBURN
attorney-in-fact
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1* Form of Underwriting Agreement.
4.1 Form of Indenture.
4.2 Form of Subordinated Debenture (included as an exhibit to Exhibit
4.1).
4.3 Certificate of Trust of Capital Trust dated as of December 20, 1996.
4.4 Trust Agreement of Capital Trust dated as of December 20, 1996.
4.5 Form of Amended and Restated Trust Agreement of Capital Trust.
4.6 Form of Preferred Security Certificate of Capital Trust (included as
an exhibit to Exhibit 4.5).
4.7 Form of Preferred Securities Guarantee Agreement for Capital Trust.
4.8 Form of Agreement as to Expenses and Liabilities (included as an
exhibit to Exhibit 4.5).
5.1* Opinion of Vedder, Price, Kaufman & Kammholz as to the validity of the
issuance of the Subordinated Debentures.
5.2* Opinion of Richards, Layton & Finger, special Delaware counsel, as to
the legality of the Preferred Securities to be issued by Capital
Trust.
8.1* Opinion of Vedder, Price, Kaufman & Kammholz 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 Vedder, Price, Kaufman & Kammholz (to be included in their
opinions filed herewith as Exhibits 5.1 and 8.1).
23.3* Consent of Richards, Layton & Finger (to be included in their opinion
filed herewith as Exhibit 5.2).
24 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.
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.
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.
</TABLE>
- --------
* Filed herewith.
II-7
<PAGE>
Exhibit 1
1,750,000 Preferred Securities
IFC Capital Trust I
% Cumulative Trust Preferred Securities
(Liquidation Amount of $25 per Preferred Security)
UNDERWRITING AGREEMENT
----------------------
____________, 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:
Irwin Financial Corporation, an Indiana corporation (the "Company") and its
financing subsidiary, IFC 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, 1,750,000
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 1,750,000 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 ___________ 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, 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 Subordinated Debentures (as hereinafter defined and as described in
the Prospectus), the Company shall pay to each Underwriter a commission of
$____________ per Firm Preferred Security
<PAGE>
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 1,750,000.
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 ___________ 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 1,750,000.
Because the proceeds from the sale of the Option Preferred Securities will be
used to purchase from the Company its Subordinated 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 ____________, 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 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 clearing house or similar next day available 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.
2
<PAGE>
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 the
name of Cede & Co., the nominee of the Depositary (as defined in the Prospectus)
which shall act as securities depositary for the Designated Preferred
Securities, 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
the offices of the Depositary 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, dated as of ____________, 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.
The Offerors jointly and severally represent and warrant to, and agree
with, each of the Underwriters that:
(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 of
a registration statement on Form S-3 (File Numbers 333-18655 and
333-18655-01) for the registration of the Designated Preferred Securities,
the Guarantee and $___________ aggregate principal amount of Debentures
under the Securities Act of 1933, as amended (the "1933 Act"), including
3
<PAGE>
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 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.
4
<PAGE>
(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" (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 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
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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 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. Each Subsidiary is a corporation or
bank duly incorporated, 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 the Prospectus is
not in existence, the most recent Preliminary Prospectus) and as currently
being conducted. The deposit accounts of Irwin Union Bank and Trust are
insured by the Bank Insurance Fund administered by the Federal Deposit
Insurance Corporation (the "FDIC") 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
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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 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.
(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
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<PAGE>
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 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 are
in breach or violation of their corporate charter, by-laws or other
governing documents (including without limitation, the Trust Agreement).
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
Banks), 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 agency or instrumentality, domestic or foreign,
8
<PAGE>
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 (or such Preliminary Prospectus),
except such as may be required under the 1933 Act, and such as may be
required under state securities laws in connection with the purchase and
distribution of the Designated Preferred Securities by the Underwriters. 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, 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 Agreement as to Expenses and Liabilities
(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 interfere with the use made or proposed to be made of
such real or personal property,
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<PAGE>
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 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 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),
10
<PAGE>
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 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.
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(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
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).
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(xxix) The Designated Preferred Securities have been approved
for quotation on The Nasdaq Stock Market's National Market subject to
official notice of issuance.
(xxx) Except as described in 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, 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 Company, (B) to make any loans or advances to, or
investments in, the Company or (C) to transfer any of its property or
assets to the Company.
(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 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:
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(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.
(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),
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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 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 net 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 Stock Market's 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 180 days from the date hereof, the Offerors shall
not, directly or indirectly, offer for sale, sell or agree to sell or otherwise
dispose of any Designated Preferred Securities, 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,
without your prior written consent.
(j) The Offerors shall use their best efforts to cause the Designated
Preferred Securities to become quoted on The Nasdaq Stock Market's National
Market, or in lieu thereof a national
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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 Stock Market's 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.
(i) 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.
(k) 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 any of the Offerors' securities.
(l) 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.
(m) 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;
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(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 Stock Market's National Market;
(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;
(i) 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;
(h) all expenses incident to the preparation, execution and delivery
of the Trust Agreements, the Indenture and the Guarantee; and
(i) 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 for any reason whatsoever, whether or not such
termination is allowable hereunder, 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.
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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 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 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) Vedder, Price, Kaufman & Kammholz, 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
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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. 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.
(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. The capital stock of
the Company authorized and issued as of September 30, 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. 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. 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 Stock Market's 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 nonmaterial 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
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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, 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 applicable 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.
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(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 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 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 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 (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," and "ERISA Considerations" in the
Prospectus, insofar as such statements constitute a summary of legal and
regulatory matters, documents or proceedings referred to therein are
accurate in all material respects and fairly present the information called
for with respect to such legal matters, documents and proceedings, other
than financial and statistical data as to which said counsel expresses no
opinion or belief.
(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.
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(xvi) Except as set forth in the Prospectus, to the best of such
counsel's knowledge, there are no contractual encumbrances or restrictions,
or material legal restrictions 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 ("Authorizations") 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 Authorizations 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 Authorization, 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.
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 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 (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
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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 or (C) that there is any amendment to
the Registration Statement required to be filed that has not already been filed.
(e) _________________________________, 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 Trust 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, 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.
(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
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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) Lewis, Rice & Fingersh, L.C., 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, Lewis, Rice & Fingersh, L.C. 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 Vedder, Price,
Kaufman & Kammholz and _____________________________ 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 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
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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 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.
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(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 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.
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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.
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 (1) upon any untrue statement or
alleged untrue statement of a material fact made by the Company or the Trust
contained in Section 2 of this Agreement (or any certificate delivered by the
Company or the Trust pursuant hereto Section 6(l) hereto) 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, any 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 of 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 with information furnished in writing to the
Offerors by or on behalf of any Underwriter expressly for use therein beneath
the heading "Underwriting;" 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
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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 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 indemnity
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 information relating to such Underwriter furnished in writing to an
Offeror through such Underwriter by or on behalf of it expressly for use in
connection with the registration statement as originally filed, the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto, beneath the heading "Underwriting" 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
indemnity 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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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 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
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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.
(i) 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.
(e) 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 night 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 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;
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(e) Trading generally on the New York Stock Exchange, the American
Stock Exchange or The Nasdaq Stock Market's 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 or
Indiana 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.
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
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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.
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 500
Washington Street, Columbus, Indiana 47201, Attention: Thomas D. Washburn (with
a copy to Vedder, Price, Kaufman & Kammholz, 222 North LaSalle Street, Chicago,
Illinois 60601, Attention: Daniel O'Rourke) and d 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
Lewis, Rice & Fingersh, L.C., 500 North Broadway, Suite 2000, St. Louis,
Missouri 63102, Attention: Thomas C. Erb, 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.
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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.
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.
33
<PAGE>
Very truly yours,
IRWIN FINANCIAL CORPORATION
By:___________________________________
Name:
Title:
IFC CAPITAL TRUST I
By:___________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of _______________, 1997.
STIFEL, NICOLAUS & COMPANY, INCORPORATED
By:______________________________
Name:
Title:
For itself and as Representative of the several
Underwriters named in Schedule I hereto.
34
<PAGE>
SCHEDULE I
----------
35
<PAGE>
EXHIBIT A
LIST OF SUBSIDIARIES
36
<PAGE>
Exhibit 5.1
January 10, 1997
Irwin Financial Corporation
500 Washington Street
Columbus, Indiana 47201
IFC Capital Trust I
500 Washington Street
Columbus, Indiana 47201
Ladies and Gentlemen:
We have acted as special counsel to Irwin Financial Corporation, an Indiana
corporation (the "Company"), and IFC Capital Trust I, a Delaware business trust
(the "Trust"), in connection with the preparation and filing with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"), of a Registration Statement on Form S-3 (Registration Nos.
333-18655 and 333-18655-01), as amended (the "Registration Statement"), for the
purpose of registering the Trust's offering of __% Cumulative Trust Preferred
Securities (the "Preferred Securities") to be guaranteed by the Company (the
"Guarantee"), and the issuance to the Trust of the ___% Subordinated Debentures
(the "Subordinated Debentures") of the Company. The Trust exists for the purpose
of issuing the Preferred Securities and investing the proceeds thereof in an
equivalent amount of Subordinated Debentures. In addition, we have reviewed: (i)
the Amended and Restated Trust Agreement to be entered into by and between the
Company and the Delaware Trustee, the Property Trustee and the Administrative
Trustees (the "Trust Agreement"), pursuant to which the Preferred Securities are
to be issued; (ii) the Indenture to be entered into by and between the Company
and the Indenture Trustee (the "Indenture") which will govern the Subordinated
Debentures to be issued by the Company; and (iii) the Preferred Securities
Guarantee Agreement to be entered into by and between the Company and the
Preferred Guarantee Trustee (the "Guarantee Agreement"), pursuant to which the
Company will guarantee certain obligations of the Trust with respect to the
Preferred Securities. All capitalized terms used herein and not otherwise
defined have the meanings specified in the Registration Statement.
<PAGE>
Irwin Financial Corporation
IFC Capital Trust I
January 10, 1997
Page 2
In so acting, we have also examined and relied upon the originals, or
copies certified or otherwise identified to our satisfaction, of such records,
documents, certificates and other instruments as in our judgment are necessary
or appropriate to enable us to render the opinion expressed below.
Based upon the foregoing, we are of the following opinions:
1. The execution and delivery by the Company of the Trust Agreement, the
Indenture and the Guarantee Agreement has been duly and validly authorized.
2. The Subordinated Debentures to be issued by the Company to the Trust
will, when issued in accordance with the terms of the Indenture as described in
the Registration Statement at the time it becomes effective, constitute valid
and binding obligations of the Company.
3. The Guarantee Agreement when provided by the Company in accordance
with the terms stated in the Registration Statement at the time it becomes
effective and upon issuance of the Preferred Securities in accordance with the
terms described in the Registration Statement, will constitute a valid and
binding obligation of the Company.
In rendering the foregoing opinion, we have relied to the extent we deem
appropriate on the opinion of Richards, Layton & Finger, special counsel to the
Trust.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the use of our name under the caption "Validity of
Securities" in the Prospectus. In giving such consent, we do not thereby concede
that we are within the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ Vedder, Price, Kaufman & Kammholz
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
<PAGE>
Exhibit 5.2
January 10, 1997
IFC Capital Trust I
c/o Irwin Financial Corporation
500 Washington Street
Columbus, Indiana 47201
Re: IFC Capital Trust I
Ladies and Gentlemen:
We have acted as special Delaware counsel for IFC Capital Trust I, a
Delaware business trust (the "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 the Trust, dated December 20, 1996
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on December 20, 1996;
(b) The Trust Agreement of the Trust, dated as of December 20, 1996,
among Irwin Financial Corporation, an Indiana corporation ("IFC"), and the
trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement") on
Form S-3, including a prospectus (the "Prospectus") relating to the _%
Cumulative Trust Preferred Securities of the Trust representing preferred
undivided beneficial interest in the Trust (each, a "Preferred Security" and
collectively, the "Preferred Securities"), as filed by IFC, the Trust
<PAGE>
IFC Capital Trust I
January 10, 1997
Page 2
and others as set forth therein with the Securities and Exchange Commission on
December 20, 1996;
(d) A form of Amended and Restated Trust Agreement of the Trust, to
be entered into among IFC, the trustees of the Trust named therein, and the
holders, from time to time, of undivided beneficial interests in the Trust (the
"Trust Agreement"), attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated January 9,
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 the Trust
Agreement 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 Trust, and that the Trust Agreement and the
Certificate 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
a Preferred Security is to be issued by the Trust (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 Trust Agreement and the Prospectus, and (vii) that the
Preferred Securities are issued and sold to the Preferred Security Holders in
accordance with the Trust Agreement and the
<PAGE>
IFC Capital Trust I
January 10, 1997
Page 3
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. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, 12 Del. C.
(S) 3801, et seq.
2. The Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the
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 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 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
EAM
<PAGE>
Exhibit 8.1
January 10, 1997
Irwin Financial Corporation IFC Capital Trust I
500 Washington Street 500 Washington Street
Columbus, Indiana 47201 Columbus, Indiana 47201
Re: Registration Statement on Form S-3
Registration No. 333-18655
Registration No. 333-18655-01
Gentlemen:
We have acted as special counsel for Irwin Financial Corporation, an
Indiana corporation (the "Company"), and IFC Capital Trust I ("Capital Trust"),
a statutory business trust created under the laws of Delaware, in connection
with the above-captioned Registration Statement on Form S-3, filed with the
Securities and Exchange Commission (the "Commission") on December 23, 1996,
under the Securities Act of 1933, as amended (the "Act"), and Amendment No. 1
thereto, filed with the Commission on January 10, 1997 (such Registration
Statement, as so amended, being hereinafter referred to as the "Registration
Statement"), for the purpose of registering the Preferred Securities issued by
Capital Trust and the Subordinated Debentures issued by the Company to Capital
Trust in connection with such issuance of the Preferred Securities. All
capitalized terms not otherwise defined herein shall have the meaning set forth
in the Registration Statement.
In rendering this opinion, we have examined originals or copies, certified
or otherwise identified to our satisfaction, of (i) the Certificate of Trust of
Capital Trust dated as of December 20, 1996; (ii) the form of the Amended and
Restated Trust Agreement of Capital Trust; (iii) the form of the Preferred
Security Certificate of Capital Trust; (iv) the form of the Preferred Securities
Guarantee Agreement for Capital Trust; (v) the form of Subordinated Debenture;
and (vi) the form of Indenture, 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 for
purposes of rendering the opinions set forth herein.
<PAGE>
January 10, 1997
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 certified or photostatic copies and the
authenticity of the originals of such copies. In making our examination of
documents executed by parties other than the Company or Capital Trust, we have
assumed that such parties had the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and execution and delivery by such
parties of such documents and that such documents constitute valid and binding
obligations of such parties. In addition, we have assumed that the Amended and
Restated Trust Agreement of Capital Trust, the Preferred Securities of Capital
Trust, the Guarantee, the Subordinated Debentures and the Indenture when
executed, will be executed in substantially the form reviewed by us and that the
terms of the Subordinated Debentures when established in conformity with the
Indenture will not violate any applicable law. 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, Capital Trust, and others.
We hereby confirm that, although the discussion set forth under the heading
"CERTAIN FEDERAL INCOME TAX CONSEQUENCES" in the form of Prospectus for the
offering of Preferred Securities filed as part of the Registration Statement
("Prospectus") does not purport to discuss all possible United States federal
income tax consequences of the purchase, ownership and disposition of Preferred
Securities, in our opinion, such discussion constitutes, in all material
respects, a fair and accurate summary of the United States federal income tax
consequences of the purchase, ownership and disposition of Preferred Securities,
based upon current law as they relate to holders described therein. It is
possible that contrary positions with regard to the purchase, ownership and
disposition of the Preferred Securities may be taken by the Internal Revenue
Service and that a court may agree with such contrary positions.
Additionally, based upon the facts, assumptions and representations set
forth or referred to herein, and the accuracy of such facts, assumptions and
representations as of the date hereof, it is our opinion that Capital Trust will
be classified for United States federal income tax purposes as a grantor trust
and not as an association taxable as a corporation. Accordingly, each holder of
Preferred Securities will be treated as owning an undivided beneficial interest
in the Subordinated Debentures.
The opinions expressed in this letter are based on the Internal Revenue
Code of 1986, as amended, the Income Tax Regulations promulgated by the Treasury
Department thereunder and judicial authority reported as of the date hereof. We
have also considered
<PAGE>
January 10, 1997
Page 3
the position of the Internal Revenue Service (the "Service") reflected in
published and private rulings. Although we are not aware of any pending changes
to these authorities that would alter our opinions, there can be no assurances
that future legislation or administrative changes, court decisions or Service
interpretations will not significantly modify the statements or opinions
expressed herein.
Our opinion is limited to those federal income tax issues specifically
considered herein and are addressed to and are only for the benefit of the
Company and Capital Trust in connection with the filing of the Registration
Statement and, except as set forth below, is not to be used, circulated, quoted
or otherwise referred to for any other purpose or relied upon by any other
person for any purpose without our written consent. We do not express any
opinion as to any other United States federal income tax issues, or any state or
local tax issues. Although the opinions herein are based upon our best
interpretation of existing sources of law and expresses what we believe a court
would properly conclude if presented with these issues, no assurance can be
given that such interpretations would be followed if they were to become the
subject of judicial or administrative proceedings.
We hereby consent to the use of our name under the captions "CERTAIN
FEDERAL INCOME TAX CONSEQUENCES" and "VALIDITY OF SECURITIES" in the Prospectus
and the filing of this opinion with the Commission as Exhibit 8.1 to the
Registration Statement. In giving this consent, we do not thereby concede that
we are within the category of persons whose consent is required under Section 7
of the Act or the rules and regulations of the Commission promulgated
thereunder. This opinion is expressed as of the date hereof and applies only to
the disclosures set forth in the Prospectus and Registration Statement. We
disclaim any undertaking to advise you of any subsequent changes of the facts
stated or assumed herein or any subsequent changes in applicable law.
Very truly yours,
/s/ Vedder, Price, Kaufman & Kammholz
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
<PAGE>
Exhibit 12.1
IRWIN FINANCIAL CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Nine Months Ended
September 30, Year Ended December 31,
------------------ ------------------------------------------------
(In Thousands) 1996 1995 1995 1994 1993 1992 1991
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
INCLUDING INTEREST ON DEPOSITS
- ------------------------------
Earnings:
Earnings before income taxes....... $26,134 $23,034 $32,449 $30,064 $25,563 $21,122 $10,789
Fixed charges from below........... 29,363 18,648 28,568 17,633 16,689 19,288 20,672
------- ------- ------- ------- ------- ------- -------
Earnings........................... $55,497 $41,682 $61,017 $47,697 $42,252 $40,410 $31,461
======= ======= ======= ======= ======= ======= =======
Fixed charges:
Interest expense................... $29,363 $18,648 $28,568 $17,633 $16,689 $19,288 $20,672
======= ======= ======= ======= ======= ======= =======
Ratio of earnings to fixed
charges........................... 1.89x 2.24x 2.14x 2.70x 2.53x 2.10x 1.52x
======= ======= ======= ======= ======= ======= =======
EXCLUDING INTEREST ON DEPOSITS
- ------------------------------
Earnings
Earnings before income taxes....... $26,134 $23,034 $32,449 $30,064 $25,563 $21,122 $10,789
Fixed charges from below........... 15,894 8,231 13,700 8,515 8,552 9,602 6,274
------- ------- ------- ------- ------- ------- -------
Earnings........................... $42,028 $31,265 $46,149 $38,579 $34,115 $30,724 $17,063
======= ======= ======= ======= ======= ======= =======
Fixed charges:
Interest expense, excluding
interest on deposits............. $15,894 $ 8,231 $13,700 $ 8,515 $ 8,552 $ 9,602 $ 6,274
======= ======= ======= ======= ======= ======= =======
Ratio of earnings to fixed
charges........................... 2.64x 3.80x 3.37x 4.53x 3.99x 3.20x 2.72x
======= ======= ======= ======= ======= ======= =======
</TABLE>
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of Irwin Financial Corporation and IFC Capital Trust I on Form S-3, of our
report dated January 16, 1996 on our audits of the consolidated financial
statements and financial statement schedules of Irwin Financial Corporation and
subsidiaries as of December 31, 1995 and 1994, and for the years ended December
31, 1995, 1994 and 1993, included in the Annual Report on Form 10-K. We also
consent to the reference to our firm under the caption "Experts."
/s/ COOPERS & LYBRAND L.L.P.
----------------------------
COOPERS & LYBRAND L.L.P.
Indianapolis, Indiana
January 10, 1997
