<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 14, 1997
REGISTRATION NO. 333-
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
MERCANTILE BANCORPORATION INC. MERCANTILE CAPITAL TRUST I
(EXACT NAME OF REGISTRANT AS SPECIFIED
IN ITS CHARTER)
(EXACT NAME OF REGISTRANT AS SPECIFIED
IN ITS CHARTER)
MISSOURI DELAWARE
(STATE OR OTHER JURISDICTION OF (STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION)
6712 6719
(PRIMARY STANDARD INDUSTRIAL (PRIMARY STANDARD INDUSTRIAL
CLASSIFICATION CODE NUMBER) CLASSIFICATION CODE NUMBER)
43-0951744 43-1769411
(I.R.S. EMPLOYER IDENTIFICATION NO.)(I.R.S. EMPLOYER IDENTIFICATION NO.)
P.O. BOX 524 P.O. BOX 524
ST. LOUIS, MISSOURI 63166-0524 ST. LOUIS, MISSOURI 63166-0524
(314) 425-2525 (314) 425-2525
(ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER, INCLUDING AREA CODE,
OR REGISTRANT'S PRINCIPAL EXECUTIVE
OFFICES)
(ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER, INCLUDING AREA CODE,
OR REGISTRANT'S PRINCIPAL EXECUTIVE
OFFICES)
---------------
JON W. BILSTROM, ESQ.
GENERAL COUNSEL AND SECRETARY
MERCANTILE BANCORPORATION INC.
P.O. BOX 524
ST. LOUIS, MISSOURI 63166-0524
(314) 425-2525
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------
COPIES TO:
JOHN Q. ARNOLD ROBERT M. LAROSE, ESQ.
CHIEF FINANCIAL OFFICER THOMPSON COBURN
MERCANTILE BANCORPORATION INC. SUITE 3400
P.O. BOX 524 ONE MERCANTILE CENTER
ST. LOUIS, MISSOURI 63166-0524 ST. LOUIS, MISSOURI 63101
(314) 425-2525 --------------- (314) 552-6000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this Registration
Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(/1/) PRICE(/1/) FEE
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<S> <C> <C> <C> <C>
Floating Rate Capital Trust Pass-
through Securities (TRUPS(TM)) of
Mercantile Capital Trust I............... $150,000,000 100% $150,000,000 $45,455
- -------------------------------------------------------------------------------------------------------------
Floating Rate Junior Subordinated Defer-
rable
Interest Debentures due 2027 of Mercan-
tile
Bancorporation Inc.(/2/)................. -- -- -- N/A
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Mercantile Bancorporation Inc. Guarantee
with
respect to Capital Securities(/3/)....... -- -- -- N/A
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Total(/4/)................................ $150,000,000(/5/) 100% $150,000,000(/5/) $45,455
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</TABLE>
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(1) Estimated solely for the purpose of computing the registration fee.
(2) The Junior Subordinated Deferrable Interest Debentures due 2027 (the
"Subordinated Debt Securities") were originally purchased by Mercantile
Capital Trust I with the proceeds of the sale of the Capital Trust Pass-
through Securities (the "Old Capital Securities"). No separate
consideration will be received for the Subordinated Debt Securities which
may be distributed upon any liquidation of Mercantile Capital Trust I.
(3) No separate consideration will be received for the Mercantile
Bancorporation Inc. Guarantee.
(4) This Registration Statement is deemed to cover the Subordinated Debt
Securities of Mercantile Bancorporation Inc., the rights of holders of
Subordinated Debt Securities of Mercantile Bancorporation Inc. under the
Indenture, the rights of holders of Old Capital Securities of Mercantile
Capital Trust I under an Amended and Restated Declaration of Trust and the
rights of holders of the Old Capital Securities under the Guarantee.
(5) Such amount represents the initial offering price of the Old Capital
Securities to be exchanged hereunder and the principal amount of
Subordinated Debt Securities that may be distributed upon any liquidation
of Mercantile Capital Trust I.
---------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
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. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED APRIL 14, 1997
PROSPECTUS
MERCANTILE CAPITAL TRUST I
OFFER TO EXCHANGE ITS FLOATING RATE CAPITAL
TRUST PASS-THROUGH SECURITIESSM
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES [MERCANTILE
ACT OF 1933 FOR ANY AND
ALL OF ITS OUTSTANDING FLOATING RATE CAPITAL LOGO]
TRUST PASS-THROUGH SECURITIESSM
(LIQUIDATION AMOUNT $1,000 PER CAPITAL
SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS
DESCRIBED HEREIN, BY
MERCANTILE BANCORPORATION INC.
-----------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1997, UNLESS EXTENDED.
-----------
Mercantile Capital Trust I, a trust formed under the laws of the State of
Delaware (the "Trust"), hereby offers, upon the terms and subject to the
conditions set forth in this Prospectus (as the same may be amended or
supplemented from time to time, the "Prospectus") and in the accompanying
Letter of Transmittal (which together constitute the "Exchange Offer"), to
exchange up to $150,000,000 aggregate liquidation amount of its Floating Rate
Capital Trust Pass-through Securitiessm (the "New Capital Securities") which
have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to a Registration Statement (as
(continued on next page)
SEE "RISK FACTORS" COMMENCING ON PAGE 17 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY HOLDERS WHO TENDER OLD CAPITAL SECURITIES (AS HEREINAFTER
DEFINED) IN THE EXCHANGE OFFER.
THE SECURITIES OFFERED BY THIS PROSPECTUS ARE NOT SAVINGS OR DEPOSIT ACCOUNTS,
ARE NOT OBLIGATIONS OF OR GUARANTEED BY ANY BANKING OR NON-BANKING AFFILIATE
OF MERCANTILE BANCORPORATION INC. (EXCEPT TO THE EXTENT THAT NEW CAPITAL
SECURITIES ARE GUARANTEED BY MERCANTILE BANCORPORATION INC. AS DESCRIBED
HEREIN), ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENT AGENCY AND INVOLVE INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF PRINCIPAL.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CON-
TRARY IS A CRIMINAL OFFENSE.
The New Capital Securities and the Old Capital Securities (together, the
"Capital Securities"), represent beneficial interests in the Trust. Mercantile
Bancorporation Inc., a Missouri corporation (the "Company" or "MBI"), is the
owner of all of the beneficial interests represented by common securities of
the Trust (as defined herein) (the "Common Securities" and, collectively with
the Capital Securities, the "Trust Securities"). The Chase Manhattan Bank is
the Institutional Trustee of the Trust. The Trust exists for the sole purpose
of issuing the Trust Securities and investing the proceeds thereof in the Old
Subordinated Debt Securities and New Subordinated Debt Securities (together,
the "Subordinated Debt Securities"). The Subordinated Debt Securities will
mature on February 1, 2027.
The date of this Prospectus is , 1997.
<PAGE>
(Continued from cover page)
defined herein) of which this Prospectus constitutes a part, for a like
liquidation amount of its outstanding Floating Rate Capital Trust Pass-through
Securitiessm (the "Old Capital Securities"), of which $150,000,000 aggregate
liquidation amount is outstanding. Pursuant to the Exchange Offer, the Company
is also exchanging its guarantee of the payment of Distributions (as defined
herein) and payments on liquidation or redemption of the Old Capital Securities
(the "Old Guarantee") for a like guarantee of the New Capital Securities (the
"New Guarantee") and all of its Floating Rate Junior Subordinated Deferrable
Interest Debentures due 2027 (the "Old Subordinated Debt Securities"), of which
$154,640,000 aggregate principal amount is outstanding, for a like aggregate
principal amount of its Floating Rate Junior Subordinated Deferrable Interest
Debentures due 2027 (the "New Subordinated Debt Securities"), which New
Guarantee and New Subordinated Debt Securities also have been registered under
the Securities Act. The Old Capital Securities, the Old Guarantee and the Old
Subordinated Debt Securities are collectively referred to herein as the "Old
Securities" and the New Capital Securities, the New Guarantee and the New
Subordinated Debt Securities are collectively referred to herein as the "New
Securities."
The terms of the New Securities are identical in all material respects to the
respective terms of the Old Securities, except that (i) the New Securities will
have been registered under the Securities Act and therefore will not be subject
to certain restrictions on transfer applicable to the Old Securities and (ii)
will not provide for an increase in the Distribution rate thereon. The New
Capital Securities are being offered for exchange in order to satisfy certain
obligations of MBI and the Trust under the Registration Rights Agreement dated
as of January 29, 1997 (the "Registration Rights Agreement") among MBI, the
Trust and Salomon Brothers Inc, as representative of the Initial Purchasers (as
defined herein) of the Old Capital Securities. In the event that the Exchange
Offer is consummated, any Old Capital Securities which remain outstanding after
consummation of the Exchange Offer and the New Capital Securities issued in the
Exchange Offer will vote together as a single class for purposes of determining
whether holders of the requisite percentage in outstanding liquidation amount
thereof have taken certain actions or exercised certain rights under the
Declaration (as defined herein).
The New Subordinated Debt Securities and the New Guarantee when issued will
be an unsecured obligation of the Company and will be subordinate and junior in
right of payment to other indebtedness of the Company, as described herein.
Upon an event of default under the Declaration in respect of the Trust, the
holders of Capital Securities issued by the Trust will have a preference over
the holders of the Common Securities of the Trust with respect to payments in
respect of Distributions and payments upon redemption, liquidation and
otherwise.
Holders of the Capital Securities are entitled to receive cumulative cash
Distributions accruing from the date of original issuance of the Old Capital
Securities, and (subject to the extensions of distribution payment periods
described below) payable quarterly in arrears on the first day of February,
May, August and November of each year, commencing May 1, 1997, at a variable
annual rate equal to LIBOR (as defined herein) plus 0.85% on the liquidation
amount of $1,000 per Capital Security ("Distributions"). The payment of
Distributions on the Capital Securities out of moneys held by the Trust and
payments on liquidation of the Trust or the redemption of the Capital
Securities, as set forth below, are guaranteed by the Company (the "Guarantee")
as described herein. The Guarantee covers payments of Distributions and other
payments on the Capital Securities only if and to the extent that the Trust has
funds available therefor, which funds will not be available except to the
extent the Company has made payments of interest or principal or other payments
on the Subordinated Debt Securities held by the Trust.
The Guarantee, when taken together with the Company's obligations under the
Subordinated Debt Securities, the Declaration and the Indenture (as defined
herein), including the Company's obligations to pay costs, expenses, debts and
other obligations of the Trust (other than with respect to the Trust
Securities), provides a full and unconditional guarantee on a subordinated
basis by the Company of amounts due on the Capital Securities. See "Risk
Factors--Guarantee Covers Distributions and Other Payments Only to the Extent
the Trust Has Available Funds; Related Remedies." The obligations of the
Company under the Guarantee and the Subordinated Debt Securities are
subordinate and junior in right of payment to all present and future Senior
2
<PAGE>
(Continued from cover page)
Indebtedness (as defined herein) of the Company and are also effectively
subordinate to claims of creditors of the Company's subsidiaries. As of
December 31, 1996, the Company had approximately $78 million of Senior
Indebtedness. There are no terms in the Subordinated Debt Securities, the
Capital Securities or the Guarantee that limit the ability of the Company or
its subsidiaries to incur additional indebtedness, liabilities and obligations,
including such indebtedness that ranks senior to the Subordinated Debt
Securities and the Guarantee. The holders of the Common Securities will be
entitled to receive distributions upon any liquidation of the Trust pro rata
with the holders of the Capital Securities, except that if a Declaration Event
of Default (as defined herein) has occurred and is continuing, the Capital
Securities shall have a preference over the Common Securities.
The distribution rate and the distribution payment dates and other payment
dates for the Capital Securities will correspond to the interest rate and
interest payment dates and other payment dates on the Subordinated Debt
Securities held by the Trust, which are the sole assets of the Trust. As a
result, if no principal or interest is paid on the Subordinated Debt
Securities, the Trust will not have sufficient funds to make distributions on
the Capital Securities, and the Guarantee will not apply for distributions for
which the Trust has insufficient funds available.
The Company has the right, subject to the conditions set forth herein, to
defer payments of interest on the Subordinated Debt Securities by extending the
interest payment period on such Subordinated Debt Securities at any time and
from time to time for up to 20 consecutive quarterly periods (each such
extended interest payment period, an "Extension Period"), provided that no
Extension Period may extend beyond the maturity of the Subordinated Debt
Securities. If interest payments are so deferred, distributions on the Capital
Securities and the Common Securities will also be deferred and the Company
(subject to certain exceptions set forth herein) will not be permitted to
declare or pay any such distributions with respect to the Company's capital
stock (which currently consists of common shares) or to make any payment with
respect to debt securities of the Company that rank pari passu with or junior
to the Subordinated Debt Securities. During any such Extension Period, interest
will continue to accrue on the Subordinated Debt Securities (and the amount of
distributions to which holders of the Capital Securities are entitled will
accumulate) at a variable annual rate equal to LIBOR plus 0.85% for United
States federal income tax purposes in respect of such deferred interest. As a
result, during any Extension Period, holders of the Capital Securities will be
required to include the deferred amounts in their gross income for United
States federal income tax purposes in advance of receipt of cash Distributions
with respect to such deferred interest payments. There could be multiple
Extension Periods of varying lengths, each up to 20 consecutive quarterly
periods, throughout the term of the Subordinated Debt Securities. See
"Description of the Subordinated Debt Securities--Option to Extend Interest
Payment Period," "Risk Factors--Option to Extend Interest Payment Period for Up
to Five Years and Consequent Deferral of Distributions on Capital Securities"
and "United States Federal Income Taxation--US Holders--Original Issue
Discount."
The Subordinated Debt Securities are redeemable by the Company at par, plus
accrued and unpaid interest to the date of redemption, in whole or in part, at
any time and from time to time, on or after February 1, 2007. In addition, in
certain circumstances described herein, upon the occurrence and continuation of
a Tax Event or a Capital Treatment Event (each as defined herein), the
Subordinated Debt Securities also are redeemable by the Company at any time,
within 90 days of the occurrence of such Tax Event or Capital Treatment Event,
in whole or in part, at par, together with accrued and unpaid interest thereon
to the date of the redemption. Any redemption prior to maturity is subject to
the Company having received prior approval from the Board of Governors of the
Federal Reserve System (the "Federal Reserve"), if then required under
applicable capital guidelines or policies of the Federal Reserve. Upon
redemption by the Company or at maturity of the Subordinated Debt Securities,
the Trust must redeem on a pro rata basis its Trust Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Subordinated Debt Securities so redeemed or matured at a redemption price equal
to $1,000 per Trust Security, plus accrued and unpaid Distributions on such
Trust Securities to the date fixed for redemption (the "Redemption Price"). See
"Description of the Capital Securities--Redemption." The Capital Securities
will be redeemed upon maturity of the Subordinated Debt Securities, whereupon
the Trust will be dissolved. See "Description of the Subordinated Debt
Securities."
3
<PAGE>
(Continued from cover page)
The Company, as the holder of all of the outstanding Common Securities, has
the right at any time, subject to the receipt of prior approval by the Federal
Reserve if then required under applicable capital guidelines or policies of the
Federal Reserve, to dissolve the Trust (including, without limitation, upon the
occurrence of a Tax Event or a Capital Treatment Event) and, after satisfaction
of liabilities to creditors of the Trust (to the extent not satisfied by the
Company), the Subordinated Debt Securities must be distributed to the holders
of the Trust Securities, on a pro rata basis, in accordance with the aggregate
stated liquidation amount thereof, in liquidation of the Trust.
In the event of the voluntary or involuntary dissolution of the Trust, other
than in connection with a redemption or the maturity of the Subordinated Debt
Securities as described above, after satisfaction of liabilities to creditors
of the Trust (to the extent not satisfied by the Company), the holders of the
Capital Securities generally will be entitled to receive the stated liquidation
amount thereof plus accrued and unpaid distributions thereon to the date of
payment, unless, in connection with such dissolution, the Subordinated Debt
Securities held by the Trust are distributed to the holders of the Trust
Securities issued by the Trust as would be required in certain circumstances.
See "Description of the Capital Securities--Liquidation Distribution Upon
Dissolution."
The Capital Securities and the Subordinated Debt Securities will be issued
and may be transferred only in blocks having a stated liquidation amount or an
aggregate principal amount, as the case may be, of not less than $100,000 (100
Capital Securities). See "Description of the Capital Securities--Restrictions
on Transfer" and "Description of the Subordinated Debt Securities--Restrictions
on Transfer."
Neither the Capital Securities nor the Subordinated Debt Securities will be
listed on a national securities exchange or quoted on an inter-dealer quotation
service after the Exchange Offer.
Based on interpretations by the staff of the Securities and Exchange
Commission (the "Commission"), as set forth in no-action letters issued to
third parties, the Company and the Trust believe that the New Capital
Securities issued pursuant to the Exchange Offer may be offered for resale,
resold or otherwise transferred by holders thereof (other than any holder that
is an "affiliate" of the Company or the Trust as defined under Rule 405 of the
Securities Act) without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that such New Capital
Securities are acquired in the ordinary course of such holders' business and
such holders are not engaged in, and do not intend to engage in, a distribution
of such New Capital Securities and have no arrangement or understanding with
any person to participate in the distribution of such New Capital Securities.
However, the staff of the Commission has not considered the Exchange Offer in
the context of a no-action letter, and there can be no assurance that the staff
of the Commission would make a similar determination with respect to the
Exchange Offer as in such other circumstances. By tendering the Old Capital
Securities in exchange for New Capital Securities, each holder, other than a
broker-dealer, will represent to the Company and the Trust that: (i) it is not
an affiliate of either the Company or the Trust (as defined under Rule 405 of
the Securities Act); (ii) any New Capital Securities to be received by it were
acquired in the ordinary course of its business; and (iii) it is not engaged
in, and does not intend to engage in, a distribution of the New Capital
Securities and has no arrangement with any person to participate in the
distribution (within the meaning of the Securities Act) of the New Capital
Securities.
Each broker-dealer that receives New Capital Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Capital Securities. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-
dealer in connection with resales of New Capital Securities received in
exchange for Old Capital Securities where such Old Capital Securities were
acquired by such broker-dealer as a result of market-making activities or other
trading activities. The Company and the Trust have agreed that, starting on the
date on which the Exchange Offer is consummated and
4
<PAGE>
(Continued from cover page)
ending on the close of business one year after such date, they will make this
Prospectus available to any broker-dealer for use in connection with any such
resale. See "Plan of Distribution."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS
PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING
WHETHER TO TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.
Old Capital Securities may be tendered for exchange on or prior to 5:00
p.m., New York City time, on , 1997 (such time on such date being
hereinafter called the "Expiration Date"), unless the Exchange Offer is
extended by MBI and the Trust (in which case the term "Expiration Date" shall
mean the latest date and time to which the Exchange Offer is extended).
Tenders of Old Capital Securities may be withdrawn at any time on or prior to
the Expiration Date. The Exchange Offer is not conditioned upon any minimum
liquidation amount of Old Capital Securities being tendered for exchange.
However, the Exchange Offer is subject to certain events and conditions which
may be waived by MBI or the Trust and to the terms and provisions of the
Registration Rights Agreement. Old Capital Securities may be tendered in whole
or in part having a liquidation amount of not less than $100,000 (100 Capital
Securities) and any integral multiple of $1,000 liquidation amount (1 Capital
Security) in excess thereof. MBI has agreed to pay all expenses of the
Exchange Offer. See "The Exchange Offer--Fees and Expenses." Each New Capital
Security will pay cumulative Distributions from the most recent Distribution
Date (as defined below) on the Old Capital Securities surrendered in exchange
for such New Capital Securities or, if no Distributions have been paid on such
Old Capital Securities, from February 4, 1997. Holders of the Old Capital
Securities whose Old Capital Securities are accepted for exchange will not
receive accumulated Distributions on such Old Capital Securities for any
period from and after the last Distribution Date on such Old Capital
Securities prior to the original issue date of the New Capital Securities or,
if no such Distributions have been paid, will not receive any accumulated
Distributions on such Old Capital Securities, and will be deemed to have
waived the rights to receive any Distributions on such Old Capital Securities
accumulated from and after such Distribution Date or, if no such Distributions
have been paid or duly provided for, from and after February 4, 1997. This
Prospectus, together with the Letter of Transmittal, is being sent to all
registered holders of Old Capital Securities as of , 1997.
Neither MBI nor the Trust will receive any cash proceeds from the issuance
of the New Capital Securities offered hereby. No dealer-manager is being used
in connection with this Exchange Offer. See "Use of Proceeds" and "Plan of
Distribution."
5
<PAGE>
AVAILABLE INFORMATION
MBI is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith,
files with the Commission reports, proxy statements and other information.
Such reports, proxy statements and other information filed with the Commission
by MBI can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549
and at the Commission's regional offices located at Suite 1300, Seven World
Trade Center, New York, New York 10048 and Suite 1400, Citicorp Center, 500
West Madison Street, Chicago, Illinois 60661. The Commission maintains an
Internet site on the World Wide Web containing reports, proxy and information
statements and other information filed electronically by MBI with the
Commission. The address of the World Wide Web site maintained by the
Commission is http://www.sec.gov. MBI Common Stock is listed on the New York
Stock Exchange (the "NYSE"), and such reports, proxy statements and other
information concerning MBI are available for inspection and copying at the
offices of the NYSE, 20 Broad Street, New York, New York 10005.
No separate financial statements of the Trust have been included herein. The
Company and the Trust do not consider that such financial statements would be
material to holders of the Capital Securities because the Trust is a newly
formed special purpose entity, has virtually no operating history or
independent operations and is not engaged in and does not propose to engage in
any activity other than holding as trust assets the Subordinated Debt
Securities and issuing the Trust Securities. See "Mercantile Capital Trust I,"
"Description of the Capital Securities," "Description of the Subordinated Debt
Securities" and "Description of the Guarantee." In addition, the Company does
not expect that the Trust will file reports under the Exchange Act with the
Commission.
This Prospectus constitutes a part of a registration statement on Form S-4
(the "Registration Statement") filed by the Company and the Trust with the
Commission under the Securities Act. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission,
and reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Company and the
Capital Securities. Any statements contained herein concerning the provisions
of any document are not necessarily complete, and, in each instance, reference
is made to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement is
qualified in its entirety by such reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
THIS PROSPECTUS INCORPORATES BY REFERENCE DOCUMENTS RELATING TO MBI WHICH
ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. IN ADDITION, THIS PROSPECTUS
INCORPORATES BY REFERENCE DOCUMENTS RELATING TO MARK TWAIN BANCSHARES, INC.
("MARK TWAIN"), A MISSOURI CORPORATION AND BANK HOLDING COMPANY, AND ROOSEVELT
FINANCIAL GROUP, INC. ("ROOSEVELT"), A DELAWARE CORPORATION AND SAVINGS AND
LOAN HOLDING COMPANY, BOTH OF WHICH RECENTLY ENTERED INTO DEFINITIVE
AGREEMENTS WITH MBI TO BE ACQUIRED BY MBI. SUCH DOCUMENTS, EXCLUDING EXHIBITS
UNLESS SPECIFICALLY INCORPORATED THEREIN, ARE AVAILABLE WITHOUT CHARGE TO ANY
PERSON TO WHOM THIS PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST, TO
JON W. BILSTROM, GENERAL COUNSEL AND SECRETARY, MERCANTILE BANCORPORATION
INC., P.O. BOX 524, ST. LOUIS, MISSOURI 63166-0524, TELEPHONE (314) 425-2525.
IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE
MADE BY , 1997.
The following documents filed with the Commission by MBI, Mark Twain and
Roosevelt under the Exchange Act are incorporated herein by reference: MBI's
Annual Report on Form 10-K for the year ended December 31, 1996; Mark Twain's
Annual Report on Form 10-K for the year ended December 31, 1996; and
Roosevelt's Annual Report on Form 10-K/A for the year ended December 31, 1996,
respectively.
6
<PAGE>
All documents filed by MBI, Mark Twain and Roosevelt pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act after the date hereof and prior
to the termination of the Exchange Offer shall be deemed to be incorporated by
reference herein and made a part hereof from the date any such document is
filed. The information relating to MBI, Mark Twain and Roosevelt contained in
this Prospectus does not purport to be complete and should be read together
with the information in the documents incorporated by reference herein. Any
statement contained herein or in a document incorporated herein by reference
shall be deemed to be modified or superseded for purposes hereof to the extent
that a subsequent statement contained herein or in any other subsequently filed
document 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 hereof. Any
statements contained in this Prospectus involving matters of opinion, whether
or not expressly so stated, are intended as such and not as representations of
fact.
As used herein, the terms "Prospectus" and "herein" mean this Prospectus,
including such documents incorporated or deemed to be incorporated herein by
reference, as the same may be amended, supplemented or otherwise modified from
time to time. Statements contained in this Prospectus as to the contents of any
contract or other document referred to herein do not purport to be complete,
and where reference is made to the particular provisions of such contract or
other document, such provisions are qualified in all respect by reference to
all of the provisions of such contract or other document.
7
<PAGE>
SUMMARY
The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and the financial statements,
including the notes thereto, appearing elsewhere or incorporated by reference
herein. Prospective investors should consider carefully the factors set forth
herein under "Risk Factors." As used in this Prospectus, the "Company" includes
Mercantile Bancorporation Inc. and its respective predecessors and
subsidiaries, except as the context otherwise may require.
MERCANTILE BANCORPORATION INC.
The Company is a registered bank holding company headquartered in St. Louis,
Missouri and was incorporated under the laws of the State of Missouri in 1970.
At December 31, 1996, the Company, directly or through its subsidiaries, owned
all of the capital stock of Mercantile Bank National Association, based in
St. Louis, Missouri and 28 other commercial banks and one federally chartered
thrift, all of which operate from 444 banking offices and 431 Fingertip Banking
automated teller machines located throughout Missouri, Illinois, Iowa, Arkansas
and eastern Kansas.
The Company's services concentrate in three major lines of business--
consumer, corporate and trust and investment advisory services. The Company
also operates non-banking subsidiaries that provide related financial services,
including investment management, brokerage services and asset-based lending.
The Company has two acquisition transactions currently pending; the proposed
acquisitions of Mark Twain and Roosevelt, each of which is headquartered in St.
Louis, Missouri. For further information regarding the pending acquisitions of
Mark Twain and Roosevelt, see "Recent Developments."
The Company is a legal entity separate and distinct from Mercantile Bank
National Association and the Company's other banking subsidiaries
(collectively, the "Banking Subsidiaries") and affiliates. Because the Company
is a bank holding company, its rights and the rights of its creditors and
shareholders, including the holders of its Subordinated Debt Securities and the
Guarantee, to participate in the assets of any subsidiary upon its liquidation
or recapitalization will be subject to the prior claims of such subsidiary's
creditors except to the extent that the Company may itself be a creditor having
recognized claims against such subsidiary, in which case it will share in such
subsidiary's assets along with other creditors.
There are various legal and regulatory limitations on the extent to which the
Company's Banking Subsidiaries may extend credit, pay dividends or otherwise
supply funds to the Company. The approval of the Office of the Comptroller of
the Currency (the "OCC") is required if total dividends declared by a national
bank in any calendar year should exceed net profits for that year combined with
its retained net profits for the preceding two years. Moreover, banks may not
pay dividends in excess of their undivided profits. In determining whether and
to what extent to pay dividends, each Banking Subsidiary must also consider the
effect of dividend payments on applicable risk-based capital and leverage
requirements as well as policy statements of the federal regulatory agencies to
the effect that, generally, banking organizations should pay dividends out of
current operating earnings. The Company's state-chartered Banking Subsidiaries
are subject to similar restrictions under their respective state laws. While
the specific standards vary from state to state, the Company's Banking
Subsidiaries are generally permitted to pay dividends only from net profits,
and then, only after first deducting losses and credit write-offs. All of the
applicable state statutes prohibit the payment of dividends if such a payment
would impair capital. In addition there are numerous governmental requirements
and regulations that affect the activities of the Company and its bank and non-
bank subsidiaries. See the discussion in Part 1, Item 1 of the Company's Form
10-K for the year ended December 31, 1996 under the caption "Supervision and
Regulation."
The principal executive offices of the Company are located at One Mercantile
Center, P.O. Box 524, St. Louis, MO 63166-0524 (telephone number (314) 425-
2525).
8
<PAGE>
MERCANTILE CAPITAL TRUST I
The Trust is a statutory business trust created under Delaware law pursuant
to (i) a declaration of trust dated as of January 28, 1997 (the "Initial
Declaration"), and (ii) the filing of a certificate of trust with the Delaware
Secretary of State on January 28, 1997. The Trust's business and affairs are
conducted by its trustees: initially, The Chase Manhattan Bank, as
Institutional Trustee (as defined herein) and Chase Manhattan Bank Delaware, as
Delaware Trustee (as defined herein). The Trust exists for the exclusive
purposes of (i) issuing the Trust Securities, (ii) investing the gross proceeds
from the sale of the Common Securities and the Capital Securities to acquire
the Subordinated Debt Securities, and (iii) engaging in only those other
activities necessary or incidental thereto, which may include engaging in the
Exchange Offer. Accordingly, the Subordinated Debt Securities will be the sole
assets of the Trust, and payments under the Subordinated Debt Securities will
be the sole revenues of the Trust. All of the Common Securities are owned by
the Company. The principal place of business of the Trust is c/o Mercantile
Bancorporation Inc., One Mercantile Center, P.O. Box 524, St. Louis, MO 63166-
0524 (telephone number (314) 425-2525).
THE EXCHANGE OFFER
The Exchange Offer.... Up to $150,000,000 aggregate liquidation amount of New
Capital Securities are being offered in exchange for a
like aggregate liquidation amount of Old Capital Secu-
rities. Old Capital Securities may be tendered for ex-
change in whole or in part in a liquidation amount of
$100,000 (100 Capital Securities) or any integral mul-
tiple of $1,000 in excess thereof. MBI and the Trust
are making the Exchange Offer in order to satisfy their
obligations under the Registration Rights Agreement re-
lating to the Old Capital Securities. For a description
of the procedures for tendering Old Capital Securities,
see "The Exchange Offer--Procedures for Tendering Old
Capital Securities."
Expiration Date....... 5:00 p.m., New York City time, on , 1997
(such time on such date being hereinafter called the
"Expiration Date"); unless the Exchange Offer is ex-
tended by MBI and the Trust (in which case the term
"Expiration Date" shall mean the latest date and time
to which the Exchange Offer is extended). See "The Ex-
change Offer--Expiration Date, Extensions, Amendments."
Conditions to the The Exchange Offer is subject to certain conditions,
Exchange............. which may be waived by MBI and the Trust in their sole
discretion. The Exchange Offer is not conditioned upon
any minimum liquidation amount of Old Capital Securi-
ties being tendered. See "The Exchange Offer--Condi-
tions to the Exchange Offer."
MBI and the Trust reserve the right in their sole and
absolute discretion, subject to applicable law, at any
time and from time to time, (i) to delay the acceptance
of the Old Capital Securities, (ii) to terminate the
Exchange Offer if certain specified conditions have not
been satisfied, (iii) to extend the Expiration Date of
the Exchange Offer and retain all Old Capital Securi-
ties tendered pursuant to the Exchange Offer, subject,
however, to the right of holders of Old Capital Securi-
ties to withdraw their tendered Old Capital Securities,
or (iv) to waive any condition or otherwise amend the
terms of the Exchange Offer in any respect. See "The
Exchange Offer--Expiration Date, Extensions, Amend-
ments."
9
<PAGE>
Listing............... Neither the Capital Securities nor the Subordinated
Debt Securities will be listed on a national securities
exchange or quoted on an inter-dealer quotation service
after the Exchange Offer.
Withdrawal Rights..... Tenders of Old Capital Securities may be withdrawn at
any time on or prior to the Expiration Date by deliver-
ing a written notice of such withdrawal to the Exchange
Agent (as defined herein) in conformity with certain
procedures as set forth below under "The Exchange Of-
fer--Withdrawal Rights."
Procedures for
Tendering Old
Capital Securities...
Tendering holders of Old Capital Securities must com-
plete and sign a Letter of Transmittal in accordance
with the instructions contained therein and forward the
same by mail, facsimile transmission or hand delivery,
together with any other required documents, to the Ex-
change Agent, either with the Old Capital Securities to
be tendered or in compliance with the specified proce-
dures for guaranteed delivery of Old Capital Securi-
ties. Certain brokers, dealers, commercial banks, trust
companies and other nominees may also effect tenders by
book-entry transfer. Holders of Old Capital Securities
registered in the name of a broker, dealer, commercial
bank, trust company or other nominee are urged to con-
tact such person promptly if they wish to tender Old
Capital Securities pursuant to the Exchange Offer. See
"The Exchange Offer--Procedures for Tendering Old Capi-
tal Securities."
Letters of Transmittal and certificates representing
Old Capital Securities should not be sent to MBI or the
Trust. Such documents should only be sent to the Ex-
change Agent. Questions regarding how to tender and re-
quests for information should be directed to the Ex-
change Agent. See "The Exchange Offer--Exchange Agent."
Resales of New
Capital Securities...
Based on interpretations by the staff of the Commis-
sion, as set forth in no-action letters issued to third
parties, the Company and the Trust believe that holders
of Old Capital Securities (other than any holder that
is an "affiliate" of the Company or the Trust as de-
fined under Rule 405 of the Securities Act) who ex-
change their Old Capital Securities for New Capital Se-
curities pursuant to the Exchange Offer may offer such
New Capital Securities for resale, resell such New Cap-
ital Securities and otherwise transfer such New Capital
Securities without compliance with the registration and
prospectus delivery provisions of the Securities Act,
provided that such New Capital Securities are acquired
in the ordinary course of such holders' business and
such holders are not engaged in, and do not intend to
engage in, a distribution of such New Capital Securi-
ties and have no arrangement or understanding with any
person to participate in the distribution of such New
Capital Securities. However, the staff of the Commis-
sion has not considered the Exchange Offer in the con-
text of a no-action letter, and there can be no assur-
ance that the staff of the Commission would make a sim-
ilar determination with respect to the Exchange Offer.
Each broker-dealer that receives New Capital Securities
for its own account in exchange for Old Capital Securi-
ties, where such Old Capital Securities were acquired
by such broker-dealer as a result of market-making ac-
tivities or other trading activities, must acknowledge
that it will deliver a prospectus in connection with
any resale of such New Capital Securities. See "Plan of
Distribution."
10
<PAGE>
Exchange Agent........ The exchange agent with respect to the Exchange Offer
is The Chase Manhattan Bank (the "Exchange Agent"). The
address, and telephone and facsimile numbers of the Ex-
change Agent are set forth in "The Exchange Offer--Ex-
change Agent" and in the Letter of Transmittal.
Use of Proceeds....... Neither MBI nor the Trust will receive any cash pro-
ceeds from the issuance of the New Capital Securities
offered hereby. See "Use of Proceeds."
Certain United States
Federal Income Tax
Considerations;
ERISA Consideration..
Holders of Old Capital Securities should review the in-
formation set forth under "United States Federal Income
Taxation" and "ERISA Considerations" prior to tendering
Old Capital Securities in the Exchange Offer.
THE CAPITAL SECURITIES
Securities Offered.... $150,000,000 aggregate liquidation amount of New Capi-
tal Securities (liquidation amount $1,000 per Capital
Security). The terms of the New Capital Securities are
identical in all material respects to the terms of the
Old Capital Securities, except that the New Capital Se-
curities have been registered under the Securities Act
and therefor are not subject to certain restrictions on
transfer applicable to the Old Capital Securities and
will not provide for an increase in the Distribution
rate thereon.
General............... The Capital Securities represent undivided beneficial
interests in the Trust's assets, which consist solely
of the Subordinated Debt Securities. The Subordinated
Debt Securities, in which the proceeds of the Trust Se-
curities are invested, mature on February 1, 2027, un-
less the Subordinated Debt Securities are redeemed by
the Company prior to such maturity as described under
"Description of the Capital Securities--Redemption."
Distributions......... Holders of the Capital Securities will be entitled to
receive cumulative cash Distributions at a variable an-
nual rate equal to LIBOR plus 0.85% on the stated liq-
uidation amount of $1,000 per Capital Security, accru-
ing from the original date of issuance of the Old Capi-
tal Securities, and (subject to the extension of dis-
tribution payment periods described below) will be pay-
able quarterly, in arrears, on the first day of Febru-
ary, May, August and November of each year, commencing
May 1, 1997. See "Description of the Capital Securi-
ties--Distributions."
Option to Extend
Interest Payment
Period...............
The Company has the right, at any time, subject to cer-
tain conditions, to defer payments of interest on the
Subordinated Debt Securities for Extension Periods,
each not exceeding 20 consecutive quarterly periods;
provided that no Extension Period may extend beyond the
maturity date of the Subordinated Debt Securities. As a
consequence of the Company's extension of the interest
payment period on the Subordinated Debt Securities,
distributions on the Capital Securities would be de-
ferred but interest would continue to accrue during any
such Extension Period to the extent permitted by law.
In the event the Company exercises its right to extend
an interest payment period, then
11
<PAGE>
during any Extension Period, subject to certain excep-
tions, (i) the Company shall not declare or pay any
dividend on, make any distributions with respect to, or
redeem, purchase, acquire or make a liquidation payment
with respect to, any of its capital stock or rights to
acquire such capital stock or make any guarantee pay-
ments (other than payments on the Guarantee and the
Common Securities Guarantee (as defined herein)) with
respect to the foregoing and (ii) the Company shall not
make any payment of interest on or principal of (or
premium, if any, on), or repay, repurchase or redeem,
any debt securities issued by the Company which rank
pari passu with or junior to the Subordinated Debt Se-
curities. Upon the termination of any Extension Period
and the payment of all amounts then due, the Company
may commence a new Extension Period, subject to certain
requirements. See "Description of the Subordinated Debt
Securities--Option to Extend Interest Payment Period."
Should an Extension Period occur with respect to the
Capital Securities, holders of the Capital Securities
will continue to recognize interest income at a vari-
able annual rate equal to LIBOR plus 0.85%, compounded
quarterly for United States federal income tax purposes
notwithstanding the deferred receipt of payments which
accrue during the Extension Period. As a result, such
holders will be required to include such amounts in
gross income for United States federal income tax pur-
poses in advance of the receipt of cash, and such hold-
ers will not receive the cash from the Trust related to
such income if such holders dispose of the Capital Se-
curities prior to the record date for payment of dis-
tributions. See "United States Federal Income Taxa-
tion--US Holders--Original Issue Discount."
Liquidation........... The Company, as the holder of all of the Common Securi-
ties, has the right at any time to dissolve the Trust
(including, without limitation, upon the occurrence of
a Tax Event or a Capital Treatment Event), subject to
certain conditions (including the receipt of prior ap-
proval by the Federal Reserve if then required under
applicable capital guidelines or policies of the Fed-
eral Reserve), with the result that, after satisfaction
of liabilities to creditors of the Trust (to the extent
not satisfied by the Company), the Subordinated Debt
Securities would be distributed to the holders of the
Trust Securities on a pro rata basis in accordance with
the respective stated liquidation amounts thereof, in
liquidation of the Trust. In addition, the Trust will
be dissolved and liquidated under certain other circum-
stances. See "Description of the Capital Securities--
Liquidation Distribution Upon Dissolution."
Liquidation Amount.... In the event of the voluntary or involuntary dissolu-
tion of the Trust, after satisfaction of liabilities to
creditors of the Trust (to the extent not satisfied by
the Company) holders of the Capital Securities will be
entitled to receive $1,000 per Capital Security plus an
amount equal to accrued and unpaid distributions
thereon to the date of payment, unless the Subordinated
Debt Securities are distributed to holders of the Trust
Securities in exchange therefor. If such liquidation
distribution can be paid only in part because the Trust
has insufficient assets available to pay in full the
aggregate liquidation distribution, then the amounts
payable directly by the Trust on the Capital Securities
shall be paid on a pro rata basis. The holders of the
Common Securities will be entitled to receive distribu-
tions upon any such liquidation pro rata with the hold-
ers of the Capital Securities, except that if a Decla-
ration Event
12
<PAGE>
of Default (as defined herein) has occurred and is con-
tinuing, the Capital Securities shall have a priority
over the Common Securities. See "Description of the
Capital Securities--Liquidation Distribution Upon Dis-
solution."
Maturity.............. Upon the repayment of the Subordinated Debt Securities
at maturity, the proceeds from such repayment will be
applied by the Institutional Trustee to redeem a like
amount of the Trust Securities, upon the terms and con-
ditions described herein. See "Description of the Capi-
tal Securities--Redemption."
Optional Redemption... The Company has the right to redeem the Subordinated
Debt Securities, in whole or in part, at any time or
from time to time on or after February 1, 2007, at par,
together with accrued and unpaid interest to the date
of redemption, subject to the Company having received
prior approval from the Federal Reserve if then re-
quired under applicable capital guidelines or policies
of the Federal Reserve. See "Description of the Subor-
dinated Debt Securities--Redemption." Upon the redemp-
tion of the Subordinated Debt Securities, the proceeds
of such redemption will be applied by the Institutional
Trustee to redeem a like amount of the Trust Securities
pro rata at the applicable Redemption Price, upon the
terms and conditions described herein. See "Description
of the Capital Securities--Redemption."
Tax Event or Capital
Treatment Event
Redemption...........
If at any time a Tax Event or a Capital Treatment Event
should occur and be continuing, the Company may, within
90 days of the occurrence of such Tax Event or Capital
Treatment Event, redeem the Subordinated Debt Securi-
ties in whole or in part in certain circumstances de-
scribed herein at a redemption price equal to par plus
accrued and unpaid interest to the redemption date,
subject to the Company having received prior approval
from the Federal Reserve if then required under appli-
cable capital guidelines or policies of the Federal Re-
serve. Upon the redemption of the Subordinated Debt Se-
curities, the proceeds of such redemption will be ap-
plied by the Institutional Trustee to redeem a like
amount of the Trust Securities on a pro rata basis,
upon the terms and conditions described herein. See
"Description of the Capital Securities--Redemption."
The Guarantee......... The payment of Distributions out of moneys held by the
Trust, payments on liquidation of the Trust and payment
upon the redemption of the Capital Securities are guar-
anteed by the Company as described herein under "De-
scription of the Guarantee." The Guarantee covers pay-
ments of Distributions and other payments on the Capi-
tal Securities only if and to the extent that the Trust
has funds available therefor, which funds will not be
available except to the extent the Company has made
payments of interest or principal or other payments on
the Subordinated Debt Securities. The Guarantee, when
taken together with the Company's obligations under the
Subordinated Debt Securities, the Declaration and the
Indenture (including its obligations to pay costs, ex-
penses, debts and other liabilities of the Trust (other
than with respect to the Trust Securities)), provides a
full and unconditional guarantee on a subordinated ba-
sis by the Company of amounts due on the Capital Secu-
rities. The Company has also agreed separately to guar-
antee the obligations of the Trust with respect to the
Common Securities as described herein under "Descrip-
tion of the Guarantee--General."
13
<PAGE>
Ranking............... The Common Securities will rank pari passu with, and
payments thereon will be made pro rata with, the Capi-
tal Securities, except that upon the occurrence and
during the continuance of a Declaration Event of De-
fault, the rights of the holders of the Common Securi-
ties to receive payment of Distributions and payments
upon liquidation, redemption or otherwise will be sub-
ordinated to the rights of the holders of the Capital
Securities. See "Description of the Capital Securi-
ties--General." The Subordinated Debt Securities will
be unsecured and subordinate and junior in right of
payment to the extent and in the manner set forth in
the Indenture to all Senior Indebtedness of the Compa-
ny. See "Description of the Subordinated Debt Securi-
ties." The Guarantee will constitute an unsecured obli-
gation of the Company and will rank subordinate and ju-
nior in right of payment to the extent and in the man-
ner set forth in the Guarantee to all Senior Indebted-
ness of the Company. The Company's obligations under
the Guarantee and the Subordinated Debt Securities are
also effectively subordinate to claims of creditors of
the Company's subsidiaries. See "Description of the
Guarantee."
Voting Rights......... Holders of the Capital Securities will have limited
voting rights relating generally to the modification of
the Capital Securities and the Guarantee and the exer-
cise of the Trust's rights as the holder of the Subor-
dinated Debt Securities. Holders of the Capital Securi-
ties will not be entitled to appoint, remove or replace
the Institutional Trustee or the Delaware Trustee ex-
cept upon the occurrence of an Indenture Event of De-
fault (as defined herein) described herein. See "De-
scription of the Capital Securities--Voting Rights" and
"Removal of Issuer Trustees; Appointment of Succes-
sors."
Rating................ The Capital Securities are expected to be rated "BBB-"
by Standard & Poor's Ratings Services ("S&P") and "a3"
by Moody's Investors Service, Inc. ("Moody's"). A secu-
rity rating is not a recommendation to buy, sell or
hold securities and may be subject to revision or with-
drawal at any time by the assigning rating organiza-
tion.
Use of Proceeds....... Neither MBI nor the Trust will receive any cash pro-
ceeds from the issuance of the New Capital Securities
offered hereby. MBI's proceeds from the sale of the
Subordinated Debt Securities were added to the general
funds of MBI and may be used to fund the proposed re-
purchases of the shares of the Company's common stock
(which are expected to be reissued by the Company in
connection with the proposed consummation of the acqui-
sition of Roosevelt) and the balance, if any, for gen-
eral corporate purposes, including, without limitation,
the reduction of indebtedness, investments in and ad-
vances to subsidiaries and possible future acquisitions
of bank and non-bank entities. Although the Company
from time to time evaluates potential acquisitions, it
currently has no understandings, commitments or agree-
ments with respect to any acquisitions, except with re-
spect to Mark Twain and Roosevelt. See "Recent Develop-
ments."
Transfer The Capital Securities have been, and will be, issued
Restrictions......... and will be transferable only in blocks having an ag-
gregate liquidation amount of not less than $100,000
(100 Capital Securities) and any integral multiple of
$1,000 liquidation amount (1 Capital Security) in ex-
cess thereof See "Description of the Capital Securi-
ties--Restrictions on Transfer."
14
<PAGE>
Absence of Market for
the Capital
Securities...........
The New Capital Securities will be a new issue of secu-
rities for which there is currently no market. There
can be no assurance as to the development or liquidity
of any market for the Capital Securities.
For additional information with respect to the Capital Securities, see
"Description of the Capital Securities," "Description of the Subordinated Debt
Securities," "Description of the Guarantee" and "United States Federal Income
Taxation."
RISK FACTORS
Prospective investors should carefully consider the matters set forth under
"Risk Factors."
MERCANTILE BANCORPORATION INC.
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth for the years indicated certain summary
historical consolidated financial information for MBI. The balance sheet data
and income statement data of MBI included in the summary financial data as of
and for the five years ended December 31, 1996 are taken from the audited
consolidated financial statements of MBI as of the end of and for each such
year. These data include all adjustments which are, in the opinion of the
management of MBI, necessary to present a fair statement of these periods and
are of a normal recurring nature. The table also sets forth pro forma combined
consolidated financial information as of and for the year ended December 31,
1996 for MBI, reflecting such financial information as if the acquisitions of
Mark Twain, Roosevelt and Regional Bancshares, Inc. ("Regional"), an Illinois
corporation and bank holding company that was acquired by MBI on March 5, 1997,
had occurred as of January 1, 1996. The following information should be read in
conjunction with the supplemental consolidated financial statements of MBI, and
the related notes thereto, included herein or in documents incorporated herein
by reference, and in conjunction with the unaudited pro forma combined
consolidated financial information, including the notes thereto, appearing
elsewhere in this Prospectus. See "Incorporation of Certain Information by
Reference" and "Pro Forma Financial Information."
15
<PAGE>
<TABLE>
<CAPTION>
ALL ENTITIES
PRO
FORMA COMBINED
CONSOLIDATED AS
OF AND FOR THE
YEAR ENDED AS OF OR FOR THE YEAR ENDED DECEMBER 31
DECEMBER 31, ----------------------------------------------------------
1996 1996 1995 1994 1993 1992
--------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
PER COMMON SHARE DATA
Net income before
extraordinary items(1). $ 2.14 $ 3.10 $ 3.74 $ 3.19 $ 2.79 $ 2.41
Dividends declared...... 1.64 1.64 1.32 1.12 .99 .93
Book value at period
end.................... 26.18 26.52 26.04 23.32 21.59 19.44
Average common shares
outstanding
(thousands)............ 83,557 61,875 61,884 59,757 58,751 55,050
EARNINGS (THOUSANDS)
Interest income......... $2,186,141 $1,325,381 $1,293,944 $1,118,069 $1,094,611 $1,139,807
Interest expense........ 1,235,461 622,992 620,534 450,950 444,573 549,642
---------- ---------- ---------- ---------- ---------- ----------
Net interest income..... 950,680 702,389 673,410 667,119 650,038 590,165
Provision for possible
loan losses............ 74,378 71,014 36,530 43,265 64,302 79,551
Other income............ 300,906 295,968 273,653 236,561 245,589 224,456
Other expense........... 886,099 637,307 553,748 555,176 570,182 529,645
Income taxes............ 112,122 98,089 124,109 113,165 96,074 69,681
---------- ---------- ---------- ---------- ---------- ----------
Net income before
extraordinary items.... $ 178,987 $ 191,947 $ 232,676 $ 192,074 $ 165,069 $ 135,744
========== ========== ========== ========== ========== ==========
ENDING BALANCE SHEET (MILLIONS)
Total assets............ $ 30,352 $ 18,987 $ 17,928 $ 16,724 $ 16,293 $ 16,033
Earning assets.......... 27,700 17,137 16,264 15,427 14,980 14,678
Investment securities... 7,971 4,039 4,211 4,280 4,670 4,632
Loans and leases, net of
unearned income........ 19,374 12,773 11,731 10,904 9,809 9,570
Deposits................ 22,825 14,820 13,714 12,865 13,243 13,260
Long-term debt.......... 1,646 303 326 330 316 336
Shareholders' equity.... 2,221 1,634 1,640 1,409 1,295 1,143
Reserve for possible
loan losses............ 257 197 202 216 206 199
SELECTED RATIOS
Return on average
assets................. .58% 1.06% 1.33% 1.17% 1.03% .89%
Return on average
equity................. 8.02 11.90 15.14 14.06 13.46 12.76
Net interest rate
margin(2).............. 3.41 4.30 4.28 4.53 4.52 4.33
Equity to assets........ 7.20 8.61 9.15 8.42 7.95 7.13
Reserve for possible
loan losses to:
Outstanding loans..... 1.33 1.54 1.72 1.98 2.10 2.08
Non-performing loans.. 304.87 313.02 245.18 583.17 290.02 154.17
Dividend payout ratio... 76.64 52.90 35.29 35.11 35.48 38.59
</TABLE>
- --------
(1) Based on weighted average common shares outstanding.
(2) Taxable-equivalent basis. Includes a pro forma 1996 tax-equivalent
adjustment of $16,331,000, and actual tax equivalent adjustments of
$15,142,000, $16,570,000, $16,616,000, $17,147,000 and $16,204,000 for
1996, 1995, 1994, 1993 and 1992, respectively. These adjustments are based
upon a Federal tax rate of 35% for all years except 1992, when a Federal
tax rate of 34% was used.
16
<PAGE>
RISK FACTORS
Prior to making an investment decision with respect to the New Capital
Securities or tendering the Old Capital Securities in the Exchange Offer,
prospective purchasers of the New Capital Securities and holders of the Old
Capital Securities should carefully review the information contained elsewhere
in this Prospectus and should particularly consider the following matters:
RANKING OF SUBORDINATE OBLIGATIONS UNDER THE GUARANTEE AND THE SUBORDINATED
DEBT SECURITIES
The obligations of the Company under the Guarantee and the Subordinated Debt
Securities are subordinate and junior in right of payment to all present and
future Senior Indebtedness of the Company. No payment of principal (including
redemption payments, if any) or interest on the Subordinated Debt Securities
may be made if (i) any Senior Indebtedness of the Company is not paid when due
and any applicable grace period with respect to such default has ended with
such default not having been cured or waived or ceasing to exist or (ii) the
maturity of any Senior Indebtedness of the Company has been accelerated because
of a default. As of December 31, 1996, the Company had approximately $78
million of Senior Indebtedness. There are no terms in the Capital Securities,
the Subordinated Debt Securities or the Guarantee that limit the ability of the
Company or its subsidiaries to incur additional indebtedness, liabilities and
obligations, including such indebtedness that ranks senior to the Subordinated
Debt Securities and the Guarantee. See "Description of the Guarantee--Status of
the Guarantee" and "Description of the Subordinated Debt Securities."
Because the Company is a bank holding company, the Subordinated Debt
Securities and the Guarantee are effectively subordinated to all existing and
future liabilities, including trade payables, of the Company's subsidiaries,
except to the extent that the Company is a creditor of the subsidiaries
recognized as such. There are also various legal limitations on the extent to
which the Company's Banking Subsidiaries may extend credit, pay dividends or
otherwise supply funds to the Company or various of its affiliates.
GUARANTEE COVERS DISTRIBUTIONS AND OTHER PAYMENTS ONLY TO THE EXTENT THE TRUST
HAS AVAILABLE FUNDS; RELATED REMEDIES
The terms of the New Guarantee will be those set forth in the Old Guarantee
and those made part of the Guarantee by the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), under which The Chase Manhattan Bank is
acting as trustee (the "Guarantee Trustee"). The Old Guarantee will be
qualified under the Trust Indenture Act upon the effectiveness of the Exchange
Offer Registration Statement with respect to the Guarantee. The Guarantee
Trustee will hold the Guarantee for the benefit of the holders of the Capital
Securities.
The Guarantee guarantees to the holders of the Capital Securities the
following payments, to the extent not paid by the Trust: (i) any accrued and
unpaid Distributions required to be paid on the Capital Securities, to the
extent the Trust has funds available therefor; (ii) the Redemption Price,
including all accrued and unpaid Distributions to the date of redemption, with
respect to the Capital Securities called for redemption by the Trust, to the
extent the Trust has funds available therefor; and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Trust (other than in
connection with the Distribution of the Subordinated Debt Securities to the
holders of the Capital Securities in exchange therefor), the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid Distributions on
the Capital Securities to the date of the payment, to the extent the Trust has
funds available therefor and (b) the amount of assets of the Trust remaining
available for distribution to holders of the Capital Securities in liquidation
of the Trust. The Guarantee is subordinated as described under "--Ranking of
Subordinate Obligations Under the Guarantee and the Subordinated Debt
Securities." The holders of a majority in liquidation amount of the Capital
Securities have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Guarantee Trustee or to direct
the exercise of any trust or power conferred upon the Guarantee Trustee under
the Guarantee. A holder of record of the Capital Securities may institute a
legal proceeding directly against the Company to enforce the Guarantee
Trustee's rights without first instituting any legal proceeding against the
Trust, the Guarantee Trustee
17
<PAGE>
or any other person or entity. If the Company were to default on its obligation
to pay amounts payable on the Subordinated Debt Securities, the Trust would
lack available funds for the payment of Distributions or amounts payable on
redemption of the Capital Securities or otherwise, and, in such event, holders
of the Capital Securities would not be able to rely upon the Guarantee for
payment of such amounts. Instead, each holder of the Capital Securities would
rely on the enforcement (i) by the Institutional Trustee of its rights as
registered holder of the Subordinated Debt Securities against the Company
pursuant to the terms of the Subordinated Debt Securities or (ii) by such
holder of the Capital Securities of its right against the Company to enforce
payments of principal and interest on the Subordinated Debt Securities having
an aggregate principal amount equal to the aggregate liquidation amount of
Capital Securities of such holder. See "Description of the Capital Securities,"
"Description of the Guarantee" and "Description of the Subordinated Debt
Securities." The Declaration provides that each holder of the Capital
Securities, by acceptance thereof, agrees to the provisions of the Guarantee,
including the subordination provisions thereof, and the Indenture.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES
If a Declaration Event of Default with respect to the Trust occurs and is
continuing, then the holders of the Capital Securities would, except as
provided below, rely on the enforcement by the Institutional Trustee of its
rights as holder of the Subordinated Debt Securities against the Company. The
holders of a majority in liquidation amount of the Capital Securities will have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Institutional Trustee with respect to the Capital
Securities or to direct the exercise of any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct the
Institutional Trustee to exercise the remedies available to it as holder of the
Subordinated Debt Securities. If the Institutional Trustee fails to enforce its
rights under the Subordinated Debt Securities after the holders of a majority
in liquidation amount of the Capital Securities have so directed the
Institutional Trustee, a holder of record of the Capital Securities may, to the
fullest extent permitted by law, institute a legal proceeding directly against
the Company to enforce the rights of the Institutional Trustee under the
Subordinated Debt Securities, without first instituting any legal proceeding
against such Institutional Trustee or any other person.
Notwithstanding the foregoing, if a Declaration Event of Default has occurred
and is continuing and such event is attributable to the failure of the Company
to pay interest or principal on the Subordinated Debt Securities on the
respective dates such interest or principal is payable, after giving effect to
any Extension Period (or in the case of redemption, on the redemption date),
then a holder of record of the Capital Securities may institute directly
against the Company a proceeding for enforcement of payment, on or after the
respective due dates specified in the Subordinated Debt Securities, to such
holder directly of the principal of or interest on the Subordinated Debt
Securities having an aggregate principal amount equal to the aggregate
liquidation amount of the Capital Securities of such holder (a "Direct
Action"). In connection with such Direct Action, the Company will be subrogated
to the rights of such holder of the Capital Securities under the Declaration to
the extent of any payment made by the Company to such holder of the Capital
Securities in such Direct Action; provided, however, that no such subrogation
right may be exercised so long as a Declaration Event of Default has occurred
and is continuing. The holders of the Capital Securities will not be able to
exercise directly any other remedy available to the holders of the Subordinated
Debt Securities. See "Description of the Capital Securities--Declaration Events
of Default."
OPTION TO EXTEND INTEREST PAYMENT PERIOD FOR UP TO FIVE YEARS AND CONSEQUENT
DEFERRAL OF DISTRIBUTIONS ON CAPITAL SECURITIES
The Company has the right under the Indenture to defer payments of interest
on the Subordinated Debt Securities by extending the interest payment period,
at any time and from time to time, subject to certain conditions, for Extension
Periods, each not exceeding 20 consecutive quarterly periods, provided that no
Extension Period may extend beyond the stated maturity of the Subordinated Debt
Securities. During each such Extension Period, quarterly Distributions on the
Capital Securities would also be deferred (but would continue to accrue at a
variable annual rate equal to LIBOR plus 0.85%, despite such deferral, with
interest thereon
18
<PAGE>
compounded quarterly to the fullest extent permitted by law) by the Trust. In
the event that the Company exercises this right to defer interest payments on
the Subordinated Debt Securities, and such deferral is continuing, or if there
shall have occurred and be continuing any Indenture Event of Default or if the
Company shall be in default with respect to the payment of its obligations
under the Guarantee, (a) the Company shall not declare or pay dividends on, or
make a distribution with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of the Company's capital stock (other
than (i) purchases or acquisitions of shares of any such capital stock or
rights to acquire such capital stock in connection with the satisfaction by the
Company of its obligations under any employee benefit plans, (ii) as a result
of a reclassification of the Company's capital stock or rights to acquire such
capital stock or the exchange or conversion of one class or series of capital
stock of the Company or rights to acquire such capital stock for another class
or series of the Company's capital stock or rights to acquire such capital
stock, (iii) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (iv) dividends and
distributions made on the Company's capital stock or rights to acquire such
capital stock with the Company's capital stock or rights to acquire such
capital stock, or (v) any declaration of a dividend in connection with the
implementation of a shareholder rights plan, or the issuance of stock under any
such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto), or make guarantee payments (other than payments under the
Guarantee and the Common Securities Guarantee) in respect of the foregoing and
(b) the Company shall not make any payment of interest, principal or premium,
if any, on or repay, repurchase or redeem any debt securities issued by the
Company that rank pari passu with or junior to the Subordinated Debt
Securities. Prior to the termination of any such Extension Period, the Company
may further extend the interest payment period, provided that each such
Extension Period, together with all such previous and further extensions
thereof, may not exceed 20 consecutive quarterly periods or extend beyond the
maturity of the Subordinated Debt Securities. Upon the termination of any
Extension Period and the payment of all amounts then due, the Company may
commence a new Extension Period, subject to the terms set forth herein. See
"Description of the Capital Securities" and "Description of the Subordinated
Debt Securities."
During each Extension Period, if any, each holder of the Capital Securities
will continue to accrue income (as original issue discount ("OID")) in respect
of the deferred interest allocable to its Capital Securities for United States
federal income tax purposes, which will be allocated but not distributed. In
such event, each holder of the Capital Securities will recognize income for
United States federal income tax purposes in advance of the receipt of cash,
and will not receive cash related to such income from the Trust if such holder
disposes of its Capital Securities prior to the record date for payment of such
deferred interest. See "United States Federal Income Taxation--US Holders--
Original Issue Discount."
The Company has no current intention of exercising its right to defer
payments of interest on the Subordinated Debt Securities. However, should the
Company determine to exercise such right in the future, the market price of the
Capital Securities is likely to be affected. A holder that disposes of its
Capital Securities during an Extension Period, therefore, might not receive the
same return on its investment as a holder that continues to hold its Capital
Securities. In addition, as a result of the existence of the Company's right to
defer interest payments, the market price, if any, of the Capital Securities
(which represent undivided beneficial interests in the Subordinated Debt
Securities) may be more volatile than the market price of other similar
securities where the issuer does not have such right to defer interest
payments.
PROPOSED TAX LEGISLATION
On February 6, 1997, 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 (the "Proposed Legislation") if
such debt obligations have a maximum term in excess of 15 years and are not
shown as indebtedness on the issuer's applicable consolidated balance sheet. As
currently proposed, the Proposed Legislation would be effective generally for
instruments issued on or after the date of first Congressional committee
action. Under current law, the Company will be able to deduct interest on the
Subordinated Debt Securities and, based upon the effective date of the Proposed
Legislation as it is currently proposed, it is expected
19
<PAGE>
that if the Proposed Legislation were enacted, such legislation would not apply
retroactively to the Subordinated Debt Securities. However, if the Proposed
Legislation is enacted with retroactive effect with respect to the Subordinated
Debt Securities, the Company would not be entitled to an interest deduction
with respect to the Subordinated Debt Securities. There can be no assurance
that the Proposed Legislation, if enacted, will not apply retroactively to the
Subordinated Debt Securities 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 Debt Securities. Accordingly, there
can be no assurance that a Tax Event will not occur. See "Description of the
Capital Securities--Redemption" and "Description of the Subordinated Debt
Securities--Proposed Tax Legislation."
REDEMPTION; DISTRIBUTION
The Company, as the holder of all of the outstanding Common Securities, has
the right at any time (including, without limitation, upon the occurrence of a
Tax Event or a Capital Treatment Event) to dissolve the Trust, and, after
satisfaction of liabilities to creditors of the Trust (to the extent not paid
by the Company), cause the Subordinated Debt Securities to be distributed to
the holders of the Trust Securities on a pro rata basis in accordance with the
respective liquidation amounts thereof, in liquidation of the Trust. See
"Description of the Capital Securities--Liquidation Distribution Upon
Dissolution." In certain circumstances described herein, the Company will have
the right to redeem the Subordinated Debt Securities, in whole or in part, in
which event the Trust will redeem the Trust Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Subordinated
Debt Securities redeemed by the Company on a pro rata basis. The exercise of
such rights is subject to the Company having received prior approval from the
Federal Reserve, if then required under applicable capital guidelines or
policies of the Federal Reserve. See "Description of the Capital Securities--
Redemption;" and "--Liquidation Distribution Upon Dissolution."
Under current United States federal income tax law, a distribution of the
Subordinated Debt Securities upon the dissolution of the Trust generally would
not be a taxable event to holders of the Capital Securities. However, a
dissolution of the Trust in which holders of the Capital Securities receive
cash would be a taxable event to such holders. See "United States Federal
Income Taxation--US Holders--Receipt of Subordinated Debt Securities or Cash
Upon Liquidation of the Trust."
There can be no assurance as to the market prices for the Capital Securities
or the Subordinated Debt Securities that may be distributed in exchange for the
Capital Securities if a dissolution and liquidation of the Trust were to occur.
Accordingly, the Capital Securities that an investor may purchase, whether in
this Exchange Offer or in the secondary market, or the Subordinated Debt
Securities that a holder of the Capital Securities may receive on dissolution
and liquidation of the Trust, may trade at a discount to the price paid to
purchase the Capital Securities offered hereby. Because the ability of the
Trust to pay amounts due on the Capital Securities is wholly dependent upon the
Company's making payments on the Subordinated Debt Securities as and when
required, and because holders of the Capital Securities may receive the
Subordinated Debt Securities upon dissolution and liquidation of the Trust,
prospective purchasers of the New Capital Securities and holders of the Old
Capital Securities are also making an investment decision with regard to the
Subordinated Debt Securities and should carefully review all the information
regarding the Subordinated Debt Securities contained herein and evaluate the
credit risk of the Company. See "Description of the Capital Securities" and
"Description of the Subordinated Debt Securities."
CONSEQUENCES OF HIGHLY LEVERAGED TRANSACTION
The Indenture does not contain any provisions that afford holders of the
Subordinated Debt Securities protection in the event of a highly leveraged
transaction, including a change of control, or other similar transactions
involving the Company that may adversely affect such holders. See "Description
of the Subordinated Debt Securities."
20
<PAGE>
LIMITED VOTING RIGHTS
Holders of the Capital Securities have limited voting rights relating
generally to the modification of the Capital Securities and the Guarantee and
the exercise of the Trust's rights as the holder of the Subordinated Debt
Securities. Holders of the Capital Securities are not entitled to appoint,
remove or replace the Institutional Trustee or the Delaware Trustee except upon
the occurrence of an Indenture Event of Default described herein. The
Institutional Trustee and the holders of a majority of the Common Securities
may amend the Declaration without the consent of the holders of the Capital
Securities to ensure that the Trust will be classified for United States
federal income tax purposes as a grantor trust and will not be required to be
registered as an investment company under the 1940 Act (as defined herein),
even if such action adversely affects the interests of such holders. See
"Description of the Capital Securities--Voting Rights" and "--Removal of Issuer
Trustees; Appointment of Successors."
CONSEQUENCES OF A FAILURE TO EXCHANGE OLD CAPITAL SECURITIES
The Old Capital Securities have not been registered under the Securities Act
or any state securities laws and therefore may not be offered, sold or
otherwise transferred except in compliance with the registration requirements
of the Securities Act and any other applicable securities laws, or pursuant to
an exemption therefrom or in a transaction not subject thereto, and in each
case in compliance with certain other conditions and restrictions. Old Capital
Securities which remain outstanding after consummation of the Exchange Offer
will continue to bear a legend reflecting such restrictions on transfer. In
addition, upon consummation of the Exchange Offer, holders of Old Capital
Securities which remain outstanding will not be entitled to any rights to have
such Old Capital Securities registered under the Securities Act or to any
similar rights under the Registration Rights Agreement. MBI and the Trust do
not intend to register under the Securities Act any Old Capital Securities
which remain outstanding after consummation of the Exchange Offer.
To the extent that Old Capital Securities are tendered and accepted in the
Exchange Offer, any trading market for Old Capital Securities which remain
outstanding after the Exchange Offer could be adversely affected.
The New Capital Securities and any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer will constitute a single
series of Capital Securities under the Declaration and, accordingly, will vote
together as a single class for purposes of determining whether holders of the
requisite percentage in outstanding liquidation amount thereof have taken
certain actions or exercised certain rights under the Declaration.
The Old Capital Securities provide that, if the Exchange Offer is not
consummated within 150 days of the original issues of the Old Capital
Securities, the Distribution rate borne by the Old Capital Securities will
increase by 0.25% per annum (to a maximum increase of 0.75%) commencing on the
151st day after the original issuance of the Old Capital Securities, until the
Exchange Offer is consummated. Following consummation of the Exchange Offer,
the Old Capital Securities will not be entitled to any increase in the
Distribution rate thereon. The New Capital Securities will not be entitled to
any such increase in the interest rate thereon.
ABSENCE OF PUBLIC MARKET
The Old Capital Securities were issued to, and the Company believes are
currently owned by, a relatively small number of beneficial owners. The Old
Capital Securities have not been registered under the Securities Act and will
continue to be subject to restrictions on transferability to the extent that
they are not exchanged for the New Capital Securities. Although the New Capital
Securities will generally be permitted to be resold or otherwise transferred by
the holders (who are not affiliates of MBI or the Trust) without compliance
with the registration requirements under the Securities Act, they will
constitute a new issue of securities with no established trading market.
Capital Securities may be transferred by the holders thereof only in blocks
having a liquidation amount of not less than $100,000 (100 Capital Securities).
Accordingly, no assurance can be given that an active public or other market
will develop for the New Capital Securities or the Old Capital Securities. If
21
<PAGE>
an active public market does not develop, the market price and liquidity of the
New Capital Securities may be adversely affected.
If a public trading market develops for the New Capital Securities, future
trading prices of such securities will depend on many factors, including, among
other things, prevailing interest rates, results of operations and the market
for similar securities. Depending on prevailing interest rates, the market for
similar securities and other factors, including the financial condition of MBI,
the New Capital Securities may trade at a discount. Neither the New Capital
Securities nor the New Subordinated Debt Securities will be listed on a
national securities exchange or quoted on an inter-dealer quotation service
after the Exchange Offer.
Notwithstanding the registration of the New Capital Securities in the
Exchange Offer, holders who are "affiliates" (as defined under Rule 405 of the
Securities Act) of MBI or the Trust may publicly offer for sale or resell the
New Capital Securities only in compliance with the provisions of Rule 144 under
the Securities Act or any other available exemptions under the Securities Act.
Each broker-dealer that receives New Capital Securities for its own account
in exchange for Old Capital Securities, where such Old Capital Securities were
acquired by such broker-dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such New Capital Securities. See "Plan of
Distribution."
EXCHANGE OFFER PROCEDURES
Issuance of the New Capital Securities in exchange for Old Capital Securities
pursuant to the Exchange Offer will be made only after a timely receipt by the
Exchange Agent of such Old Capital Securities, a properly completed and duly
executed Letter of Transmittal and all other required documents. Therefore,
holders of the Old Capital Securities desiring to tender such Old Capital
Securities in exchange for New Capital Securities should allow sufficient time
to ensure timely delivery. The Company, the Trust, the Institutional Trustee,
the Indenture Trustee and the Exchange Agent are under no duty to give
notification of defects or irregularities with respect to the tenders of Old
Capital Securities for exchange.
22
<PAGE>
MERCANTILE BANCORPORATION INC.
The Company is a registered bank holding company headquartered in St. Louis,
Missouri and incorporated under the laws of the State of Missouri in 1970. At
December 31, 1996, the Company, directly or through its subsidiaries, owned all
of the capital stock of Mercantile Bank National Association, based in St.
Louis, Missouri and 28 other commercial banks and one federally chartered
thrift, all of which operate from 444 banking offices and 431 Fingertip Banking
automated teller machines located throughout Missouri, Illinois, Iowa, Arkansas
and eastern Kansas.
The Company's services concentrate in three major lines of business--
consumer, corporate and trust and investment advisory services. The Company
also operates non-banking subsidiaries that provide related financial services,
including investment management, brokerage services and asset-based lending.
The Company has two acquisition transactions currently pending; the proposed
acquisitions of Mark Twain and Roosevelt, each of which is headquartered in St.
Louis, Missouri. For further information regarding the pending acquisitions of
Mark Twain and Roosevelt, see "Recent Developments."
The Company is a legal entity separate and distinct from Mercantile Bank
National Association and the Company's other Banking Subsidiaries and
affiliates. Because the Company is a holding company, its rights and the rights
of its creditors and shareholders, including the holders of its Subordinated
Debt Securities and the Guarantee, to participate in the assets of any
subsidiary upon its liquidation or recapitalization will be subject to the
prior claims of such subsidiary's creditors except to the extent that the
Company may itself be a creditor having recognized claims against such
subsidiary, in which case it will share in such subsidiary's assets along with
other creditors.
There are various legal and regulatory limitations on the extent to which the
Company's Banking Subsidiaries may extend credit, pay dividends or otherwise
supply funds to the Company. The approval of the OCC is required if total
dividends declared by a national bank in any calendar year should exceed net
profits for that year combined with its retained net profits for the preceding
two years. Moreover, banks may not pay dividends in excess of their undivided
profits. In determining whether and to what extent to pay dividends, each
Banking Subsidiary must also consider the effect of dividend payments on
applicable risk-based capital and leverage requirements as well as policy
statements of the federal regulatory agencies to the effect that, generally,
banking organizations should pay dividends out of current operating earnings.
The Company's state-chartered Banking Subsidiaries are subject to similar
restrictions under their respective state laws. While the specific standards
vary from state to state, the Company's Banking Subsidiaries are generally
permitted to pay dividends only from net profits, and then, only after first
deducting losses and credit write-offs. All of the applicable state statutes
prohibit the payment of dividends if such a payment would impair capital. In
addition there are numerous governmental requirements and regulations that
affect the activities of the Company and its bank and non-bank subsidiaries.
See the discussion in Part 1, Item 1 of the Company's Form 10-K for the year
ended December 31, 1996 under the caption "Supervision and Regulation."
23
<PAGE>
RECENT DEVELOPMENTS
The Company reported, on a consolidated basis, net income of $191.9 million
for the year ended December 31, 1996, compared with $232.7 million for 1995. As
of December 31, 1996, the Company reported, on a consolidated basis, total
assets of $19.0 billion, total deposits of $14.8 billion and shareholders'
equity of $1.6 billion, compared with total assets of $17.9 billion, total
deposits of $13.7 billion and shareholders' equity of $1.6 billion, as of
December 31, 1995.
During the fourth quarter of 1996, the Company announced the execution of
definitive agreements to acquire Mark Twain, a Missouri corporation and a bank
holding company, and Roosevelt, a Delaware corporation and a savings and loan
holding company. The definitive agreement with respect to the Mark Twain
transaction was executed on October 27, 1996 and the acquisition is expected to
close in the second quarter of 1997. The definitive agreement with respect to
the Roosevelt acquisition was dated December 23, 1996 and the transaction is
expected to close during the third quarter of 1997. Each transaction is subject
to prior approval of the shareholders of the companies to be acquired (and, in
the case of Mark Twain, approval of the shareholders of the Company) and
appropriate regulatory approvals.
Mark Twain, which is headquartered in St. Louis, Missouri, owns four banks
and operates from 41 banking offices in the St. Louis, Kansas City and
Springfield, Missouri metropolitan areas, including locations in southeastern
Illinois within the St. Louis metropolitan area and eastern Kansas in the
Kansas City metropolitan area. As of December 31, 1996, Mark Twain reported, on
a consolidated basis, total assets of $3.1 billion, total deposits of $2.6
billion and stockholders' equity of $312 million. Upon consummation of the
transaction, the Company will issue approximately 17.2 million shares of its
common stock as consideration in the acquisition. The Mark Twain acquisition
will be accounted for as a pooling-of-interests.
Roosevelt, with its executive offices in St. Louis, Missouri, owns Roosevelt
Bank which operates from 81 locations in Missouri, Kansas and Illinois. As of
December 31, 1996, Roosevelt reported, on a consolidated basis, total assets of
$7.8 billion, total deposits of $5.3 billion and total stockholders' equity of
$497 million. Upon consummation of the transaction, the Company will issue up
to 13 million shares (net of up to 7 million reissued treasury shares) of its
common stock at an exchange ratio of .4211 for each share of Roosevelt common
stock, or $22.00 per share in cash, as consideration in the acquisition. The
Roosevelt transaction will be accounted for as a purchase.
24
<PAGE>
PRO FORMA COMBINED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The Company has completed or announced a number of acquisitions during the
years covered by the pro forma financial statements that follow. Set forth
below is a table which summarizes certain information with respect to such
acquisitions:
<TABLE>
<CAPTION>
DATE OF
CONSUMMATION CONSIDERATION
OR EXPECTED ------------------- ACCOUNTING
CONSUMMATION ASSETS DEPOSITS CASH SHARES METHOD
------------- ---------- ---------- ------- ---------- ----------
(DOLLARS IN THOUSANDS)
ACQUISITIONS COMPLETED
- ----------------------
<S> <C> <C> <C> <C> <C> <C>
Today's Bancorp, Inc.... Nov. 7, 1996 $ 501,418 $ 432,104 $34,912 1,127,058 Purchase
First Financial
Corporation of America. Nov. 1, 1996 87,649 76,791 3,253 258,742 Purchase
Peoples State Bank...... Aug. 22, 1996 95,657 75,149 -- 325,837 Purchase
Metro Savings Bank,
F.S.B.................. Mar. 7, 1996 80,857 73,843 5 197,902 Purchase
Security Bank of Conway,
F.S.B.................. Feb. 9, 1996 102,502 89,697 1 321,964 Purchase
Hawkeye Bancorporation.. Jan. 2, 1996 1,987,540 1,739,811 80 7,892,196 Pooling
First Sterling Bancorp,
Inc.................... Jan. 2, 1996 167,610 147,588 1 521,417 Pooling(1)
Southwest Bancshares,
Inc.................... Aug. 1, 1995 187,701 155,628 1 674,975 Pooling(1)
AmeriFirst
Bancorporation, Inc.... Aug. 1, 1995 155,521 130,179 1 661,356 Pooling(1)
Plains Spirit Financial
Corporation............ July 7, 1995 400,754 276,887 6,697 1,301,180 Purchase
TCBankshares, Inc....... May 1, 1995 1,422,798 1,217,740 -- 4,749,999(2) Pooling
Central Mortgage
Bancshares, Inc........ May 1, 1995 654,584 571,105 8 2,537,723 Pooling
UNSL Financial Corp..... Jan. 3, 1995 508,346 380,716 11 1,578,107 Pooling
Wedge Bank.............. Jan. 3, 1995 195,716 152,865 1 969,954 Pooling(1)
<CAPTION>
ACQUISITIONS PENDING
- --------------------
<S> <C> <C> <C> <C> <C> <C>
Regional Bancshares,
Inc.*.................. Mar. 5, 1997 181,365 146,829 12,000 600,417 Purchase
Mark Twain Bancshares,
Inc.................... 2nd Qtr. 1997 3,133,265 2,594,912 -- 17,200,000(3) Pooling
Roosevelt Financial
Group, Inc............. 3rd Qtr. 1997 7,796,412 5,347,071 (4) (4) Purchase
</TABLE>
- --------
(1) The historical financial statements of the Company were not restated for
the acquisition due to the immateriality of the acquiree's financial
condition and results of operations to those of the Company.
(2) In addition to the Company's common stock issued, the Company assumed,
through an exchange, the outstanding, non-convertible preferred stock of
TCBankshares, Inc. Such preferred stock was redeemed in the first quarter
of 1996.
(3) Estimated shares to be issued in acquisition.
(4) The Company will deliver up to 13,000,000 shares of common stock at an
exchange ratio of .4211 shares of the Company's common stock, or $22.00 in
cash, for each share of Roosevelt common stock.
*Although this acquisition was consummated on March 5, 1997, it is
considered pending for purposes of the Pro Forma Combined Consolidated
Financial Statements because it was consummated after December 31, 1996.
The following unaudited pro forma combined consolidated balance sheet gives
effect to the completed or pending acquisitions of Mark Twain, Roosevelt and
Regional (collectively, the "Acquisitions"), as if each of the Acquisitions
were consummated on December 31, 1996. The following pro forma combined
consolidated income statements set forth the results of operations of the
Company combined with the Acquisitions as if each such Acquisition had occurred
as of the first day of each period presented.
The unaudited pro forma combined consolidated financial statements should be
read in conjunction with the accompanying Notes to the Pro Forma Combined
Consolidated Financial Statements and with the historical financial statements
of the Company, Mark Twain and Roosevelt incorporated herein by reference.
These pro forma combined consolidated financial statements may not be
indicative of the results of operations that actually would have occurred if
the Acquisitions had been consummated on the dates assumed above or of the
results of operations that may be achieved in the future.
25
<PAGE>
MERCANTILE BANCORPORATION INC.
PRO FORMA COMBINED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1996
(THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
ROOSEVELT, ALL ENTITIES
MARK TWAIN, PRO FORMA
THE REGIONAL COMBINED
COMPANY(1) ROOSEVELT MARK TWAIN REGIONAL ADJUSTMENTS(2) CONSOLIDATED
ASSETS ----------- ---------- ---------- -------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Cash and due from banks. $ 1,223,911 $ 48,642 $ 150,926 $ 5,988 $(355,250)(3) $ 1,095,430
(412,250)(4)
467,500 (6)
150,000 (7)
(38,400)(8)
(83,307)(10)
(50,000)(12)
(12,330)(13)
Due from banks--interest
bearing................ 91,616 -- 4,387 -- 96,003
Federal funds sold and
repurchase agreements.. 234,212 -- 23,500 1,230 258,942
Investments in debt and
equity securities
Trading................ 500 -- 30,772 -- 31,272
Available-for-sale..... 3,691,509 3,157,757 218,479 67,674 7,135,419
Held to maturity....... 346,566 -- 458,164 -- 804,730
----------- ---------- ---------- -------- --------- -----------
Total................ 4,038,575 3,157,757 707,415 67,674 -- 7,971,421
Loans and leases........ 12,772,920 4,321,188 2,177,915 101,962 19,373,985
Reserve for possible
loan losses............ (196,627) (22,719) (33,745) (1,789) (2,500)(8) (257,380)
----------- ---------- ---------- -------- --------- -----------
Net loans and leases. 12,576,293 4,298,469 2,144,170 100,173 (2,500) 19,116,605
Other assets............ 822,352 291,544 102,867 6,300 497,427 (4) 1,814,051
574,573 (4)(15)
(497,427)(5)
311,624 (9)
(311,624)(11)
24,585 (13)
16,415 (13)(15)
(24,585)(14)
----------- ---------- ---------- -------- --------- -----------
Total Assets......... $18,986,959 $7,796,412 $3,133,265 $181,365 $ 254,451 $30,352,452
=========== ========== ========== ======== ========= ===========
</TABLE>
See Notes to Pro Forma Combined Consolidated Financial Statements.
26
<PAGE>
MERCANTILE BANCORPORATION INC.
PRO FORMA COMBINED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1996
(THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
ROOSEVELT, ALL ENTITIES
MARK TWAIN, PRO FORMA
THE REGIONAL COMBINED
COMPANY(1) ROOSEVELT MARK TWAIN REGIONAL ADJUSTMENTS(2) CONSOLIDATED
LIABILITIES ----------- ---------- ---------- -------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Deposits
Non-interest bearing... $ 2,584,340 $ -- $ 498,431 $ 14,063 $(83,307)(10) $ 3,013,527
Interest bearing....... 11,983,660 5,347,071 2,096,481 132,766 19,559,978
Foreign................ 251,887 -- -- -- 251,887
----------- ---------- ---------- -------- -------- -----------
Total Deposits....... 14,819,887 5,347,071 2,594,912 146,829 (83,307) 22,825,392
Federal funds purchased
and repurchase
agreements............. 1,589,261 3,095 185,751 8,000 1,786,107
Other borrowings........ 676,207 1,837,756 9,876 -- 467,500 (6) 3,141,339
150,000 (7)
Other liabilities....... 267,577 111,063 31,102 1,951 (14,724)(8) 378,969
(18,000)(12)
----------- ---------- ---------- -------- -------- -----------
Total Liabilities.... 17,352,932 7,298,985 2,821,641 156,780 501,469 28,131,807
SHAREHOLDERS' EQUITY
Preferred stock......... -- 13 -- -- (13)(5) --
Common stock............ 316,663 442 21,394 253 30,000 (4) 427,798
(442)(5)
81,135 (9)
(21,394)(11)
(253)(14)
Capital surplus......... 228,151 298,283 75,492 2,907 274,500 (4) 458,122
(298,283)(5)
(46,462)(9)
(75,492)(11)
1,933 (13)
(2,907)(14)
Retained earnings....... 1,173,414 198,689 227,375 21,425 (198,689)(5) 1,342,613
(26,176)(8)
227,375 (9)
(227,375)(11)
(32,000)(12)
(21,425)(14)
Treasury stock.......... (84,201) -- (12,637) -- (355,250)(3) (7,888)
355,250 (4)
49,576 (9)
12,637 (11)
26,737 (13)
----------- ---------- ---------- -------- -------- -----------
Total Shareholders'
Equity.............. 1,634,027 497,427 311,624 24,585 (247,018) 2,220,645
----------- ---------- ---------- -------- -------- -----------
Total Liabilities and
Shareholders'
Equity.............. $18,986,959 $7,796,412 $3,133,265 $181,365 $254,451 $30,352,452
=========== ========== ========== ======== ======== ===========
</TABLE>
See Notes to Pro Forma Combined Consolidated Financial Statements.
27
<PAGE>
MERCANTILE BANCORPORATION INC.
PRO FORMA COMBINED CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1996
(THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
ROOSEVELT, ALL ENTITIES
MARK TWAIN, PRO FORMA
THE MARK REGIONAL COMBINED
COMPANY(1) ROOSEVELT TWAIN REGIONAL ADJUSTMENTS(2) CONSOLIDATED
---------- --------- -------- -------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Interest income......... $1,325,381 $640,311 $229,641 $13,135 $ (7,500)(17) $2,186,141
(10,395)(18)
(2,479)(16)
(1,953)(19)
Interest expense........ 622,992 462,724 101,920 6,519 31,556 (6) 1,235,461
9,750 (7)
---------- -------- -------- ------- --------- ----------
Net interest income.. 702,389 177,587 127,721 6,616 (63,633) 950,680
Provision for possible
loan losses............ 71,014 1,262 2,002 100 74,378
---------- -------- -------- ------- --------- ----------
Net Interest Income
after provision for
Possible Loan
Losses.............. 631,375 176,325 125,719 6,516 (63,633) 876,302
Other Income
Trust.................. 79,413 -- 7,206 208 86,827
Service charges........ 80,660 17,157 8,256 344 106,417
Credit card fees....... 27,007 -- 955 -- 27,962
Net loss from
financial
instruments........... -- (76,634) -- -- (76,634)
Securities gains
(losses).............. (317) -- 234 (11) (94)
Other.................. 109,205 23,510 23,156 557 156,428
---------- -------- -------- ------- --------- ----------
Total Other Income... 295,968 (35,967) 39,807 1,098 300,906
Other Expense
Salaries and employee
benefits.............. 315,620 42,304 49,706 2,074 409,704
Net occupancy and
equipment............. 91,079 18,081 12,492 535 122,187
Other.................. 230,608 63,024 19,614 1,563 38,305 (15) 354,208
1,094 (15)
---------- -------- -------- ------- --------- ----------
Total Other Expense.. 637,307 123,409 81,812 4,172 39,399 886,099
---------- -------- -------- ------- --------- ----------
Income (Loss) Before
Income Taxes........ 290,036 16,949 83,714 3,442 (103,032) 291,109
Income Taxes............ 98,089 5,835 30,446 659 (21,312)(2) 112,122
(892)(2)
(703)(2)
---------- -------- -------- ------- --------- ----------
Net Income Before
Extraordinary Items. $ 191,947 $ 11,114 $ 53,268 $ 2,783 $ (80,125) $ 178,987
========== ======== ======== ======= ========= ==========
Per Share Data
Average Common Shares
Outstanding........... 61,874,882 83,557,359(21)
Net Income Before
Extraordinary Items... $3.10 $2.14
</TABLE>
See Notes to Pro Forma Combined Consolidated Financial Statements.
28
<PAGE>
MERCANTILE BANCORPORATION INC.
NOTES TO PRO FORMA COMBINED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(1) Represents the Company's restated historical consolidated financial
statements reflecting the acquisition of Hawkeye Bancorporation,
effective January 2, 1996. Such acquisition was accounted for as a
pooling-of-interests. The acquisition of First Sterling Bancorp, Inc.
("Sterling"), also consummated on January 2, 1996, was accounted for as a
pooling-of-interests; however, due to the immateriality of the financial
condition and results of operations of Sterling to that of the Company,
the Company did not restate its historical financial statements to
reflect the acquisition of Sterling. Therefore, Sterling is included in
these pro forma financial statements only from its acquisition date
forward. Each of Security Bank of Conway, F.S.B., Metro Savings Bank,
F.S.B., Peoples State Bank, First Financial Corporation of America and
TODAY's Bancorp., Inc., which was acquired during 1996 and accounted for
as purchases, is included in these pro forma financial statements only
from its acquisition date forward. The full impact of these acquisitions
is immaterial to the pro forma combined consolidated financial
statements.
(2) The acquisition of Mark Twain will be accounted for as a pooling-of-
interests. The acquisitions of Roosevelt and Regional will be accounted
for as purchase transactions. Purchase accounting adjustments offset each
other or are believed to be immaterial at this time to the pro forma
consolidated financial condition and results of operations of the
Company. Included herein are the amortization of goodwill over a 15-year
period (see footnote 15 below), the lost interest income/interest expense
on the cash consideration (for Roosevelt and Regional) and stock
buybacks. Goodwill is considered non-tax deductible. The balance sheet
impact of goodwill amortization and lost interest income is ignored due
to immateriality. The income tax benefit associated with taxable income
statement adjustments is computed at an effective tax rate of 36%.
(3) In conjunction with the proposed acquisition of Mark Twain, the Company
plans to deliver 986,091 shares of the Company's common stock previously
acquired in the open market at an average price per share of $50.275. In
conjunction with the acquisition of Regional, the Company repurchased
600,418 shares of the Company's common stock in the open market at an
average price per share of $44.53. In conjunction with the proposed
acquisition of Roosevelt, the Company plans to repurchase 7,000,000
shares of the Company's common stock in the open market. The assumed
repurchase price per share is $50.75, the closing price of the Company's
common stock on December 20, 1996, the last business date before the
announcement of the reorganization agreement between the Company and
Roosevelt.
(4) Purchase entry of Roosevelt with assumed consideration consisting of
7,000,000 reissued treasury shares at $50.75 per share, 6,000,000 shares
of the Company's issued common stock and $412,250,000 in cash. The
closing price for the Company's common stock on December 20, 1996, the
business date preceding the announcement of the reorganization agreement
between the Company and Roosevelt, was $50.75. The pro forma financial
statements assume that all Roosevelt preferred shares are converted to
common shares prior to the acquisition by the Company of Roosevelt.
Roosevelt completed three acquisitions in the fourth quarter of 1996.
Roosevelt acquired Community Charter Corporation, a commercial bank
holding company, Mutual Bancompany, Inc., the parent company of Mutual
Savings Bank, and Sentinel Financial Corporation, a thrift holding
company. The impact of these acquisitions is immaterial to the pro forma
combined consolidated financial statements.
(5) Elimination of the Company's investment in Roosevelt.
(6) Proposed senior and subordinated debt of $467,500,000 to be issued. This
amount was determined based upon present cash levels of the Company and
estimated outflows associated with cash payments to Roosevelt
shareholders and with treasury share repurchases. Therefore,
significantly all of the proposed senior and subordinated debt will be
used to finance the acquisition of Roosevelt. The assumed interest rate
on such subordinated debt is 6.75%.
(7) Issuance of $150,000,000 of Subordinated Debt Securities. The
Subordinated Debt Securities are issued at a floating rate equal to the
three-month LIBOR plus 85 basis points. The average rate assumed in
calculating the expense for the pro forma combined consolidated financial
statements is 6.5%.
29
<PAGE>
(8) Balance sheet impact of adjustments related to the merger with Roosevelt
(see footnote 20 below). These adjustments, excluding the reserve for
possible loan losses entry, will be initially recorded as a credit to
accrued liabilities. Because they will be paid out in cash over an
estimated 18-month period following the merger with Roosevelt, the Pro
Forma Combined Consolidated Financial Statements reflect the cash outlay.
An income tax benefit at an effective tax rate of 36% is included in this
adjustment.
(9) Acquisition of Mark Twain with 17,213,114 shares of the Company's issued
common stock, including 986,091 reissued treasury shares, based on the
exchange ratio of .952 shares of the Company's common stock per share of
Mark Twain common stock. The number of shares of the Company's common
stock, which represents the aggregate number of shares to be issued in
the merger with Mark Twain, was calculated as follows:
<TABLE>
<S> <C>
Shares of Mark Twain common stock outstanding at March 10,
1997......................................................... 16,825,778
Escrowed shares for First City Bancshares, Inc. (see
discussion in next paragraph)................................ 25,011
Maximum number of shares of Mark Twain common stock which
could be issued pursuant to Mark Twain's stock option plans
and Mark Twain's 7% convertible subordinated capital notes
due 1999..................................................... 1,230,213
----------
Maximum number of shares of Mark Twain common stock to be
cancelled.................................................... 18,081,002
Exchange ratio................................................ X .952
----------
Aggregate number of shares of the Company's common stock to be
issued....................................................... 17,213,114
==========
</TABLE>
Mark Twain acquired First City Bancshares, Inc. in December 1996 in an
acquisition accounted for as a purchase. First City Bancshares, Inc. is
included in these pro forma financial statements only from its acquisition
date forward. The full impact of this acquisition is immaterial to the Pro
Forma Combined Consolidated Financial Statements. Mark Twain acquired
Northland Bancshares, Inc., owner of First National Bank of Platte County,
in September 1996 in an acquisition accounted for as a pooling-of-
interests. However, due to the immateriality of the financial condition
and results of operations of Northland Bancshares, Inc. to that of Mark
Twain, Mark Twain did not restate its historical financial statements to
reflect this acquisition. The full impact of the acquisition of Northland
Bancshares, Inc. is immaterial to the Pro Forma Combined Consolidated
Financial Statements.
(10) Elimination of non-interest bearing deposit balance of Mark Twain
subsidiary bank with the Company's subsidiary bank.
(11) Elimination of the Company's investment in Mark Twain.
(12) Balance sheet impact of adjustment related to the acquisition of Mark
Twain (see footnote 20 below). These adjustments will be initially
recorded as a credit to accrued liabilities. Because they will be paid
out in cash within an 18-month period following the acquisition of Mark
Twain, the Pro Forma Combined Consolidated Financial Statements reflect
the cash outlay. An income tax benefit at an effective tax rate of 36% is
included in this adjustment.
(13) Purchase entry of Regional with assumed consideration totaling 600,418
reissued treasury shares at $47.75 per share and $12,330,000 in cash. The
closing price for the Company's common stock on August 23, 1996 (the date
of the execution of the merger agreement with Regional) was $47.75.
(14) Elimination of the Company's investment in the Acquisitions.
(15) The pro forma excess of cost over fair value of net assets acquired was
$574,573,000 and $16,415,000 as of December 31, 1996 for Roosevelt and
Regional, respectively. The annual amount of goodwill amortization given
that goodwill is amortized over a 15-year period is $38,505,000 for
Roosevelt and $1,094,000 for Regional.
(16) Interest income foregone as the result of the Company repurchasing
986,091 treasury shares in conjunction with the acquisition of Mark Twain
by the Company. The assumed interest rate is 5%, which represent the
approximate rate the Company receives on overnight funds.
(17) To partially finance the Roosevelt acquisition, it is estimated that
$150,000,000 in short-term earning assets will be liquidated. The assumed
rate is 5%.
(18) Interest income foregone if Roosevelt repurchases 7,000,000 of its shares
in the open market prior to its acquisition by the Company at a per share
price of $22. The assumed rate is 6.75%, which is the same rate indicated
in footnote 6 for senior and subordinated debt.
30
<PAGE>
(19) Interest income foregone as the result of the Company repurchasing
600,418 treasury shares in conjunction with the acquisition of Regional
by the Company. The assumed interest rate is 5%.
(20) Upon consummation of the merger with Mark Twain, the Company expects to
record certain adjustments related to such merger at an approximate pre-
tax total of between $40 and $50 million. Upon consummation of the
acquisition of Roosevelt, the Company expects to record certain
adjustments to conform accounting and credit policies regarding loan and
other asset valuations with those of the Company. The pre-tax adjustment
for Roosevelt is expected to total between $38 million and $45 million.
The Roosevelt and Mark Twain pre-tax adjustments are estimated as
follows:
<TABLE>
<CAPTION>
ROOSEVELT MARK TWAIN
--------- ----------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Transition and duplicative costs related to system
standardization and signage....................... $ 8,000 $10,000
Provision for possible loan losses................. 2,500 --
Valuation of other real estate for accelerated
disposition....................................... 3,100 --
Accruals for severance and change of control
payments.......................................... 6,600 13,000
Write-downs to fair value of branches and equipment
to be disposed of................................. 8,500 9,000
Investment banking, legal and accounting fees...... 8,800 7,000
Environmental exposure............................. 3,400 1,000
------- -------
Total........................................... $40,900 $40,000
======= =======
</TABLE>
The Mark Twain and Roosevelt adjustments are the Company's estimates based
upon prior acquisitions, where amounts required to standardize systems and
standardize procedures and accruals for severance and employee change of
control contracts and the write down of fixed assets approximated 60 basis
points of total assets. For the Mark Twain acquisition, approximately $11
million was added for professional fees, and, as the transaction is
entirely in-market, additional charges for branch closings and severance
payments are expected to exceed the base 60 basis point estimate. As
Roosevelt's asset base is three times that of Mark Twain and includes a
significant investment portfolio, no additional amount was deemed
necessary.
(21) The computation of year-to-date average shares for the year ended
December 31, 1996 is as follows:
<TABLE>
<S> <C> <C>
Reported by the Company for the year ended December
31, 1996.......................................... 61,874,882
Reported by Mark Twain for the year ended December
31, 1996.......................................... 16,473,190
Exchange Ratio..................................... X .952
----------
15,682,477
Shares of the Company's common stock to be issued
in the Roosevelt acquisition, net of treasury
shares............................................ 6,000,000
----------
All Entities Pro Forma Combined Consolidated....... 83,557,359
==========
</TABLE>
31
<PAGE>
CAPITALIZATION
The following table sets forth the unaudited consolidated capitalization of
the Company and its subsidiaries as of December 31, 1996, and "as adjusted" to
reflect, on a pro forma basis as of such date, (i) the application of the net
proceeds from the sale of the Old Capital Securities and (ii) the application
of the net proceeds from the sale of the Old Capital Securities and the
consummation of the Acquisitions.
<TABLE>
<CAPTION>
DECEMBER 31, 1996
---------------------------------------
AS AS ADJUSTED AND
ACTUAL ADJUSTED ACQUISITIONS
---------- ---------- ---------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Long-Term Debt.......................... $ 302,795 $ 452,795 $1,646,331
---------- ---------- ----------
Shareholders' Equity:
Preferred Stock -- -- --
Common Stock.......................... 316,663 316,663 427,798
Capital Surplus....................... 228,151 228,151 458,122
Retained Earnings..................... 1,173,414 1,173,414 1,342,613
Treasury Stock, at Cost............... (84,201) (84,201) (7,888)
---------- ---------- ----------
Total Shareholders' Equity.......... 1,634,027 1,634,027 2,220,645
---------- ---------- ----------
Total Capitalization................ $1,936,822 $2,086,822 $3,866,976
========== ========== ==========
</TABLE>
32
<PAGE>
ACCOUNTING TREATMENT
For financial reporting purposes, the Trust will be treated as a subsidiary
of the Company and, accordingly, the accounts of the Trust will be included in
the consolidated financial statements of the Company. The Capital Securities
will be presented in the consolidated balance sheet of the Company as a
component of long-term debt. The Company will record Distributions payable on
the Capital Securities as interest expense in its consolidated statement of
income.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1996 1995 1994 1993 1992
----- ----- ----- ----- -----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends(1)....................
Excluding Interest on Deposits................... 3.39x 3.57x 4.35x 5.02x 3.99x
Including Interest on Deposits................... 1.46x 1.56x 1.65x 1.57x 1.36x
</TABLE>
- --------
(1) For purposes of calculating the ratio of earnings to combined fixed charges
and preferred stock dividends, earnings consist of earnings before income
taxes plus interest and one-third of rental expense. Fixed charges,
excluding interest on deposits, consists of interest on indebtedness and
one-third of rental expense (which is deemed representative of the interest
factor). Fixed charges, including interest on deposits, consists of the
foregoing items plus interest on deposits.
USE OF PROCEEDS
Neither MBI nor the Trust will receive any cash proceeds from the issuance of
the New Capital Securities offered hereby. In consideration for issuing the New
Capital Securities in exchange for the Old Capital Securities as described in
this Prospectus, the Trust will receive Old Capital Securities in like
liquidation amount. The Old Capital Securities surrendered in exchange for the
New Capital Securities will be retired and cancelled. The net proceeds to the
Trust from the offering of the Old Capital Securities was approximately $147.0
million (after payment of the expenses of the offering and the Initial
Purchasers' compensation). All of the net proceeds from the sale of the Capital
Securities were invested by the Trust in the Old Subordinated Debt Securities.
The Company intends to use the net proceeds from the sale of the Old
Subordinated Debt Securities to fund the proposed repurchases of the shares of
the Company's common stock (which are expected to be reissued by the Company in
connection with the proposed consummation of the acquisition of Roosevelt) and
the balance, if any, for general corporate purposes, including, without
limitation, the reduction of indebtedness, investments in and advances to
subsidiaries and possible future acquisitions of bank and non-bank
subsidiaries. Although the Company from time to time evaluates potential
acquisitions, it currently has no understandings, commitments or agreements
with respect to any acquisitions, except with respect to Mark Twain and
Roosevelt. See "Recent Developments." Pending such application, the net
proceeds were invested in short-term investment grade obligations.
33
<PAGE>
MERCANTILE CAPITAL TRUST I
The Trust is a statutory business trust created under Delaware law pursuant
to (i) the Initial Declaration (as such Initial Declaration was amended and
restated, the "Declaration") and (ii) the filing of a certificate of trust for
the Trust with the Delaware Secretary of State on January 28, 1997. The Trust's
business and affairs are conducted by its trustees. Pursuant to the
Declaration, at least one trustee of the Trust is required to be an entity that
maintains its principal place of business in the State of Delaware (the
"Delaware Trustee") and at least one trustee is required to be a financial
institution that is unaffiliated with the Company and is eligible and acts as
property trustee and as indenture trustee pursuant to the terms set forth
therein (the "Institutional Trustee" and together with the Delaware Trustee,
the "Issuer Trustees"). The Chase Manhattan Bank is initially serving as
Institutional Trustee and Chase Manhattan Bank Delaware is initially serving as
Delaware Trustee. In addition, three individuals who are employees or officers
of or affiliated with the holder of the majority of the Common Securities, are
acting as administrators with respect to the Trust (the "Administrators"). The
Administrators were selected by the holders of a majority of the Common
Securities. See "Description of the Capital Securities--Miscellaneous." The
Trust exists for the exclusive purposes of (i) issuing the Trust Securities
representing undivided beneficial interests in the assets of the Trust, (ii)
investing the gross proceeds of such Trust Securities in the Subordinated Debt
Securities and (iii) engaging in only those other activities necessary or
incidental thereto, which may include engaging in the Exchange Offer. All of
the Common Securities of the Trust are and will continue to be directly or
indirectly owned by the Company. The Common Securities of the Trust rank pari
passu, and payments will be made thereon pro rata, with the Capital Securities
of the Trust except that upon the occurrence and continuation of a Declaration
Event of Default, the rights of the holders of the Common Securities to payment
from the Trust in respect of distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the Capital Securities. The Trust has a term of approximately 55 years, but may
earlier dissolve as provided in the Declaration. The Company, as the holder of
all of the outstanding Common Securities, has the right at any time to dissolve
the Trust (including, without limitation, upon the occurrence of a Tax Event)
and, after satisfaction of liabilities to creditors of the Trust, cause the
Subordinated Debt Securities to be distributed to the holders of the Trust
Securities on a pro rata basis in accordance with the respective liquidation
amounts thereof, in liquidation of the Trust.
The Institutional Trustee holds title to the Subordinated Debt Securities for
the benefit of the holders of the Trust Securities and has the power to
exercise all rights, powers and privileges under the Indenture as the holder of
the Subordinated Debt Securities. In addition, the Institutional Trustee
maintains exclusive control of a separate, segregated, non-interest bearing
trust account (the "Property Account") to hold all payments made in respect of
the Subordinated Debt Securities for the benefit of the holders of the Trust
Securities issued by the Trust. The Institutional Trustee will make payments of
distributions and payments on liquidation, redemption and otherwise to the
holders of record of the Trust Securities out of funds from the Property
Account. Holders of the Capital Securities are not entitled to appoint, remove
or replace the Institutional Trustee or the Delaware Trustee except upon the
occurrence of an Indenture Event of Default. See "Description of the Capital
Securities--Voting Rights" and "Removal of Trustees; Appointment of
Successors." The Company, as borrower under the Indenture, has covenanted to
pay all costs, expenses, debts and other obligations related to the Trust
(other than in respect of the Trust Securities). See "Description of the
Subordinated Debt Securities--Miscellaneous." The rights of the holders of the
Capital Securities of the Trust, including economic rights, rights to
information and voting rights, are set forth in the Declaration, the Delaware
Business Trust Act, as amended (the "Trust Act"), and the Trust Indenture Act.
See "Description of the Capital Securities."
34
<PAGE>
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
In connection with the sale of the Old Capital Securities, MBI and the Trust
entered into the Registration Rights Agreement with the Initial Purchasers,
pursuant to which MBI and the Trust agreed to file and to use their best
efforts to cause to become effective with the Commission a registration
statement with respect to the exchange of the Old Capital Securities for
capital securities with terms identical in all material respects to the terms
of the Old Capital Securities. A copy of the Registration Rights Agreement has
been filed as an exhibit to the Registration Statement of which this Prospectus
is a part.
The Exchange Offer is being made to satisfy the contractual obligations of
MBI and the Trust under the Registration Rights Agreement. The form and terms
of the New Capital Securities are the same as the form and terms of the Old
Capital Securities except that the New Capital Securities have been registered
under the Securities Act and therefore will not be subject to certain
restrictions on transfer applicable to the Old Capital Securities and will not
provide, under certain circumstances, for any increase in the Distribution rate
thereon. In that regard, the Old Capital Securities provide, among other
things, that, if the Exchange Offer is not consummated by July 4, 1997, the
Distribution rate borne by the Old Capital Securities commencing on July 5,
1997, will increase by 0.25% per annum (to a maximum increase of 0.75%) until
the Exchange Offer is consummated. Upon consummation of the Exchange Offer,
holders of Old Capital Securities will not be entitled to any increase in the
Distribution rate thereon or any further registration rights under the
Registration Rights Agreement, except under limited circumstances. See "Risk
Factors--Consequences of a Failure to Exchange Old Capital Securities."
The Exchange Offer is not being made to, nor will the Company accept tenders
for exchange from, holders of Old Capital Securities in any jurisdiction in
which the Exchange Offer or the acceptance thereof would not be in compliance
with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect to the
Exchange Offer means any person in whose name the Old Capital Securities are
registered on the books of the Company or any other person who has obtained a
properly completed bond power from the registered holder, or any participant in
The Depository Trust Company ("DTC") whose name appears on a security position
listing as a holder of Old Capital Securities (which, for purposes of the
Exchange Offer, include beneficial interests in the Old Capital Securities,
held by direct or indirect participants in The Depository Trust Company and Old
Capital Securities held in definitive form).
Pursuant to the Exchange Offer, MBI will exchange as soon as practicable
after the date hereof the Old Guarantee for the New Guarantee and all of the
Old Subordinated Debt Securities, of which $154,640,000 aggregate principal
amount is outstanding, for a like aggregate principal amount of the New
Subordinated Debt Securities. The New Guarantee and New Subordinated Debt
Securities have been registered under the Securities Act.
TERMS OF THE EXCHANGE
The Company hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $150,000,000 aggregate liquidation amount of New Capital
Securities for a like aggregate liquidation amount of Old Capital Securities
properly tendered on or prior to the Expiration Date and not properly withdrawn
in accordance with the procedures described below. The Company will issue,
promptly after the Expiration Date, an aggregate liquidation amount of up to
$150,000,000 of New Capital Securities in exchange for a like principal amount
of outstanding Old Capital Securities tendered and accepted in connection with
the Exchange Offer. Holders may tender their Old Capital Securities in whole or
in part in a liquidation amount of not less than $100,000 or any integral
multiple of $1,000 in excess thereof.
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The Exchange Offer is not conditioned upon any minimum liquidation amount of
Old Capital Securities being tendered. As of the date of this Prospectus,
$150,000,000 aggregate liquidation amount of the Old Capital Securities is
outstanding.
Holders of Old Capital Securities do not have any appraisal or dissenters'
rights in connection with the Exchange Offer. Old Capital Securities which are
not tendered for or are tendered but not accepted in connection with the
Exchange Offer will remain outstanding and will not be entitled to any further
registration rights under the Registration Rights Agreement, except under
limited circumstances. See "Risk Factors--Consequences of a Failure to Exchange
Old Capital Securities."
If any tendered Old Capital Securities are not accepted for exchange because
of an invalid tender, the occurrence of certain other events set forth herein
or otherwise, certificates for any such unaccepted Old Capital Securities will
be returned, without expense, to the tendering holder thereof promptly after
the Expiration Date.
Holders who tender Old Capital Securities in connection with the Exchange
Offer will not be required to pay brokerage commissions or fees or, subject to
the instructions in the Letter of Transmittal, transfer taxes with respect to
the exchange of Old Capital Securities in connection with the Exchange Offer.
MBI will pay all charges and expenses, other than certain applicable taxes
described below, in connection with the Exchange Offer. See "--Fees and
Expenses."
NEITHER THE BOARD OF DIRECTORS OF MBI NOR ANY OF THE TRUSTEES OF THE TRUST
MAKES ANY RECOMMENDATION TO HOLDERS OF OLD CAPITAL SECURITIES AS TO WHETHER TO
TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF THEIR OLD CAPITAL
SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO ONE HAS BEEN
AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD CAPITAL SECURITIES
MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE EXCHANGE OFFER
AND, IF SO, THE AGGREGATE AMOUNT OF OLD CAPITAL SECURITIES TO TENDER AFTER
READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND CONSULTING WITH THEIR
ADVISERS, IF ANY, BASED ON THEIR FINANCIAL POSITION AND REQUIREMENTS.
EXPIRATION DATE, EXTENSIONS, AMENDMENTS
The term "Expiration Date" means 5:00 p.m., New York City time, on
, 1997 unless the Exchange Offer is extended by MBI and the
Trust (in which case the term "Expiration Date" shall mean the latest date and
time to which the Exchange Offer is extended).
MBI and the Trust expressly reserve the right in their sole and absolute
discretion, subject to applicable law, at any time and from time to time, (i)
to delay the acceptance of the Old Capital Securities for exchange, (ii) to
terminate the Exchange Offer (whether or not any Old Capital Securities have
theretofore been accepted for exchange) if MBI and the Trust determine, in
their sole and absolute discretion, that any of the events or conditions
referred to under "--Conditions to the Exchange Offer" has occurred or exists
or has not been satisfied, (iii) to extend the Expiration Date of the Exchange
Offer and retain all Old Capital Securities tendered pursuant to the Exchange
Offer, subject, however, to the right of holders of Old Capital Securities to
withdraw their tendered Old Capital Securities as described under "--Withdrawal
Rights", and (iv) to waive any condition or otherwise amend the terms of the
Exchange Offer in any respect. If the Exchange Offer is amended in a manner
determined by MBI and the Trust to constitute a material change, or if MBI and
the Trust waive a material condition of the Exchange Offer, MBI and the Trust
will promptly disclose such amendment by means of a prospectus supplement that
will be distributed to the registered holders of the Old Capital Securities,
and MBI and the Trust will extend the Exchange Offer to the extent required by
Rule 14e-1 under the Exchange Act.
Any such delay in acceptance, extension, termination or amendment will be
followed promptly by oral or written notice thereof to the Exchange Agent (any
such oral notice to be promptly confirmed in writing) and by
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making a public announcement thereof, and such announcement in the case of an
extension will be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. Without limiting
the manner in which MBI and the Trust may choose to make any public
announcement and subject to applicable laws, MBI and the Trust shall have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a release to an appropriate news agency.
ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF NEW CAPITAL SECURITIES
Upon the terms and subject to the conditions of the Exchange Offer, the Trust
will exchange, and will issue to the Exchange Agent, New Capital Securities for
Old Capital Securities validly tendered and not withdrawn (pursuant to the
withdrawal rights described under "--Withdrawal Rights") promptly after the
Expiration Date.
In all cases, delivery of New Capital Securities in exchange for Old Capital
Securities tendered and accepted for exchange pursuant to the Exchange Offer
will be made only after timely receipt by the Exchange Agent of (i) Old Capital
Securities or a book-entry confirmation of a book-entry transfer of Old Capital
Securities into the Exchange Agent's account at DTC, (ii) the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, and (iii) any other documents required by
the Letter of Transmittal.
The term "book-entry confirmation" means a timely confirmation of a book-
entry transfer of Old Capital Securities into the Exchange Agent's account at
DTC.
Subject to the terms and conditions of the Exchange Offer, the Trust will be
deemed to have accepted for exchange, and thereby exchanged, Old Capital
Securities validly tendered and not withdrawn as, if and when the Trust gives
oral or written notice to the Exchange Agent (any such oral notice to be
promptly confirmed in writing) of the Trust's acceptance of such Old Capital
Securities for exchange pursuant to the Exchange Offer. The Exchange Agent will
act as agent for the Trust for the purpose of receiving tenders of Old Capital
Securities, Letters of Transmittal and related documents, and as agent for
tendering holders for the purpose of receiving Old Capital Securities, Letters
of Transmittal and related documents and transmitting New Capital Securities to
validly tendered holders. Such exchange will be made promptly after the
Expiration Date. If for any reason whatsoever, acceptance for exchange or the
exchange of any Old Capital Securities tendered pursuant to the Exchange Offer
is delayed (whether before or after the Trust's acceptance for exchange of Old
Capital Securities) or the Trust extends the Exchange Offer or is unable to
accept for exchange or exchange Old Capital Securities tendered pursuant to the
Exchange Offer, then, without prejudice to the Trust's rights set forth herein,
the Exchange Agent may, nevertheless, on behalf of the Trust and subject to
Rule 14e-1(c) under the Exchange Act, retain tendered Old Capital Securities
and such Old Capital Securities may not be withdrawn except to the extent
tendering holders are entitled to withdrawal rights as described under "--
Withdrawal Rights."
Pursuant to the Letter of Transmittal, a holder of Old Capital Securities
will warrant and agree in the Letter of Transmittal that it has full power and
authority to tender, exchange, sell, assign and transfer Old Capital
Securities, that the Trust will acquire good, marketable and unencumbered title
to the tendered Old Capital Securities, free and clear of all liens,
restrictions, charges and encumbrances, and the Old Capital Securities tendered
for exchange are not subject to any adverse claims or proxies. The holder also
will warrant and agree that it will, upon request, execute and deliver any
additional documents deemed by the Trust or the Exchange Agent to be necessary
or desirable to complete the exchange, sale, assignment and transfer of the Old
Capital Securities tendered pursuant to the Exchange Offer.
PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES
Valid Tender. Except as set forth below, in order for Old Capital Securities
to be validly tendered pursuant to the Exchange Offer, either (i) a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees and any other required documents, must be
received by the Exchange Agent at the address set forth under "--Exchange
Agent," on or prior to the Expiration Date and (a)
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tendered Old Capital Securities must be received by the Exchange Agent, or (b)
such Old Capital Securities must be tendered pursuant to the procedures for
book-entry transfer set forth below and a book-entry confirmation must be
received by the Exchange Agent, in each case on or prior to the Expiration
Date, or (ii) the guaranteed delivery procedures set forth below must be
complied with.
If less than all of the Old Capital Securities are tendered, a tendering
holder should fill in the amount of Old Capital Securities being tendered in
the appropriate box on the Letter of Transmittal. The entire amount of Old
Capital Securities delivered to the Exchange Agent will be deemed to have been
tendered unless otherwise indicated.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN RECEIPT
REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Book-Entry Transfer. The Exchange Agent will establish an account with
respect to the Old Capital Securities at DTC for purposes of the Exchange Offer
within two business days after the date of this Prospectus. Any financial
institution that is a participant in DTC's book-entry transfer facility system
may make a book-entry delivery of the Old Capital Securities by causing DTC to
transfer such Old Capital Securities into the Exchange Agent's account at DTC
in accordance with DTC's procedures for transfers. However, although delivery
of Old Capital Securities may be effected through book-entry transfer into the
Exchange Agent's account at DTC, the Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees and any other required documents, must in any case be delivered to
and received by the Exchange Agent at its address set forth under "--Exchange
Agent" on or prior to the Expiration Date, or the guaranteed delivery procedure
set forth below must be complied with.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT
Signature Guarantees. Certificates for the Old Capital Securities need not be
endorsed and signature guarantees on the Letter of Transmittal are unnecessary
unless (a) a certificate for the Old Capital Securities is registered in a name
other than that of the person surrendering the certificate or (b) such
registered holder completes the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" in the Letter of Transmittal. In the case of
(a) or (b) above, such certificates for Old Capital Securities must be duly
endorsed or accompanied by a properly executed bond power, with the endorsement
or signature on the bond power and on the Letter of Transmittal guaranteed by a
firm or other entity identified in Rule 17Ad-15 under the Exchange Act as an
"eligible guarantor institution," including (as such terms are defined
therein): (i) a bank; (ii) a broker, dealer, municipal securities broker or
dealer or government securities broker or dealer; (iii) a credit union; (iv) a
national securities exchange, registered securities association or clearing
agency; or (v) a savings association that is a participant in a Securities
Transfer Association (an "Eligible Institution"), unless surrendered on behalf
of such Eligible Institution. See Instruction 1 to the Letter of Transmittal.
Guaranteed Delivery. If a holder desires to tender Old Capital Securities
pursuant to the Exchange Offer and the certificates for such Old Capital
Securities are not immediately available or time will not permit all required
documents to reach the Exchange Agent on or before the Expiration Date, or the
procedures for book-entry transfer cannot be completed on a timely basis, such
Old Capital Securities may nevertheless be tendered, provided that all of the
following guaranteed delivery procedures are complied with:
(i) such tenders are made by or through an Eligible Institution;
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(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form accompanying the Letter of Transmittal,
is received by the Exchange Agent, as provided below, on or prior to
Expiration Date; and
(iii) the certificates (or book-entry confirmation) representing all
tendered Old Capital Securities, in proper form for transfer, together with
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees and any other documents
required by the Letter of Transmittal, are received by the Exchange Agent
within three New York Stock Exchange trading days after the date of
execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or transmitted by
facsimile or mail to the Exchange Agent and must include a guarantee by an
Eligible Institution in the form set forth in such notice.
Notwithstanding any other provision hereof, the delivery of New Capital
Securities in exchange for Old Capital Securities tendered and accepted for
exchange pursuant to the Exchange Offer will in all cases be made only after
timely receipt by the Exchange Agent of Old Capital Securities, or of a book-
entry confirmation with respect to such Old Capital Securities, and a properly
completed and duly executed Letter of Transmittal (or facsimile thereof),
together with any required signature guarantees and any other documents
required by the Letter of Transmittal. Accordingly, the delivery of New Capital
Securities might not be made to all tendering holders at the same time, and
will depend upon when Old Capital Securities, book-entry confirmations with
respect to Old Capital Securities and other required documents are received by
the Exchange Agent.
The Trust's acceptance for exchange of Old Capital Securities tendered
pursuant to any of the procedures described above will constitute a binding
agreement between the tendering holder and the Trust upon the terms and subject
to the conditions of the Exchange Offer.
Determination of Validity. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange
of any tendered Old Capital Securities will be determined by the Trust, in its
sole discretion, whose determination shall be final and binding on all parties.
The Trust reserves the absolute right, in its sole and absolute discretion, to
reject any and all tenders determined by it not to be in proper form or the
acceptance of which, or exchange for, may, in the view of counsel to the Trust,
be unlawful. The Trust also reserves the absolute right, subject to applicable
law, to waive any of the conditions of the Exchange Offer as set forth under
"--Conditions to the Exchange Offer" or any condition or irregularity in any
tender of Old Capital Securities of any particular holder whether or not
similar conditions or irregularities are waived in the case of other holders.
The Trust's interpretation of the terms and conditions of the Exchange Offer
(including the Letter of Transmittal and the instructions thereto) will be
final and binding. No tender of Old Capital Securities will be deemed to have
been validly made until all irregularities with respect to such tender have
been cured or waived. Neither the Trust, any affiliates or assigns of the
Trust, the Exchange Agent nor any other person shall be under any duty to give
any notification of any irregularities in tenders or incur any liability for
failure to give any such notification.
If any Letter of Transmittal, endorsement, bond power, power of attorney or
any other document required by the Letter of Transmittal is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and unless waived by the Trust,
evidence satisfactory to the Trust, in its sole discretion, of such person's
authority to so act must be submitted.
A beneficial owner of Old Capital Securities that are held by or registered
in the name of a broker, dealer, commercial bank, trust company or other
nominee or custodian is urged to contact such entity promptly if such
beneficial holder wishes to participate in the Exchange Offer.
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RESALES OF NEW CAPITAL SECURITIES
Based on interpretations by the staff of the Commission, as set forth in no-
action letters issued to third parties, the Company and the Trust believe that
holders of Old Capital Securities (other than any holder that is an "affiliate"
of the Company or the Trust as defined under Rule 405 of the Securities Act)
who exchange their Old Capital Securities for New Capital Securities pursuant
to the Exchange Offer may offer such New Capital Securities for resale, resell
such New Capital Securities and otherwise transfer such New Capital Securities
without compliance with the registration and prospectus delivery provisions of
the Securities Act, provided that such New Capital Securities are acquired in
the ordinary course of such holders' business and such holders are not engaged
in, and do not intend to engage in, a distribution of such New Capital
Securities and have no arrangement or understanding with any person to
participate in the distribution of such New Capital Securities. However, the
staff of the Commission has not considered the Exchange Offer in the context of
a no-action letter, and there can be no assurance that the staff of the
Commission would make a similar determination with respect to the Exchange
Offer. Each broker-dealer that receives New Capital Securities for its own
account in exchange for Old Capital Securities, where such Old Capital
Securities were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such New Capital Securities. See
"Plan of Distribution."
WITHDRAWAL RIGHTS
Except as otherwise provided herein, tenders of Old Capital Securities may be
withdrawn at any time on or prior to the Expiration Date.
In order for a withdrawal to be effective, a written, telegraphic or
facsimile transmission of such notice of withdrawal must be timely received by
the Exchange Agent at one of its addresses set forth under "Exchange Agent" on
or prior to the Expiration Date. Any such notice of withdrawal must specify the
name of the person who tendered the Old Capital Securities to be withdrawn, the
aggregate principal amount of Old Capital Securities to be withdrawn, and (if
certificates for such Old Capital Securities have been tendered) the name of
the registered holder of the Old Capital Securities as set forth on the Old
Capital Securities, if different from that of the person who tendered such Old
Capital Securities. If Old Capital Securities have been delivered or otherwise
identified to the Exchange Agent, then prior to the physical release of such
Old Capital Securities, the tendering holder must submit the serial numbers
shown on the particular Old Capital Securities to be withdrawn and the
signature on the notice of withdrawal must be guaranteed by an Eligible
Institution, except in the case of Old Capital Securities tendered for the
account of an Eligible Institution. If Old Capital Securities have been
tendered pursuant to the procedures for book-entry transfer set forth in
"Procedures for Tendering Old Capital Securities," the notice of withdrawal
must specify the name and number of the account at DTC to be credited with the
withdrawal of Old Capital Securities, in which case a notice of withdrawal will
be effective if delivered to the Exchange Agent by written, telegraphic or
facsimile transmission. Withdrawals of tenders of Old Capital Securities may
not be rescinded. Old Capital Securities properly withdrawn will not be deemed
validly tendered for purposes of the Exchange Offer, but may be retendered at
any subsequent time on or prior to the Expiration Date by following any of the
procedures described above under "Procedures for Tendering Old Capital
Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Trust, in its
sole discretion, whose determination shall be final and binding on all parties.
Neither the Trust, any affiliates or assigns of the Trust, the Exchange Agent
or any other person shall be under any duty to give any notification of any
irregularities in any notice of withdrawal or incur any liability for failure
to give any such notification. Any Old Capital Securities that have been
tendered but which are withdrawn will be returned to the holder thereof
promptly after withdrawal.
DISTRIBUTIONS ON THE NEW CAPITAL SECURITIES
Holders of Old Capital Securities whose Old Capital Securities are accepted
for exchange will not receive accumulated Distributions on such Old Capital
Securities for any period from and after the last Distribution Date with
respect to such Old Capital Securities prior to the original issue date of the
New Capital Securities or, if no
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such Distributions have been made, will not receive any accumulated
Distributions on such Old Capital Securities, and will be deemed to have waived
the right to receive any Distributions on such Old Capital Securities
accumulated from and after such Distribution Date or, if no such Distributions
have been made, from and after February 4, 1997.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or any extension
of the Exchange Offer, MBI and the Trust will not be required to accept for
exchange, or to exchange, any Old Capital Securities for any New Capital
Securities, and, as described below, may terminate the Exchange Offer (whether
or not any Old Capital Securities have theretofore been accepted for exchange)
or may waive any conditions to or amend the Exchange Offer, if any of the
following conditions have occurred or exist or have not been satisfied:
(a) there shall occur a change in the current interpretation by the staff
of the Commission which permits the New Capital Securities issued pursuant
to the Exchange Offer in exchange for Old Capital Securities to be offered
for resale, resold and otherwise transferred by holders thereof (other than
broker-dealers and any such holder which is an "affiliate" of MBI or the
Trust within the meaning of Rule 405 under the Securities Act) without
compliance with the registration and prospectus delivery provisions of the
Securities Act provided that such New Capital Securities are acquired in
the ordinary course of such holders' business and such holders have no
arrangement or understanding with any person to participate in the
distribution of such New Capital Securities;
(b) any action or proceeding shall have been instituted or threatened in
any court or by or before any governmental agency or body with respect to
the Exchange Offer which, in MBI's and the Trust's judgment, would
reasonably be expected to impair the ability of MBI and the Trust to
proceed with the Exchange Offer;
(c) any law, statute, rule or regulation shall have been adopted or
enacted which, in MBI's and the Trust's judgment, would reasonably be
expected to impair the ability of MBI and the Trust to proceed with the
Exchange Offer;
(d) a banking moratorium shall have been declared by United States
federal or any state banking authorities which, in MBI's and the Trust's
judgment, would reasonably be expected to impair the ability of MBI and the
Trust to proceed with the Exchange Offer;
(e) trading on the New York Stock Exchange or generally in the United
States over-the-counter market shall have been suspended by Order of the
Commission or any other governmental authority which, in MBI's and the
Trust's judgment, would reasonably be expected to impair the ability of MBI
and the Trust to proceed with the Exchange Offer;
(f) a stop order shall have been issued by the Commission or any state
securities authority suspending the effectiveness of the Registration
Statement or proceedings shall have been initiated or, to the knowledge of
MBI or the Trust, threatened for that purpose or that any governmental
approval has not been obtained, which approval MBI and the Trust shall, in
their sole discretion, deem necessary for the consummation of the Exchange
Offer as contemplated hereby; or
(g) any change, or any development involving a prospective change, in the
business or financial affairs of MBI and the Trust or any of their
subsidiaries have occurred which, in the sole judgment of MBI and the
Trust, might materially impair the ability of MBI and the Trust to proceed
with the Exchange Offer.
If MBI and the Trust determine in their sole and absolute discretion that any
of the foregoing events or conditions has occurred or exist or has not been
satisfied, MBI and the Trust may, subject to applicable law, terminate the
Exchange Offer (whether or not any Old Capital Securities have theretofore been
accepted for exchange) or may waive any such condition or otherwise amend the
terms of the Exchange Offer in any respect. If such waiver or amendment
constitutes a material change to the Exchange Offer, MBI and the Trust will
promptly disclose such waiver by means of a prospectus supplement that will be
distributed to the registered holders of the Old Capital Securities, and MBI
and the Trust will extend the Exchange Offer to the extent required by Rule
14e-1 under the Exchange Act.
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EXCHANGE AGENT
The Chase Manhattan Bank has been appointed as Exchange Agent for the
Exchange Offer. Delivery of the Letters of Transmittal and any other required
documents, questions, requests for assistance and requests for additional
copies of this Prospectus or of the Letter of Transmittal should be directed to
the Exchange Agent as follows:
The Chase Manhattan Bank
Global Trust Services
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Ronald J. Halleran
Telephone: (212) 946-3068
Facsimile: (212) 946-8158
Delivery to other than the above address or facsimile numbers will not
constitute a valid delivery.
FEES AND EXPENSES
MBI has agreed to pay the Exchange Agent reasonable and customary fees for
its services and will reimburse it for its reasonable out-of-pocket expenses in
connection therewith. MBI will also pay brokerage houses and other custodians,
nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them
in forwarding copies of this Prospectus and related documents to the beneficial
owners of Old Capital Securities, and in handling or tendering for their
customers.
Holders who tender their Old Capital Securities for exchange will not be
obligated to pay any transfer taxes in connection therewith. If, however, New
Capital Securities are to be delivered to, or are to be issued in the name of,
any person other than the registered holder of the Old Capital Securities
tendered, or if a transfer tax is imposed for any reason other than the
exchange of Old Capital Securities in connection with the Exchange Offer, then
the amount of any such transfer taxes (whether imposed on the registered holder
or any other persons) will be payable by the tendering holder. If satisfactory
evidence of payment of such taxes or exemption therefrom is not submitted with
the Letter of Transmittal, the amount of such transfer taxes will be billed
directly to such tendering holder.
Neither MBI nor the Trust will make any payment to brokers, dealers or others
soliciting acceptances of the Exchange Offer.
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DESCRIPTION OF THE CAPITAL SECURITIES
The Old Capital Securities were issued and the New Capital Securities will be
issued pursuant to the terms of the Declaration. The Institutional Trustee, The
Chase Manhattan Bank, is trustee for the Capital Securities under the
Declaration. The terms of the Capital Securities include those stated in the
Declaration and those made part of the Declaration by the Trust Indenture Act
and the Trust Act. The following summary of the material terms and provisions
of the Capital Securities does not purport to be complete and is subject to,
and qualified in its entirety by reference to, the Declaration (a copy of which
may be obtained from the Company or the Trust), the Trust Act and the Trust
Indenture Act.
GENERAL
The Declaration authorizes the Administrators to issue, on behalf of the
Trust, the Trust Securities, which represent undivided beneficial interests in
the assets of the Trust. All of the Common Securities are owned by the Company.
The Common Securities rank pari passu, and payments will be made thereon on a
pro rata basis, with the Capital Securities, except that upon the occurrence
and during the continuance of a Declaration Event of Default, the rights of the
holders of the Common Securities to receive payment of periodic distributions
and payments upon liquidation, redemption and otherwise will be subordinated to
the rights of the holders of the Capital Securities. The Declaration does not
permit the issuance by the Trust of any securities other than the Trust
Securities and the Exchange Securities or the incurrence of any indebtedness by
the Trust. Pursuant to the Declaration, the Institutional Trustee holds legal
title to the Subordinated Debt Securities purchased by the Trust for the
benefit of the holders of the Trust Securities. The payment of Distributions
out of money held by the Trust, and payments upon redemption of the Capital
Securities upon liquidation of the Trust, are guaranteed by the Company as
described under "Description of the Guarantee." The Guarantee is held by The
Chase Manhattan Bank, the Guarantee Trustee, for the benefit of the holders of
the Capital Securities. The Guarantee does not cover payment of Distributions
in respect of the Capital Securities to the extent the Trust does not have
available funds to pay Distributions. In such event, the remedy of holders of
the Capital Securities would be, through the vote of holders of a majority in
liquidation amount of the Capital Securities, to direct the Institutional
Trustee to enforce the Institutional Trustee's rights under the Subordinated
Debt Securities except in the circumstances in which a holder of such Capital
Securities may take Direct Action. See "--Voting Rights" and "--Declaration
Events of Default."
DISTRIBUTIONS
Distributions on each Capital Security are payable in U.S. dollars at a
variable annual rate equal to LIBOR plus 0.85% (which is the same rate payable
on the Subordinated Debt Securities) on the stated liquidation amount of $1,000
per Capital Security, compounded quarterly to the extent permitted by law. The
term "Distribution" as used herein includes cash distributions and any such
compounded distributions payable unless otherwise stated. The amount of
Distributions payable for any period will be computed on the basis of the
actual number of days elapsed in a year of twelve, 30-day months.
Distributions on the Capital Securities are cumulative, accrue from the date
of original issuance of the Old Capital Securities, and are payable (subject to
extension of distribution payment periods as described herein) quarterly in
arrears on the first day of February, May, August and November of each year
(each, a "Distribution Payment Date"), commencing May 1, 1997, when, as and if
available for payment. Distributions will be made by the Institutional Trustee,
except as otherwise described below.
The Company has the right under the Indenture to defer payments of interest
on the Subordinated Debt Securities by extending the interest payment period at
any time and from time to time, subject to the conditions described below,
although such interest will continue to accrue on the Subordinated Debt
Securities at a variable annual rate of LIBOR plus 0.85%, compounded quarterly
to the extent permitted by law during any Extension Period. If such right is
exercised, quarterly Distributions on the Capital Securities will also be
deferred (though such distributions will continue to accrue at the variable
annual rate equal to LIBOR plus 0.85%, compounded
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quarterly to the extent permitted by law), during any Extension Period. Such
right to extend any interest payment period for the Subordinated Debt
Securities is limited to Extension Periods, each not exceeding 20 consecutive
quarterly periods, and no Extension Period may be initiated while accrued
interest from a prior, completed Extension Period is unpaid or while the
Company is in default on the payment of interest that has become due and
payable on the Subordinated Debt Securities, and no Extension Period may extend
beyond the maturity of the Subordinated Debt Securities. In the event that the
Company exercises this right, then during any Extension Period (a) the Company
shall not declare or pay dividends on, make a distribution with respect to, or
redeem, purchase or acquire, or make a liquidation payment with respect to, any
of its capital stock or rights to acquire such capital stock (other than (i)
purchases or acquisitions of shares of any such capital stock or rights to
acquire such capital stock in connection with the satisfaction by the Company
of its obligations under any employee benefit plans, (ii) as a result of a
reclassification of the Company's capital stock or rights to acquire such
capital stock or the exchange or conversion of one class or series of the
Company's capital stock or rights to acquire such capital stock for another
class or series of the Company's capital stock or rights to acquire such
capital stock, (iii) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (iv) dividends
and distributions made on the Company's capital stock or rights to acquire such
capital stock with the Company's capital stock or rights to acquire the capital
stock or (v) any declaration of a dividend in connection with the
implementation of a shareholder rights plan, or the issuance of stock under any
such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto), or make guarantee payments (other than payments under the
Guarantee and the Common Securities Guarantee) with respect to the foregoing
and (b) the Company shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued
by the Company that rank pari passu with or junior to the Subordinated Debt
Securities. Prior to the termination of any such Extension Period in respect of
the Subordinated Debt Securities, the Company may further extend the interest
payment period; provided that each such Extension Period in respect of the
Subordinated Debt Securities, together with all such previous and further
extensions thereof, may not exceed 20 consecutive quarterly periods or extend
beyond the maturity of the Subordinated Debt Securities. Upon the termination
of any Extension Period in respect of the Subordinated Debt Securities and the
payment of all amounts then due, the Company may commence a new Extension
Period, subject to the above requirements. See "Description of the Subordinated
Debt Securities--Interest" "--Option to Extend Interest Payment Period" and "--
Certain Covenants." If Distributions are deferred, the Distributions due on
such Capital Securities will be paid on the date that the related Extension
Period terminates, or, if such date is not a Distribution Payment Date, on the
immediately following Distribution Payment Date, to holders of applicable
Capital Securities as they appear on the books and records of the Trust on the
record date immediately preceding such date.
Distributions on the Capital Securities must be paid on the dates payable
(after giving effect to any Extension Period) to the extent that the Trust has
funds available for the payment of such Distributions in the Property Account.
The Trust's funds available for distribution to the holders of the Capital
Securities will be limited to payments received from the Company on the
Subordinated Debt Securities. See "Description of the Subordinated Debt
Securities." The payment of Distributions out of moneys held by the Trust is
guaranteed by the Company to the extent set forth under "Description of the
Guarantee."
Distributions on the Capital Securities will be payable to the holders
thereof as they appear on the books and records of the Trust on the relevant
record dates, which, as long as the Capital Securities are held solely in book-
entry only form, will be one Business Day (as defined below) prior to the
relevant payment dates. Such distributions will be paid through the
Institutional Trustee who will hold amounts received in respect of the
Subordinated Debt Securities in the Property Account for the benefit of the
holders of the Trust Securities. Subject to any applicable laws and regulations
and the provisions of the Declaration, each such payment will be made as
described under "--Book-Entry Only Issuance--The Depository Trust Company." At
any time when the Capital Securities are not held solely in book-entry only
form, the Administrators shall select record dates, which shall be 15 days
prior to the relevant payment date. In the event that any date on which
Distributions are to be made on the Capital Securities is not a Business Day,
then payment of the Distributions payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment
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in respect of any such delay) with the same force and effect as if made on such
payment date. A "Business Day" shall mean any day other than Saturday, Sunday
or any other day on which banking institutions in New York City (in the State
of New York) and St. Louis (in the State of Missouri) are permitted or required
by any applicable law to close.
REDEMPTION
The Subordinated Debt Securities will mature on February 1, 2027. The
Subordinated Debt Securities may be redeemed by the Company, in whole or in
part, at any time and from time to time on or after February 1, 2007, at par,
plus accrued and unpaid interest thereon to the date of redemption. In
addition, the Subordinated Debt Securities may be redeemed by the Company at
any time, in whole or in part, in certain circumstances described herein upon
the occurrence and continuation of a Tax Event or a Capital Treatment Event,
within 90 days following the occurrence of such Tax Event or Capital Treatment
Event, as the case may be, at par, together with accrued and unpaid interest
thereon to the date of redemption, upon not less than 30 nor more than 60 days'
notice to holders of such Subordinated Debt Securities. In each case, the right
of the Company to redeem the Subordinated Debt Securities is subject to the
Company having received prior approval from the Federal Reserve, if then
required under applicable capital guidelines or policies of the Federal
Reserve.
Upon the repayment in full at maturity or redemption in whole or in part of
the Subordinated Debt Securities (other than following the distribution of the
Subordinated Debt Securities to the holders of the Trust Securities), the
proceeds from such repayment or payment shall concurrently be applied to redeem
on a pro rata basis at the applicable Redemption Price, Trust Securities having
an aggregate liquidation amount equal to the aggregate principal amount of the
Subordinated Debt Securities so repaid or redeemed; provided, however, that
holders of such Trust Securities shall be given not less than 30 nor more than
60 days' notice of such redemption (other than at the scheduled maturity of the
Subordinated Debt Securities). See "Description of the Subordinated Debt
Securities--Redemption." In the event that fewer than all of the outstanding
Capital Securities are to be redeemed, the Capital Securities held in book-
entry form will be redeemed in accordance with the procedures of DTC as
described under "--Book-Entry Only Issuance--The Depository Trust Company."
"Tax Event" means the receipt by the Institutional Trustee of an opinion of a
nationally recognized independent tax counsel to the Company experienced in
such matters to the effect that, as a result of (a) any amendment to,
clarification of 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, (b) any judicial decision
or official administrative pronouncement, ruling, regulatory procedure, notice
or announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action") or (c) any amendment to,
clarification of or change in the administrative position or interpretation of
any Administrative Action or judicial decision that differs from the
theretofore generally accepted position, in each case, by any legislative body,
court, governmental agency or regulatory body, irrespective of the manner in
which such amendment, clarification or change is made known, which amendment,
clarification or change is effective or such Administrative Action or decision
is announced, in each case, on or after the date of this Prospectus, there is
more than an insubstantial risk that (i) the Trust is, or will be within 90
days of the date thereof, subject to United States federal income tax with
respect to interest accrued or received on the Subordinated Debt Securities or
subject to more than a de minimis amount of other taxes, duties or other
governmental charges, or (ii) any portion of interest payable by the Company to
the Trust on the Subordinated Debt Securities is not, or within 90 days of the
date thereof will not be, deductible by the Company for United States federal
income tax purposes.
"Capital Treatment Event" means the Company shall have received an opinion of
independent bank regulatory counsel experienced in such matters to the effect
that, as a result of (a) any amendment to, or change (including any announced
prospective change) in, the laws (or any rules or regulations thereunder) of
the United States or any rules, guidelines or policies of the Federal Reserve
or (b) any official or administrative pronouncement or action or judicial
decision interpreting or applying such laws or regulations, which amendment or
change is effective or such pronouncement, action or decision is announced on
or after the date of original
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issuance of the Capital Securities, the Company will not be entitled to treat
the Capital Securities or the Subordinated Debt Securities, if the Subordinated
Debt Securities were to be distributed following the occurrence of a Tax Event
as described in the proviso to this paragraph, as "Tier 1 Capital" (or the
equivalent thereof) for purposes of the risk-based capital adequacy guidelines
of the Federal Reserve, as then in effect and applicable to the Company;
provided, however, that the distribution of the Subordinated Debt Securities in
connection with the liquidation of the Trust by the Company shall not in and of
itself constitute a Capital Treatment Event unless such liquidation shall have
occurred in connection with a Tax Event.
REDEMPTION PROCEDURES
The Trust may not redeem fewer than all of the outstanding Capital Securities
unless all accrued and unpaid Distributions have been paid on all such Capital
Securities for all quarterly Distribution periods terminating on or prior to
the date of redemption.
If the Trust gives a notice of redemption in respect of the Capital
Securities (which notice will be irrevocable), then by 12:00 noon, New York
City time, on the redemption date, provided that the Institutional Trustee has
a sufficient amount of cash in connection with the related redemption or
maturity of the Subordinated Debt Securities, the Institutional Trustee will
irrevocably deposit with the Depositary or its nominee funds sufficient to pay
the applicable Redemption Price and will give the Depositary irrevocable
instructions and authority to pay such Redemption Price to the holders of such
Capital Securities. See "--Book-Entry Only Issuance--The Depository Trust
Company." With respect to the Capital Securities that are Certificated
Securities (as defined herein), provided that the Company has paid to the
Institutional Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Subordinated Debt Securities, the
Institutional Trustee will pay the applicable Redemption Price to the holders
of such Capital Securities by check mailed to the address of each such holder
appearing on the books and records of the Trust on the redemption date. If
notice of redemption shall have been given and funds deposited as required,
then, immediately prior to the close of business on the date of such deposit,
Distributions will cease to accrue on the Capital Securities and all rights of
holders of such Capital Securities will cease, except the right of the holders
of such Capital Securities to receive the applicable Redemption Price but
without interest on such Redemption Price. In the event that any date fixed for
redemption of the Capital Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (without any interest or other payment in respect of any
such delay), except that, if such Business Day falls in the next calendar year,
such payment will be made on the immediately preceding Business Day. In the
event that payment of the Redemption Price in respect of the Capital Securities
is improperly withheld or refused and not paid either by the Institutional
Trustee or by the Company pursuant to the Guarantee, Distributions on such
Capital Securities will continue to accrue at the then applicable rate from the
original redemption date to the actual date of payment, in which case the
actual payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price.
In the event that fewer than all of the outstanding Capital Securities are to
be redeemed, Capital Securities will be redeemed on a pro rata basis in
accordance with the procedures of DTC as described under "--Book-Entry Only
Issuance--The Depository Trust Company."
In the event of any redemption of the Capital Securities in part, the Trust
shall not be required to (i) issue, register the transfer of or exchange any
Certificated Security (as defined herein) during a period beginning at the
opening of business 15 days before any selection for redemption of the Capital
Securities and ending at the close of business on the earliest date on which
the relevant notice of redemption is deemed to have been given to all holders
of the Capital Securities to be so redeemed or (ii) register the transfer of or
exchange any Certificated Securities so selected for redemption, in whole or in
part, except for the unredeemed portion of any Certificated Securities being
redeemed in part.
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Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws), provided that the acquiror is not the
holder of the Common Securities or the obligor under the Subordinated Debt
Securities, the Company or its subsidiaries may at any time, and from time to
time, purchase outstanding Capital Securities by tender, in the open market or
by private agreement.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of the voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust (each a "Liquidation") other than in
connection with a redemption of the Subordinated Debt Securities as previously
described, the holders of the Capital Securities will be entitled to receive
out of the assets of the Trust, after satisfaction of liabilities to creditors
of the Trust (to the extent not satisfied by the Company), Distributions in an
amount equal to the aggregate of the stated liquidation amount of $1,000 per
Capital Security plus accrued and unpaid Distributions thereon to the date of
payment (the "Liquidation Distribution"), unless, in connection with such
Liquidation, the Subordinated Debt Securities in an aggregate stated principal
amount equal to the aggregate stated liquidation amount of the Trust Securities
have been distributed on a pro rata basis to the holders of the Trust
Securities in exchange for the Trust Securities. Upon any Liquidation in which
the Subordinated Debt Securities are distributed, if at the time of such
Liquidation the Capital Securities are rated by at least one nationally
recognized statistical rating organization, the Company will use its best
efforts to obtain from at least one nationally recognized statistical rating
organization a rating for the Subordinated Debt Securities.
The Company, as the holder of all of the Common Securities, has the right at
any time to dissolve the Trust (including, without limitation, upon the
occurrence of a Tax Event or Capital Treatment Event), subject to the receipt
by the Company of prior approval from the Federal Reserve, if then required
under applicable capital guidelines or policies of the Federal Reserve, and,
after satisfaction of liabilities to creditors of the Trust (to the extent not
satisfied by the Company), cause the Subordinated Debt Securities to be
distributed to the holders of the Trust Securities on a pro rata basis in
accordance with the aggregate stated liquidation amount thereof, in liquidation
of the Trust.
Pursuant to the Declaration, the Trust shall dissolve on the first to occur
of (i) February 1, 2052, the expiration of the term of the Trust, (ii) the
bankruptcy of the Company, (iii) (other than in connection with a merger,
consolidation or similar transaction not prohibited by the Indenture, the
Declaration or the Guarantee, as the case may be) the filing of a certificate
of dissolution or its equivalent with respect to the Trust, upon the consent of
the holders of at least a majority in liquidation amount of the Trust
Securities voting together as a single class to file a certificate of
cancellation with respect to the Trust, or upon the revocation of the charter
of the Company and the expiration of 90 days after the date of revocation
without a reinstatement thereof, (iv) the distribution to the holders of the
Trust Securities of the Subordinated Debt Securities, upon exercise of the
right of the holder of all of the outstanding Common Securities of the Trust to
dissolve the Trust as described above, (v) the entry of a decree of judicial
dissolution of the Company or the Trust, or (vi) the redemption of all of the
Trust Securities. Pursuant to the Declaration, as soon as practicable after the
dissolution of the Trust and upon completion of the winding up of the Trust,
the Trust shall terminate upon the filing of a certificate of cancellation.
If a Liquidation occurs as described in clause (i), (ii), (iii) or (v) of the
preceding paragraph, the Trust shall be liquidated by the Institutional Trustee
as expeditiously as such Institutional Trustee determines to be possible by
distributing to the holders of the Trust Securities, after satisfaction of
liabilities to creditors of the Trust to the extent not satisfied by the
Company, the Subordinated Debt Securities, unless such distribution is
determined by the Institutional Trustee not to be practical, in which event
such holders will be entitled to receive out of the assets of the Trust
available for distribution to holders, after satisfaction of liabilities to
creditors of the Trust to the extent not satisfied by the Company, an amount
equal to the Liquidation Distribution. An early Liquidation of the Trust
pursuant to clause (iv) above shall occur only if the Institutional Trustee
determines that such Liquidation is possible by distributing to the holders of
the Trust Securities, after satisfaction of liabilities to creditors of the
Trust to the extent not satisfied by the Company, the Subordinated Debt
Securities, and such distribution occurs.
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If, upon any such Liquidation, the Liquidation Distribution can be paid only
in part because the Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on such Capital Securities shall be paid to the holders of the Trust
Securities on a pro rata basis. The holders of the Common Securities issued by
the Trust will be entitled to receive distributions upon any such Liquidation
pro rata with the holders of such Capital Securities, except that if a
Declaration Event of Default has occurred and is continuing in respect of the
Trust, the Capital Securities shall have a preference over the Common
Securities with regard to such distributions.
After the date for any distribution of the Subordinated Debt Securities upon
dissolution of the Trust, (i) the Trust Securities will be deemed to be no
longer outstanding, (ii) the Depositary (as defined herein) or its nominee, as
the record holder of the Capital Securities issued in book-entry form, will
receive a registered Global Certificate (as defined herein) or Certificates
representing the Subordinated Debt Securities to be delivered upon such
distribution, and (iii) any certificates representing the Capital Securities
not held by the Depositary or its nominee will be deemed to represent undivided
beneficial interests in the Subordinated Debt Securities having an aggregate
principal amount equal to the aggregate stated liquidation amount of such
Capital Securities until such certificates are presented to the Company or its
agent for transfer or reissuance.
There can be no assurance as to the market prices for either the Capital
Securities or the Subordinated Debt Securities that may be distributed in
exchange for the Capital Securities if a dissolution and liquidation of the
Trust were to occur. Accordingly, the Capital Securities that an investor may
acquire, whether pursuant to the Exchange Offer made hereby or in the secondary
market, or the Subordinated Debt Securities that an investor may receive if a
dissolution and liquidation of the Trust were to occur, may trade at a discount
to the price paid to purchase the Capital Securities offered hereby.
DECLARATION EVENTS OF DEFAULT
An event of default under the Indenture in respect of the Subordinated Debt
Securities (an "Indenture Event of Default") constitutes an event of default
under the Declaration with respect to the Trust Securities (each a "Declaration
Event of Default"); provided that pursuant to the Declaration, the holder of
the Common Securities will be deemed to have waived any Declaration Event of
Default with respect to such Common Securities until all Declaration Events of
Default with respect to the Capital Securities have been cured, waived or
otherwise eliminated. Until such Declaration Events of Default have been so
cured, waived, or otherwise eliminated, the Institutional Trustee will be
deemed to be acting solely on behalf of the holders of the Capital Securities
and only the holders of such Capital Securities will have the right to direct
the Institutional Trustee with respect to certain matters under the
Declaration, and therefore the Indenture. The holders of a majority in
liquidation amount of the Capital Securities will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Institutional Trustee or to direct the exercise of any trust or power
conferred upon the Institutional Trustee under the Declaration, including the
right to direct the Institutional Trustee to exercise the remedies available to
it as holder of the Subordinated Debt Securities. If the Institutional Trustee
fails to enforce its rights under the Subordinated Debt Securities after the
holders of a majority in liquidation amount of the Capital Securities have so
directed the Institutional Trustee, to the fullest extent permitted by law, a
holder of record of such Capital Securities may institute a legal proceeding
against the Company to enforce the Institutional Trustee's rights under the
Subordinated Debt Securities without first instituting any legal proceeding
against the Institutional Trustee or any other person or entity.
Notwithstanding the foregoing, if a Declaration Event of Default has occurred
and is continuing and such event is attributable to the failure of the Company
to pay interest or principal on the Subordinated Debt Securities on the
respective dates such interest or principal is payable (or in the case of
redemption, the redemption date), then a holder of record of such Capital
Securities may institute a Direct Action against the Company for payment, on or
after the respective due dates specified in the Subordinated Debt Securities,
to such holder directly of the principal of or interest on Subordinated Debt
Securities having an aggregate principal amount equal to the aggregate
liquidation amount of the Capital Securities of such holder. In connection with
such Direct Action, the Company will be subrogated to the rights of such holder
of Capital Securities under the Declaration to the extent of any payment
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made by the Company to such holder of the Capital Securities in such Direct
Action; provided, however, that no such subrogation right may be exercised so
long as a Declaration Event of Default has occurred and is continuing. The
holders of the Capital Securities will not be able to exercise directly any
other remedy available to the holders of the Subordinated Debt Securities.
Upon the occurrence of a Declaration Event of Default, the Institutional
Trustee, so long as it is the sole holder of the Subordinated Debt Securities,
will have the right under the Indenture to declare the principal of and
interest on the Subordinated Debt Securities to be immediately due and payable.
The Company and the Trust are each required to file annually with the
Institutional Trustee an officer's certificate as to its compliance with all
conditions and covenants under the Declaration.
VOTING RIGHTS
Except as described below, under the Trust Act and under "--Removal of Issuer
Trustees; Appointment of Successors" and "Description of the Guarantee--
Modification of the Guarantee; Assignment," and as otherwise required by law
and the Declaration, the holders of the Capital Securities will have no voting
rights.
Subject to the requirements set forth in this paragraph, the holders of a
majority in aggregate liquidation amount of the Capital Securities have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Institutional Trustee, or exercising any trust or power
conferred upon such Institutional Trustee under the Declaration, including the
right to direct such Institutional Trustee, as holder of the Subordinated Debt
Securities, to (i) exercise the remedies available to it under the Indenture as
a holder of the Subordinated Debt Securities, (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 Debt Securities shall be
due and payable or (iv) consent on behalf of all the holders of the Capital
Securities of the Trust to any amendment, modification or termination of the
Indenture or the Subordinated Debt Securities where such consent shall be
required; provided, however, that where a consent or action under the Indenture
would require the consent or act of holders of more than a simple majority in
principal amount of the Subordinated Debt Securities (a "Super-Majority")
affected thereby, the Institutional Trustee may only give such consent or take
such action at the written direction of the holders of at least the proportion
in aggregate liquidation amount of the Capital Securities outstanding which the
relevant Super-Majority represents of the aggregate principal amount of the
Subordinated Debt Securities outstanding. If the Institutional Trustee fails to
enforce its rights under the Subordinated Debt Securities after the holders of
a majority in liquidation amount of such Capital Securities have so directed
the Institutional Trustee, to the extent permitted by law, a holder of record
of the Capital Securities may institute a legal proceeding directly against the
Company to enforce the Institutional Trustee's rights under the Subordinated
Debt Securities without first instituting any legal proceeding against the
Institutional Trustee or any other person or entity. Notwithstanding the
foregoing, if a Declaration Event of Default has occurred and is continuing and
such event is attributable to the failure of the Company to pay interest or
principal on the Subordinated Debt Securities on the respective dates such
interest or principal is payable (or in the case of redemption, the redemption
date) then a holder of record of the Capital Securities may institute a Direct
Action against the Company for payment, on or after the respective due dates
specified in the Subordinated Debt Securities, to such holder directly of the
principal of or interest on the Subordinated Debt Securities having an
aggregate principal amount equal to the aggregate liquidation amount of the
Capital Securities of such holder. The Institutional Trustee shall notify all
holders of the Capital Securities of any default actually known to the
Institutional Trustee with respect to the Subordinated Debt Securities unless
(x) such default has been cured prior to the giving of such notice or (y) the
Institutional Trustee determines in good faith that the withholding of such
notice is in the interest of the holders of such Capital Securities, except
where the default relates to the payment of interest or principal of on any of
the Subordinated Debt Securities. Such notice shall state that such Indenture
Event of Default also constitutes a Declaration Event of Default. Except with
respect to directing the time, method and place of conducting a proceeding for
a remedy, the Institutional Trustee shall not take any of the actions described
in clauses (i), (ii) or (iii) above unless the Institutional Trustee has
obtained an opinion of tax counsel
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to the effect that, as a result of such action, the Trust will not be
classified as other than a grantor trust for United States federal income tax
purposes.
In the event the consent of the Institutional Trustee, as the holder of the
Subordinated Debt Securities, is required under the Indenture with respect to
any amendment, modification or termination of the Indenture, such Institutional
Trustee shall request the direction of the holders of the Trust Securities with
respect to such amendment, modification or termination and shall vote with
respect to such amendment, modification or termination as directed by a
majority in liquidation amount of such Trust Securities voting together as a
single class; provided, however, that where a consent under the Indenture would
require the consent of a Super-Majority, the Institutional Trustee may only
give such consent at the direction of the holders of at least the proportion in
liquidation amount of such Trust Securities outstanding which the relevant
Super-Majority represents of the aggregate principal amount of the Subordinated
Debt Securities outstanding. The Institutional Trustee shall not take any such
action in accordance with the directions of the holders of such Trust
Securities unless the Institutional Trustee has obtained an opinion of tax
counsel to the effect that, as a result of such action, the Trust will not be
classified as other than a grantor trust for United States federal income tax
purposes.
A waiver of an Indenture Event of Default will constitute a waiver of the
corresponding Declaration Event of Default.
Any required approval or direction of holders of the Capital Securities may
be given at a separate meeting of such holders convened for such purpose, at a
meeting of all of the holders of Trust Securities or pursuant to written
consent. The Institutional Trustee will cause a notice of any meeting at which
holders of the Capital Securities are entitled to vote, or of any matter upon
which action by written consent of such holders is to be taken, to be mailed to
each holder of record of the Capital Securities. Each such notice will include
a statement setting forth the following information: (i) the date of such
meeting or the date by which such action is to be taken; (ii) a description of
any resolution proposed for adoption at such meeting on which such holders are
entitled to vote or of such matter upon which written consent is sought; and
(iii) instructions for the delivery of proxies or consents. No vote or consent
of the holders of the Capital Securities will be required for the Trust to
redeem and cancel the Capital Securities or distribute the Subordinated Debt
Securities in accordance with the Declaration.
Notwithstanding that holders of the Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the Capital
Securities that are owned at such time by the Company or any entity directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, the Company, shall not entitle the holders thereof to vote or
consent and shall, for purposes of such vote or consent, be treated as if such
Capital Securities were not outstanding.
The procedures by which holders of the Capital Securities issued in book-
entry form may exercise their voting rights are described below. See "--Book-
Entry Only Issuance--The Depository Trust Company" below.
REMOVAL OF INSTITUTIONAL TRUSTEES; APPOINTMENT OF SUCCESSORS
If an Indenture Event of Default has occurred and is continuing, an
Institutional Trustee may be removed and its successor appointed by the holders
of at least a majority in liquidation amount of Capital Securities. In no event
will the holders of the Capital Securities have the right to vote to appoint,
remove or replace the Administrators, which voting rights are vested
exclusively in the Company as the holder of the Common Securities. No
resignation or removal of an Institutional Trustee and no appointment of a
successor trustee shall be effective until the acceptance of appointment by the
successor trustee in accordance with the provisions of the Declaration.
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MODIFICATION OF THE DECLARATION
The Declaration may be amended from time to time by the Institutional Trustee
and the holders of a majority of the Common Securities without the consent of
the holders of the Capital Securities to: (i) cure any ambiguity; (ii) correct
or supplement any provision in such Declaration that may be defective or
inconsistent with any other provision of such Declaration; (iii) add to the
covenants, restrictions or obligations of the Company; (iv) modify, eliminate
or add to any provision of the Declaration to such an extent as may be
necessary to ensure that the Trust will be classified for United States federal
income tax purposes at all times as a grantor trust and will not be required to
register as an "investment company" under the Investment Company Act of 1940,
as amended (the "1940 Act") (including, without limitation, to conform to any
change in Rule 3a-5, Rule 3a-7 or any other applicable rule under the 1940 Act
or written change in interpretation or application thereof by any legislative
body, court, government agency or regulatory authority), which amendment does
not have a material adverse effect on the right, preferences or privileges of
the holders of the Capital Securities; and (v) modify, eliminate and add to any
provision of such Declaration, provided that no such modification, elimination
or addition referred to in clauses (i), (ii), (iii) and (v) hereof shall
adversely affect the powers, preferences or special rights of the holders of
such Capital Securities so long as they remain outstanding.
In addition, the Declaration may be modified and amended if approved by the
Institutional Trustee and the holders of a majority of the Common Securities
(and in certain circumstances the Delaware Trustee), provided that, if any
proposed amendment provides for, or the Institutional Trustee otherwise
proposes to effect, (i) any action that would adversely affect the powers,
preferences or special rights of the Trust Securities, whether by way of
amendment to the Declaration or otherwise or (ii) the Liquidation of the Trust
other than pursuant to the terms of the Declaration, then the holders of the
Trust Securities voting together as a single class will be entitled to vote on
such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of the holders of at least a majority in
liquidation amount of the Trust Securities affected thereby; provided that if
any amendment or proposal referred to in clause (i) above would adversely
affect only the Capital Securities or only the Common Securities, then only the
affected class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of a
majority in liquidation amount of such class of Trust Securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause the Trust to
be classified for purposes of United States federal income taxation as other
than a grantor trust or (ii) cause the Trust to be deemed an "investment
company" which is required to be registered under the 1940 Act.
Notwithstanding any provision of the Declaration, the provisions of Section
316(b) of the Trust Indenture Act incorporated by reference into the
Declaration provides that the right of any holder of the Capital Securities to
receive payments of Distributions and other payments upon redemption or
otherwise on or after their respective due dates, or to institute suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such holder.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
The Trust may not 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 corporation or other body, except as described below or as
otherwise described in "--Liquidation Distribution Upon Dissolution." The Trust
may, with the consent of the Institutional Trustee and without the consent of
the Delaware Trustee or the holders of the Capital Securities, consolidate,
amalgamate, merge with or into, or be replaced by, a trust organized as such
under the laws of any state of the United States; provided that (i) if the
Trust is not the survivor, such successor entity either (x) expressly assumes
all of the obligations of the Trust under the Trust Securities or (y)
substitutes for the Trust Securities other securities having substantially the
same terms as the Trust Securities (the "Successor Securities"), so that the
Successor Securities rank the same as the Trust Securities rank with respect to
Distributions and payments upon liquidation, redemption and otherwise, (ii) a
trustee of such successor entity
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possessing the same powers and duties as the Institutional Trustee is appointed
as the holder of the Subordinated Debt Securities, (iii) such merger,
consolidation, amalgamation or replacement does not cause the Capital
Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (iv) such merger,
consolidation, amalgamation or replacement does not adversely affect the
rights, preferences and privileges of the holders of such Trust Securities
(including any Successor Securities) in any material respect (other than with
respect to any dilution of the holders' interest in such successor entity), (v)
such successor entity has a purpose substantially identical to that of the
Trust, (vi) prior to such merger, consolidation, amalgamation or replacement,
the Trust has received an opinion of a nationally recognized independent
counsel to the Trust experienced in such matters to the effect that (A) such
merger, consolidation, amalgamation or replacement does not adversely affect
the rights, preferences and privileges of the holders of the Trust Securities
(including any Successor Securities) in any material respect (other than with
respect to any dilution of the holders' interest in such successor entity), (B)
following such merger, consolidation, amalgamation or replacement, neither the
Trust nor such successor entity will be required to register as an investment
company under the 1940 Act and (C) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor such successor entity will
be classified as other than a grantor trust for United States federal income
tax purposes, and (vii) the Company guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Guarantee. Notwithstanding the foregoing, the Trust shall not, except
with the consent of holders of 100% in liquidation amount of the Trust
Securities, consolidate, amalgamate, merge with or into, or be replaced by, any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it, if such consolidation, amalgamation, merger or
replacement would cause the Trust or the successor entity to be classified as
other than a grantor trust for United States federal income tax purposes. In
addition, the Indenture Trustee will be required pursuant to the Indenture to
exchange for Subordinated Debt Securities, as part of the Exchange Offer,
Exchange Securities that will have terms identical in all material respects to
the Subordinated Debt Securities except for the transfer restrictions under the
Securities Act and the provision for an increase in the interest rate thereon
under certain circumstances. See "--Exchange Offer; Registration Rights."
BOOK-ENTRY ONLY ISSUANCE--THE DEPOSITORY TRUST COMPANY
The description of book-entry procedures in this Prospectus includes
summaries of certain rules and operating procedures of DTC that affect
transfers of interests in the global certificate or certificates issued in
connection with sales of Capital Securities. Except as described in the next
paragraph, the Capital Securities will be issued only as fully registered
securities registered in the name of Cede & Co. (as nominee for DTC). One or
more fully registered global Capital Security certificates (the "Global
Certificates") will be issued, representing, in the aggregate, the New Capital
Securities, and will be deposited with DTC.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of securities in definitive form. Such laws may impair
the ability to transfer beneficial interests in the global Capital Securities
as represented by a Global Certificate.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Participants in DTC
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the New York Stock Exchange
Inc., the American Stock Exchange, Inc., and the National Association of
Securities Dealers, Inc. Access to the DTC system is also available to others,
such as securities brokers and dealers, banks and trust companies that clear
transactions through or maintain a direct or indirect
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custodial relationship with a Direct Participant, either directly or indirectly
("Indirect Participants"). The rules applicable to DTC and its Participants are
on file with the Commission.
Purchases of the Capital Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Capital
Securities on DTC's records. The ownership interest of each actual purchaser of
each Capital Security ("Beneficial Owner") is in turn to be recorded on the
Direct Participants' and Indirect Participants' records. Beneficial Owners will
not receive written confirmation from DTC of their purchases, but Beneficial
Owners are expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the Direct
Participants or Indirect Participants through which the Beneficial Owners
purchased the Capital Securities. Transfers of ownership interests in the
Capital Securities are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not
receive certificates representing their ownership interests in the Capital
Securities, except in the event that use of the book-entry system for the
Capital Securities is discontinued.
To facilitate subsequent transfers, all the Capital Securities deposited by
Participants with DTC will be registered in the name of DTC's nominee, Cede &
Co. The deposit of the Capital Securities with DTC and their registration in
the name of Cede & Co. will effect no change in beneficial ownership. DTC will
have no knowledge of the actual Beneficial Owners of the Capital Securities.
DTC's records will reflect only the identity of the Direct Participants to
whose accounts such Capital Securities are credited, which may or may not be
the Beneficial Owners. The Direct Participants and Indirect Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
So long as DTC, or its nominee, is the registered owner or holder of a Global
Certificate in respect of the Capital Securities, DTC or such nominee, as the
case may be, will be considered the sole owner or holder of the Capital
Securities represented thereby for all purposes under the Declaration and such
Capital Securities. No Beneficial Owner of an interest in a Global Certificate
will be able to transfer that interest except in accordance with DTC's
applicable procedures.
DTC has advised the Company that it will take any action permitted to be
taken by a holder of the Capital Securities (including the presentation of the
Capital Securities for exchange as described below) only at the direction of
one or more Participants to whose accounts the DTC interest in the Global
Certificates is credited and only in respect of such portion of the aggregate
liquidation amount of the Capital Securities as to which such Participant or
Participants has or have given such direction. However, if there is a
Declaration Event of Default with respect to the Capital Securities, DTC will,
upon notice, exchange the Global Certificates in respect of such Capital
Securities for Certificated Securities, which it will distribute to its
Participants.
Conveyance of notices and other communications by DTC to Direct Participants,
by Direct Participants to Indirect Participants, and by Direct Participants and
Indirect Participants to Beneficial Owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
Redemption notices in respect of the Capital Securities held in book-entry
form will be sent to Cede & Co. If less than all of the Capital Securities are
being redeemed, the Capital Securities will be redeemed on a pro rata basis.
Although voting with respect to the Capital Securities is limited, in those
cases where a vote is required, neither DTC nor Cede & Co. will itself consent
or vote with respect to the Capital Securities. Under its usual procedures, DTC
would mail an omnibus proxy to the Trust as soon as possible after the record
date. The omnibus proxy assigns Cede & Co.'s consenting or voting rights to
those Direct Participants to whose accounts the Capital Securities are credited
on the record date (identified in a listing attached to the omnibus proxy).
Distributions on the Capital Securities held in book-entry form will be made
to DTC in immediately available funds. DTC's practice is to credit Direct
Participants' accounts on the relevant payment date in
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accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payments on such payment date.
Payments by Direct Participants and Indirect Participants to Beneficial Owners
will be governed by standing instructions and customary practices and will be
the responsibility of such Direct Participants and Indirect Participants and
not of DTC, the Trust or the Company, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of distributions to
DTC is the responsibility of the Trust, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursement of such payments to
the Beneficial Owners is the responsibility of Direct Participants and Indirect
Participants.
Except as provided herein, a Beneficial Owner of an interest in a Global
Certificate will not be entitled to receive physical delivery of the Capital
Securities. Accordingly, each Beneficial Owner must rely on the procedures of
DTC, the Direct Participants and the Indirect Participants to exercise any
rights under the Capital Securities.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Certificates among Participants of DTC,
DTC is under no obligation to perform or continue to perform such procedures,
and such procedures may be discontinued at any time. None of the Company, the
Trust or the Institutional Trustee will have any responsibility for the
performance by DTC or its Direct Participants or Indirect Participants under
the rules and procedures governing DTC. DTC may discontinue providing its
services as a securities depositary with respect to the Capital Securities at
any time by giving notice to the Trust. Under such circumstances, in the event
that a successor securities depositary is not obtained, the Capital Security
certificates will be required to be printed and delivered. Additionally, the
Trust (with the consent of the Company) may decide to discontinue use of the
system of book-entry transfers through DTC (or a successor depositary) with
respect to the Capital Securities of the Trust. In that event, certificates for
such Capital Securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company and the Trust believes to be
reliable, but neither the Company nor the Trust takes responsibility for the
accuracy thereof.
RESTRICTIONS ON TRANSFER
The Capital Securities will be issued and may be transferred only in blocks
having a stated liquidation amount of not less that $100,000 (100 Capital
Securities). Any such transfer of the Capital Securities in a block having a
stated liquidation amount of less than $100,000 shall be deemed to be void and
of no legal effect whatsoever. Any such transferee shall be deemed not to be
the holder of such Capital Securities for any purpose, including but not
limited to, the receipt of Distributions on such Capital Securities, and such
transferee shall be deemed to have no interest whatsoever in such Capital
Securities.
PAYMENT AND PAYING AGENCY
Payments in respect of the Capital Securities represented by the Global
Certificates shall be made to DTC, which shall credit the relevant accounts at
DTC on the applicable distribution payment dates or, in the case of
Certificated Securities in non-book entry form, such payments shall be made by
check mailed to the address of the holder entitled thereto as such address
shall appear on books and records of the Trust. The paying agent for the Trust
Securities (the "Paying Agent") shall initially be The Chase Manhattan Bank.
The Paying Agent shall be permitted to resign as Paying Agent upon 30 days'
written notice to the Institutional Trustee, the Administrators and the
Company. In the event that The Chase Manhattan Bank shall no longer be the
Paying Agent, the Institutional Trustee shall appoint a successor to act as
Paying Agent (which shall be a bank or trust company).
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REGISTRAR AND TRANSFER AGENT
The Institutional Trustee will act as registrar and transfer agent for the
Capital Securities of the Trust.
Registration of transfers or exchanges of the Capital Securities will be
effected without charge by or on behalf of the Trust, but upon payment (with
the giving of such indemnity as the Trust or the Company may require) in
respect of any tax or other government charges which may be imposed in relation
to it.
The Trust will not be required to register or cause to be registered the
transfer or exchange of the Capital Securities after such Capital Securities
have been called for redemption.
INFORMATION CONCERNING THE INSTITUTIONAL TRUSTEE
The Institutional Trustee, prior to the occurrence of a default with respect
to the Trust Securities and after the curing of any defaults that may have
occurred, undertakes to perform only such duties as are specifically set forth
in the Declaration and, after default, shall exercise such of the rights and
powers vested in it by such Declaration, and use the same degree of care and
skill in their exercise, as a prudent individual would exercise or use in the
conduct of his or her own affairs. Subject to such provisions, the
Institutional Trustee is under no obligation to exercise any of the powers
vested in it by the Declaration at the request of any holder of the Capital
Securities, unless offered reasonable indemnity by such holder against the
costs, expenses and liabilities which might be incurred thereby. The holders of
the Capital Securities will not be required to offer such indemnity in the
event such holders, by exercising their voting rights, direct the Institutional
Trustee to take any action it is empowered to take under the Declaration
following a Declaration Event of Default. The Institutional Trustee also serves
as trustee under the Guarantee and the Indenture.
Whenever in the exercise of its rights or powers or the performance of its
duties under the Declaration the Institutional Trustee shall deem it desirable
to receive instructions with respect to enforcing any remedy or right or taking
any other action thereunder, the Institutional Trustee (i) may request
instructions from the holders of the Capital Securities, which instructions may
only be given by the holders of a majority, or such other proportion, in
liquidation amount of the Capital Securities as would be entitled to direct the
Institutional Trustee under the terms of such Capital Securities in respect of
such remedy, right or action, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received, and
(iii) shall be protected in conclusively relying on or acting in or accordance
with such instructions.
The Company and certain of its affiliates maintain a banking relationship
with the Institutional Trustee and its affiliates.
GOVERNING LAW
The Declaration and the Capital Securities will be governed by, and construed
in accordance with, the laws of the State of Delaware, without regard to
principles of conflict of laws.
MISCELLANEOUS
The Administrators, the holders of a majority of the Common Securities and
the Institutional Trustee are authorized and directed to operate the Trust in
such a way so that the Trust will not be required to register as an "investment
company" under the 1940 Act nor be characterized as other than a grantor trust
for United States federal income tax purposes. The Company has agreed to
conduct its affairs so that the Subordinated Debt Securities will be treated as
indebtedness of the Company for United States federal income tax purposes. In
this connection, the Institutional Trustee and the holders of a majority of the
Common Securities are authorized to take any action, not inconsistent with
applicable law or the Declaration, that the Institutional Trustee and such
holders of the Common Securities determine in their discretion to be necessary
or desirable to achieve such end, even if such action adversely affects the
interests of the holders of the Capital Securities.
Holders of the Capital Securities have no preemptive or similar rights.
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DESCRIPTION OF THE GUARANTEE
The Old Guarantee was executed and delivered by the Company with the issuance
by the Trust of the Old Capital Securities for the benefit of the holders from
time to time of the Old Capital Securities. As soon as practicable after the
date hereof, the Old Guarantee will be exchanged by the Company for the New
Guarantee. The Old Guarantee will be of no force and effect after such
exchange. This summary of certain provisions of the New Guarantee does not
purport to be complete and is subject to, and qualified by reference to, all of
the provisions of the New Guarantee, including the definitions therein of
certain terms, and the Trust Indenture Act. The Guarantee Trustee will hold the
New Guarantee for the benefit of the holders of the New Capital Securities, the
Old Capital Securities and the Common Securities.
GENERAL
Pursuant to the Guarantee, the Company has irrevocably and unconditionally
agreed, to the extent set forth therein, to pay in full, to the holders of the
Capital Securities, the Guarantee Payments (as defined herein) (except to the
extent paid by the Trust), as and when due, regardless of any defense, right of
set-off or counterclaim which the Trust may have or assert. The following
payments with respect to the Capital Securities, to the extent not paid by the
Trust (the "Guarantee Payments"), are subject to the Guarantee (without
duplication): (i) any accrued and unpaid Distributions which are required to be
paid on the Capital Securities, to the extent the Trust shall have funds
available therefor; (ii) the Redemption Price, to the extent the Trust has
funds available therefor, with respect to any Capital Securities called for
redemption by the Trust; and (iii) upon Liquidation of the Trust (other than in
connection with the distribution of the Subordinated Debt Securities to the
holders of the Capital Securities in exchange therefor), the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid Distributions on
such Capital Securities to the date of payment, to the extent the Trust has
funds available therefor, and (b) the amount of assets of the Trust remaining
available for distribution to holders of such Capital Securities in liquidation
of the Trust. The Company's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Company to the
holders of the Capital Securities or by causing the Trust to pay such amounts
to such holders.
The Guarantee does not apply to any payment of Distributions except to the
extent the Trust shall have funds available therefor, which funds will not be
available except to the extent the Company has made payments of interest or
principal or other payments on the Subordinated Debt Securities purchased by
the Trust. See "Description of the Subordinated Debt Securities--Certain
Covenants." The Guarantee, when taken together with the Company's obligations
under the Subordinated Debt Securities, the Declaration and the Indenture,
including its obligations to pay costs, expenses, debts and other obligations
of the Trust (other than with respect to the Trust Securities), provides a full
and unconditional guarantee on a subordinated basis by the Company of payments
due on the Capital Securities.
Because the Guarantee is a guarantee of payment and not of collection,
holders of the Capital Securities may proceed directly against the Company,
rather than having to proceed against the Trust before attempting to collect
from the Company, and the Company waives any right or remedy to require that
any action be brought against the Trust or any other person or entity before
proceeding against the Company. Such obligations will not be discharged except
by payment of the Guarantee Payments in full. The Guarantee has been deposited
with the Guarantee Trustee to be held for the benefit of the holders of Capital
Securities. Except as otherwise noted herein, the Guarantee Trustee has the
right to enforce the Guarantee on behalf of the holders of the Capital
Securities.
The Company has also agreed separately to irrevocably and unconditionally
guarantee the obligations of the Trust with respect to Common Securities (the
"Common Securities Guarantee") to the same extent as the Guarantee, except that
upon the occurrence and continuance of a Declaration Event of Default, holders
of Capital Securities shall have priority over holders of Common Securities
with respect to any payments made by the Company on or in respect of the Trust
Securities under the Guarantee and the Common Securities Guarantee.
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CERTAIN COVENANTS OF THE COMPANY UNDER THE GUARANTEE
In the Guarantee, the Company covenants that, so long as any Capital
Securities remain outstanding, if the Company shall be in default under the
Guarantee or there shall have occurred and be continuing any event that would
constitute a Declaration Event of Default, under the Declaration, then (a) the
Company shall not declare or pay any dividend on, make a distribution with
respect to, or redeem, purchase or make a liquidation payment with respect to,
any of the Company's capital stock or rights to acquire such capital stock
(other than (i) purchases or acquisitions of shares of the Company's capital
stock or rights to acquire such capital stock in connection with the
satisfaction by the Company of its obligations under any employee benefit
plans, (ii) as a result of a reclassification of the Company's capital stock or
rights to acquire such capital stock or the exchange or conversion of one class
or series of the Company's capital stock or rights to acquire such capital
stock for another class or series of the Company's capital stock or rights to
acquire such capital stock, (iii) the purchase of fractional interests in
shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(iv) dividends and distributions made on the Company's capital stock or rights
to acquire such capital stock with the Company's capital stock or rights to
acquire such capital stock, or (v) any declaration of a dividend in connection
with the implementation of a shareholder rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto), or make any guarantee payments (other than payments
under the Guarantee and the Common Securities Guarantee) with respect to the
foregoing and (b) the Company shall not make any payment of interest, principal
or premium, if any, on or repay, repurchase or redeem any debt securities
issued by the Company that rank pari passu with or junior to the Subordinated
Debt Securities.
MODIFICATION OF THE GUARANTEE; ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of the Capital Securities in any material respect (in which case no
vote of such holders will be required), the Guarantee may be amended only with
the prior approval of the holders of not less than a majority in liquidation
amount of the outstanding Capital Securities. All guarantees and agreements
contained in the Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Company and shall inure to the benefit of
the holders of the Capital Securities then outstanding.
TERMINATION
The Guarantee will terminate as to the Capital Securities (a) upon full
payment of the Redemption Price of all Capital Securities, (b) upon
distribution of the Subordinated Debt Securities to the holders of the Capital
Securities or (c) upon full payment of the amounts payable in accordance with
the Declaration upon liquidation of the Trust. The Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
holder of the Capital Securities must restore payment of any sums paid under
such the Capital Securities or the Guarantee.
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 a majority in liquidation amount of the Capital Securities
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of the
Guarantee or to direct the exercise of any trust or power conferred upon the
Guarantee Trustee under the Guarantee. A holder of record of the Capital
Securities may institute a legal proceeding directly against the Company to
enforce the Guarantee Trustee's rights under the Guarantee, without first
instituting a legal proceeding against the Trust, the Guarantee Trustee or any
other person or entity. Pursuant to the Guarantee, the Company waives any right
or remedy to require that any action be brought first against the Trust or any
other person or entity before proceeding directly against the Company.
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STATUS OF THE GUARANTEE
The Company's obligations under the Guarantee are subordinate and junior in
right of payment to all present and future Senior Indebtedness of the Company
and are also effectively subordinated to claims of creditors of the Company's
subsidiaries. The terms of the Capital Securities provide that each holder of
the Capital Securities by acceptance thereof agrees to the subordination
provisions and other terms of the Guarantee relating thereto. Because the
Company is a bank holding company, 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 is subject to the prior claims of
creditors of that subsidiary, except to the extent the Company may itself be
recognized as a creditor of that subsidiary. Accordingly, the Company's
obligations under the Guarantee 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. The
Guarantee does not limit the incurrence or issuance of other secured or
unsecured debt of the Company, including Senior Indebtedness of the Company,
under any indenture that the Company may enter into in the future or otherwise.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default with respect to
the Guarantee, undertakes to perform only such duties as are specifically set
forth in such Guarantee and, after default, shall exercise such of the rights
and powers vested in it by such Guarantee, and use the same degree of care and
skill in their exercise, as a prudent individual would exercise or use in the
conduct of his or her own affairs. Subject to such provisions, the Trustee is
under no obligation to exercise any of the powers vested in it by the Guarantee
at the request of any holder of Capital Securities, unless offered reasonable
indemnity against the costs, expenses and liabilities which might be incurred
thereby.
The Company and certain of its affiliates maintain a banking relationship
with the Guarantee Trustee and its affiliates.
GOVERNING LAW
The Guarantee is governed by and construed in accordance with the laws of the
State of New York, without regard to conflict of laws principles.
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DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES
Set forth below is a description of the principal terms of the Subordinated
Debt Securities. The following description does not purport to be complete and
is subject to, and is qualified in its entirety by reference to, the
description in the Indenture, dated as of February 4, 1997, as supplemented by
the Supplemental Indenture dated April 22, 1997 (the "Base Indenture"), between
the Company and The Chase Manhattan Bank, as trustee (the "Debt Trustee"), as
supplemented by a First Supplemental Indenture dated as of February 4, 1997
(the Base Indenture, as so supplemented, is herein referred to as the
"Indenture"). Certain capitalized terms used herein are defined in the
Indenture. The terms of the Indenture are those set forth in the Indenture and
those made part thereof by the Trust Indenture Act. The Indenture, by its
terms, requires the Company and the Indenture Trustee to comply with the Trust
Indenture Act. This summary of the material terms of the Indenture does not
purport to be complete and is subject in all respects to the provisions of, and
is qualified in its entirety by reference to, the Indenture (a copy of which
has been filed as an exhibit to the Registration Statement of which this
Prospectus is a part) and the Trust Indenture Act. The Indenture has been
qualified under the Trust Indenture Act.
In certain circumstances, the Subordinated Debt Securities may be distributed
to the holders of the Trust Securities in liquidation of the Trust. See
"Description of the Capital Securities--Liquidation Distribution Upon
Dissolution."
GENERAL
Concurrently with the issuance of the Capital Securities, the Trust invested
the proceeds thereof, together with the consideration paid by the Company for
the Common Securities, in the Old Subordinated Debt Securities issued by the
Company. The Old Subordinated Debt Securities were and the New Subordinated
Debt Securities exchanged for the Old Subordinated Debt Securities will be
issued as unsecured debt under the Indenture. The Subordinated Debt Securities
will be limited to an amount equal to the sum of the aggregate stated
liquidation amounts of the Trust Securities.
The Subordinated Debt Securities are not subject to a sinking fund provision.
The entire principal amount of the Subordinated Debt Securities will mature and
become due and payable, together with any accrued and unpaid interest thereon,
including Compounded Interest (as defined herein), if any, on February 1, 2027.
If the Subordinated Debt Securities are distributed to holders of the Capital
Securities in liquidation of such holders' interests in the Trust, the
Subordinated Debt Securities will, with respect to the Capital Securities held
in book-entry only form, initially be issued as a Global Security (as defined
herein) having an aggregate principal amount equal to the liquidation amount of
such Capital Securities and, with respect to such Capital Securities held in
certificated non-book entry form, will initially be deemed to be represented by
such certificates and to have an aggregate principal amount equal to the
liquidation amount of such Capital Securities. As described herein, under
certain limited circumstances, Subordinated Debt Securities may be issued in
certificated non-book entry form in exchange for a Global Security. See "--
Book-Entry Issuance and Settlement" below. The Subordinated Debt Securities
deemed to be represented by a Capital Security certificate will be issued in
certificated form upon presentation for transfer or reissuance. Payments on the
Subordinated Debt Securities issued as a Global Security will be made to DTC, a
successor depositary or, in the event that no depositary is used, to a paying
agent for the Subordinated Debt Securities. In the event the Subordinated Debt
Securities are issued in certificated non-book entry form, interest and
principal will be payable, the transfer of the Subordinated Debt Securities
will be registrable and the Subordinated Debt Securities will be exchangeable
for the Subordinated Debt Securities of other denominations of a like aggregate
principal amount at the corporate trust office of the Debt Trustee in New York,
New York; provided that payment of interest may be made, at the option of the
Company, by check mailed to the address of the holder entitled thereto or by
wire transfer to an account appropriately designated by the holder entitled
thereto. Notwithstanding the foregoing, so long as the holder of any
Subordinated Debt Securities is the Institutional Trustee, the payment of
interest and principal on the Subordinated Debt Securities held by the
Institutional Trustee will be made at such place and to such account as may be
designated by the Institutional Trustee.
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The Indenture does not contain provisions that afford holders of the
Subordinated Debt Securities protection in the event of a highly leveraged
transaction or other similar transaction involving the Company that may
adversely affect such holders.
SUBORDINATION
The Indenture provides that the Subordinated Debt Securities are subordinated
and junior in right of payment to all present and future Senior Indebtedness of
the Company. No payment of principal (including redemption payments) or
interest on the Subordinated Debt Securities may be made (in cash, property,
securities, by set-off or otherwise) if (i) any Senior Indebtedness of the
Company, as the case may be, is not paid when due and any applicable grace
period with respect to a payment default under such Senior Indebtedness has
ended and such default has not been cured or waived or ceased to exist or (ii)
the maturity of any Senior Indebtedness of the Company has been accelerated
because of a default. Upon any distribution of assets of the Company to
creditors upon any dissolution, winding-up, liquidation or reorganization,
whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or
other proceedings, all principal and interest due or to become due on all
Senior Indebtedness of the Company must be paid in full before the holders of
the Subordinated Debt Securities are entitled to receive or retain any payment.
Upon satisfaction of all claims of all Senior Indebtedness then outstanding,
the rights of the holders of the Subordinated Debt Securities will be
subrogated to the rights of the holders of Senior Indebtedness of the Company
to receive payments or distributions applicable to Senior Indebtedness until
all amounts owing on the Subordinated Debt Securities are paid in full.
The term "Senior Indebtedness" means, with respect to the Company (except any
other obligations which rank pari passu with the Subordinated Debt Securities)
(i) the principal and interest in respect of (A) indebtedness of the Company
for money borrowed, and (B) indebtedness evidenced by securities, debentures,
notes, bonds or other similar instruments issued by the Company, including,
without limitation, any current or future indebtedness under any indenture
(other than the Indenture) to which the Company is party; (ii) all capital
lease obligations of the Company, (iii) all obligations of the Company issued
or assumed as the deferred purchase price of property, all conditional sale
obligations of the Company and all obligations of the Company under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business), (iv) all obligations of the Company for the
reimbursement on any letter of credit, any banker's acceptance, any security
purchase facility, any repurchase agreement or similar arrangement, any
interest rate swap, any other hedging arrangement, any obligation under options
or any similar credit or other transaction, (v) all obligations of the type
referred to in clauses (i) through (iv) above of other persons for the payment
of which the Company is responsible or liable as obligor, guarantor or
otherwise and (vi) all obligations of the type referred to in clauses (i)
through (v) above of other persons secured by any lien on any property or asset
of the Company (whether or not such obligation is assumed by the Company),
except for (1) any indebtedness between or among the Company or any affiliate
of the Company and (2) any other debt securities issued pursuant to the
Indenture and guarantees in respect of those debt securities. Senior
Indebtedness does not include the Subordinated Debt Securities or any junior
subordinated debt securities issued in the future with subordination terms
substantially similar to the Subordinated Debt Securities. Senior Indebtedness
shall continue to be Senior Indebtedness and be entitled to the benefits of the
subordination provisions irrespective of any amendment, modification or waiver
of any term of such Senior Indebtedness.
Because the Company is a bank holding company, the right of the Company to
participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise is subject to the prior
claims of creditors of that subsidiary, except to the extent the Company may
itself be recognized as a creditor of that subsidiary. The Company is a legal
entity separate and distinct from its Banking Subsidiaries and non-banking
subsidiaries. The Company's principal assets are the stock of its Banking
Subsidiaries and non-banking subsidiaries. The Company relies primarily on
dividends from such subsidiaries to meet its obligations for payment of
principal and interest on its outstanding debt obligations and corporate
expenses. The principal sources of the Company's income are dividends, interest
and fees from the Banking Subsidiaries and non-banking subsidiaries. The
Banking Subsidiaries of the Company are subject to certain
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restrictions imposed by federal and state law on any extensions of credit to,
and certain other transactions with the Company and certain other affiliates
and on investments in stock or other securities thereof. In addition, payment
of dividends to the Company by the Banking Subsidiaries is subject to ongoing
review by banking regulators and is subject to various statutory limitations
and in certain circumstances requires approval by banking regulatory
authorities. Accordingly, the Company's obligations under the Subordinated Debt
Securities 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.
The Indenture does not limit the aggregate amount of Senior Indebtedness that
may be issued by the Company. The Company had approximately $78 million of
Senior Indebtedness as of December 31, 1996.
REDEMPTION
The Company may redeem the Subordinated Debt Securities, in whole or in part,
at any time and from time to time, on or after February 1, 2007 upon not less
than 30 nor more than 60 days' notice, at par plus accrued and unpaid interest
to the redemption date. In addition, the Subordinated Debt Securities may be
redeemed by the Company at any time, in whole or in part, in certain
circumstances described herein upon the occurrence and continuation of a Tax
Event or a Capital Treatment Event, within 90 days following the occurrence of
such Tax Event or Capital Treatment Event, upon not less than 30 nor more than
60 days' notice, at par, plus any accrued and unpaid interest to the redemption
date. In each case, redemption prior to maturity is subject to the receipt by
the Company of prior approval from the Federal Reserve, if then required under
applicable capital guidelines or policies of the Federal Reserve. See
"Description of the Capital Securities--Redemption."
INTEREST
The Subordinated Debt Securities shall bear interest at a variable annual
rate equal to LIBOR plus 0.85%, from the original date of issuance of the Old
Subordinated Debt Securities, payable quarterly in arrears on the first day of
February, May, August and November of each year (each an "Interest Payment
Date"), commencing May 1, 1997, to the person in whose name such Subordinated
Debt Security is registered, subject to certain exceptions, at the close of
business on the Business Day next preceding such Interest Payment Date. The
term "interest" as used herein, as such term relates to the Subordinated Debt
Securities, includes any Compounded Interest or Additional Interest payable
unless otherwise stated. In the event the Subordinated Debt Securities are not
held solely in book-entry only form, the Company will select relevant record
dates, which shall be 15 days prior to the relevant Interest Payment Date.
The Chase Manhattan Bank, as Calculation Agent (the "Calculation Agent"),
will calculate the interest rate for each quarterly interest period based on
LIBOR determined as of two London Business Days (defined as any day, other than
a Saturday or Sunday, on which banks are open for business in London) prior to
the first day of such interest period (each, a "Determination Date"). "LIBOR"
means, with respect to a quarterly interest period relating to an Interest
Payment Date (in the following order of priority):
(i) the rate (expressed as a percentage per annum) for Eurodollar
deposits having a three-month maturity that appears on Telerate Page 3750
as of 11:00 a.m. (London time) on the related Determination Date;
(ii) if such rate does not appear on Telerate Page 3750 as of 11:00 a.m.
(London time) on the related Determination Date, LIBOR will be the
arithmetic mean (if necessary rounded upwards to the nearest whole multiple
of .00001%) of the rates (expressed as percentages per annum) for
Eurodollar deposits having a three-month maturity that appear on Reuters
Monitor Money Rates Page LIBO ("Reuters Page LIBO") as of 11:00 a.m.
(London time) on such Determination Date;
(iii) if such rate does not appear on Reuters Page LIBO as of 11:00 a.m.
(London time) on the related Determination Date, the Calculation Agent will
request the principal London offices of four leading banks in the London
interbank market to provide such banks' offered quotations (expressed as
percentages per annum) to prime banks in the London interbank market for
Eurodollar deposits having a three-month
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maturity as of 11:00 a.m. (London time) on such Determination Date. If at
least two quotations are provided, LIBOR will be the arithmetic mean (if
necessary rounded upwards to the nearest whole multiple of .00001%) of such
quotations;
(iv) if fewer than two such quotations are provided as requested in
clause (iii) above, the Calculation Agent will request four major New York
City banks to provide such banks' offered quotations (expressed as
percentages per annum) to leading European banks for loans in Eurodollars
as of 11:00 a.m. (London time) on such Determination Date. If at least two
such quotations are provided, LIBOR will be the arithmetic mean (if
necessary rounded upwards to the nearest whole multiple of .00001%) of such
quotations; and
(v) if fewer than two such quotations are provided as requested in clause
(iv) above, LIBOR will be LIBOR determined with respect to the interest
period immediately preceding such current interest period.
If the rate for Eurodollar deposits having a three-month maturity that
initially appears on Telerate Page 3750 or Reuters Page LIBO, as the case may
be, as of 11:00 a.m. (London time) on the related Determination Date is
superseded on Telerate Page 3750 or Reuters Page LIBO, as the case may be, by a
corrected rate before 12:00 noon (London time) on such Determination Date, the
corrected rate as so substituted on the applicable page will be the applicable
LIBOR for such Determination Date.
LIBOR for the initial interest period (commencing upon the original issuance
of the Subordinated Debt Securities) is 5.5625% and the interest rate for the
initial interest period is 6.4125%.
Absent manifest error, the Calculation Agent's determination of LIBOR and its
calculation of the applicable interest rate for each interest period will be
final and binding. Investors may obtain the interest rates for the current and
preceding interest period by writing or calling Corporate Trust Administration
at the Calculation Agent at The Chase Manhattan Bank, 450 West 33rd Street, New
York, New York 10001.
The amount of interest payable for any period will be computed on the basis
of the actual number of days elapsed in a year of twelve 30-day months. In the
event that any date on which interest is payable on the Subordinated Debt
Securities 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 such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as the Company is not in default in the payment of interest that has
become due and payable on the Subordinated Debt Securities and no accrued
interest from a prior completed Extension Period is unpaid, the Company shall
have the right to defer payments of interest on the Subordinated Debt
Securities by extending the interest payment period, at any time and from time
to time, for Extension Periods, each not exceeding 20 consecutive quarterly
periods and none extending beyond the maturity date of the Subordinated Debt
Securities, provided, however, that on the date on which each such Extension
Period ends or, if such date is not an Interest Payment Date, on the
immediately following Interest Payment Date, the Company shall pay all interest
then accrued and unpaid, together with interest thereon at a variable annual
rate equal to LIBOR plus 0.85%, compounded quarterly to the extent permitted by
applicable law ("Compounded Interest"). During any Extension Period (a) the
Company shall not declare or pay dividends on, make any distribution with
respect to, or redeem, purchase, acquire, or make a liquidation payment with
respect to, any of its capital stock or rights to acquire such capital stock
(other than (i) purchases or acquisitions of shares of any such capital stock
or rights to acquire such capital stock in connection with the satisfaction by
the Company of its obligations under any employee benefit plans, (ii) as a
result of a reclassification of the Company's capital stock or rights to
acquire such capital stock or the exchange or conversion of one class or series
of the Company's capital stock or rights to acquire such capital stock for
another class or series of the Company's capital stock or rights to acquire
such capital stock, (iii) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (iv)
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dividends and distributions made on the Company's capital stock or rights to
acquire such capital stock with the Company's capital stock or rights to
acquire such capital stock, or (v) any declaration of a dividend in connection
with the implementation of a shareholder rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto), or make any guarantee payments (other than payments
under the Guarantee and the Common Securities Guarantee) with respect to the
foregoing and (b) the Company shall not make any payment of interest, principal
or premium, if any, on or repay, repurchase or redeem any debt securities
issued by the Company that rank pari passu with or junior to the Subordinated
Debt Securities. Prior to the termination of any such Extension Period, the
Company may further defer payments of interest by extending the interest
payment period; provided, however, that each such Extension Period, including
all such previous and further extensions thereof, may not exceed 20 consecutive
quarterly periods or extend beyond the maturity of the Subordinated Debt
Securities. Upon the termination of any Extension Period and the payment of all
amounts then due, the Company may commence a new Extension Period, subject to
the terms set forth herein. No interest during an Extension Period, except on
the date on which such Extension Period terminates (or if such date is not an
Interest Payment Date, on the immediately following Interest Payment Date),
shall be due and payable. The Company has no present intention of exercising
its right to defer payments of interest on the Subordinated Debt Securities.
If the Institutional Trustee shall be the sole holder of the Subordinated
Debt Securities, the Company shall give the Administrators, the Institutional
Trustee and the Indenture Trustee notice of its initiation of any Extension
Period one Business Day prior to the earlier of (i) the date Distributions on
the Capital Securities are payable or (ii) the date the Administrators are
required to give notice to holders of the Capital Securities (or any national
securities exchange or other organization on which the Capital Securities are
listed, if any) of the record date or the distribution payment date, in each
case with respect to Distributions on the Trust Securities the payment of which
is being deferred. An Administrator shall give notice of the Company's
initiation of any Extension Period to the holders of such Capital Securities.
If the Institutional Trustee shall not be the sole holder of the Subordinated
Debt Securities, the Company shall give the holders of such Subordinated Debt
Securities notice of its initiation of such Extension Period ten Business Days
prior to the earlier of (i) the next succeeding Interest Payment Date or (ii)
the date upon which the Company is required to give notice to holders of such
Subordinated Debt Securities (or any national securities exchange or other
organization on which the corresponding Capital Securities are listed, if any)
of the record date or interest payment date, in each case with respect to
interest payments the payment of which is being deferred.
ADDITIONAL INTEREST
If at any time the Trust shall be required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, then, in
any such case, the Company will pay as additional interest ("Additional
Interest") on the Subordinated Debt Securities such additional amounts as shall
be required so that the net amounts received and retained by the Trust after
paying any such taxes, duties, assessments or other governmental charges will
equal the amounts the Trust and the Institutional Trustee would have received
had no such taxes, duties, assessments or other governmental charges been
imposed.
PROPOSED TAX LEGISLATION
On February 6, 1997, President Clinton proposed the Proposed Legislation that
would, among other things, generally deny corporate issuers a deduction for
interest in respect of certain debt obligations if such debt obligations have a
maximum term in excess of 15 years and are not shown as indebtedness on the
issuer's applicable consolidated balance sheet. As currently proposed, the
Proposed Legislation would be effective generally for instruments issued on or
after the date of first Congressional committee action. Under current law, the
Company will be able to deduct interest on the Subordinated Debt Securities
and, based upon the effective date of the Proposed Legislation as it is
currently proposed, it is expected that if the Proposed Legislation were
enacted, such legislation would not apply retroactively to the Subordinated
Debt Securities. However, if the
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Proposed Legislation is enacted with retroactive effect with respect to the
Subordinated Debt Securities, the Company would not be entitled to an interest
deduction with respect to the Subordinated Debt Securities. There can be no
assurance that the Proposed Legislation, if enacted, will not apply
retroactively to the Subordinated Debt Securities 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 Debt
Securities. Accordingly, there can be no assurance that a Tax Event will not
occur. See "Description of the Capital Securities Redemption."
CERTAIN COVENANTS
If (i) there shall have occurred and be continuing any event that would
constitute an Event of Default (as defined herein) under the Indenture, (ii)
the Company shall be in default with respect to its payment of any obligations
under the Guarantee or the Common Securities Guarantee, or (iii) the Company
shall have given notice of its election to defer payments of interest on the
Subordinated Debt Securities by extending the interest payment period as
provided in the Indenture and such period, or any extension thereof, shall be
continuing, then (a) the Company shall not declare or pay any dividend on, make
a distribution with respect to, or redeem, purchase or make a liquidation
payment with respect to, any of its capital stock or rights to acquire such
capital stock (other than (i) purchases or acquisitions of shares of any such
capital stock or rights to acquire such capital stock in connection with the
satisfaction by the Company of its obligations under any employee benefit
plans, (ii) as a result of a reclassification of the Company's capital stock or
rights to acquire such capital stock or the exchange or conversion of one class
or series of the Company's capital stock or rights to acquire such capital
stock for another class or series of the Company's capital stock or rights to
acquire such capital stock, (iii) the purchase of fractional interests in
shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(iv) dividends and distributions made on the Company's capital stock or rights
to acquire such capital stock with the Company's capital stock or rights to
acquire such capital stock, or (v) any declaration of a dividend in connection
with the implementation of a shareholder rights plan, or the issuance of stock
under such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto), or make any guarantee payments (other than payments
under the Guarantee and the Common Securities Guarantee) with respect to the
foregoing and (b) the Company shall not make any payment of interest, principal
or premium, if any, on or repay, repurchase or redeem any debt securities
issued by the Company that rank pari passu with or junior to the Subordinated
Debt Securities.
For so long as the Trust Securities remain outstanding, the Company will
covenant to maintain 100% ownership of the Common Securities; provided,
however, that any permitted successor of the Company under the Indenture may
succeed to the Company's ownership of such Common Securities. The
Administrators and the holder of a majority of the Common Securities each will
covenant to use their respective reasonable efforts to cause the Trust (a) to
remain a statutory business trust, except in connection with the distribution
of the Subordinated Debt Securities to the holders of the Trust Securities in
liquidation of the Trust, the redemption of all of the Trust Securities or
certain mergers, consolidations or amalgamations, each as permitted by the
Declaration, and (b) to otherwise continue to be classified as a grantor trust
for United States federal income tax purposes and (c) to use its reasonable
efforts to cause each holder of the Trust Securities to be treated as owning an
undivided beneficial interest in the Subordinated Debt Securities.
LIMITATION ON MERGERS AND SALES OF ASSETS
Nothing contained in the Indenture or in the Subordinated Debt Securities
shall prevent any consolidation or merger of the Company with or into any other
corporation (whether or not affiliated with the Company) or successive
consolidations or mergers in which the Company or its successor or successors
shall be a party, or shall prevent any sale, conveyance, transfer or other
disposition of the property of the Company or its successor or successors as an
entirety, or substantially as an entirety, to any other corporation (whether or
not affiliated with the Company or its successor or successors) authorized to
acquire and operate the same; provided, however, that the Company shall, upon
any such consolidation, merger, sale, conveyance, transfer or other
disposition, cause the obligations of the Company under the Subordinated Debt
Securities and under the Indenture to be
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expressly assumed, by supplemental indenture satisfactory in form to the
Indenture Trustee and executed and delivered to the Indenture Trustee, by the
successor entity formed by such consolidation or into which the Company shall
have been merged, or which shall have acquired such property. Upon execution
and delivery of such supplemental indenture to the Indenture Trustee, such
successor entity will be substituted under the Indenture and thereupon the
Company will be relieved of any further liability or obligation thereunder.
EVENTS OF DEFAULT, WAIVER AND NOTICE
The Indenture provides that any one or more of the following described events
which has occurred and is continuing with respect to the Subordinated Debt
Securities constitutes an Indenture Event of Default with respect to the
Subordinated Debt Securities:
(a) default for 30 days in payment of any interest on the Subordinated
Debt Securities, including any Compounded Interest or Additional Interest
in respect thereof, when due; provided, however, that a valid extension of
the interest payment period by the Company shall not constitute a default
in the payment of interest for this purpose; or
(b) default in payment of principal on the Subordinated Debt Securities
when due either at maturity, upon redemption, by declaration or otherwise;
provided, however, that a valid extension of the maturity of such
Subordinated Debt Securities shall not constitute a default for this
purpose; or
(c) default resulting in acceleration of other indebtedness of the
Company for borrowed money where the aggregate principal amount so
accelerated exceeds $25 million and such acceleration is not rescinded or
annulled within 30 days after the written notice thereof to the Company by
the Indenture Trustee or to the Company and the Indenture Trustee by the
holders of 25% in aggregate principal amount of the Subordinated Debt
Securities then outstanding; or
(d) default by the Company in the performance of any other of the
covenants or agreements in the Indenture which shall not have been remedied
for a period of 90 days after notice to the Company by the Indenture
Trustee or to the Company and the Indenture Trustee by the holders of not
less than 25% in aggregate principal amount of Subordinated Debt
Securities; or
(e) certain events of bankruptcy, insolvency or reorganization of the
Company; or
(f) the Liquidation of the Trust, except in connection with the
distribution of the Subordinated Debt Securities to the holders of the
Trust Securities in liquidation of the Trust, the redemption of all of the
Trust Securities, or certain mergers, consolidations or amalgamations, each
as permitted by the Declaration.
The Indenture provides that the Indenture Trustee may, under certain
circumstances, withhold from the holders notice of default with respect to the
Subordinated Debt Securities (except for any default in payment of principal of
or interest or premium, if any, on the Subordinated Debt Securities) if the
Trustee considers it in the interest of such holders to do so.
The Indenture provides that if an Indenture Event of Default in respect of
the Subordinated Debt Securities shall have occurred and be continuing, either
the Indenture Trustee or the holders of not less than 25% in aggregate
principal amount of the Subordinated Debt Securities then outstanding may
declare the principal of and accrued interest on all Subordinated Debt
Securities to be due and payable immediately, but upon certain conditions such
declarations may be annulled and past defaults may be waived (except defaults
in payment of principal of or interest or premium on the Subordinated Debt
Securities, which must be cured or paid in full) by the holders of a majority
in aggregate principal amount of the Subordinated Debt Securities then
outstanding.
No holder of any Subordinated Debt Security shall have any right to institute
any suit, action or proceeding for any remedy under the Indenture, unless such
holder previously shall have given to the Indenture Trustee written notice of a
continuing Event of Default with respect to the Subordinated Debt Securities
and unless the holders of not less than 25% in aggregate principal amount of
the Subordinated Debt Securities then outstanding shall have given the
Indenture Trustee a written request to institute such action, suit or
proceeding and shall have offered to the Indenture Trustee such reasonable
indemnity as it may require against the costs, expenses
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and liabilities to be incurred thereby, and the Indenture Trustee for 60 days
after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such action, suit or proceeding; provided that no
holder of the Subordinated Debt Securities shall have any right to prejudice
the rights of any other holder of the Subordinated Debt Securities, obtain
priority or preference over any other such holder or enforce any right under
the Indenture except as provided in the Indenture and for the equal, ratable
and common benefit of all holders of the Subordinated Debt Securities.
Notwithstanding the foregoing, the right of any holder of any Subordinated Debt
Security to receive payment of the principal of, premium, if any, and interest,
on such Subordinated Debt Security when due, or to institute suit for the
enforcement of any such payment, shall not be impaired or affected without the
consent of such holder.
The holders of a majority in aggregate principal amount of the Subordinated
Debt Securities then outstanding shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to, or
exercising any trust or power conferred on, the Indenture Trustee under the
Indenture; provided, however, that, except under certain circumstances, the
Indenture Trustee may decline to follow any such direction if the Indenture
Trustee determines that the action so directed would be unjustly prejudicial to
holders not taking part in such direction or would be unlawful or would involve
the Indenture Trustee in personal liability. The Indenture requires the annual
filing by the Company with the Indenture Trustee of a certificate as to the
absence of certain defaults under the Indenture.
An Indenture Event of Default under the Indenture also constitutes a
Declaration Event of Default. The holders of the Capital Securities, in certain
circumstances, have the right to direct the Institutional Trustee to exercise
its rights as the holder of the Subordinated Debt Securities. See "Description
of the Capital Securities--Declaration Events of Default" and "Voting Rights."
Notwithstanding the foregoing, if an Indenture Event of Default has occurred
and is continuing and such event is attributable to the failure of the Company
to pay interest or principal (or premium, if any) on the Subordinated Debt
Securities on the respective dates such interest or principal (or premium, if
any) is payable (or in the case of redemption, on the redemption date), the
Company acknowledges that a holder of record of the Capital Securities may
institute a Direct Action for payment, on or after the respective due dates
specified in such Subordinated Debt Securities, to such holder directly of the
principal of (or premium, if any) or interest on the Subordinated Debt
Securities having an aggregate principal amount equal to the aggregate
liquidation amount of the Capital Securities of such holder. Notwithstanding
any payments made to such holder of the Capital Securities by the Company in
connection with a Direct Action, the Company shall remain obligated to pay the
principal of (or premium, if any) or interest on the Subordinated Debt
Securities, and the Company shall be subrogated to the rights of such holder of
such Capital Securities under the Declaration to the extent of any payments
made by the Company to such holder in any Direct Action; provided, however,
that no such subrogation right may be exercised so long as a Declaration Event
of Default has occurred and is continuing. Except to the extent described above
under "Description of the Capital Securities--Declaration Events of Default"
and "Voting Rights," the holders of the Capital Securities will not be able to
exercise directly any other remedy available to the holders of the Subordinated
Debt Securities.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Indenture
Trustee, with the consent of the holders of not less than a majority in
principal amount of the Subordinated Debt Securities at the time outstanding,
to modify the Indenture or any supplemental indenture or the rights of the
holders of the Subordinated Debt Securities; provided, however, that no such
modification shall without the consent of the holder of each Subordinated Debt
Security so affected (i) extend the fixed maturity of any Subordinated Debt
Security, or reduce the principal amount thereof or any redemption premium
thereon, or reduce the rate or extend the time of payment of interest thereon,
or make the principal of or interest on, the Subordinated Debt Securities
payable in any coin or currency other than that provided in the Subordinated
Debt Securities, or impair or affect the right of any holder of the
Subordinated Debt Securities to institute suit for the payment thereof or (ii)
reduce the aforesaid percentage of Subordinated Debt Securities the consent of
the holders of which is required for any such modification.
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The Company and the Indenture Trustee may enter into supplemental indentures,
without the consent of any holder of the Subordinated Debt Securities: (i) to
evidence the succession of another corporation to the Company and the
assumption by the successor corporation of the covenants, agreements and
obligations of the Company pursuant to the Indenture; (ii) to add to the
covenants of the Company such further covenants, restrictions or conditions for
the protection of the holders of the Subordinated Debt Securities and to make
the occurrence, or the occurrence and continuance (including any or no grace
periods), of a default in any of such additional covenants, restrictions or
conditions a default or an Event of Default permitting the enforcement of
remedies provided in the Indenture; (iii) to cure any ambiguity or to correct
or supplement any provision contained in the Indenture or in any supplemental
indenture which may be defective or inconsistent with any other provision
contained therein or in any supplemental indenture, or to make such other
provisions in regard to matters or questions arising under the Indenture;
provided that any such action shall not adversely affect the interests of the
holders of the Subordinated Debt Securities; (iv) to add to, delete from, or
revise the terms of the Subordinated Debt Securities to provide for transfer
procedures and restrictions substantially similar to those applicable to the
Capital Securities (for purposes of assuring that no registration of the
Subordinated Debt Securities is required under the Securities Act); (v) to
evidence and provide for the acceptance of appointment under the Indenture by a
successor Indenture Trustee with respect to the Subordinated Debt Securities
and to add to or change any of the provisions of the Indenture as shall be
necessary to provide for or facilitate the administration of the Trust under
the Indenture by more than one Debt Trustee, pursuant to the Indenture; (vi) to
make any change that does not adversely affect the rights of any holder of any
Subordinated Debt Security in any material respect; or (vii) to provide for the
issuance, and establish the form and terms and conditions, of the Subordinated
Debt Securities, to establish the form of any certifications required to be
furnished pursuant to the terms of the Indenture or the Subordinated Debt
Securities or to add to the rights of the holders of the Subordinated Debt
Securities.
DISCHARGE
The Indenture provides that when, among other things, all Subordinated Debt
Securities not previously delivered to the Indenture Trustee for cancellation
(i) have become due and payable or (ii) will become due and payable at the
stated maturity within one year or are to be called for redemption within one
year under arrangements satisfactory to the Indenture Trustee, and the Company
deposits or causes to be deposited with the Indenture Trustee funds, in trust,
for the purpose and in an amount sufficient to pay and discharge the entire
indebtedness on the Subordinated Debt Securities not previously delivered to
the Indenture Trustee for cancellation, for the principal and interest to the
date of the stated maturity or redemption date, as the case may be, then the
Indenture will cease to be of further effect (except as to the Company's
obligations to pay all other sums due pursuant to the Indenture and to provide
the officers' certificates and opinions of counsel described therein), and the
Company will be deemed to have satisfied and discharged the Indenture.
THE INDENTURE TRUSTEE
The Company and certain of its affiliates maintain a banking relationship
with the Indenture Trustee and its affiliates.
BOOK-ENTRY ISSUANCE AND SETTLEMENT
If distributed to holders of the Capital Securities of the Trust in
connection with the involuntary or voluntary dissolution, winding-up or
liquidation of the Trust, the Subordinated Debt Securities will, with respect
to such Capital Securities held in book-entry form, initially be issued in the
form of one or more global certificates (each a "Global Security") registered
in the name of the Depositary or its nominee. Except under the limited
circumstances described below, the Subordinated Debt Securities represented by
a Global Security will not be exchangeable for, and will not otherwise be
issuable as, the Subordinated Debt Securities in definitive form. The Global
Securities described above may not be transferred except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or to a successor depositary or its
nominee.
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The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of such securities in definitive form. Such laws may
impair the ability to transfer beneficial interests in such a Global Security.
Except as provided below, owners of beneficial interests in a Global Security
will not be entitled to receive physical delivery of Subordinated Debt
Securities in definitive form and will not be considered the holders (as
defined in the Indenture) thereof for any purpose under the Indenture, and no
Global Security representing the Subordinated Debt Securities shall be
exchangeable, except for another Global Security of like denomination and tenor
to be registered in the name of the Depositary or its nominee or to a successor
Depositary or its nominee. Accordingly, each beneficial owner must rely on the
procedures of the Depositary or if such person is not a Participant, on the
procedures of the Participant through which such person owns its interest to
exercise any rights of a holder under the Indenture.
THE DEPOSITARY
If the Subordinated Debt Securities are distributed to holders of the Capital
Securities in liquidation of such holders' interests in the Trust, DTC will act
as securities Depositary for the Subordinated Debt Securities distributed by
the Trust with respect to the Capital Securities held in book-entry form. For a
description of DTC and the specific terms of the depositary arrangements, see
"Description of the Capital Securities--Book-Entry Only Issuance--The
Depository Trust Company." As of the date of this Prospectus, the description
herein of DTC's book-entry system and DTC's practices as they relate to
purchases, transfers, notices and payments with respect to the Capital
Securities would apply in all material respects to any debt obligations
represented by one or more Global Securities held by DTC. The Company may
appoint a successor to DTC or any successor depositary in the event DTC or such
successor depositary is unable or unwilling to continue as the Depositary for
the Global Securities.
None of the Company, the Trust, the Institutional Trustee, the Indenture
Trustee, any paying agent and any other agent of the Company, the Trust, the
Institutional Trustee or the Indenture Trustee will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in a Global Security for the Subordinated
Debt Securities or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
DISCONTINUANCE OF THE DEPOSITARY'S SERVICES
A Global Security shall be exchangeable for the Subordinated Debt Securities
registered in the names of persons other than the Depositary or its nominee
only if (i) the Depositary notifies the Company that it is unwilling or unable
to continue as a depositary for such Global Security and no successor
depositary shall have been appointed, (ii) the Depositary, at any time, ceases
to be a clearing agency registered under the Exchange Act at which time the
Depositary is required to be so registered to act as such depositary and no
successor depositary shall have been appointed, (iii) the Company, in its sole
discretion, determines that such Global Security shall be so exchangeable or
(iv) there shall have occurred an Indenture Event of Default. Any Global
Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for the Subordinated Debt Securities registered in such names as
the Depositary shall direct. It is expected that such instructions will be
based upon directions received by the Depositary from its Participants with
respect to ownership of beneficial interests in such Global Security.
RESTRICTIONS ON TRANSFER
The Subordinated Debt Securities will be issued and may be transferred only
in blocks having an aggregate principal amount of not less that $100,000 (and
integral multiples of $1,000 in excess thereof). Any such transfer of the
Subordinated Debt Securities in a block having an aggregate principal amount of
less than $100,000 shall be deemed to be void and of no legal effect
whatsoever. Any such transferee shall be deemed not to be the holder of such
Subordinated Debt Securities for any purpose, including but not limited to the
receipt of payments on
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such Subordinated Debt Securities, and such transferee shall be deemed to have
no interest whatsoever in such Subordinated Debt Securities.
GOVERNING LAW
The Indenture and the Subordinated Debt Securities are governed by, and
construed in accordance with, the laws of the State of New York, without regard
to conflict of laws principles.
MISCELLANEOUS
The Indenture provides that the Company will pay all fees and expenses
related to (i) the organization, maintenance and dissolution of the Trust, (ii)
the retention of the Institutional Trustee and Administrators and (iii) the
enforcement by the Institutional Trustee of the rights of the holders of the
Capital Securities.
The Company will have the right at all times to assign any of its respective
rights or obligations under the Indenture to a direct or indirect wholly owned
subsidiary of the Company; provided that, in the event of any such assignment,
the Company will remain liable for all of its obligations. Subject to the
foregoing, the Indenture will be binding upon and inure to the benefit of the
parties thereto and their respective successors and assigns. Except as
otherwise provided in "Limitation on Mergers and Sales of Assets," the
Indenture provides that it may not be assigned by the parties thereto.
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EFFECT OF OBLIGATIONS UNDER THE SUBORDINATED DEBT SECURITIES
AND THE GUARANTEE
As set forth in the Declaration, the sole purpose of the Trust is to issue
and sell the Trust Securities evidencing undivided beneficial interests in the
assets of the Trust, and to invest the proceeds from such issuance and sale in
the Subordinated Debt Securities issued by the Company in accordance with such
Trust Securities.
As long as payments of interest and other payments are made when due on the
Subordinated Debt Securities, such payments will be sufficient to cover
distributions and payments due on the Trust Securities because of the following
factors: (i) the aggregate principal amount of the Subordinated Debt Securities
equal to the aggregate stated liquidation amount of the Trust Securities; (ii)
the interest rate and the interest and other payment dates on the Subordinated
Debt Securities match the distribution rate and distribution and other payment
dates for the Trust Securities; (iii) the Company shall pay all, and the Trust
shall not be obligated to pay directly or indirectly any, costs, expenses,
debts, and other obligations of the Trust (other than with respect to such
Trust Securities); and (iv) the Declaration further provides that the
Institutional Trustee shall not take any action or cause or permit the Trust
to, among other things, engage in any activity that is not consistent with the
purposes of the Trust.
Payments of Distributions (to the extent funds therefor are available to the
Trust) and other payments due on the Capital Securities (to the extent funds
therefor are available to the Trust) are guaranteed by the Company as described
under "Description of the Guarantee." If the Company does not make interest
payments on the Subordinated Debt Securities, it is expected that the Trust
will not have sufficient funds to pay Distributions on such Capital Securities.
The Guarantee will not apply to any payment of Distributions except to the
extent that the Trust has funds available for the payment of such
distributions. The Guarantee will cover the payment of Distributions and other
payments on such Capital Securities only if and to the extent that the Company
has made payments of interest or principal on the Subordinated Debt Securities
held by the Trust as its sole assets. The Guarantee, when taken together with
the Company's obligations under the Subordinated Debt Securities, the
Declaration and the Indenture, including its obligations to pay costs,
expenses, debts and other obligations of the Trust (other than with respect to
the Trust Securities), provide a full and unconditional guarantee on a
subordinated basis by the Company of amounts when due on such Capital
Securities.
If the Company fails to make interest or other payments on the Subordinated
Debt Securities when due (after giving effect to any Extension Period), the
Declaration provides a mechanism whereby the holders of the Capital Securities,
using the procedures described herein under "Description of the Capital
Securities--Book-Entry Only Issuance--The Depository Trust Company" and "Voting
Rights," may direct the Institutional Trustee, to the fullest extent permitted
by law to enforce its rights under the Subordinated Debt Securities. If the
Institutional Trustee fails to enforce its rights under the Subordinated Debt
Securities after a majority in liquidation amount of the Capital Securities
have so directed the Institutional Trustee, a holder of record of the Capital
Securities may to the fullest extent permitted by law institute a legal
proceeding against the Company to enforce the Institutional Trustee's rights
under the Subordinated Debt Securities without first instituting any legal
proceedings against the Institutional Trustee or any other person or entity.
Notwithstanding the foregoing, if a Declaration Event of Default has occurred
and is continuing and such event is attributable to the failure of the Company
to pay principal or interest on the Subordinated Debt Securities on the
respective dates such principal or interest is payable (or in the case of
redemption, on the redemption date), then a holder of record of the Capital
Securities may institute a Direct Action for payment on or after the respective
due dates specified in the Subordinated Debt Securities. In connection with
such Direct Action, the Company will be subrogated to the rights of such holder
of the Capital Securities under the Declaration to the extent of any payment
made by the Company to such holder of the Capital Securities in such Direct
Action; provided, however, that no such subrogation right may be exercised so
long as a Declaration Event of Default has occurred and is continuing.
Because the Company is a bank holding company, the Subordinated Debt
Securities and the Guarantee are effectively subordinated to all existing and
future liabilities, including trade payables, of the Company's subsidiaries,
except to the extent that the Company is a creditor of the subsidiaries
recognized as such.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives New Capital Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
Prospectus in connection with any resale of such New Capital Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of New Capital Securities
received in exchange for Old Capital Securities where such New Capital
Securities were acquired as a result of market-making activities or other
trading activities. The Company and the Trust have agreed that, starting on the
date on which the Exchange Offer is consummated and ending on the close of
business one year after such date, they will make this Prospectus, as amended
or supplemented, available to any broker-dealer for use in connection with any
such resale. In addition, until , 199 , all dealers offering
transactions in the New Capital Securities may be required to deliver a
Prospectus.
The Company and the Trust will not receive any proceeds from any sale of New
Capital Securities by broker-dealers. New Capital Securities received by
broker-dealers for their own account pursuant to the Exchange Offer may be sold
from time to time in one or more transactions in the over-the-counter market,
in negotiated transactions, through the writing of options on the New Capital
Securities or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or negotiated prices. Any such resale may be made directly to purchasers
or to or through brokers or dealers who may receive compensation in the form of
commissions or concessions from any such broker-dealer and/or the purchasers of
any such New Capital Securities. Any broker-dealer that resells New Capital
Securities that were received by it for its own account pursuant to the
Exchange Offer and any broker or dealer that participates in a distribution of
such New Capital Securities may be deemed to be an "underwriter" within the
meaning of the Securities Act and any profit of any such resale of New Capital
Securities and any commissions or concessions received by any such persons may
be deemed to be underwriting compensation under the Securities Act. The Letter
of Transmittal states that by acknowledging that it will deliver and by
delivering a Prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.
Each broker-dealer that surrenders Old Capital Securities pursuant to the
Exchange Offer will be deemed to have agreed, by execution of the Letter of
Transmittal, to comply with applicable laws in connection with offers and sales
by way of this Prospectus including, without limitation, the prospectus
delivery requirements of the Securities Act and the applicable requirements of
Rules 10b-5 and 10b-6 under the Exchange Act and to discontinue offers and
sales upon notice from the Company of the happening of any event that requires
the making of changes in the Registration Statement or the Prospectus so that
the statements therein are not misleading and do not omit to state a material
fact required to be stated therein or necessary to make the statements therein
(in the case of the Prospectus, in light of the circumstances under which they
were made) not misleading. The Company has agreed, subject to certain
exceptions, to make any such required change promptly following the occurrence
of any such event.
For a period of one year after the date on which the Exchange Offer is
consummated, the Company and the Trust will promptly send additional copies of
this Prospectus and any amendment or supplement to this Prospectus to any
broker-dealer that requests such documents in the Letter of Transmittal. The
Company and the Trust have agreed to pay all expenses incidental to the
Exchange Offer (including the expenses of one counsel for the holders of the
Old Capital Securities) other than commissions or concessions of any brokers or
dealers and will indemnify the holders of the Old Capital Securities (including
any broker-dealers) against certain liabilities, including liabilities under
the Securities Act.
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UNITED STATES FEDERAL INCOME TAXATION
GENERAL
In the opinion of Wachtell, Lipton, Rosen & Katz, New York, New York, special
tax counsel to the Company ("Counsel"), the discussion of United States federal
income taxation which follows summarizes the material United States federal
income tax consequences of the purchase, ownership and disposition of the
Capital Securities.
This summary is based on the Internal Revenue Code of 1986, as amended (the
"Code"), Treasury regulations thereunder, and administrative and judicial
interpretations thereof, each as of the date hereof, all of which are subject
to change, possibly on a retroactive basis.
Except as otherwise stated, this summary deals only with the Capital
Securities held as a capital asset by a holder who or which (i) purchased the
Capital Securities upon original issuance (an "Initial Holder") and (ii) is a
US Holder (as defined below). It does not deal with all aspects of United
States federal income taxation, nor with the particular United States federal
income tax (hereafter, "income tax") consequences which may be applicable to
certain classes of US Holders (such as banks, thrift institutions, real estate
investment trusts, regulated investment companies, insurance companies, brokers
and dealers in securities or currencies, other financial institutions, tax-
exempt organizations, persons holding the Capital Securities as a position in a
"straddle," as part of a "synthetic security or hedge," as part of a
"conversion transaction" or as part of any other integrated investment, persons
having a functional currency other than the U.S. Dollar and certain United
States expatriates). Further, this summary does not address (a) the income tax
consequences to shareholders in, or partners or beneficiaries of, a holder of
the Capital Securities, (b) the United States federal alternative minimum tax
consequences of the purchase, ownership or disposition of the Capital
Securities, or (c) any state, local or foreign tax consequences of the
purchase, ownership and disposition of Capital Securities.
A "US Holder" is a holder of the Capital Securities who or which is a citizen
or individual resident (or is treated as a citizen or individual resident) of
the United States for income tax purposes, a corporation or partnership created
or organized (or treated as created or organized for income tax purposes) in or
under the laws of the United States or any political subdivision thereof, or an
estate the income of which is includible in its gross income for United States
federal income tax purposes without regard to its source, or a trust if (i) a
court within the United States is able to exercise primary supervision over the
administration of the trust and (ii) one or more United States trustees have
the authority to control all substantial decisions of the trust.
EXCHANGE OF THE CAPITAL SECURITIES
The exchange of the Old Capital Securities for the New Capital Securities
should not be a taxable event to holders for income tax purposes. The exchange
of the Old Capital Securities for the New Capital Securities pursuant to the
Exchange Offer should not be treated as an "exchange" for federal income tax
purposes because the degree to which the New Capital Securities differ from the
Old Capital Securities is not economically significant and because the exchange
will occur by operation of the terms of the Old Capital Securities.
Accordingly, the New Capital Securities should have the same issue price as the
Old Capital Securities, and a holder should have the same adjusted basis and
holding period in the New Capital Securities as the holder had in the Old
Capital Securities immediately before the exchange. Therefore, the tax opinions
rendered by counsel in connection with the issuance of the Old Capital
Securities, when read in conjunction with the tax opinion rendered in
connection with the Exchange Offer, are equally applicable to this issuance of
the New Capital Securities.
US HOLDERS
Characterization of the Trust. In connection with the issuance of the Old
Capital Securities, Counsel has rendered its opinion generally to the effect
that, under then current law and assuming full compliance with the
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terms of the Declaration (and other documents), and based on certain
assumptions and qualifications referenced in the opinion, the Trust will be
characterized for United States federal income tax purposes as a grantor trust
and will not be characterized as an association taxable as a corporation for
such purposes. Accordingly, for income tax purposes, each holder of the Capital
Securities generally is considered the owner of an undivided interest in the
Subordinated Debt Securities owned by the Trust, and each US Holder is required
to include all income or gain recognized for income tax purposes with respect
to its allocable share of the Subordinated Debt Securities on its own income
tax return.
Characterization of the Subordinated Debt Securities. In connection with the
issuance of the Old Subordinated Debt Securities, Counsel has rendered its
opinion generally to the effect that, under then current law and assuming full
compliance with the terms of the Indenture (and other documents), and based on
certain assumptions and qualifications referenced in the opinion, the
Subordinated Debt Securities will be characterized for United States federal
income tax purposes as debt of the Company.
Original Issue Discount. Under the terms of the Subordinated Debt Securities,
the Company has the option to defer payments of interest from time to time by
extending the interest payment period for a period not exceeding 20 consecutive
quarterly periods, but not beyond the maturity of the Subordinated Debt
Securities. Recently issued Treasury regulations under Section 1273 of the Code
provide that debt instruments like the Subordinated Debt Securities will not be
considered issued with OID by reason of the Company's option to defer payments
of interest if the likelihood of deferral is "remote."
The Company has concluded, and this discussion assumes, that, as of the date
of this Prospectus, the likelihood of exercise of that option is "remote"
within the meaning of the applicable regulations, in part because exercising
that option would prevent the Company from declaring dividends on its stock and
would prevent the Company from making any payments with respect to debt
securities that rank pari passu with or junior to the Subordinated Debt
Securities. Therefore, the Subordinated Debt Securities should not be treated
as issued with OID by reason of the Company's deferral option. Rather, stated
interest on the Subordinated Debt Securities is generally taxable to a US
Holder, as ordinary income, when paid or accrued in accordance with that
holder's method of accounting for income tax purposes. It should be noted,
however, that these regulations have not yet been addressed in any rulings or
other interpretations by the Service. Accordingly, it is possible that the
Service could take a position contrary to the interpretation described herein.
In the event the Company subsequently exercised its option to defer payments
of interest, the Subordinated Debt Securities would be treated as reissued for
OID purposes and the sum of the remaining interest payments on the Subordinated
Debt Securities would thereafter be treated as OID, which would accrue, and be
includible in a US Holder's taxable income, on an economic accrual basis
(regardless of the US Holder's method of accounting for income tax purposes)
over the remaining term of the Subordinated Debt Securities (including any
period of interest deferral), without regard to the timing of payments under
the Subordinated Debt Securities. (Subsequent distributions of interest on the
Subordinated Debt Securities generally would not be taxable.) The amount of OID
that accrued in any period would generally equal the amount of interest that
accrued on the Subordinated Debt Securities in that period at the stated
interest rate. Consequently, during any period of interest deferral, US Holders
will include OID in gross income in advance of the receipt of cash, and a US
Holder which disposes of a Capital Security prior to the record date for
payment of distributions on the Subordinated Debt Securities following that
period will be subject to income tax on OID accrued through the date of
disposition (and not previously included in income), but will not receive cash
from the Trust with respect to that OID.
If the Company's option to defer payments of interest were not treated as
remote, the Subordinated Debt Securities would be treated as initially issued
with OID in an amount equal to the aggregate stated interest over the term of
the Subordinated Debt Securities. That OID would generally be includible in a
US Holder's taxable income, over the term of the Subordinated Debt Securities,
on an economic accrual basis.
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Characterization of Income. Because the income underlying the Capital
Securities will not be characterized as dividends for income tax purposes,
corporate holders of the Capital Securities will not be entitled to a
dividends-received deduction for any income recognized with respect to the
Capital Securities.
Market Discount and Bond Premium. Holders of the Capital Securities may be
considered to have acquired their undivided interests in the Subordinated Debt
Securities with market discount or acquisition premium (as each phrase is
defined for income tax purposes).
Receipt of Subordinated Debt Securities or Cash Upon Liquidation of the
Trust. Under certain circumstances described herein (see "Description of the
Capital Securities"), the Company has the right to distribute the Subordinated
Debt Securities to holders in exchange for the Capital Securities and in
liquidation of the Trust. Except as discussed below, such a distribution would
not be a taxable event for income tax purposes, and each US Holder would have
an aggregate adjusted basis in its Subordinated Debt Securities for income tax
purposes equal to such holder's aggregate adjusted basis in its Capital
Securities. For income tax purposes, a US Holder's holding period in the
Subordinated Debt Securities received in such a liquidation of the Trust would
include the period during which the Capital Securities were held by the holder.
If, however, the relevant event is a Tax Event which results in the Trust being
treated as an association taxable as a corporation, the distribution would
likely constitute a taxable event to US Holders of the Capital Securities for
income tax purposes.
Under certain circumstances described herein (see "Description of the Capital
Securities"), the Subordinated Debt Securities may be redeemed for cash and the
proceeds of such redemption distributed to holders in redemption of their
Capital Securities. Such a redemption would be taxable for income tax purposes,
and a US Holder would recognize gain or loss as if it had sold the Capital
Securities for cash. See "Sales of Capital Securities" below.
Sales of Capital Securities. A US Holder that sells Capital Securities will
recognize gain or loss equal to the difference between its adjusted basis in
the Capital Securities and the amount realized on the sale of such Capital
Securities. A US Holder's adjusted basis in the Capital Securities generally
will be its initial purchase price, increased by OID previously included (or
currently includible) in such holder's gross income to the date of disposition,
and decreased by payments received on the Capital Securities (other than any
interest received with respect to the period prior to the effective date of the
Company's first exercise of its option to defer payments of interest). Any such
gain or loss generally will be a capital gain or loss, and generally will be a
long-term capital gain or loss if the Capital Securities have been held for
more than one year.
A holder who disposes of his Capital Securities between record dates for
payments of distributions thereon will be required to include accrued but
unpaid interest (or OID) on the Subordinated Debt Securities through the date
of disposition in its taxable income for income tax purposes (notwithstanding
that the holder may receive a separate payment from the purchaser with respect
to accrued interest), and to deduct that amount from the sales proceeds
received (including the separate payment, if any, with respect to accrued
interest) for the Capital Securities (or as to OID only, to add such amount to
such holder's adjusted tax basis in its Capital Securities). To the extent the
selling price is less than the holder's adjusted tax basis (which will include
accrued but unpaid OID, if any), a holder will recognize a capital loss.
Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for income tax purposes.
NON-US HOLDERS
The following discussion applies to an Initial Holder who is not a US Holder
(a "Non-US Holder").
Payments to a holder of a Capital Security which is a Non-US Holder will
generally not be subject to withholding of income tax, provided that (a) the
beneficial owner of the Capital Security does not (directly or indirectly,
actually or constructively) own 10% or more of the total combined voting power
of all classes of stock of the Company entitled to vote, (b) the beneficial
owner of the Capital Security is not a controlled foreign corporation that is
related to the Company through stock ownership, and (c) either (i) the
beneficial owner of the
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Capital Securities certifies to the Trust or its agent, under penalties of
perjury, that it is a Non-US Holder and provides its name and address, or (ii)
a securities clearing organization, bank or other financial institution that
holds customers' securities in the ordinary course of its trade or business (a
"Financial Institution"), and holds the Capital Security in such capacity,
certifies to the Trust or its agent, under penalties of perjury, that such a
statement has been received from the beneficial owner by it or by another
Financial Institution between it and the beneficial owner in the chain of
ownership, and furnishes the Trust or its agent with a copy thereof.
As discussed above (see "Description of the Capital Securities--Redemption"),
changes in legislation affecting the income tax consequences of the
Subordinated Debt Securities are possible, and could adversely affect the
ability of the Company to deduct the interest payable on the Subordinated Debt
Securities. Moreover, any such legislation could adversely affect, as the
Proposed Legislation would have adversely affected, Non-US Holders by
characterizing income derived from the Subordinated Debt Securities as
dividends, generally subject to a 30% income tax (on a withholding basis) when
paid to a Non-US Holder, rather than as interest which, as discussed above, is
generally exempt from income tax in the hands of a Non-US Holder.
A Non-US Holder of a Capital Security will generally not be subject to
withholding of income tax on any gain realized upon the sale or other
disposition of a Capital Security.
A Non-US Holder which holds the Capital Securities in connection with the
active conduct of a United States trade or business will be subject to income
tax on all income and gains recognized with respect to its proportionate share
of the Subordinated Debt Securities.
The exchange of the Old Capital Securities for the New Capital Securities in
the Exchange Offer should not constitute a taxable event to Non-US Holders.
INFORMATION REPORTING
In general, information reporting requirements will apply to payments made
on, and proceeds from the sale of, the Capital Securities held by a
noncorporate US Holder within the United States. In addition, payments made on,
and payments of the proceeds from the sale of, the Capital Securities to or
through the United States office of a broker are subject to information
reporting unless the holder thereof certifies as to its non-United States
status or otherwise establishes an exemption from information reporting and
backup withholding. See "--Backup Withholding." Taxable income on the Capital
Securities for a calendar year should be reported to US Holders on Forms 1099
by the following January 31st.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, the Capital Securities may
be subject to a "backup" withholding tax of 31% unless the holder complies with
certain identification or exemption requirements. Any amounts so withheld will
be allowed as a credit against the holder's income tax liability, or refunded,
provided the required information is provided to the Service.
* * *
THE PRECEDING DISCUSSION IS ONLY A SUMMARY AND DOES NOT ADDRESS THE
CONSEQUENCES TO A PARTICULAR HOLDER OF THE PURCHASE, OWNERSHIP AND DISPOSITION
OF THE CAPITAL SECURITIES. POTENTIAL HOLDERS OF THE CAPITAL SECURITIES ARE
URGED TO CONTACT THEIR OWN TAX ADVISORS TO DETERMINE THEIR PARTICULAR TAX
CONSEQUENCES.
75
<PAGE>
ERISA CONSIDERATIONS
Each fiduciary of a pension, profit-sharing or other employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA") (a "Plan"), should consider the fiduciary standards of ERISA in the
context of the Plan's particular circumstances before authorizing purchase of
the Capital Securities in a secondary transaction. Accordingly, among other
factors, the fiduciary should consider whether the investment would satisfy the
prudence and diversification requirements of ERISA and would be consistent with
the documents and instruments governing the Plan.
Section 406 of ERISA and Section 4975 of the Code prohibit Plans, as well as
individual retirement accounts and Keogh plans subject to Section 4975 of the
Code (also "Plans"), from engaging in certain transactions involving "plan
assets" with persons who are "parties in interest" under ERISA or "disqualified
persons" under the Code ("Parties in Interest") with respect to such Plan. A
violation of these "prohibited transaction" rules may result in an excise tax
or other liabilities under ERISA and/or Section 4975 of the Code for such
persons, unless exemptive relief is available under an applicable statutory or
administrative exemption. Employee benefit plans that are governmental plans
(as defined in Section 3(32) of ERISA), certain church plans (as defined in
Section 3(33) of ERISA) and foreign plans (as described in Section 4(b)(5) of
ERISA) are not subject to the requirements of ERISA or Section 4975 of the
Code.
Under a regulation (the "Plan Assets Regulation") issued by the U.S.
Department of Labor (the "DOL"), the assets of the Trust would be deemed to be
"plan assets" of a Plan for purposes of ERISA and Section 4975 of the Code if
"plan assets" of the Plan were used to acquire an equity interest in such Trust
and no exception were applicable under the Plan Assets Regulation. An "equity
interest" is defined under the Plan Assets Regulation as any interest in an
entity other than an instrument which is treated as indebtedness under
applicable local law and which has no substantial equity features and
specifically includes a beneficial interest in a trust.
Pursuant to an exception contained in the Plan Assets Regulation, the assets
of the Trust would not be deemed to be "plan assets" of investing Plans if,
immediately after the most recent acquisition of any equity interest in the
Trust, less than 25% of the value of each class of equity interests in the
Trust were held by Plans, other employee benefit plans not subject to ERISA or
Section 4975 of the Code (such as governmental, church and foreign plans), and
entities holding assets deemed to be "plan assets" of any Plan (collectively,
"Benefit Plan Investors"). No assurance can be given that the value of the
Capital Securities held by Benefit Plan investors will be less than 25% of the
total value of such Capital Securities at any given time, and no monitoring or
other measures will be taken with respect to the satisfaction of the conditions
to this exception. All of the Common Securities will be purchased and held by
the Company.
Certain transactions involving the Trust could be deemed to constitute direct
or indirect prohibited transactions under ERISA and Section 4975 of the Code
with respect to a Plan if the Capital Securities of the Trust were acquired
with "plan assets" of such Plan and assets of the Trust were deemed to be "plan
assets" of Plans investing in the Trust. For example, if the Company is a Party
in Interest with respect to an investing Plan (either directly or by reason of
its ownership of its subsidiaries), extensions of credit between the Company
and the Trust (as represented by the Subordinated Debt Securities and the
Guarantees) would likely be prohibited by Section 406(a)(1)(B) of ERISA and
Section 4975(c)(1)(B) of the Code, unless exemptive relief were available under
an applicable administrative exemption (see below).
The DOL has issued five prohibited transaction class exemptions ("PTCEs")
that may provide exemptive relief for direct or indirect prohibited
transactions resulting from the purchase or holding of the Capital Securities,
assuming that assets of the Trust were deemed to be "plan assets" of Plans
investing in the Trust (see above). Those class exemptions are PTCE 96-23 (for
certain transactions determined by in-house asset managers), PTCE 95-60 (for
certain transactions involving insurance company general accounts), PTCE 91-38
(for certain transactions involving bank collective investment funds), PTCE 90-
1 (for certain transactions involving insurance company separate accounts), and
PTCE 84-14 (for certain transactions determined by independent qualified asset
managers).
76
<PAGE>
Because the Capital Securities may be deemed to be equity interests in the
Trust for purposes of applying ERISA and Section 4975 of the Code, the Capital
Securities may not be purchased or held by any Plan, any entity whose
underlying assets include "plan assets" by reason of any Plan's investment in
the entity (a "Plan Asset Entity") or any person investing "plan assets" of any
Plan, unless such purchaser or holder is eligible for the exemptive relief
available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14.
Due to the complexity of these rules and the penalties that may be imposed
upon persons involved in non-exempt prohibited transactions, it is particularly
important that fiduciaries or other persons considering purchasing the Capital
Securities on behalf of or with "plan assets" of any Plan consult with their
counsel regarding the potential consequences if the assets of the Trust were
deemed to be "plan assets" and the availability of exemptive relief under PTCE
96-23, 95-60, 91-38, 90-1 or 84-14.
LEGAL MATTERS
The validity under Missouri law of the New Subordinated Debt Securities and
the New Guarantee and the validity under Delaware law of the New Capital
Securities have been passed upon for the Company and the Trust by Thompson
Coburn, St. Louis, Missouri. Certain United States federal income tax matters
have been, and will be in connection with the Exchange Offer, passed upon for
the Company and the Trust by Wachtell, Lipton, Rosen & Katz, New York, New
York.
EXPERTS
The consolidated financial statements of the Company as of December 31, 1996,
1995 and 1994, and for each of the years in the three-year period ended
December 31, 1996, incorporated by reference in the Company's Annual Report on
Form 10-K, have been incorporated by reference herein in reliance upon the
reports of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
The consolidated financial statements of Mark Twain incorporated by reference
in Mark Twain's Annual Report on Form 10-K for the year ended December 31,
1996, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon incorporated by reference therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Roosevelt as of December 31, 1996
and 1995 and for each of the years in the three-year period ended December 31,
1996, included in Roosevelt's Annual Report on Form 10-K/A for the year ended
December 31, 1996, have been incorporated by reference herein in reliance upon
the report of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
77
<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE EXCHANGE
OFFER MADE HEREBY EXCEPT AS CONTAINED IN THIS PROSPECTUS OR THE ACCOMPANYING
LETTER OF TRANSMITTAL, AND IF GIVEN OR MADE, NO SUCH INFORMATION OR
REPRESENTATION SHOULD BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY,
THE TRUST OR ANY OF THEIR RESPECTIVE AGENTS. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR THE ACCOMPANYING LETTER OF TRANSMITTAL OR BOTH TOGETHER NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH HEREIN OR IN THE
AFFAIRS OF THE COMPANY OR THE TRUST SINCE THE DATE HEREOF. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR THE ACCOMPANYING LETTER OF TRANSMITTAL OR BOTH
TOGETHER CONSTITUTES AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE
CAPITAL SECURITIES BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION.
--------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 6
Incorporation of Certain Information by Reference......................... 6
Summary................................................................... 8
Risk Factors.............................................................. 17
Mercantile Bancorporation Inc............................................. 23
Recent Developments....................................................... 24
Pro Forma Combined Consolidated Financial Statements...................... 25
Capitalization............................................................ 32
Accounting Treatment...................................................... 33
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
......................................................................... 33
Use of Proceeds........................................................... 33
Mercantile Capital Trust I................................................ 34
The Exchange Offer........................................................ 35
Description of the Capital Securities..................................... 43
Description of the Guarantee.............................................. 56
Description of the Subordinated Debt Securities........................... 59
Effect of Obligations Under the Subordinated Debt Securities and the
Guarantee................................................................ 70
Plan of Distribution...................................................... 71
United States Federal Income Taxation..................................... 72
ERISA Considerations...................................................... 76
Legal Matters............................................................. 77
Experts................................................................... 77
</TABLE>
$150,000,000
LOGO
MERCANTILE
CAPITAL TRUST I
FLOATING RATE CAPITAL TRUST
PASS-THROUGH SECURITIESSM
(TRUPSSM)
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
MERCANTILE
BANCORPORATION INC.
PROSPECTUS
DATED , 1997
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Sections 351.355(1) and (2) of The General and Business Corporation Law of
the State of Missouri provide that a corporation may indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding by reason of the fact that he
is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful, except that, in the case of an action or suit by or in
the right of the corporation, the corporation may not indemnify such persons
against judgments and fines and no person shall be indemnified as to any claim,
issue or matter as to which such person shall have been adjudged to be liable
for negligence or misconduct in the performance of his duty to the corporation,
unless and only to the extent that the court in which the action or suit was
brought determines upon application that such person is fairly and reasonably
entitled to indemnity for proper expenses. Section 351.355(3) provides that, to
the extent that a director, officer, employee or agent of the corporation has
been successful in the defense of any such action, suit or proceeding or any
claim, issue or matter therein, he shall be indemnified against expenses,
including attorneys' fees, actually and reasonably incurred in connection with
such action, suit or proceeding. Section 351.355(7) provides that a corporation
may provide additional indemnification to any person indemnifiable under
subsection (1) or (2), provided such additional indemnification is authorized
by the corporation's articles of incorporation or an amendment thereto or by a
shareholder-approved bylaw or agreement, and provided further that no person
shall thereby be indemnified against conduct which was finally adjudged to have
been knowingly fraudulent, deliberately dishonest or willful misconduct or
which involved an accounting for profits pursuant to Section 16(b) of the
Securities Exchange Act of 1934.
Article 12 of the Restated Articles of Incorporation of the Registrant
provides that the Registrant shall extend to its directors and executive
officers the indemnification specified in subsections (1) and (2) and the
additional indemnification authorized in subsection (7) and that it may extend
to other officers, employees and agents such indemnification and additional
indemnification.
Pursuant to directors' and officers' liability insurance policies, with total
annual limits of $30,000,000, the Registrant's directors and officers are
insured, subject to the limits, retention, exceptions and other terms and
conditions of such policy, against liability for any actual or alleged error,
misstatement, misleading statement, act or omission, or neglect or breach of
duty by the directors or officers of the Registrant, individually or
collectively, or any matter claimed against them solely by reason of their
being directors or officers of the Registrant.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
A. Exhibits. See Exhibit Index.
B. Financial Statement Schedules. Not Applicable.
ITEM 22. UNDERTAKINGS
(1) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
each Registrant pursuant to the foregoing provisions, or otherwise, each
Registrant 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
II-1
<PAGE>
a claim for indemnification against such liabilities (other than the payment by
each Registrant of expenses incurred or paid by a director, officer or
controlling person of each Registrant 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, each Registrant 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 of
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.
(2) Each of the undersigned Registrants hereby undertake that, for purposes
of determining any liability under the Securities Act of 1933, each filing of a
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement 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.
(3) Each of the undersigned Registrants hereby undertake as follows: that
prior to any public reoffering of the securities registered hereunder through
use of a prospectus which is a part of this Registration Statement, by any
person or party who is deemed to be an underwriter within the meaning of Rule
145(c), the issuer undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other Items of the applicable form.
(4) Each of the Registrants undertake that every prospectus (i) that is filed
pursuant to paragraph (3) immediately preceding, or (ii) that purports to meet
the requirements of section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415 (Section 230.415 of this
chapter), will be filed as a part of an amendment to the Registration Statement
and will not be used until such amendment is effective, and that, for purposes
of determining any liability under the Securities Act of 1933, each such post-
effective amendment shall be deemed to be a new registration statement relating
to the securities offering therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(5) Each of the undersigned Registrants hereby undertake to respond to
requests for information that is incorporated by reference into the prospectus
pursuant to Item 4, 10(b), 11 or 13 of this Form, within one business day of
receipt of such request and to send the incorporated documents by first class
mail or other equally prompt means. This includes information contained in the
documents filed subsequent to the effective date of the Registration Statement
through the date of responding to the request.
(6) Each of the undersigned Registrants hereby undertake to supply by means
of a post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
(7) Each of the undersigned Registrants hereby undertake:
(a) To file during any period in which offers and sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof), which individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement.
II-2
<PAGE>
(b) That for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment 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.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing a Registration Statement on Form S-4 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of St. Louis, State of
Missouri, on April 14, 1997.
Mercantile Bancorporation Inc.
By: /s/ Thomas H. Jacobsen
----------------------------------
Thomas H. Jacobsen, Chairman of
the Board, President and Chief
Executive Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of Mercantile Bancorporation
Inc., hereby severally and individually constitute and appoint Thomas H.
Jacobsen and John Q. Arnold, and each of them, the true and lawful attorneys
and agents of each of us to execute in the name, place and stead of each of us
(individually and in any capacity stated below) any and all amendments to this
Registration Statement on Form S-4, registering the Floating Rate Capital
Trust Pass-through Securities of Mercantile Capital Trust I, the Floating Rate
Junior Subordinated Deferrable Interest Debentures due 2027 of Mercantile
Bancorporation Inc. and the Guarantee of Mercantile Bancorporation Inc., and
all instruments necessary or advisable in connection therewith and to file the
same with the Securities and Exchange Commission, each of said attorneys and
agents to have the power to act with or without the others and to have full
power and authority to do and perform in the name and on behalf of each of the
undersigned every act whatsoever necessary or advisable to be done in the
premises as fully and to all intents and purposes as any of the undersigned
might or could do in person, and we hereby ratify and confirm our signatures
as they may be signed by our said attorneys and agents or each of them to any
and all such amendments and instruments.
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 date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Thomas H. Jacobsen Chairman of the Board April 14, 1997
____________________________________ President, Chief Executive
Thomas H. Jacobsen Officer and Director
Principal Executive Officer
/s/ John Q. Arnold Senior Executive Vice April 14, 1997
____________________________________ President and Chief
John Q. Arnold Financial Officer
Principal Financial Officer
/s/ Michael T. Normile Senior Vice President-- April 14, 1997
____________________________________ Finance and Control
Michael T. Normile
Principal Accounting Officer
/s/ Harry M. Cornell, Jr. Director April 14, 1997
____________________________________
Harry M. Cornell, Jr.
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ William A. Hall Director April 14, 1997
____________________________________
William A. Hall
Director
____________________________________
Thomas A. Hays
/s/ Frank Lyon, Jr. Director April 14, 1997
____________________________________
Frank Lyon, Jr.
/s/ Edward A. Mueller Director April 14, 1997
____________________________________
Edward A. Mueller
/s/ Robert W. Murray Director April 14, 1997
____________________________________
Robert W. Murray
/s/ Harvey Saligman Director April 14, 1997
____________________________________
Harvey Saligman
/s/ Craig D. Schnuck Director April 14, 1997
____________________________________
Craig D. Schnuck
/s/ Robert L. Stark Director April 14, 1997
____________________________________
Robert L. Stark
/s/ Patrick T. Stokes Director April 14, 1997
____________________________________
Patrick T. Stokes
/s/ John A. Wright Director April 14, 1997
____________________________________
John A. Wright
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing a Registration Statement on Form S-4 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of St. Louis, State of
Missouri, on April 14, 1997.
Mercantile Capital Trust I
By: /s/ Jon W. Bilstrom
----------------------------------
Jon W. Bilstrom, Administrator
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
3.1 MBI's Restated Articles of Incorporation, as amended and
currently in effect, filed as Exhibit 3(i) to MBI's
Quarterly Report on Form 10-Q for the quarter ended June
30, 1994, are incorporated herein by reference.
3.2 MBI's By-Laws, as amended and currently in effect, filed as
Exhibit 3.2 to Amendment No. 2 to MBI's Registration
Statement on Form S-4 (Reg. No. 333-17757), is incorporated
herein by reference.
4.1 Form of Indenture Regarding Subordinated Securities between
MBI and The First National Bank of Chicago, Trustee, filed
as Exhibit 4.1 to MBI's Report on Form 8-K dated September
24, 1992, is incorporated herein by reference.
4.2 Rights Agreement dated as of May 23, 1988 between MBI and
Mercantile Bank, as Rights Agent (including as exhibits
thereto the form of Certificate of Designation, Preferences
and Rights of Series A Junior Participating Preferred Stock
and the form of Right Certificate), filed as Exhibits 1 and
2 to MBI's Registration Statement No. 0-6045 on Form 8-A,
dated May 24, 1988, is incorporated herein by reference.
4.3 Certificate of Trust of Mercantile Capital Trust I dated as
of January 28, 1997.
4.4 Amended and Restated Declaration of Trust dated as of
February 4, 1997 among Chase Manhattan Bank Delaware, as
Delaware Trustee, The Chase Manhattan Bank, as
Institutional Trustee, MBI, as Sponsor, and John Q. Arnold,
Kenneth E. Schutte and Jon W. Bilstrom, as Administrators
of Mercantile Capital Trust I.
4.5 Indenture dated February 4, 1997 between MBI, as Issuer,
and The Chase Manhattan Bank, as Indenture Trustee.
4.6 First Supplemental Indenture dated February 4, 1997 between
MBI, as Issuer, and The Chase Manhattan Bank, as Indenture
Trustee.
4.7 Form of Capital Security Certificate for Mercantile Capital
Trust I (included as Exhibit A-1 to Exhibit 4.4).
4.8 Capital Securities Guarantee Agreement dated February 4,
1997 between MBI and The Chase Manhattan Bank, as Guarantee
Trustee.
4.9 Registration Rights Agreement dated January 29, 1997 by and
among MBI, Mercantile Capital Trust I and Salomon Brothers
Inc, as Representative of the Initial Purchasers.
4.10 Form of Subordinated Debt Security (included as part of
Exhibit 4.6).
4.11 Form of Waiver of Certain Obligations under Registration
Rights Agreement between MBI and Mercantile Capital Trust
I.
4.12 Form of Supplemental Indenture of First Supplemental
Indenture between MBI, as Issuer, and The Chase Manhattan
Bank, as Trustee.
5.1 Opinion of Thompson Coburn as to the legality of the
Floating Rate Capital Trust Pass-through Securities of
Mercantile Capital Trust I, the Floating Rate Junior
Subordinated Deferrable Interest Debentures due 2027 of MBI
and the Guarantee of MBI with respect to the Capital
Securities.
8.1 Opinion of Wachtell, Lipton, Rosen & Katz with respect to
certain federal income tax consequences.
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
10.1 The Mercantile Bancorporation Inc. 1987 Stock Option Plan,
as amended, filed as Exhibit 10-3 to MBI's Report on Form
10-K for the year ended December 31, 1989 (File No. 1-
11792), is incorporated herein by reference.
10.2 The Mercantile Bancorporation Inc. Executive Incentive
Compensation Plan, filed as Appendix C to MBI's definitive
Proxy Statement for the 1994 Annual Meeting of
Shareholders is incorporated herein by reference.
10.3 The Mercantile Bancorporation Inc. Employee Stock Purchase
Plan, filed as Exhibit 10-7 to MBI's Report on Form 10-K
for the year ended December 31, 1989 (File No. 1-11792),
is incorporated herein by reference.
10.4 The Mercantile Bancorporation Inc. 1991 Employee Incentive
Plan, filed as Exhibit 10-7 to MBI's Report on Form 10-K
for the year ended December 31, 1990 (File No. 1-11792),
is incorporated herein by reference.
10.5 Amendment Number One to the Mercantile Bancorporation Inc.
1991 Employee Incentive Plan, filed as Exhibit 10-6 to
MBI's Report on Form 10-K for the year ended December 31,
1994, is incorporated herein by reference.
10.6 The Mercantile Bancorporation Inc. 1994 Stock Incentive
Plan, filed as Appendix B to MBI's definitive Proxy
Statement for the 1994 Annual Meeting of Shareholders, is
incorporated herein by reference.
10.7 The Mercantile Bancorporation Inc. 1994 Stock Incentive
Plan for Non-Employee Directors, filed as Appendix E to
MBI's definitive Proxy Statement for the 1994 Annual
Meeting of Shareholders, is incorporated herein by
reference.
10.8 The Mercantile Bancorporation Inc. Voluntary Deferred
Compensation Plan, filed as Appendix D to MBI's definitive
Proxy Statement for the 1994 Annual Meeting of
Shareholders, is incorporated herein by reference.
10.9 Form of Employment Agreement for Thomas H. Jacobsen, as
amended, filed as Exhibit 10-8 to MBI's Report on Form 10-
K for the year ended December 31, 1989 (File No. 1-11792),
is incorporated herein by reference.
10.10 Form of Change of Control Employment Agreement for John W.
McClure, W. Randolph Adams, John Q. Arnold and Certain
Other Executive Officers, filed as Exhibit 10-10 to MBI's
Report on Form 10-K for the year ended December 31, 1989
(File No. 1-11792), is incorporated herein by reference.
10.11 Amended and Restated Agreement and Plan of Reorganization
dated as of December 2, 1994 by and among MBI and
TCBankshares, Inc., filed as Exhibit 2.1 to MBI's Report
on Form
8-K dated December 21, 1994, is incorporated herein by
reference.
10.12 Agreement and Plan of Reorganization dated August 4, 1995,
by and between MBI and Hawkeye Bancorporation, filed as
Exhibit 2.1 to MBI's Registration Statement No. 33-63609,
is incorporated herein by reference.
10.13 The Mercantile Bancorporation Inc. Supplemental Retirement
Plan, filed as Exhibit 10-12 to MBI's Report on Form 10-K
for the year ended December 31, 1992 (File No. 1-11792),
is incorporated herein by reference.
10.14 Agreement and Plan of Reorganization, dated October 27,
1996, among MBI, Ameribanc and Mark Twain Bancshares,
Inc., filed as Exhibit 2.1 to MBI's Current Report on Form
8-K, dated November 6, 1996, is incorporated herein by
reference.
10.15 Agreement and Plan of Reorganization, dated December 22,
1996, by and between MBI and Roosevelt Financial Group,
Inc., filed as Exhibit 2.1 to MBI's Current Report on Form
8-K, dated December 22, 1996, is incorporated herein by
reference.
</TABLE>
II-7
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
10.16 Amendment to Agreement and Plan of Reorganization, dated
January 24, 1997, among MBI, Ameribanc and Mark Twain
Bancshares, Inc., filed as Exhibit 10.16 to Amendment No.
2 to MBI's Registration Statement on Form S-4 (Reg. No.
333-17757), is incorporated herein by reference.
12.1 Statement of Earnings to Fixed Charges.
23.1 Consent of Thompson Coburn (included in Exhibit 5.1).
23.2 Consent of Wachtell, Lipton, Rosen & Katz (included in
Exhibit 8.1).
23.3 Consent of KPMG Peat Marwick LLP with regard to the use of
its reports on MBI's financial statements.
23.4 Consent of Ernst & Young LLP with regard to the use of its
report on Mark Twain's financial statements.
23.5 Consent of KPMG Peat Marwick LLP with regard to the use of
its report on Roosevelt's financial statements.
24.1 Power of Attorney (included on signature page).
25.1 Form T-1 Statement of Eligibility for The Chase Manhattan
Bank to act as trustee under the Indenture.
25.2 Form T-1 Statement of Eligibility for The Chase Manhattan
Bank to act as trustee under the Amended and Restated
Declaration of Trust.
</TABLE>
II-8
<PAGE>
Exhibit 4.3
CERTIFICATE OF TRUST
OF
MERCANTILE CAPITAL TRUST I
THIS Certificate of Trust of Mercantile Capital Trust I (the "Trust"),
dated as of January 28, 1997, is being duly executed and filed by the
undersigned, as trustee, to form a holders trust under the Delaware Business
Trust Act (12 Del. C. [section]3801, et seq.).
1. Name. The name of the business trust formed hereby is Mercantile
Capital Trust I.
2. Delaware Trustee. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware are Chase
Manhattan Bank Delaware, 1201 Market Street, Wilmington, Delaware 19801, attn:
Corporate Trustee Administration.
3. Effective Date. This Certificate of Trust shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned, being the trustee of the Trust, has
executed this Certificate of Trust as of the date first-above written.
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but solely as trustee
of the Trust
By: /s/ John J. Cashin
--------------------------------
Name: JOHN J. CASHIN
Title: SENIOR TRUST OFFICER
<PAGE>
Exhibit 4.4
==============================================
AMENDED AND RESTATED DECLARATION
OF TRUST
MERCANTILE CAPITAL TRUST I
Dated as of February 4, 1997
==============================================
<PAGE>
CROSS-REFERENCE TABLE*
Section of Trust Indenture
Act of 1939, as amended Section of Declaration
- ----------------------- ----------------------
310(a) 5.3(a)
310(c) Inapplicable
311(c) Inapplicable
312(a) 2.2(a)
312(b) 2.2(b)
313 2.3
314(a) 2.4
314(b) Inapplicable
314(c) 2.5
314(d) Inapplicable
314(f) Inapplicable
315(a) 3.9(b)
315(c) 3.9(a)
315(d) 3.9(a)
316(a) Annex I
316(b) Annex I
316(c) 3.6(e)
- --------------------------
* This Cross-Reference Table does not constitute part of this Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
MERCANTILE CAPITAL TRUST I
February 4, 1997
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of February 4, 1997, by the Trustees (as defined herein), the
Administrators (as defined herein), the Sponsor (as defined herein) and by the
holders, from time to time, of undivided beneficial interests in the Trust to be
issued pursuant to this Declaration;
WHEREAS, the Trustees, the Administrators and the Sponsor established
Mercantile Capital Trust I (the "Trust"), a statutory business trust under the
Delaware Business Trust Act pursuant to a Declaration of Trust dated as of
January 28, 1997 (the "Original Declaration"), and a Certificate of Trust filed
with the Secretary of State of the State of Delaware on January 28, 1997, for
the sole purpose of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain debentures of the Debenture Issuer (as defined
herein);
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees, the Administrators and the Sponsor, by
this Declaration, amend and restate each and every term and provision of the
Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a statutory business trust under the Business Trust Act
(as defined herein) and that this Declaration constitutes the governing
instrument of such statutory business trust, the Trustees declare that all
assets contributed to the Trust will be held in trust for the benefit of the
holders, from time to time, of the securities representing undivided beneficial
interests in the assets of the Trust issued hereunder, subject to the provisions
of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
<PAGE>
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and Exhibits to
this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act (as defined herein) has
the same meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Administrative Action" has the meaning set forth in paragraph 4(b) of
Annex I.
"Administrators" means each of John Q. Arnold, Kenneth E. Schutte and
Jon W. Bilstrom, solely in such Person's capacity as Administrator of the Trust
created and continued hereunder and not in such Person's individual capacity, or
such Administrator's successor in interest in such capacity, or any successor
appointed as herein provided.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Bankruptcy Event" means, with respect to any Person:
(a) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of such Person in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of such Person or for any substantial part
of its property, or ordering the winding-up or liquidation of its affairs and
such decree or order shall remain unstayed and in effect for a period of 90
consecutive days; or
(b) such Person shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, shall
consent to the entry of an order for relief in an involuntary case under any
such law, or shall consent to the
2
<PAGE>
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of such Person of
any substantial part of its property, or shall make any general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due.
"Book Entry Interest" means a beneficial interest in one or more
Global Capital Securities, ownership and transfers of which shall be maintained
and made through book entries by a Clearing Agency as described in Section 9.2.
"Business Day" means any day other than Saturday, Sunday or any other
day on which banking institutions in New York City (in the State of New York) or
St. Louis (in the State of Missouri) are permitted or required by any applicable
any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code (S) 3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Capital Securities Guarantee" means the guarantee agreement to be
dated as of February 4, 1997, of the Sponsor in respect of the Capital
Securities.
"Capital Securities" means the Initial Capital Securities and the
Exchange Capital Securities.
"Capital Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Capital Security Certificate" means a Certificate representing a
Capital Security substantially in the form of Exhibit A-1.
"Certificate" means any certificate evidencing Securities.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Capital Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Capital Security and which shall
undertake to effect book entry transfers and pledges of the Capital Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the "Closing Date" under the Purchase Agreement.
3
<PAGE>
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning set forth in Section 7.1(a).
"Common Securities Guarantee" means the guarantee agreement to be
dated as of February 4, 1997 of the Sponsor in respect of the Common Securities.
"Common Security" has the meaning set forth in Section 7.1(a).
"Common Security Certificate" means a definitive Certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-3.
"Company Indemnified Person" means (a) any Administrator; (b) any
Affiliate of any Administrator; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Administrator; or
(d) any officer, employee or agent of the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Institutional Trustee
at which the corporate trust business of the Institutional Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Declaration is located at 450 West 33rd Street, 15th Floor,
New York, New York 10001.
"Covered Person" means: (a) any Administrator, officer, director,
shareholder, partner, member, representative, employee or agent of (i) the Trust
or (ii) the Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Mercantile Bancorporation Inc., a Missouri
corporation, in its capacity as issuer of the Debentures under the Indenture.
"Debenture Trustee" means The Chase Manhattan Bank, a New York banking
corporation, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"Debentures" means the Initial Debentures and the Exchange Debentures.
"Definitive Capital Securities" means Initial Definitive Capital
Securities and Exchange Definitive Capital Securities.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Depositary" means, with respect to the Capital Securities, DTC, or
another Clearing Agency.
4
<PAGE>
"Direct Action" has the meaning set forth in Section 3.8(e).
"Distribution" means a distribution payable to Holders of Securities
in accordance with Section 6.1.
"Distribution Payment Date" has the meaning set forth in paragraph
2(b) of Annex I.
"DTC" means The Depository Trust Company, New York, New York, the
initial Clearing Agency.
"Event of Default" in respect of the Securities means an Indenture
Event of Default has occurred and is continuing in respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Exchange Capital Securities" has the meaning set forth in Section
7.1(a).
"Exchange Capital Security Certificate" means a Certificate
representing an Exchange Capital Security substantially in the form of Exhibit
A-2.
"Exchange Certificate" means a Common Security Certificate or an
Exchange Capital Security Certificate.
"Exchange Debentures" means the Floating Rate Junior Subordinated
Deferrable Interest Debentures due 2027 to be issued by the Debenture Issuer
under the Indenture in exchange for the Initial Debentures pursuant to the
Registration Rights Agreement.
"Exchange Definitive Capital Securities" means any Exchange Securities
in definitive form issued by the Trust.
"Exchange Global Capital Securities" means any Exchange Capital
Securities in global form issued by the Trust.
"Exchange Securities" means Common Securities and Exchange Capital
Securities.
"Extension Period" has the meaning set forth in paragraph 2(b) of
Annex I.
"Federal Reserve" has the meaning set forth in paragraph 3 of Annex I.
"Fiduciary Indemnified Person" shall mean the Institutional Trustee,
the Delaware Trustee, any Affiliate of the Institutional Trustee or the Delaware
Trustee, and any
5
<PAGE>
officers, directors, shareholders, members, partners, employees,
representatives, custodians, nominees or agents of the Institutional Trustee and
the Delaware Trustee.
"Global Capital Securities" means any Initial Global Capital
Securities and Exchange Global Capital Securities.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"IAI" has the meaning set forth in Section 7.3(c).
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the Indenture dated as of February 4, 1997, among
the Debenture Issuer and the Debenture Trustee, and any indenture supplemental
thereto pursuant to which the Debentures are to be issued.
"Indenture Event of Default" means an "Event of Default" as defined
in the Indenture.
"Initial Capital Securities" has the meaning set forth in Section
7.1(a).
"Initial Capital Security Certificate" means a certificate
representing an Initial Capital Security substantially in the form of Exhibit A-
1.
"Initial Certificate" means a Common Security Certificate or an
Initial Capital Security Certificate.
"Initial Debentures" means the Floating Rate Junior Subordinated
Deferrable Interest Debentures due 2027 to be issued by the Debenture Issuer
under the Indenture on the Closing Date to be held by the Institutional Trustee
or, upon a dissolution of the Trust, the Depositary or the Holder, as the case
may be, a specimen certificate for such series of Debentures being Exhibit D.
"Initial Definitive Capital Securities" means any Restricted
Definitive Capital Security and any other Initial Capital Securities in
definitive form issued by the Trust.
"Initial Global Capital Securities" means any Rule 144A Global
Security and any other Initial Capital Securities in global form issued by the
Trust.
"Initial Securities" means the Common Securities and the Initial
Capital Securities.
6
<PAGE>
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3
"Interest" means any interest due on the Debentures including any
Compounded Interest, Special Interest and Additional Interest (as each such term
is defined in the Indenture).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.8(e).
"Liquidation" has the meaning set forth in paragraph 3 of Annex I.
"Liquidation Distribution" has the meaning set forth in paragraph 3 of
Annex I.
"Majority in liquidation amount of the Securities" means Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holders of outstanding Capital Securities or Holders of outstanding
Common Securities voting separately as a class, who are the record owners of
more than 50% of the aggregate liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Offering Memorandum" has the meaning set forth in Section 3.6.
"Officers' Certificates" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for it in this Declaration shall include:
(a) a statement that each officer signing the Certificate has read
the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
7
<PAGE>
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 7.2.
"Payment Amount" has the meaning set forth in Section 6.1.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"PORTAL" has the meaning set forth in Section 3.6(a)(i).
"Property Account" has the meaning set forth in Section 3.8(c).
"Pro Rata" has the meaning set forth in paragraph 8 of Annex I.
"Purchase Agreement" means the Purchase Agreement for the offering and
sale of Capital Securities in the form of Exhibit E.
"QIBs" has the meaning set forth in Section 7.3.
"Quorum" means a majority of the Administrators or, if there are only
two Administrators, both of them.
"Redemption/Distribution Notice" has the meaning set forth in
paragraph 4(g) of Annex I.
"Redemption Price" has the meaning set forth in paragraph 4(a) of
Annex I.
"Registered Exchange Offer" has the meaning as set forth in the
Registration Rights Agreement.
"Registrar" has the meaning set forth in Section 7.2.
"Registration Rights Agreement" means the Registration Rights
Agreement relating to the Securities in the form of Exhibit F.
"Relevant Trustee" has the meaning set forth in Section 5.7(a).
"Responsible Officer" means, with respect to the Institutional
Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, the treasurer, any assistant treasurer, any trust officer
or other officer of the Corporate Trust Office of the Institutional Trustee
customarily performing functions similar to those performed by any of the above
8
<PAGE>
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Restricted Capital Securities" means Rule 144A Global Capital
Securities and Restricted Definitive Capital Securities.
"Restricted Definitive Capital Securities" has the meaning set forth
in Section 7.3(c).
"Restricted Securities Legend" has the meaning set forth in Section
9.2(g).
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Global Capital Security" has the meaning set forth in
Section 7.3(a).
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act.
"Securities" means the Common Securities and the Capital Securities.
"Securities Act" means the Securities Act of 1933, as amended from
time to time or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and the
Capital Securities Guarantee.
"Sponsor" means Mercantile Bancorporation Inc., a Missouri
corporation, or any successor entity in a merger, consolidation or amalgamation,
in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section
5.7(b).
"Successor Entity" has the meaning set forth in Section 3.15(b).
"Successor Institutional Trustee" has the meaning set forth in Section
5.7(b).
"Successor Securities" has the meaning set forth in Section 3.15(b).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Event" has the meaning set forth in paragraph 4(b) of Annex I.
9
<PAGE>
"10% in liquidation amount of the Securities" means Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holders of outstanding Capital Securities or Holders of outstanding
Common Securities voting separately as a class, who are the record owners of 10%
or more of the aggregate liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities of the relevant class.
"Transfer Agent" has the meaning set forth in Section 7.2.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Trust Property" means (a) the Debentures, (b) any cash on deposit in,
or owing to, the Property Account and (c) all proceeds and rights in respect of
the foregoing and any other property and assets for the time being held or
deemed to be held by the Institutional Trustee pursuant to the trusts of this
Declaration.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by (S)(S) 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
10
<PAGE>
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Administrators on behalf of the Trust
shall provide the Institutional Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Institutional
Trustee may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided that neither the
Sponsor nor the Administrators on behalf of the Trust shall be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Institutional Trustee by the
Sponsor and the Administrators on behalf of the Trust, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request therefor, a
List of Holders as of a date no more than 14 days before such List of Holders is
given to the Institutional Trustee. The Institutional Trustee shall preserve,
in as current a form as is reasonably practicable, all information contained in
Lists of Holders given to it or which it receives in its capacity as Paying
Agent (if acting in such capacity) provided that the Institutional Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Institutional Trustee shall comply with its obligations under
(S)(S) 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee. Within 60 days
after May 15 of each year, the Institutional Trustee shall provide to the
Holders of the Capital Securities such reports as are required by (S) 313 of the
Trust Indenture Act, if any, in the form and in the manner provided by (S) 313
of the Trust Indenture Act. The Institutional Trustee shall also comply with
the requirements of (S) 313(d) of the Trust Indenture Act. The Sponsor shall
promptly notify the Institutional Trustee in writing when the Capital Securities
are listed on any stock exchange.
SECTION 2.4 Periodic Reports to Institutional Trustee. Each of the
Sponsor and the Administrators on behalf of the Trust shall provide to the
Institutional Trustee such documents, reports and information as required by (S)
314 (if any) and the compliance certificate required by (S) 314 of the Trust
Indenture Act in the form, in the manner and at the times required by (S) 314 of
the Trust Indenture Act and an Officers' Certificate as to its compliance with
all conditions and covenants under this Declaration, on an annual basis on or
before 120 days after the end of each fiscal year of the Sponsor.
SECTION 2.5 Evidence of Compliance with Conditions Precedent. Each
of the Sponsor and the Administrators on behalf of the Trust shall provide to
the Institutional Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Declaration that relate to any of the
matters set forth in (S) 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to (S) 314(c)(1) may be
given in the form of an Officers' Certificate.
11
<PAGE>
SECTION 2.6 Events of Default; Waiver. (a) The Holders of a
Majority in liquidation amount of the Capital Securities may, by vote or
consent, on behalf of the Holders of all of the Capital Securities, waive any
past Event of Default in respect of the Capital Securities and its consequences,
provided that, if the underlying Indenture Event of Default:
(i) is not waivable under the Indenture, the Event of Default
under this Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super Majority")
to be waived under the Indenture, such Event of Default under this
Declaration may only be waived by the vote or consent of the Holders
of at least the proportion in liquidation amount of the Capital
Securities that the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of
(S) 316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
Indenture Event of Default shall cease to exist, and any Event of Default with
respect to the Capital Securities arising therefrom shall be deemed to have been
cured, for every purpose of this Declaration, but no such waiver shall extend to
any subsequent or other default or Event of Default with respect to the Capital
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Capital Securities of an Event of Default with respect to the Capital
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any other act, vote, or
consent of the Holders of the Common Securities.
The Holders of a Majority in liquidation amount of the Capital
Securities will have the right to direct the time, method and place of
conducting any proceeding of any remedy available to the Institutional Trustee
or to direct the exercise of any trust or power conferred upon the Institutional
Trustee, including the right to direct the Institutional Trustee to exercise the
remedies available to it as holder of the Debentures.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote or consent, on behalf of the Holders of all of the
Common Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that if the underlying Indenture Event
of Default:
(i) is not waivable under the Indenture, the Event of
Default under this Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived under the Indenture, such Event of Default under this
Declaration may only be waived by the vote or consent of the
Holders
12
<PAGE>
of at least the proportion in liquidation amount of the Common
Securities that the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding;
provided, further, that, notwithstanding (i) or (ii) above, each
Holder of the Common Securities will be deemed to have waived any
such Indenture Event of Default and all Events of Default with
respect to the Common Securities and their consequences until all
Events of Default with respect to the Capital Securities have
been cured, waived or otherwise eliminated, and until such Events
of Default have been so cured, waived or otherwise eliminated,
the Institutional Trustee will be deemed to be acting solely on
behalf of the Holders of the Capital Securities and only the
Holders of the Capital Securities will have the right to direct
the Institutional Trustee in accordance with the terms of the
Securities. The foregoing provisions of this Section 2.6(b) shall
be in lieu of (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act and (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act are hereby expressly excluded from this
Declaration and the Securities, as permitted in the Trust
Indenture Act. Subject to the foregoing provisions in this
Section 2.6(b), upon such waiver, any such Indenture Event of
Default shall cease to exist, and any Event of Default with
respect to the Common Securities arising therefrom shall be
deemed to have been cured, for every purpose of this Declaration,
but no such waiver shall extend to any subsequent or other
default or Event of Default with respect to the Common Securities
or impair any right consequent thereon.
(c) A waiver of an Indenture Event of Default by the Institutional
Trustee at the direction of the Holders of the Capital Securities constitutes a
waiver of the corresponding Event of Default under this Declaration. The
foregoing provisions of this Section 2.6(c) shall be in lieu of (S) 316(a)(1)(B)
of the Trust Indenture Act and (S) 316(a)(1)(B) of the Trust Indenture Act is
hereby expressly excluded from this Declaration and the Securities, as permitted
by the Trust Indenture Act.
SECTION 2.7 Events of Default; Notice. (a) The Institutional
Trustee shall, within 90 days after the occurrence of an Event of Default,
transmit by mail, first class postage prepaid, to the Holders of the Securities,
notices of all defaults with respect to the Securities actually known to a
Responsible Officer of the Institutional Trustee, unless such defaults have been
cured before the giving of such notice (the term "defaults" for the purposes of
this Section 2.7(a) being hereby defined to be an Indenture Event of Default,
not including any periods of grace provided for therein and irrespective of the
giving of any notice provided therein); provided, however, that, except for a
default in the payment of principal of (or premium, if any) or interest on any
of the Debentures, the Institutional Trustee shall be protected in withholding
such notice if and so long as a Responsible Officer of the Institutional Trustee
in good faith determines that the withholding of such notice is in the interests
of the Holders of the Capital Securities.
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(a) The Institutional Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 5.01(a) and 5.01(b) of the
Indenture; or
(ii) any default as to which the Institutional Trustee shall
have received written notice or of which a Responsible Officer of
the Institutional Trustee charged with the administration of the
Declaration shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name. The Trust is named "Mercantile Capital Trust I,"
as such name may be modified from time to time by the Administrators following
written notice to the Holders of the Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Administrators.
SECTION 3.2 Office. The address of the principal office of the Trust
is c/o Mercantile Bancorporation Inc., One Mercantile Center, P.O. Box 524, St.
Louis, Missouri 63166-0524. On ten Business Days written notice to the Holders
of the Securities, the Administrators may designate another principal office.
SECTION 3.3 Purpose. The exclusive purposes and functions of the
Trust are (a) to issue and sell the Securities representing undivided beneficial
interests in the assets of the Trust, (b) investing the gross proceeds from such
sale to acquire the Debentures and (c) except as otherwise limited herein, to
engage in only those other activities necessary or incidental thereto, which may
include engaging in the Exchange Offer. The Trust shall not borrow money, issue
debt or reinvest proceeds derived from investments, pledge any of its assets, or
otherwise undertake (or permit to be undertaken) any activity that would cause
the Trust not to be classified for United States federal income tax purposes as
a grantor trust.
SECTION 3.4 Authority. Except as specifically provided in this
Declaration, the Institutional Trustee shall have exclusive and complete
authority to carry out the purposes of the Trust. An action taken by a Trustee
in accordance with its powers shall constitute the act of and serve to bind the
Trust. In dealing with the Trustees acting on behalf of the Trust, no Person
shall be required to inquire into the authority of the Trustees to bind the
Trust. Persons dealing with the Trust are entitled to rely conclusively on the
power and authority of the Trustees as set forth in this Declaration. The
Administrators shall have only those ministerial duties set forth herein with
respect to accomplishing the purposes of the Trust and are not intended to be
trustees or fiduciaries with respect to the Trust or the Holders. The
Institutional Trustee shall have the right, but shall not be obligated except as
provided in Section 3.6, to perform those duties assigned to the Administrators.
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SECTION 3.5 Title to Property of the Trust. Except as provided in
Section 3.8 with respect to the Debentures and the Property Account or as
otherwise provided in this Declaration, legal title to all assets of the Trust
shall be vested in the Trust. The Holders shall not have legal title to any
part of the assets of the Trust, but shall have an undivided beneficial interest
in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Trustees and the Administrators.
(a) The Trustees and the Administrators shall conduct the affairs of the Trust
in accordance with the terms of this Declaration. Subject to the limitations
set forth in paragraph (b) of this Section, and in accordance with the following
provisions (i) and (ii), the Trustees and the Administrators shall have the
authority to enter into all transactions and agreements determined by the
Trustees to be appropriate in exercising the authority, express or implied,
otherwise granted to the Trustees or the Administrators, as the case may be,
under this Declaration, and to perform all acts in furtherance thereof,
including without limitation, the following:
(i) Each Administrator shall have the power and authority to act
on behalf of the Trust with respect to the following matters:
(A) the issuance and sale of the Securities;
(B) to cause the Trust to enter into, and to execute and
deliver on behalf of the Trust, such agreements as may be
necessary or desirable in connection with the purposes and
function of the Trust, including the Registration Rights
Agreement and agreements with the Depositary and the Paying
Agent;
(C) ensuring compliance with the Securities Act, applicable
state securities or blue sky laws, and assisting in the
compliance with the Trust Indenture Act;
(D) to execute and file one or more registration statements
relating to the Capital Securities contemplated by the
Registration Rights Agreement and the preparation and filing of
all periodic and other reports and other documents pursuant to
the foregoing;
(E) if and at such time determined by the Sponsor,
assisting in the designation of the Capital Securities for
trading in the Private Offering, Resales and Trading through the
Automatic Linkages ("PORTAL") system or any other national stock
exchange or the Nasdaq Stock Market's National Market;
(F) the sending of notices (other than notices of default),
and other information regarding the Securities and the Debentures
to the Holders in accordance with this Declaration;
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(G) the consent to the appointment of a Paying Agent,
Transfer Agent and Registrar in accordance with this Declaration
which consent shall not be unreasonably withheld;
(H) execution of the Securities in accordance with this
Declaration;
(I) execution and delivery of closing certificates,
pursuant to the Purchase Agreement and the application for a
taxpayer identification number;
(J) unless otherwise determined by the Institutional
Trustee or the Holders of a Majority in liquidation amount of the
Securities or as otherwise required by the Business Trust Act or
the Trust Indenture Act, to execute on behalf of the Trust
(either acting alone or together with any or all of the
Administrators) any documents that the Administrators have the
power to execute pursuant to this Declaration;
(K) the taking of any action incidental to the foregoing as
the Institutional Trustee may from time to time determine is
necessary or advisable to give effect to the terms of this
Declaration for the benefit of the Holders (without consideration
of the effect of any such action on any particular Holder);
(L) execution and delivery of letters or documents to, or
instruments with DTC relating to the Capital Securities;
(M) to establish a record date with respect to all actions
to be taken hereunder that require a record date be established,
including and with respect to, for the purposes of (S) 316(c) of
the Trust Indenture Act, Distributions, voting rights,
redemptions and exchanges, and to issue relevant notices to the
Holders of Capital Securities and Holders of Common Securities as
to such actions and applicable record dates; and
(N) to duly prepare and file all applicable tax returns and
tax information reports that are required to be filed with
respect to the Trust on behalf of the Trust.
(ii) As among the Trustees and the Administrators, the
Institutional Trustee shall have the power, duty and authority to act
on behalf of the Trust with respect to the following matters:
(A) the establishment of the Property Account;
(B) the receipt of the Debentures;
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(C) the collection of interest, principal and any other
payments made in respect of the Debentures in the Property
Account;
(D) the distribution through the Paying Agent of amounts
owed to the Holders in respect of the Securities;
(E) the exercise of all of the rights, powers and
privileges of a holder of the Debentures;
(F) the sending of notices of default and other information
regarding the Securities and the Debentures to the Holders in
accordance with this Declaration;
(G) the distribution of the Trust Property in accordance
with the terms of this Declaration;
(H) to the extent provided in this Declaration, the winding
up of the affairs of and liquidation of the Trust and the
preparation, execution and filing of the certificate of
cancellation with the Secretary of State of the State of
Delaware;
(I) after any Event of Default (provided that such Event of
Default is not by or with respect to the Institutional Trustee)
the taking of any action incidental to the foregoing as the
Institutional Trustee may from time to time determine is
necessary or advisable to give effect to the terms of this
Declaration and protect and conserve the Trust Property for the
benefit of the Holders (without consideration of the effect of
any such action on any particular Holder); and
(J) to take all action that may be necessary or appropriate
for the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory
business trust under the laws of the State of Delaware and of
each other jurisdiction in which such existence is necessary to
protect the limited liability of the Holders of the Capital
Securities or to enable the Trust to effect the purposes for
which the Trust was created;
(iii) The Institutional Trustee shall have the power and
authority to act on behalf of the Trust with respect to any of the
duties, liabilities, powers or the authority of the Administrators set
forth in Section 3.6(a)(i)(E), (F) and (H) herein but shall not have a
duty to do any such act unless specifically requested to do so in
writing by the Sponsor, and shall then be fully protected in acting
pursuant to such written request; and in the event of a conflict
between the action of the Administrators and the action of the
Institutional Trustee, the action of the Institutional Trustee shall
prevail.
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(b) So long as this Declaration remains in effect, the Trust (or the
Trustees or Administrators acting on behalf of the Trust) shall not undertake
any business, activities or transaction except as expressly provided herein or
contemplated hereby. In particular, neither the Trustees nor the Administrators
may cause the Trust to (i) acquire any investments or engage in any activities
not authorized by this Declaration, (ii) sell, assign, transfer, exchange,
mortgage, pledge, set-off or otherwise dispose of any of the Trust Property or
interests therein, including to Holders, except as expressly provided herein,
(iii) take any action that would reasonably be expected to cause the Trust to
fail or cease to qualify as a "grantor trust" for United States federal income
tax purposes, (iv) incur any indebtedness for borrowed money or issue any other
debt or (v) take or consent to any action that would result in the placement of
a lien on any of the Trust Property. The Institutional Trustee shall, at the
sole cost and expense of the Trust, defend all claims and demands of all Persons
at any time claiming any lien on any of the Trust Property adverse to the
interest of the Trust or the Holders in their capacity as Holders.
(c) In connection with the issue and sale of the Capital Securities,
the Sponsor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Sponsor in furtherance of the following prior to the date of this
Declaration are hereby ratified and confirmed in all respects):
(i) the preparation by the Trust of an offering memorandum in
relation to the Capital Securities, including any amendments or
supplements thereto (the "Offering Memorandum") and the taking of any
action necessary to obtain an exemption from the Securities Act;
(ii) the determination of the States in which to take
appropriate action to qualify or register for sale all or part of the
Capital Securities and the determination of any and all such acts,
other than actions which must be taken by or on behalf of the Trust,
and the advice to the Trustees of actions they must take on behalf of
the Trust, and the preparation for execution and filing of any
documents to be executed and filed by the Trust or on behalf of the
Trust, as the Sponsor deems necessary or advisable in order to comply
with the applicable laws of any such States in connection with the
sale of the Capital Securities;
(iii) the negotiation of the terms of, and the execution and
delivery of, the Purchase Agreement providing for the sale of the
Capital Securities; and
(iv) the taking of any other actions necessary or desirable to
carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrators, the Institutional Trustee and the Holders of a Majority in
liquidation amount of the Common Securities are authorized and directed to
conduct the affairs of the Trust and to operate the
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Trust so that the Trust will not be deemed to be an "investment company"
required to be registered under the Investment Company Act, or fail to be
classified as a grantor trust for United States federal income tax purposes and
so that the Debentures will be treated as indebtedness of the Debenture Issuer
for United States federal income tax purposes. In this connection, the
Institutional Trustee and the Holders of a Majority in liquidation amount of the
Common Securities are authorized to take any action, not inconsistent with
applicable laws, the Certificate of Trust or this Declaration, as amended from
time to time, that each of the Institutional Trustee and the Holders of a
Majority in liquidation amount of the Common Securities determines in its
discretion to be necessary or desirable for such purposes, even if such action
adversely affects the interests of the Holders of the Capital Securities.
(e) All expenses incurred by the Administrators or the Trustees
pursuant to this Section 3.6 shall be reimbursed by the Sponsor, and the
Trustees shall have no obligations with respect to such expenses.
(f) The assets of the Trust shall consist of the Trust Property.
(g) Legal title to all Trust Property shall be vested at all times in
the Institutional Trustee (in its capacity as such) and shall be held and
administered by the Institutional Trustee for the benefit of the Trust and
neither the Administrator nor the Holders in accordance with this Declaration.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Institutional Trustee shall cause the Trust
not to, engage in any activity other than as required or authorized by this
Declaration. In particular, the Trust shall not and the Institutional Trustee
shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of the
Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust Property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in any way
whatsoever other than as expressly provided herein;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
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(vii) other than as provided in this Declaration (including
Annex I), (A) direct the time, method and place of exercising any
trust or power conferred upon the Debenture Trustee with respect to
the Debentures, (B) waive any past default that is waivable under the
Indenture, (C) exercise any right to rescind or annul any declaration
that the principal of all the Debentures shall be due and payable, or
(D) consent to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required
unless the Trust shall have received an opinion of counsel to the
effect that such modification will not cause more than an
insubstantial risk that for United States federal income tax purposes
the Trust will not be classified as a grantor trust.
SECTION 3.8 Powers and Duties of the Institutional Trustee. (a) The
legal title to the Debentures shall be owned by and held of record in the name
of the Institutional Trustee in trust for the benefit of the Trust and the
Holders of the Securities. The right, title and interest of the Institutional
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Institutional Trustee in accordance with Section 5.7.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Administrators or to the Delaware Trustee (if
the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Account") in the name of and under the
exclusive control of the Institutional Trustee, and maintained in the
Institutional Trustee's trust department, on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in
respect of the Debentures held by the Institutional Trustee, deposit
such funds into the Property Account and make payments to the Holders
of the Capital Securities and Holders of the Common Securities from
the Property Account in accordance with Section 6.1. Funds in the
Property Account shall be held uninvested until disbursed in
accordance with this Declaration.
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Capital
Securities and the Common Securities to the extent the Debentures are
redeemed or mature; and
(iii) upon written notice of distribution issued by the
Administrators in accordance with the terms of the Securities, engage
in such ministerial activities as shall be necessary or appropriate to
effect the distribution of the Debentures to Holders of Securities
upon the occurrence of certain circumstances pursuant to the terms of
the Securities.
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(d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities.
(e) The Institutional Trustee may bring or defend, pay, collect,
compromise, arbitrate, resort to legal action, or otherwise adjust claims or
demands of or against the Trust ("Legal Action") which arises out of or in
connection with an Event of Default of which a Responsible Officer of the
Institutional Trustee has actual knowledge or the Institutional Trustee's duties
and obligations under this Declaration or the Trust Indenture Act; provided,
however, that if an Event of Default has occurred and is continuing and such
event is attributable to the failure of the Debenture Issuer to pay interest or
principal on the Debentures on the date such interest or principal is otherwise
payable (or in the case of redemption, on the redemption date), then a Holder of
the Capital Securities may directly institute a proceeding for enforcement of
payment to such Holder of the principal of or interest on the Debentures having
a principal amount equal to the aggregate liquidation amount of the Capital
Securities of such Holder (a "Direct Action") on or after the respective due
date specified in the Debentures. In connection with such Direct Action, the
rights of the Holders of the Common Securities will be subrogated to the rights
of such Holder of the Capital Securities to the extent of any payment made by
the Debenture Issuer to such Holder of the Capital Securities in such Direct
Action; provided, however, that no Holder of the Common Securities may exercise
any such right of subrogation so long as an Event of Default with respect to the
Capital Securities has occurred and is continuing.
(f) The Institutional Trustee shall continue to serve as a Trustee
until either:
(i) the Trust has been completely liquidated and the proceeds of
the liquidation distributed to the Holders of the Securities pursuant to
the terms of the Securities; or
(ii) a Successor Institutional Trustee (as defined herein) has
been appointed and has accepted that appointment in accordance with Section
5.7.
(g) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a Holder of the Debentures under the
Indenture and, if an Event of Default occurs and is continuing, the
Institutional Trustee may, for the benefit of Holders of the Securities, enforce
its rights as holder of the Debentures subject to the rights of the Holders
pursuant to this Declaration (including Annex I) and the terms of the
Securities.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
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SECTION 3.9 Certain Duties and Responsibilities of the Trustees and
Administrators.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Institutional Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6), the Institutional
Trustee shall exercise such of the rights and powers vested in it by this
Declaration, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) The duties and responsibilities of the Trustees and the
Administrators shall be as provided by this Declaration and, in the case of the
Institutional Trustee, by the Trust Indenture Act. Notwithstanding the
foregoing, no provision of this Declaration shall require the Trustees or
Administrators to expend or risk their own funds or otherwise incur any
financial liability in the performance of any of their duties hereunder, or in
the exercise of any of their rights or powers, if they shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
satisfactory to it against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this
Declaration relating to the conduct or affecting the liability of or affording
protection to the Trustees or Administrators shall be subject to the provisions
of this Article. Nothing in this Declaration shall be construed to release an
Administrator or Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct. To the extent that, at
law or in equity, a Trustee or an Administrator has duties and liabilities
relating thereto to the Trust or to the Holders, such Administrator or Trustee
shall not be liable to the Trust or to any Holder for such Administrator's good
faith reliance on the provisions of this Declaration. The provisions of this
Declaration, to the extent that they restrict the duties and liabilities of the
Administrators or the Trustees otherwise existing at law or in equity, are
agreed by the Sponsor and the Holders to replace such other duties and
liabilities of the Administrators or the Trustees.
(c) All payments made by the Institutional Trustee or a Paying Agent
in respect of the Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Institutional Trustee
or a Paying Agent to make payments in accordance with the terms hereof. Each
Holder, by its acceptance of a Security, agrees that it will look solely to the
revenue and proceeds from the Trust Property to the extent legally available for
distribution to it as herein provided and that the Trustees and the
Administrators are not personally liable to it for any amount distributable in
respect of any Security or for any other liability in respect of any Security.
This Section 3.9(c) does not limit the liability of the Trustees expressly set
forth elsewhere in this Declaration or, in the case of the Institutional
Trustee, in the Trust Indenture Act.
(d) No provision of this Declaration shall be construed to relieve
the Institutional Trustee from liability with respect to matters that are within
the authority of the
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Institutional Trustee under this Declaration for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) the Institutional Trustee shall not be liable for any error
or judgment made in good faith by an authorized officer of the
Institutional Trustee, unless it shall be proved that the Institutional
Trustee was negligent in ascertaining the pertinent facts;
(ii) the Institutional Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
liquidation amount of the Capital Securities or the Common Securities, as
applicable, relating to the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or
exercising any trust or power conferred upon the Institutional Trustee
under this Declaration;
(iii) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Property Account shall be to deal with such property in a similar manner as
the Institutional Trustee deals with similar property for its own account,
subject to the protections and limitations on liability afforded to the
Institutional Trustee under this Declaration and the Trust Indenture Act;
(iv) the Institutional Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree in
writing with the Sponsor; and money held by the Institutional Trustee need
not be segregated from other funds held by it except in relation to the
Property Account maintained by the Institutional Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law; and
(v) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Administrators or the Sponsor with their
respective duties under this Declaration, nor shall the Institutional
Trustee be liable for any default or misconduct of the Administrators or
the Sponsor.
SECTION 3.10 Certain Rights of Institutional Trustee. Subject to the
provisions of Section 3.9:
(a) the Institutional Trustee may conclusively rely and shall fully
be protected in acting or refraining from acting in good faith upon any
resolution, opinion of counsel, certificate, written representation of a Holder
or transferee, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
appraisal, bond, debenture, note, other evidence of indebtedness or other paper
or document believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties;
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(b) if (i) in performing its duties under this Declaration, the
Institutional Trustee is required to decide between alternative courses of
action, or (ii) in construing any of the provisions of this Declaration, the
Institutional Trustee finds the same ambiguous or inconsistent with any other
provisions contained herein, or (iii) the Institutional Trustee is unsure of the
application of any provision of this Declaration, then, except as to any matter
as to which the Holders of Capital Securities are entitled to vote under the
terms of this Declaration, the Institutional Trustee may deliver a notice to the
Sponsor requesting the Sponsor's opinion as to the course of action to be taken
and the Institutional Trustee shall take such action, or refrain from taking
such action, as the Institutional Trustee in its sole discretion shall deem
advisable and in the best interests of the Holders, in which event the
Institutional Trustee shall have no liability except for its own bad faith,
negligence or willful misconduct;
(c) any direction or act of the Sponsor or the Administrators
contemplated by this Declaration shall be sufficiently evidenced by an Officers'
Certificate;
(d) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before undertaking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and conclusively rely upon
an Officers' Certificate as to factual matters which, upon receipt of such
request, shall be promptly delivered by the Sponsor or the Administrators;
(e) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or reregistration thereof;
(f) the Institutional Trustee may consult with counsel (which counsel
may be counsel to the Sponsor or any of its Affiliates) and the advice of such
counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon and in accordance with such advice; the Institutional Trustee
shall have the right at any time to seek instructions concerning the
administration of this Declaration from any court of competent jurisdiction;
(g) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at the
request or direction of any of the Holders pursuant to this Declaration, unless
such Holders shall have offered to the Institutional Trustee security or
indemnity reasonably satisfactory to it against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction, provided that nothing contained in this Section 3.10(g) shall be
taken to relieve the Institutional Trustee, upon the occurrence of an Event of
Default, or its obligation to exercise the rights and powers vested in it by
this Declaration;
(h) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond, debenture, note or other evidence of
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indebtedness or other paper or document, unless requested in writing to do so by
one or more Holders, but the Institutional Trustee may make such further inquiry
or investigation into such facts or matters as it may see fit;
(i) the Institutional Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys and the Institutional Trustee shall not be responsible for
any misconduct or negligence on the part of, or for the supervision of, any such
agent or attorney appointed with due care by it hereunder;
(j) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action hereunder
the Institutional Trustee (i) may request instructions from the Holders of the
Capital Securities which instructions may only be given by the Holders of the
same proportion in liquidation amount of the Capital Securities as would be
entitled to direct the Institutional Trustee under the terms of the Capital
Securities in respect of such remedy, right or action, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be fully protected in acting in
accordance with such instructions;
(k) except as otherwise expressly provided in this Declaration, the
Institutional Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Declaration;
(l) when the Institutional Trustee incurs expenses or renders
services in connection with a Bankruptcy Event, such expenses (including the
fees and expenses of its counsel) and the compensation for such services are
intended to constitute expenses of administration under any bankruptcy law or
law relating to creditors rights generally;
(m) the Institutional Trustee shall not be charged with knowledge of
an Event of Default unless a Responsible Officer of the Institutional Trustee
obtains actual knowledge of such event or the Institutional Trustee receives
written notice of such event from Holders holding more than a Majority in
liquidation amount of the Capital Securities (based upon liquidation amount);
(n) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional Trustee or its agents alone shall be sufficient
and effective to perform any such action and no third party shall be required to
inquire as to the authority of the Institutional Trustee to so act or as to its
compliance with any of the terms and provisions of this Declaration, both of
which shall be conclusively evidenced by the Institutional Trustee's or its
agent's taking such action; and
(o) no provision of this Declaration shall be deemed to impose any
duty or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be
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illegal, or in which the Institutional Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts,
or to exercise any such right, power, duty or obligation. No permissive power or
authority available to the Institutional Trustee shall be construed to be a
duty.
SECTION 3.11 Delaware Trustee. Notwithstanding any other provision
of this Declaration other than Section 5.2, the Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities of any of the Trustees or the Administrators
described in this Declaration. Except as set forth in Section 5.2, the Delaware
Trustee shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of (S) 3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents. Subject to the provisions of
Section 3.11, unless otherwise determined in writing by the Institutional
Trustee, and except as otherwise required by the Business Trust Act, the
Institutional Trustee, or any one or more of the Administrators, as the case may
be, is authorized to execute on behalf of the Trust any documents that the
Trustees or the Administrators, as the case may be, have the power and authority
to execute pursuant to Section 3.6.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be taken as
the statements of the Sponsor, and the Trustees do not assume any responsibility
for their correctness. The Trustees make no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustees make
no representations as to the validity or sufficiency of this Declaration, the
Debentures or the Securities.
SECTION 3.14 Duration of Trust. The Trust, unless terminated
pursuant to the provisions of Article VIII hereof, shall have existence for
fifty-five (55) years from the Closing Date.
SECTION 3.15 Mergers. (a) The Trust may not 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 corporation or
other body, except as described in this Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Institutional Trustee and
without the consent of the Delaware Trustee or the Holders of the Capital
Securities, consolidate, amalgamate, merge with or into, or be replaced by a
trust organized as such under the laws of any State; provided that:
(i) if the Trust is not the Survivor, such successor entity (the
"Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
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(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor
Securities") so that the Successor Securities rank the same as
the Securities rank with respect to Distributions and payments
upon Liquidation, redemption and otherwise;
(ii) the Institutional Trustee expressly appoints a trustee of
the Successor Entity that possesses the same powers and duties as
the Institutional Trustee as the Holder of the Debentures;
(iii) the Capital Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon notification
of issuance, on any national securities exchange or with another
organization on which the Capital Securities are then listed or
quoted, if any;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the Capital Securities (including any Successor Securities)
to be downgraded by any nationally recognized statistical rating
organization;
(v) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of the
Holders of the Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of such
Holders' interests in the Successor Entity as a result of such merger,
consolidation, amalgamation or replacement);
(vi) such Successor Entity has a purpose substantially identical
to that of the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Trust has received an opinion of a nationally
recognized independent counsel to the Trust experienced in such
matters to the effect that:
(A) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges
of the Holders of the Securities (including any Successor
Securities) in any material respect (other than with respect to
any dilution of the Holders' interest in the Successor Entity);
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to
be
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classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the Securities Guarantees;
(ix) prior to such merger, consolidation, amalgamation or replacement,
the Institutional Trustee shall have received an Officers' Certificate of
the Administrators and an opinion of counsel, each to the effect that all
conditions precedent of this paragraph (b) to such transaction have been
satisfied.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or to be replaced by any other
entity or permit any other entity to consolidate, amalgamate, merge with or
into, or replace it if such consolidation, amalgamation, merger or replacement
would cause the Trust or Successor Entity to be classified as other than a
grantor trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities. On the Closing
Date, the Sponsor will purchase all of the Common Securities issued by the
Trust, in an amount at least equal to 3% of the capital of the Trust, at the
same time as the Capital Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor. In connection with the
issue and sale of the Capital Securities, the Sponsor shall have the exclusive
right and responsibility to engage in the following activities:
(a) to prepare and distribute the Offering Memorandum in relation to
the Capital Securities, including any supplements and amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Capital Securities and to do any
and all such acts, other than actions which must be taken by the Trust, and
advise the Trust of actions it must take, and prepare for execution and filing
any documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such
States;
(c) to prepare for filing and request the Administrators to cause the
filing by the Trust, as may be appropriate, of an application to the PORTAL, the
New York Stock
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Exchange or any other national stock exchange or the Nasdaq National Market for
listing or quotation upon notice of issuance of any Capital Securities; and
(d) to negotiate the terms of and/or execute on behalf of the Trust,
the Purchase Agreement, the Registration Rights Agreement and other related
agreements providing for the sale of the Capital Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees. The number of Trustees initially
shall be two (2), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a Majority in liquidation
amount of the Capital Securities voting as a class at a meeting of the Holders
of the Capital Securities; provided, however, that there shall be a Delaware
Trustee if required by Section 5.2; and there shall always be one Trustee who
shall be the Institutional Trustee, and such Trustee may also serve as Delaware
Trustee if it meets the applicable requirements, in which case Section 3.11
shall have no application to such entity in its capacity as Institutional
Trustee.
SECTION 5.2 Delaware Trustee. If required by the Business Trust Act,
one Trustee (the "Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements of
applicable law, including (S)3807 of the Business Trust Act.
SECTION 5.3 Institutional Trustee; Eligibility. (a) There shall at
all times be one Trustee which shall act as Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) not offer or provide credit or credit enhancement to the
Trust; and
(iii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation permitted by the Commission
to act as an institutional trustee under the Trust Indenture Act,
authorized under such
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laws to exercise corporate trust powers, having a combined capital and
surplus of at least 50 million U.S. dollars ($50,000,000), and subject
to supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to above, then for
the purposes of this Section 5.3(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.7(a).
(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of (S) 310(b) of the Trust Indenture
Act, the Institutional Trustee shall either eliminate such interest or resign,
to the extent and in the manner provided by, and subject to the provisions of,
the Trust Indenture Act and this Declaration.
(d) The Indenture, the Debt Securities (as defined therein) issued or
to be issued thereunder, the Declaration, the Securities issued or to be issued
hereunder and the Capital Securities Guarantee and Common Securities Guarantee
in connection therewith shall be deemed to be specifically described in this
Declaration for purposes of clause (i) of the proviso contained in (S) 310(b)(1)
of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be The Chase Manhattan
Bank.
SECTION 5.4 Certain Qualifications of the Delaware Trustee Generally.
The Delaware Trustee shall be either a natural person who is at least 21 years
of age or a legal entity that shall act through one or more Authorized Officers.
SECTION 5.5 Administrators. The initial Administrators shall be John
Q. Arnold, Kenneth E. Schutte and Jon W. Bilstrom.
Except where a requirement for action by a specific number of
Administrators is expressly set forth in this Declaration and except with
respect to any action the taking of which is the subject of a meeting of the
Administrators any action required or permitted to be taken by the
Administrators may be taken by, and any power of the Administrators may be
exercised by, or with the consent of, any one such Administrators.
SECTION 5.6 Delaware Trustee. The initial Delaware Trustee shall be
Chase Manhattan Bank Delaware.
SECTION 5.7 Appointment, Removal and Resignation of Trustees and
Administrators. (a) No resignation or removal of any Trustee (the "Relevant
Trustee") and no appointment of a successor Trustee pursuant to this Article
shall become effective until
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the acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of this Section 5.7.
Subject to the immediately preceding paragraph, a Relevant Trustee may
resign at any time by giving written notice thereof to the Holders of the
Securities and by appointing a successor Relevant Trustee. Upon the resignation
of the Institutional Trustee, the Institutional Trustee shall appoint a
successor by requesting from at least three Persons meeting the eligibility
requirements, its expenses and charges to serve as the successor Institutional
Trustee on a form provided by the Administrators, and selecting the Person who
agrees to the lowest expense and charges (the "Successor Institutional
Trustee"). If the instrument of acceptance by the successor Relevant Trustee
required by Section 5.7 shall not have been delivered to the Relevant Trustee
within 60 days after the giving of such notice of resignation or delivery of the
instrument of removal, the Relevant Trustee may petition, at the expense of the
Trust, any court of competent jurisdiction for the appointment of a successor
Relevant Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Relevant Trustee. The Institutional
Trustee shall have no liability for the selection of such successor pursuant to
this Section 5.7.
The Institutional Trustee or the Delaware Trustee, or both of them,
may be removed by the act of the Holders of a Majority in liquidation amount of
the Capital Securities, delivered to the Relevant Trustee (in its individual
capacity and on behalf of the Trust) if an Event of Default shall have occurred
and be continuing. If any Trustee shall be so removed, the Holders of Capital
Securities, by act of the Holders of a Majority in liquidation amount of the
Capital Securities then outstanding delivered to the Relevant Trustee, shall
promptly appoint a successor Relevant Trustee or Trustees, and such successor
Trustee shall comply with the applicable requirements of this Section 5.7. If
no successor Relevant Trustee shall have been so appointed by the Holders of a
Majority in liquidation amount of the Capital Securities and accepted
appointment in the manner required by this Section 5.7, within 30 days after
delivery of an instrument of removal, any Holder who has been a Holder of the
Securities for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Relevant Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a successor
Relevant Trust or Trustees.
The Institutional Trustee shall give notice of each resignation and
each removal of a Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 5.7(b) and shall give notice to the
Sponsor. Each notice shall include the name of the successor Relevant Trustee
and the address of its Corporate Trust Office if it is the Institutional
Trustee.
Notwithstanding the foregoing or any other provision of this
Declaration, in the event a Delaware Trustee who is a natural person dies or
becomes incompetent or incapacitated, the vacancy created by such death,
incompetence or incapacity may be filled by the Institutional Trustee following
the procedures in this Section 5.7 (with the successor being a Person who
satisfies the eligibility requirement for a Delaware Trustee set forth in this
Declaration) (the "Successor Delaware Trustee").
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(b) In case of the appointment hereunder of a successor Relevant
Trustee, the retiring Relevant Trustee and each successor Relevant Trustee with
respect to the Trust Securities shall execute and deliver an amendment hereto
wherein each successor Relevant Trustee shall accept such appointment and which
(a) shall contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Securities and the Trust and (b) shall add to or change any of the provisions of
this Declaration as shall be necessary to provide for or facilitate the
administration of the Trust by more than one Relevant Trustee, it being
understood that nothing herein or in such amendment shall constitute such
Relevant Trustees co-trustees and upon the execution and delivery of such
amendment the resignation or removal of the retiring Relevant Trustee shall
become effective to the extent provided therein and each such successor Relevant
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Relevant Trustee; but,
on request of the Trust of any successor Relevant Trustee such retiring Relevant
Trustee shall duly assign, transfer and deliver to such successor Relevant
Trustee all Trust Property, all proceeds thereof and money held by such retiring
Relevant Trustee hereunder with respect to the Securities and the Trust.
(c) No Institutional Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
(d) The Holders of the Capital Securities will have no right to vote
to appoint, remove or replace the Administrators, which voting rights are vested
exclusively in the Holder of the Common Securities.
SECTION 5.8 Vacancies Among Trustees. If a Trustee ceases to hold
office for any reason and the number of Trustees is not reduced pursuant to
Section 5.1, or if the number of Trustees is increased pursuant to Section 5.1,
a vacancy shall occur. A resolution certifying the existence of such vacancy by
the Trustees or, if there are more than two, a majority of the Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with an a Trustee appointed in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies. The death, resignation, retirement,
removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to
perform the duties of a Trustee shall not operate to dissolve, terminate or
annul the Trust. Whenever a vacancy in the number of Trustees shall occur,
until such vacancy is filled by the appointment of a Trustee in accordance with
Section 5.7, the Institutional Trustee shall have all the powers granted to the
Trustees and shall discharge all the duties imposed upon the Trustees by this
Declaration.
SECTION 5.10 Meetings of the Trustees and the Administrators.
Meetings of the Trustees or the Administrators shall be held from time to time
upon the call of any Trustee or Administrator, as applicable. Regular meetings
of the Trustees and the Administrators, respectively, may be held at a time and
place fixed by resolution of the Trustees or the Administrators, as applicable.
Notice of any in-person meetings of the
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Trustees or the Administrators shall be hand delivered or otherwise delivered in
writing (including by facsimile, with a hard copy by overnight courier) not less
than 48 hours before such meeting. Notice of any telephonic meetings of the
Trustees or the Administrators or any committee thereof shall be hand delivered
or otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before a meeting. Notices shall
contain a brief statement of the time, place and anticipated purposes of the
meeting. The presence (whether in person or by telephone) of a Trustee or an
Administrator, as the case may be, at a meeting shall constitute a waiver of
notice of such meeting except where a Trustee or an Administrator, as the case
may be, attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been lawfully
called or convened. Unless provided otherwise in this Declaration, any action of
the Trustees or the Administrators, as the case may be, may be taken at a
meeting by vote of a majority of the Trustees or the Administrators present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Trustees or the Administrators. Meetings of the Trustees
and the Administrators together shall be held from the time to time upon the
call of any Trustee or Administrator.
SECTION 5.11 Delegation of Power. (a) Any Trustee or any
Administrator, as the case may be, may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6; and
(b) the Trustees shall have power to delegate from time to time to
such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Trustees or otherwise as the Trustees may deem expedient, to the extent
such delegation is not prohibited by applicable law or contrary to the
provisions of the Trust, as set forth herein.
SECTION 5.12 Conversion, Consolidation or Succession to Business. Any
Person into which the Institutional Trustee or the Delaware Trustee, as the case
may be, may be merged or converted or with which either may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Institutional Trustee or the Delaware Trustee, as the case may be, shall be a
party, or any Person succeeding to all or substantially all the corporate trust
business of the Institutional Trustee or the Delaware Trustee, as the case may
be, shall be the successor of the Institutional Trustee or the Delaware Trustee,
as the case may be, hereunder, provided such Person shall be otherwise qualified
and eligible under this Article, without the execution or filing of any paper or
any further act on the part of any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions. Holders shall receive Distributions (as
defined herein) in accordance with the applicable terms of the relevant Holder's
Securities.
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Distributions shall be made on the Capital Securities and the Common Securities
in accordance with the preferences set forth in their respective terms. If and
to the extent that the Debenture Issuer makes a payment of interest (including
any Compounded Interest, Special Interest and Additional Interest and/or
principal on the Debentures held by the Institutional Trustee (the amount of any
such payment being a "Payment Amount"), the Institutional Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities. (a) The
Administrators shall on behalf of the Trust issue one series of capital
securities substantially in the form of Exhibit A-1 representing undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I ("Initial Capital Securities") and to be exchanged pursuant to
the Registration Rights Agreement for Capital Securities substantially in the
form of Exhibit A-2 having the terms set forth in Annex I (the "Exchange
Securities" and together with the Initial Capital Securities, the "Capital
Securities") and one series of common securities representing undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I (the "Common Securities"). The Trust shall issue no securities
or other interests in the assets of the Trust other than the Capital Securities
and the Common Securities. The Capital Securities rank pari passu and payment
thereon shall be made Pro Rata with the Common Securities except that, where an
Event of Default has occurred and is continuing, the rights of Holders of the
Common Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to payment
of the Holders of the Capital Securities.
(b) The Certificates shall be signed on behalf of the Trust by one or
more Administrators. Such signature shall be the facsimile or manual signature
of any Administrator. In case any Administrator of the Trust who shall have
signed any of the Securities shall cease to be such Administrator before the
Certificates so signed shall be delivered by the Trust, such Certificates
nevertheless may be delivered as though the person who signed such Certificates
had not ceased to be such Administrator; and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of such
Security, shall be an Administrator of the Trust, although at the date of the
execution and delivery of the Declaration any such person was not such an
Administrator. A Capital Security shall not be valid until authenticated by the
manual signature of an authorized officer of the Institutional Trustee. Such
signature shall be conclusive evidence that the Capital Security has been
authenticated under this Declaration. Upon written order of the Trust signed by
one Administrator, the Institutional Trustee shall authenticate the Capital
Securities for original issue. The Institutional Trustee may appoint an
authenticating agent acceptable to the Trust to authenticate the Capital
Securities. A Common Security need not be so authenticated.
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(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(e) Every Person, by virtue of having become a Holder or a Capital
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration and the Capital Securities Guarantee.
SECTION 7.2 Paying Agent, Transfer Agent and Registrar. The Trust
shall maintain in the Borough of Manhattan, City of New York, State of New York,
an office or agency where the Capital Securities may be presented for payment
("Paying Agent"), and an office or agency where Securities may be presented for
registration of transfer (the "Transfer Agent"). The Trust shall keep or cause
to be kept at such office or agency a register for the purpose of registering
Securities and transfers and exchanges of Securities, such register to be held
by a registrar (the "Registrar"). The Administrators may appoint the Paying
Agent, the Registrar, the Transfer Agent and may appoint one or more additional
Paying Agents or one or more co-Registrars, or one or more co-Transfer Agents in
such other locations as it shall determine. The term "Paying Agent" includes
any additional paying agent, the term "Registrar" includes any additional
registrar or co-Registrar and the term "Transfer Agent" includes any additional
transfer agent. The Administrators may change any Paying Agent without prior
notice to any Holder. The Administrators shall notify the Institutional Trustee
of the name and address of any Paying Agent, Transfer Agent and Registrar not a
party to this Declaration. The Administrators hereby appoint the Institutional
Trustee to act as Paying Agent, Transfer Agent and Registrar for the Capital
Securities and the Common Securities. The Institutional Trustee or any of its
Affiliates may act as Paying Agent or Registrar.
SECTION 7.3 Form and Dating. The Initial Capital Securities and the
Institutional Trustee's certificate of authentication thereon shall be
substantially in the form of Exhibit A-1, the Exchange Capital Securities and
the Institutional Trustee's certificate of authentication thereon shall be
substantially in the form of Exhibit A-2 and the Common Securities shall be
substantially in the form of Exhibit A-3, each of which is hereby incorporated
in and expressly made a part of this Declaration. Certificates may be typed,
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrators, as conclusively evidenced by their
execution thereof. The Securities may have letters, numbers, notations or other
marks of identification or designation and such legends or endorsements required
by law, stock exchange rule, agreements to which the Trust is subject, if any,
or usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Sponsor). The Trust at the direction of the Sponsor shall
furnish any such legend not contained in Exhibit A-1 to the Institutional
Trustee in writing. Each Capital Security shall be dated the date of its
authentication. The terms and provisions of the Securities set forth in Annex I
and the forms of Securities set
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forth in Exhibits A-1, A-2 and A-3 are part of the terms of this Declaration and
to the extent applicable, the Institutional Trustee, the Delaware Trustee, the
Administrators and the Sponsor, by their execution and delivery of this
Declaration, expressly agree to such terms and provisions and to be bound
thereby. Capital Securities will be issued only in blocks having a stated
liquidation amount of not less than $100,000.
(a) Global Capital Securities. The Capital Securities are being
offered and sold by the Trust pursuant to the Purchase Agreement. Securities
offered and sold to Qualified Institutional Buyers ("QIBs") in reliance on Rule
144A as provided in the Purchase Agreement, shall be issued in the form of one
or more permanent global Securities in definitive, fully registered form without
distribution coupons with the appropriate global legends and the Restricted
Securities Legend set forth in Section 9.2(g) hereto (each, a "Rule 144A Global
Capital Security"), which shall be deposited on behalf of the purchasers of the
Capital Securities represented thereby with the Institutional Trustee, at its
New York office, as custodian for the Depositary, and registered in the name of
the Depositary or a nominee of the Depositary, duly executed by the Trust and
authenticated by the Institutional Trustee as hereinafter provided. The number
of Capital Securities represented by the Rule 144A Global Capital Security may
from time to time be increased or decreased by adjustments made on the records
of the Institutional Trustee and the Depositary or its nominee as hereinafter
provided.
In the event the Initial Global Security is tendered in a Registered
Exchange Offer, it shall be exchanged for interests in a single, permanent
global security in definitive, fully registered form without distribution
coupons. Upon issuance such Exchange Global Security shall be deposited on
behalf of the holders of the Exchange Capital Securities represented thereby
with the Institutional Trustee, at its New York office, as custodian for the
Depositary, and registered in the name of the Depositary or a nominee of the
Depositary, duly executed by the Trust and authenticated by the Institutional
Trustee as hereinafter provided.
(b) Book-Entry Provisions. This Section 7.3(b) shall apply only to
the Rule 144A Global Capital Securities and such other Capital Securities in
global form as may be authorized by the Trust to be deposited with or on behalf
of the Depositary. The Trust shall execute and the Institutional Trustee shall,
in accordance with this Section 7.3, authenticate and deliver initially one or
more Rule 144A Global Capital Securities that (a) shall be registered in the
name of Cede & Co. or other nominee of such Depositary and (b) shall be
delivered by the Institutional Trustee to such Depositary or pursuant to such
Depositary's instructions or held by the Institutional Trustee as custodian for
the Depositary. Clearing Agency Participants shall have no rights under this
Declaration with respect to any Rule 144A Global Capital Security held on their
behalf by the Depositary or by the Institutional Trustee as the custodian of the
Depositary or under such Rule 144A Global Capital Security, and the Depositary
may be treated by the Trust, the Institutional Trustee and any agent of the
Trust or the Institutional Trustee as the absolute owner of such Rule 144A
Global Capital Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Trust, the Institutional Trustee or
any agent of the Trust or the Institutional Trustee from giving effect to any
written certification, proxy or other
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authorization furnished by the Depositary or impair, as between the Depositary
and the Clearing Agency Participants, the operation of customary practices of
such Depositary governing the exercise of the rights of a holder of a beneficial
interest in any Rule 144A Global Capital Security.
(c) Definitive Capital Securities. Except as provided in Section
7.5, Section 9.2(e) and Section 9.2(f), owners of beneficial interests in the
Rule 144A Global Capital Security will not be entitled to receive physical
delivery of Definitive Capital Securities. Purchasers of Initial Securities who
are institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act) ("IAIs"), but are not QIBs will receive Initial
Capital Securities in the form of individual certificates in definitive, fully
registered form without distribution coupons and with the Restricted Securities
Legend ("Restricted Definitive Capital Securities"); provided, however, that
upon registration of transfer of such Restricted Definitive Capital Securities
to a QIB, such Restricted Definitive Capital Securities will, unless the Rule
144A Global Capital Security has previously been exchanged, be exchanged for an
interest in a Rule 144A Global Capital Security pursuant to the provisions set
forth in Section 9.2. Restricted Definitive Securities will bear the Restricted
Securities Legend set forth in Section 9.2(g) unless removed in accordance with
this Section 7.3 or Section 9.2.
In the event Initial Definitive Capital Securities are tendered in a
Registered Exchange Offer, they will be exchanged for certificated securities in
definitive, fully registered form, without coupons and without the Restricted
Securities Legend; or, at the option of the Holder, as an interest in the
Exchange Global Capital Security issued pursuant to Section 7.1(a).
SECTION 7.4 Mutilated, Destroyed, Lost or Stolen Certificates. If:
(a) any mutilated Certificates should be surrendered to the Registrar, or if the
Registrar shall receive evidence to their satisfaction of the destruction, loss
or theft of any Certificate; and
(b) there shall be delivered to the Registrar and the Administrators
such security or indemnity as may be required by them to keep each of them
harmless; then, in the absence of notice that such Certificate shall have been
acquired by a bona fide purchaser, an Administrator on behalf of the Trust shall
execute (and in the case of a Capital Security Certificate, the Institutional
Trustee shall authenticate) and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
denomination. In connection with the issuance of any new Certificate under this
Section 7.4, the Registrar or the Administrators may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith. Any duplicate Certificate issued pursuant to this
Section shall constitute conclusive evidence of an ownership interest in the
relevant Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
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SECTION 7.5 Temporary Securities.
Until definitive Securities are ready for delivery, the Administrators
may prepare and, in the case of the Capital Securities, the Institutional
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in form of definitive Securities but may have variations that the
Administrators consider appropriate for temporary Securities. Without
unreasonable delay, the Administrators shall prepare and, in the case of the
Capital Securities, the Institutional Trustee shall authenticate definitive
Securities in exchange for temporary Securities.
SECTION 7.6 Cancellation.
The Administrators at any time may deliver Securities to the
Institutional Trustee for cancellation. The Registrar shall forward to the
Institutional Trustee any Securities surrendered to it for registration of
transfer, redemption or payment. The Institutional Trustee shall promptly
cancel all Securities surrendered for registration of transfer, payment,
replacement or cancellation and shall destroy such canceled Securities as the
Administrators direct. The Administrators may not issue new Securities to
replace Securities that have been paid or that have been delivered to the
Institutional Trustee for cancellation.
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
SECTION 8.1 Dissolution and Termination of Trust. (a) The Trust
shall dissolve:
(i) unless earlier terminated, on February 4, 2052, the
expiration of the term of the Trust;
(ii) upon a Bankruptcy Event with respect to the Sponsor; the
Trust or the Debenture Issuer;
(iii) (other than in connection with a merger, consolidation or
similar transaction not prohibited by the Indenture, this Declaration
or the Securities Guarantees, as the case may be) upon the filing of a
certificate of dissolution or its equivalent with respect to the
Sponsor; upon the consent of Holders of a Majority in liquidation
amount of the Securities voting together as a single class to file a
certificate of cancellation with respect to the Trust or upon the
revocation of the charter of the Sponsor and the expiration of 90 days
after the date of revocation without a reinstatement thereof;
(iv) upon the distribution of the Debentures to the Holders of
the Securities, upon exercise of the right of the Holder of all of the
outstanding Common Securities to terminate the Trust as provided in
Annex I hereto;
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(v) upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor, the Trust or the
Debenture Issuer;
(vi) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the
Securities; or
(vii) before the issuance of any Securities, with the consent of
all of the Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), and after satisfaction of liabilities to
creditors of the Trust, and subject to the terms set forth in Annex I, the
Trustees shall terminate the Trust by filing a certificate of cancellation with
the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 General. (a) Where Capital Securities are presented to
the Registrar or a co-registrar with a request to register a transfer or to
exchange them for an equal number of Capital Securities represented by different
certificates, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met. To permit registrations of
transfer and exchanges, the Trust shall issue and the Institutional Trustee
shall authenticate Capital Securities at the Registrar's request.
(b) Upon issuance of the Common Securities, the Sponsor shall acquire
and retain beneficial and record ownership of the Common Securities and for so
long as the Securities remain outstanding, the Sponsor shall maintain 100%
ownership of the Common Securities, provided, however, that any permitted
successor of the Sponsor under the Indenture may succeed to the Sponsor's
ownership of the Common Securities.
(c) Capital Securities may only be transferred, in whole or in part,
in accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities, provided, however, that Initial Capital Securities
may be transferred only in blocks having a stated liquidation amount of not less
than $100,000 (i.e., 100 Initial Capital Securities). Any transfer or purported
transfer of any Security not made in accordance with this Declaration shall be
null and void and will be deemed to be of no legal effect whatsoever and any
such transferee shall be deemed not to be the holder of such Capital Securities
for any purpose, including but not limited to the receipt of Distributions on
such Capital Securities, and such transferee shall be deemed to have no interest
whatsoever in such Capital Securities.
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(d) The Registrar shall provide for the registration of Securities
and of transfers of Securities, which will be effected without charge but only
upon payment (with such indemnity as the Registrar may require) in respect of
any tax or other governmental charges that may be imposed in relation to it.
Upon surrender for registration of transfer of any Securities, the Registrar
shall cause one or more new Securities to be issued in the name of the
designated transferee or transferees. Every Security surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by the Holder or
such Holder's attorney duly authorized in writing. Each Security surrendered
for registration of transfer shall be canceled by the Institutional Trustee
pursuant to Section 7.6. A transferee of a Security shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Security. By acceptance of a Security, each transferee
shall be deemed to have agreed to be bound by this Declaration.
(e) The Trust shall not be required (i) to issue, register the
transfer of, or exchange any Capital Securities during a period beginning at the
opening of business 15 days before the day of any selection of Capital
Securities for redemption and ending at the close of business on the earliest
date on which the relevant notice of redemption is deemed to have been given to
all Holders of the Capital Securities to be redeemed, or (ii) to register the
transfer or exchange of any Capital Security so selected for redemption in whole
or in part, except the unredeemed portion of any Capital Security being redeemed
in part.
SECTION 9.2 Transfer Procedures and Restrictions.
(a) General. (i) If Initial Capital Securities are issued upon the
registration of transfer, exchange or replacement of Initial Capital Securities
bearing the Restricted Securities Legend, or if a request is made to remove such
Restricted Securities Legend on Initial Capital Securities, the Initial Capital
Securities so issued shall bear the Restricted Securities Legend, or the
Restricted Securities Legend shall not be removed, as the case may be, unless
there is delivered to the Trust such satisfactory evidence, which may include an
opinion of counsel licensed to practice law in the State of New York, as may be
reasonably required by the Trust, that neither the legend nor the restrictions
on transfer set forth therein are required to ensure that transfers thereof
comply with the provisions of Rule 144A or Rule 144 under the Securities Act or,
with respect to Restricted Capital Securities, that such Securities are not
"restricted" within the meaning of Rule 144 under the Securities Act. Upon
provision of such satisfactory evidence, the Institutional Trustee, at the
written direction of the Trust, shall authenticate and deliver Capital
Securities that do not bear the legend.
(ii) If a transfer of Initial Capital Securities is made
pursuant to an effective Shelf Registration Statement, the
Restricted Securities Legend shall be removed from such Initial
Capital Securities so transferred at the request of the Holder.
(iii) Any Initial Capital Securities which are presented to
the Registrar for exchange pursuant to a Registered Exchange
Offer shall
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be exchanged for Exchange Capital Securities of equal liquidation
amount upon surrender to the Registrar of the Initial Capital
Securities to be exchanged in accordance with the terms of the
Registered Exchange Offer; provided that the Initial Capital
Securities so surrendered for exchange are duly endorsed and
accompanied by a letter of transmittal or written instrument of
transfer in form satisfactory to the Institutional Trustee and
the Registrar and duly executed by the Holder thereof or such
Holder's attorney who shall be duly authorized in writing to
execute such document on the behalf of such Holder.
(b) Transfer and Exchange of Definitive Capital Securities. When
Initial Definitive Capital Securities or Exchange Definitive Capital Securities
are presented to the Registrar (x) to register the transfer of such Initial
Definitive Capital Securities or Exchange Definitive Capital Securities, or (y)
to exchange such Initial Definitive Capital Securities or Exchange Definitive
Capital Securities for an equal number of Initial Definitive Capital Securities
or Exchange Definitive Capital Securities, respectively, of another number, the
Registrar shall register the transfer or make the exchange as requested if its
reasonable requirements for such transaction are met; provided, however, that
the Definitive Capital Securities surrendered for registration of transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the
Trust and the Registrar, duly executed by the Holder thereof or
his attorney duly authorized in writing; and
(ii) in the case of Initial Definitive Capital Securities
that are Restricted Definitive Capital Securities, are being
transferred or exchanged pursuant to an effective registration
statement under the Securities Act or pursuant to clause (A),
(B), (C) or (D) below, and are accompanied by the following
additional information and documents, as applicable:
(A) if such Restricted Definitive Capital Securities
are being delivered to the Registrar by a Holder for
registration in the name of such Holder, without transfer, a
certification from such Holder to that effect;
(B) if such Restricted Definitive Capital Securities
are being transferred pursuant to an exemption from
registration in accordance with Rule 144 under the
Securities Act: (i) a certification to that effect and (ii)
if the Trust so requests, evidence reasonably satisfactory
to the Trust as to the compliance with the restrictions set
forth in the Restricted Securities Legend;
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(C) if such Restricted Definitive Capital Securities
are transferred to QIBs in accordance with Rule 144A under
the Securities Act, the transferee QIBs must take delivery
of their interests in the Capital Securities in the form of
a beneficial interest in the Rule 144A Global Capital
Security in accordance with Section 9.2(c); or
(D) if such Restricted Definitive Capital Securities
are being transferred to a Person who is an IAI, but it is
not a QIB, upon the delivery of a certificate by the
transferee IAI substantially in the form of Exhibit B hereto
and such other opinion, certification and/or other
information as may be reasonably required by the Trust or
the Sponsor, the Institutional Trustee shall cancel or cause
to be canceled such Restricted Definitive Securities being
transferred and concurrently therewith, the Trust shall
issue and the Institutional Trustee shall authenticate, upon
written order of any Administrator, an appropriate number of
Restricted Definitive Capital Securities.
(c) Restrictions on Transfer of an Initial Definitive Capital
Security for a Beneficial Interest in an Initial Global Capital Security. An
Initial Definitive Capital Security may not be exchanged for a beneficial
interest in an Initial Global Capital Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Institutional Trustee of an
Initial Definitive Capital Security, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Trust, together with:
(i) if such Initial Definitive Capital Security is a Restricted
Capital Security, certification, substantially in the form set forth
of Exhibit C hereto, that such Definitive Capital Security is being
transferred to a QIB in accordance with Rule 144A under the Securities
Act; and
(ii) whether or not such Definitive Capital Security is a
Restricted Capital Security, written instructions directing the
Institutional Trustee to make, or to direct the Depositary to make, an
adjustment on its books and records with respect to such Initial
Global Capital Security to reflect an increase in the number of the
Initial Capital Securities represented by the Initial Global Capital
Security,
then the Institutional Trustee shall cancel such Initial Definitive Capital
Security and cause, or direct the Depositary to cause, the aggregate number of
Initial Capital Securities represented by the Global Capital Security to be
increased accordingly. If no Initial Global Capital Securities are then
outstanding, the Trust shall issue and the Institutional Trustee shall
authenticate, upon written order of any Administrator, an appropriate number of
Initial Capital Securities in global form.
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(d) Transfer and Exchange of Global Capital Securities. The transfer
and exchange of Initial Global Capital Securities or Exchange Global Capital
Securities or beneficial interests therein shall be effected through the
Depositary, in accordance with this Declaration (including applicable
restrictions on transfer set forth in the Restricted Securities Legend) and the
procedures of the Depositary therefor.
Notwithstanding any other provisions of this Declaration, a Global Capital
Security may not be transferred as a whole except by the Depositary to a nominee
of the Depositary or another nominee of the Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary.
(e) Transfer of a Beneficial Interest in an Initial Global Capital
Security for a Definitive Capital Security.
(i) Any Person having a beneficial interest in an Initial Global
Capital Security that is being transferred or exchanged pursuant to an
effective registration statement under the Securities Act or pursuant
to clause (A) or (B) below may upon request, and if accompanied by the
information specified below, exchange such beneficial interest for an
Initial Definitive Capital Security or an Exchange Definitive Capital
Security, as the case may be, representing the same number of Initial
Capital Securities or Exchange Definitive Capital Securities, as the
case may be. Upon receipt by the Institutional Trustee from the
Depositary or its nominee on behalf of any Person having a beneficial
interest in an Initial Global Capital Security or an Exchange
Definitive Capital Security, as the case may be, of written
instructions or such other form of instructions as is customary for
the Depositary or the Person designated by the Depositary as having
such a beneficial interest in such Global Capital Security and in the
case of an Initial Global Security the following additional
information and documents (all of which may be submitted by
facsimile):
(A) if such beneficial interest is being transferred
pursuant to an exemption from registration in accordance with
Rule 144 under the Securities Act: (i) a certification to that
effect from the transferee or transferor and (ii) if the Trust so
requests, additional evidence reasonably satisfactory to it as to
the compliance with the restrictions set forth in the Restricted
Securities legend; or
(B) if such beneficial interest is being transferred to a
Person who is an IAI, but is not a QIB, upon the delivery of a
certificate by the transferee IAI substantially in the form of
Exhibit B hereto and such other opinion, certification and/or
other information as may be reasonably required by the Trust and
the Sponsor,
then the Institutional Trustee will cause, in accordance with the
standing instructions and procedures of the Depositary, the aggregate
liquidation amount
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of the Global Capital Security to be reduced on its books and records
and, following such reduction, the Administrators will issue and the
Institutional Trustee will authenticate, upon written order of any
Administrator, an appropriate number of Definitive Capital Securities.
(ii) Definitive Capital Securities issued in exchange for a
beneficial interest in a Global Capital Security pursuant to this
Section 9.2(e) shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions
from Clearing Agency Participants or indirect participants or
otherwise, shall instruct the Institutional Trustee. The Institutional
Trustee shall deliver such Capital Securities to the Persons in whose
names such Capital Securities are so registered in accordance with the
instructions of the Depositary.
(f) Authentication of Definitive Capital Securities.
If at any time:
(i) the Depositary notifies the Institutional Trustee and the
Administrators that the Depositary is unwilling or unable to continue
as Depositary for the Global Capital Securities and a successor
Depositary for the Global Capital Securities is not appointed by the
Trust at the direction of the Sponsor within 90 days after delivery of
such notice; or
(ii) the Administrators notify the Institutional Trustee in
writing to issue Definitive Capital Securities under this Declaration,
then the Trust will execute, and the Institutional Trustee, upon receipt of a
written order of the Trust signed by one Administrator requesting the
authentication and delivery of Definitive Capital Securities to the Persons
designated by the Trust, will authenticate and deliver Definitive Capital
Securities, in an aggregate principal amount equal to the principal amount of
Global Capital Securities, in exchange for such Global Capital Securities.
(g) Legend.
Except as permitted by Section 9.2(a), each Initial Capital Security
certificate evidencing the Rule 144A Global Capital Securities and the
Restricted Definitive Capital Securities (and all Initial Capital Securities
issued in exchange therefor or substitution thereof) shall bear a legend (the
"Restricted Securities Legend") in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
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ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF
THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY PRIOR TO THE DATE WHICH IS THREE YEARS AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH MERCANTILE
BANCORPORATION INC. (THE "COMPANY") OR MERCANTILE CAPITAL TRUST I (THE "TRUST")
OR ANY AFFILIATE OF THE COMPANY OR THE TRUST WAS THE OWNER OF THIS SECURITY (OR
ANY PREDECESSOR OF THIS SECURITY) (THE "RESALE RESTRICTIONS TERMINATION DATE")
ONLY (A) TO THE COMPANY OR THE TRUST, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE
501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT,
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S AND THE TRUST'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM IN ACCORDANCE WITH THE DECLARATION OF TRUST, A COPY OF WHICH MAY BE
OBTAINED FROM THE COMPANY OR THE TRUST. THE HOLDER OF THIS SECURITY AGREES THAT
IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS. SECURITIES OWNED BY A PURCHASER
THAT IS NOT A QUALIFIED INSTITUTIONAL BUYER MAY NOT BE HELD IN BOOK-ENTRY FORM.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE
RESTRICTIONS TERMINATION DATE.
(h) Cancellation or Adjustment of Global Capital Security. At such
time as all beneficial interests in a Global Capital Security have either been
exchanged for Definitive Capital Securities to the extent permitted by this
Declaration or redeemed, repurchased or canceled in accordance with the terms of
this Declaration, such Global Capital Security shall be returned to the
Depositary for cancellation or retained and canceled by the Institutional
Trustee. At any time prior to such cancellation, if any beneficial interest in
a Global Capital Security is exchanged for Definitive Capital Securities,
Capital Securities represented by such Global Capital Security shall be reduced
and an adjustment shall be made on the books and records of the Institutional
Trustee (if it is then the Securities Custodian for such Global
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Capital Security) with respect to such Global Capital Security, by the
Institutional Trustee to reflect such reduction.
(i) Obligations with Respect to Transfers and Exchanges of Capital
Securities.
(i) To permit registrations of transfers and exchanges, the
Trust shall execute and the Institutional Trustee shall authenticate
Definitive Capital Securities and Global Capital Securities at the
Registrar's request.
(ii) Registrations of transfers or exchanges will be effected
without charge, but only upon payment (with such indemnity as the
Registrar or the Sponsor may require) in respect of any tax or other
governmental charge that may be imposed in relation to it.
(iii) The Registrar shall not be required to register the
transfer of or exchange of any Capital Security during a period
beginning at the opening of business 15 days before the day of any
selection of any Capital Security for redemption set forth in the
terms and ending at the close of business on the earliest date on
which the relevant notice of redemption is deemed to have been given
to all Holders of Capital Securities to be redeemed, or
(iv) All Capital Securities issued upon any registration of
transfer or exchange pursuant to the terms of this Declaration shall
evidence the same security and shall be entitled to the same benefits
under this Declaration as the Capital Securities surrendered upon such
registration of transfer or exchange.
SECTION 9.3 Deemed Security Holders. The Trust, the Administrators,
the Trustees, the Paying Agent, the Transfer Agent or the Registrar may treat
the Person in whose name any Certificate shall be registered on the books and
records of the Trust as the sole holder of such Certificate and of the
Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trust, the Administrators, the Trustees, the
Paying Agent, the Transfer Agent or the Registrar shall have actual or other
notice thereof.
SECTION 9.4 Notices to Clearing Agency. Whenever a notice or other
communication to the Capital Security Holders is required under this
Declaration, unless and until Definitive Capital Securities shall have been
issued to the beneficial owners of Capital Securities pursuant to Section 9.2(e)
or Section 9.2(f), the Administrators shall give all such notices and
communications specified herein to be given to the Capital Security Holders to
the Clearing Agency, and shall have no notice obligations to the beneficial
owners of Capital Securities.
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SECTION 9.5 Appointment of Successor Clearing Agency. If any
Clearing Agency elects to discontinue its services as securities depositary with
respect to the Capital Securities, the Institutional Trustee, in its sole
discretion, shall appoint a successor Clearing Agency with respect to such
Capital Securities.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability. (a) Except as expressly set forth in this
Declaration, the Securities Guarantees and the terms of the Securities, the
Sponsor shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the
Securities which shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of the
Securities any deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to (S) 3803(a) of the Business Trust Act, the Holders of
the Capital Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Trust or any Covered
Person for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of the
Trust and in a manner such Indemnified Person reasonably believed to be within
the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's
negligence or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and, if selected by such Indemnified Person, has been selected by
such Indemnified Person with reasonable care by or on behalf of the Trust,
including information, opinions, reports or statements as to the
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value and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty. (a) To the extent that, at law or in
equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Declaration shall not be liable to the
Trust or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity (other than the duties imposed on the
Institutional Trustee under the Trust Indenture Act), are agreed by the parties
hereto to replace such other duties and liabilities of the Indemnified Person.
(b) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests
and factors as it desires, including its own interests, and shall have
no duty or obligation to give any consideration to any interest of or
factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not
be subject to any other or different standard imposed by this
Declaration or by applicable law.
SECTION 10.4 Indemnification. (a) (i) The Sponsor shall indemnify,
to the full extent permitted by law, any Indemnified Person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by reason
of the fact that he is or was an Indemnified Person against expenses (including
attorneys' fees and expenses), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the Indemnified
Person did not act in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent permitted by
law, any Indemnified Person who was or is a party or is threatened to
be made
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a party to any threatened, pending or completed action or suit by or
in the right of the Trust to procure a judgment in its favor by reason
of the fact that he is or was an Indemnified Person against expenses
(including attorneys' fees and expenses) actually and reasonably
incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust
and except that no such indemnification shall be made in respect of
any claim, issue or matter as to which such Indemnified Person shall
have been adjudged to be liable to the Trust unless and only to the
extent that the Court of Chancery of Delaware or the court in which
such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such Court of Chancery
or such other court shall deem proper.
(iii) To the extent that an Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an
action without prejudice or the settlement of an action without
admission of liability) in defense of any action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 10.4(a), or in
defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees and expenses) actually and reasonably
incurred by him in connection therewith.
(iv) Any indemnification of an Administrator under paragraphs
(i) and (ii) of this Section 10.4(a) (unless ordered by a court) shall
be made by the Sponsor only as authorized in the specific case upon a
determination that indemnification of the Indemnified Person is proper
in the circumstances because he has met the applicable standard of
conduct set forth in paragraphs (i) and (ii). Such determination shall
be made (1) by the Administrators by a majority vote of a Quorum
consisting of such Administrators who were not parties to such action,
suit or proceeding, (2) if such a Quorum is not obtainable, or, even
if obtainable, if a Quorum of disinterested Administrators so directs,
by independent legal counsel in a written opinion, or (3) by the
Common Security Holder of the Trust.
(v) To the fullest extent permitted by law, expenses
(including attorneys' fees and expenses) incurred by an Indemnified
Person in defending a civil, criminal, administrative or investigative
action, suit or proceeding referred to in paragraphs (i) and (ii) of
this Section 10.4(a) shall be paid by the Sponsor in advance of the
final disposition of such action, suit or proceeding upon receipt of
an undertaking by or on behalf of such Indemnified Person to repay
such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Sponsor as authorized in this
Section 10.4(a). Notwithstanding the foregoing, no advance shall be
made by the Sponsor if a determination is reasonably and promptly made
(i) by the Administrators by a
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majority vote of a Quorum of disinterested Administrators, (ii) if
such a Quorum is not obtainable, or, even if obtainable, if a quorum
of disinterested Administrators so directs, by independent legal
counsel in a written opinion or (iii) by the Common Security Holder of
the Trust, that, based upon the facts known to the Administrators,
counsel or the Common Security Holder at the time such determination
is made, such Indemnified Person acted in bad faith or in a manner
that such Person did not believe to be in or not opposed to the best
interests of the Trust, or, with respect to any criminal proceeding,
that such Indemnified Person believed or had reasonable cause to
believe his conduct was unlawful. In no event shall any advance be
made in instances where the Administrators, independent legal counsel
or the Common Security Holder reasonably determine that such Person
deliberately breached his duty to the Trust or its Common or Capital
Security Holders.
(vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section
10.4(a) shall not be deemed exclusive of any other rights to which
those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of stockholders or disinterested
directors of the Sponsor or Capital Security Holders of the Trust or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office. All rights to
indemnification under this Section 10.4(a) shall be deemed to be
provided by a contract between the Sponsor and each Indemnified Person
who serves in such capacity at any time while this Section 10.4(a) is
in effect. Any repeal or modification of this Section 10.4(a) shall
not affect any rights or obligations then existing.
(vii) The Sponsor or the Trust may purchase and maintain
insurance on behalf of any Person who is or was an Indemnified Person
against any liability asserted against him and incurred by him in any
such capacity, or arising out of his status as such, whether or not
the Sponsor would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any Person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 10.4(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
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(ix) The indemnification and advancement of expenses provided
by, or granted pursuant to, this Section 10.4(a) shall, unless
otherwise provided when authorized or ratified, continue as to a
Person who has ceased to be an Indemnified Person and shall inure to
the benefit of the heirs, executors and administrators of such a
Person.
SECTION 10.5 Outside Businesses. Any Covered Person, the Sponsor,
the Delaware Trustee and the Institutional Trustee (subject to Section 5.3(c))
may engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the business
of the Trust, and the Trust and the Holders of Securities shall have no rights
by virtue of this Declaration in and to such independent ventures or the income
or profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. No Covered Person, the Sponsor, the Delaware Trustee, or the
Institutional Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, the Delaware Trustee and the Institutional Trustee shall have the
right to take for its own account (individually or as a partner or fiduciary) or
to recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Institutional Trustee may engage or
be interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
SECTION 10.6 Compensation; Fee. The Sponsor agrees:
(a) to pay to the Trustees from time to time reasonable compensation
for all services rendered by them hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust); and
(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this
Declaration (including the reasonable compensation and the expenses and
disbursements of their respective agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith.
The provisions of this Section 10.6 shall survive the dissolution of
the Trust and the termination of this Declaration and the removal or resignation
of any Trustee.
No Trustee may claim any lien or charge on any property of the Trust
as a result of any amount due pursuant to this Section 10.6.
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ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year. The fiscal year ("Fiscal Year") of the
Trust shall be the calendar year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters. (a) At all times during the
existence of the Trust, the Administrators shall keep, or cause to be kept, full
books of account, records and supporting documents, which shall reflect in
reasonable detail each transaction of the Trust. The books of account shall be
maintained on the accrual method of accounting, in accordance with generally
accepted accounting principles, consistently applied. The books of account and
the records of the Trust shall be examined by and reported upon as of the end of
each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Administrators.
(b) The Administrators shall cause to be prepared and delivered to
each of the Holders of Securities, within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss which shall be examined by and reported upon by a firm of
independent certified public accountants selected by the Administrators.
(c) The Administrators shall cause to be duly prepared and delivered
to each of the Holders of Securities any annual United States federal income tax
information statement required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Administrators shall endeavor to deliver all
such statements within 30 days after the end of each Fiscal Year of the Trust.
(d) The Administrators shall cause to be duly prepared and filed an
annual United States federal income tax return on a Form 1041 or such other form
required by United States federal income tax law, and any other annual income
tax returns required to be filed by the Administrators on behalf of the Trust
with any state or local taxing authority.
SECTION 11.3 Banking. The Trust shall maintain one or more bank
accounts in the name and for the sole benefit of the Trust; provided, however,
that all payments of funds in respect of the Debentures held by the
Institutional Trustee shall be made directly to the Property Account and no
other funds of the Trust shall be deposited in the Property Account. The sole
signatories for such accounts (including the Property Account) shall be
designated by the Institutional Trustee.
SECTION 11.4 Withholding. The Institutional Trustee or any Paying
Agent and the Administrators shall comply with all withholding requirements
under United States federal, state and local law. The Institutional Trustee or
any Paying Agent shall request, and
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the Holders shall provide to the Institutional Trustee or any Paying Agent, such
forms or certificates as are necessary to establish an exemption from
withholding with respect to each Holder, and any representations and forms as
shall reasonably be requested by the Institutional Trustee or any Paying Agent
to assist it in determining the extent of, and in fulfilling, its withholding
obligations. The Administrators shall file required forms with applicable
jurisdictions and, unless an exemption from withholding is properly established
by a Holder, shall remit amounts withheld with respect to the Holder to
applicable jurisdictions. To the extent that the Institutional Trustee or any
Paying Agent is required to withhold and pay over any amounts to any authority
with respect to distributions or allocations to any Holder, the amount withheld
shall be deemed to be a Distribution in the amount of the withholding to the
Holder. In the event of any claimed overwithholding, Holders shall be limited to
an action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Institutional
Trustee or any Paying Agent may reduce subsequent Distributions by the amount of
such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments. (a) Except as otherwise provided in this
Declaration or by any applicable terms of the Securities, this Declaration may
only be amended by a written instrument approved and executed by
(i) the Institutional Trustee; and
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware
Trustee.
(b) Notwithstanding any other provision of this Article XII, no
amendment shall be made, and any such purported amendment shall be void and
ineffective:
(i) unless the Institutional Trustee shall have first received
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the
Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms
of the Securities); and
(ii) if the result of such amendment would be to
(A) cause the Trust to fail to continue to be classified
for purposes of United States federal income taxation as a
grantor trust;
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(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture
Act; or
(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment Company
Act.
(c) Except as provided in Section 12.1(d), (e) or (h), no amendment
shall be made, and any such purported amendment shall be void and ineffective
unless the Holders of a Majority in liquidation amount of the Capital Securities
shall have consented to such amendment.
(d) In addition to and notwithstanding any other provision in this
Declaration, without the consent of each affected Holder, this Declaration may
not be amended to (i) change the amount or timing of any distribution on the
Securities or otherwise adversely affect the amount of any distribution required
to be made in respect of the Securities as of a specified date or (ii) restrict
the right of a Holder to institute suit for the enforcement of any such payment
on or after such date.
(e) Section 9.1(b) and 9.1(c) and this Section 12.1 shall not be
amended without the consent of all of the Holders of the Securities.
(f) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities.
(g) the rights of the Holders of the Capital Securities under Article
V to increase or decrease the number of, and appoint and remove, Trustees shall
not be amended without the consent of the Holders of a Majority in liquidation
amount of the Capital Securities.
(h) Subject to Section 12.1(c), this Declaration may be amended by
the Institutional Trustee and the Holders of a Majority in the liquidation
amount of the Common Securities without the consent of the Holders of the
Capital Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration
that may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) to modify, eliminate or add to any provision of this
Declaration to such extent as may be necessary to ensure that the
Trust will be classified for United States federal income tax purposes
at all times as a grantor trust and will not be required to register
as an "investment company" under the Investment Company Act (including
without limitation to conform to any change in Rule 3a-5, Rule 3a-7 or
any other applicable rule under the
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Investment Company Act or written change in interpretation or
application thereof by any legislative body, court, government agency
or regulatory authority) which amendment does not have a material
adverse effect on the right, preferences or privileges of the Holders
of Securities;
provided, however, that no such modification, elimination or addition
referred to in clauses (i), (ii) or (iii) shall adversely affect the powers,
preferences or special rights of Holders of Capital Securities.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent. (a) Meetings of the Holders of any class of Securities may be called
at any time by the Administrators (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading, if any. The Administrators shall
call a meeting of the Holders of such class if directed to do so by the Holders
of at least 10% in liquidation amount of such class of Securities. Such
direction shall be given by delivering to the Administrators one or more calls
in a writing stating that the signing Holders of the Securities wish to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Holders of the Securities calling a meeting shall specify in
writing the Certificates held by the Holders of the Securities exercising the
right to call a meeting and only those Securities represented by such
Certificates shall be counted for purposes of determining whether the required
percentage set forth in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of the
Securities:
(i) notice of any such meeting shall be given to all the Holders
of the Securities having a right to vote thereat at least 7 days and
not more than 60 days before the date of such meeting. Whenever a
vote, consent or approval of the Holders of the Securities is
permitted or required under this Declaration or the rules of any stock
exchange on which the Capital Securities are listed or admitted for
trading, if any, such vote, consent or approval may be given at a
meeting of the Holders of the Securities. Any action that may be taken
at a meeting of the Holders of the Securities may be taken without a
meeting if a consent in writing setting forth the action so taken is
signed by the Holders of the Securities owning not less than the
minimum amount of Securities in liquidation amount that would be
necessary to authorize or take such action at a meeting at which all
Holders of the Securities having a right to vote thereon were present
and voting. Prompt notice of the taking of action without a meeting
shall be given to the Holders of the Securities entitled to vote who
have not consented in writing. The Administrators may specify that any
written ballot submitted to the Holders of the Securities for the
purpose of taking any action without a meeting shall be returned to
the Trust within the time specified by the Administrators;
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(ii) each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of Securities is
entitled to participate, including waiving notice of any meeting, or
voting or participating at a meeting. No proxy shall be valid after
the expiration of 11 months from the date thereof unless otherwise
provided in the proxy. Every proxy shall be revocable at the pleasure
of the Holder of the Securities executing it. Except as otherwise
provided herein, all matters relating to the giving, voting or
validity of proxies shall be governed by the General Corporation Law
of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Securities were stockholders of a
Delaware corporation; each meeting of the Holders of the Securities
shall be conducted by the Administrators or by such other Person that
the Administrators may designate; and
(iii) unless the Business Trust Act, this Declaration, the terms
of the Securities, the Trust Indenture Act or the listing rules of any
stock exchange on which the Capital Securities are then listed for
trading, if any, otherwise provides, the Administrators, in their sole
discretion, shall establish all other provisions relating to meetings
of Holders of Securities, including notice of the time, place or
purpose of any meeting at which any matter is to be voted on by any
Holders of the Securities, waiver of any such notice, action by
consent without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee.
The Trustee that acts as initial Institutional Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Institutional Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Institutional Trustee's acceptance of its
appointment as Institutional Trustee, that:
(a) the Institutional Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the United States with trust power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, this Declaration;
(b) the execution, delivery and performance by the Institutional
Trustee of this Declaration has been duly authorized by all necessary corporate
action on the part of the Institutional Trustee. This Declaration has been duly
executed and delivered by the Institutional Trustee, and it constitutes a legal,
valid and binding obligation of the
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Institutional Trustee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to general
principles of equity (regardless of whether considered in a proceeding in equity
or at law);
(c) the execution, delivery and performance of this Declaration by
the Institutional Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the execution,
delivery or performance by the Institutional Trustee of this Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee. The
Trustee that acts as initial Delaware Trustee represents and warrants to the
Trust and to the Sponsor at the date of this Declaration, and each Successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee, that:
(a) The Delaware Trustee is duly organized, validly existing and in
good standing under the laws of the State of Delaware, with trust power and
authority to execute and deliver, and to carry out and perform its obligations
under the terms of, this Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and this Declaration. This
Declaration under Delaware law constitutes a legal, valid and binding obligation
of the Delaware Trustee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to general
principles of equity (regardless of whether considered in a proceeding in equity
or at law).
(c) No consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee of this Declaration.
(d) The Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware and, in either case, a Person that
satisfies for the Trust the requirements of Section 3807 of the Business Trust
Act.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices. All notices provided for in this Declaration
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
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(a) if given to the Trust, in care of the Administrators at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders of the Securities):
c/o Mercantile Bancorporation Inc.
One Mercantile Center
P.O. Box 524
St. Louis, Missouri 63166-0524
Attention: Secretary
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of to the
Holders of the Securities):
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
Attention: Global Trust Services
(c) if given to the Institutional Trustee, at the Institutional
Trustee's mailing address set forth below (or such other address as the
Institutional Trustee may give notice of to the Holders of the Securities):
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Global Trust Services
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice of to the Trust):
Mercantile Bancorporation Inc.
One Mercantile Center
P.O. Box 524
St. Louis, Missouri 63166-0524
Attention: Secretary
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
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SECTION 14.2 Governing Law. This Declaration and the rights of the
parties hereunder shall be governed by and interpreted in accordance with the
laws of the State of Delaware and all rights and remedies shall be governed by
such laws without regard to the principles of conflict of laws of the State of
Delaware or any other jurisdiction that would call for the application of the
law of any jurisdiction other than the State of Delaware; provided, however,
that there shall not be applicable to the Trust, the Trustees or this
Declaration any provision of the laws (statutory or common) of the State of
Delaware pertaining to trusts that relate to or regulate, in a manner
inconsistent with the terms hereof (a) the filing with any court or governmental
body or agency of trustee accounts or schedules of trustee fees and charges, (b)
affirmative requirements to post bonds for trustees, officers, agents or
employees of a trust, (c) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (d) fees or other sums payable to trustees, officers,
agents or employees of a trust, (e) the allocation of receipts and expenditures
to income or principal, (f) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding or investing trust assets or (g)
the establishment of fiduciary or other standards of responsibility or
limitations on the acts or powers of trustees that are inconsistent with the
limitations or liabilities or authorities and powers of the Trustees as set
forth or referenced in this Declaration. Section 3540 of Title 12 of the
Delaware Code shall not apply to the Trust.
SECTION 14.3 Intention of the Parties. It is the intention of the
parties hereto that the Trust be classified for United States federal income tax
purposes as a grantor trust. The provisions of this Declaration shall be
interpreted to further this intention of the parties.
SECTION 14.4 Headings. Headings contained in this Declaration are
inserted for convenience of reference only and do not affect the interpretation
of this Declaration or any provision hereof.
SECTION 14.5 Successors and Assigns. Whenever in this Declaration
any of the parties hereto is named or referred to, the successors and assigns of
such party shall be deemed to be included, and all covenants and agreements in
this Declaration by the Sponsor and the Trustees shall bind and inure to the
benefit of their respective successors and assigns, whether or not so expressed.
SECTION 14.6 Partial Enforceability. If any provision of this
Declaration, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Declaration, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
SECTION 14.7 Counterparts. This Declaration may contain more than
one counterpart of the signature page and this Declaration may be executed by
the affixing of the signature of each of the Trustees and Administrators to any
of such counterpart signature pages. All of such counterpart signature pages
shall be read as though one, and they shall
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have the same force and effect as though all of the signers had signed a single
signature page.
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
CHASE MANHATTAN BANK DELAWARE
as Delaware Trustee
By: /s/ John J. Cashin
--------------------------------
Name: John J. Cashin
Title: Senior Trust Officer
THE CHASE MANHATTAN BANK
as Institutional Trustee
By: /s/ R.J. Halleran
--------------------------------
Name: R.J. Halleran
Title: Second Vice President
MERCANTILE BANCORPORATION INC.,
as Guarantor
By: /s/ John Q. Arnold
--------------------------------
Name: John Q. Arnold
Title: Senior Executive Vice President
and Chief Financial Officer
MERCANTILE CAPITAL TRUST I
By: /s/ John Q. Arnold
--------------------------------
John Q. Arnold, as Administrator
By: /s/ Kenneth E. Schutte
--------------------------------
Kenneth E. Schutte, as Administrator
By: /s/ Jon W. Bilstrom
--------------------------------
Jon W. Bilstrom, as Administrator
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ANNEX I
TERMS OF
FLOATING RATE CAPITAL TRUST PASS-THROUGH SECURITIES/SM /(TRUPS/SM/)/*/
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of February 4, 1997 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital Securities and the Common
Securities are set out below (each capitalized term used but not defined herein
has the meaning set forth in the Declaration or, if not defined in the
Declaration, as defined in the Offering Memorandum referred to below):
1. Designation and Number. (a) Capital Securities. 150,000
Capital Securities of Mercantile Capital Trust I (the "Trust"), with an
aggregate stated liquidation amount with respect to the assets of the Trust of
one hundred fifty million dollars ($150,000,000) and a stated liquidation amount
with respect to the assets of the Trust of $1,000 per Capital Security, are
hereby designated for the purposes of identification only as the "Floating Rate
Capital Trust Pass-through Securities"/SM /(the "Capital Securities"). The
Capital Security Certificates evidencing the Capital Securities shall be
substantially in the form of Exhibit A-1 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice or to conform to the rules of any stock exchange on
which the Capital Securities are listed, if any.
(b) Common Securities. 4,640 Common Securities of the Trust (the
"Common Securities"). The Common Security Certificates evidencing the Common
Securities shall be substantially in the form of Exhibit A-3 to the Declaration,
with such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice.
2. Distributions. (a) Distributions payable on each Security will
be payable at a variable annual rate equal to LIBOR plus 0.85% (the "Coupon
Rate") of the stated liquidation amount of $1,000 per Security, such rate being
the rate of interest payable on the Debentures to be held by the Institutional
Trustee. Except as set forth below in respect of an Extension Period,
Distributions in arrears for more than one quarterly period will bear interest
thereon compounded quarterly at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes cash
distributions and any such compounded distributions payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the extent
the Institutional Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full semiannual
period on the basis of the actual number of days elapsed in a year of twelve 30-
day months.
- -------------------------
/*/ Salomon Brothers Inc has filed applications with the United States Patent
and Trademark Office for the registration of the "Capital Trust Pass-
through Securities" and the "TRUPS" service marks.
I-1
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(b) Distributions on the Securities will be cumulative, will accrue
from the date of original issuance, and will be payable, subject to extension of
distribution payment periods as described herein, quarterly in arrears on the
first day of February, May, August and November of each year, commencing on May
1, 1997 (each a "Distribution Payment Date") when, as and if available for
payment. The Debenture Issuer has the right under the Indenture to defer
payments of interest on the Debentures by extending the interest payment period
(each an "Extension Period") at any time and from time to time on the
Debentures, subject to the conditions described below, although such interest
would continue to accrue on the Debentures at a variable annual rate equal to
LIBOR plus 0.85% compounded quarterly to the extent permitted by law during any
Extension Period. If such right is exercised, quarterly distributions on the
Securities will also be deferred (though such distributions would continue to
accrue at the variable annual rate equal to LIBOR plus 0.85%, compounded
quarterly to the extent permitted by law) during any Extension Period. Such
right to extend any interest payment period in respect of the Debentures is
limited to Extension Periods, each not exceeding 20 consecutive quarterly
periods, provided, however, that no Extension Period shall be initiated while
accrued interest from a prior, completed Extension Period is unpaid or while the
Debenture Issuer is in default in the payment of interest that has become due
and payable on the Debentures; and, provided, further, that no Extension Period
shall extend beyond the maturity of the Debentures. In the event that the
Debenture Issuer exercises this right, then, during any Extension Period (a) the
Debenture Issuer shall not declare or pay dividends on, make a distribution with
respect to, or redeem, purchase or acquire, or make a liquidation payment with
respect to, any of its capital stock or rights to acquire such capital stock
(other than (i) purchases or acquisitions of shares of any such capital stock or
rights to acquire such capital stock in connection with the satisfaction by the
Debenture Issuer of its obligations under any employee benefit plans, (ii) as a
result of a reclassification of the Debenture Issuer's capital stock or rights
to acquire such capital stock or the exchange or conversion of one class or
series of the Debenture Issuer's capital stock or rights to acquire such capital
stock for another class or series of the Debenture Issuer's capital stock or
rights to acquire such capital stock, (iii) the purchase of fractional interests
in shares of the Debenture Issuer's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (iv) dividends and distributions made on the Debenture Issuer's
capital stock or rights to acquire such capital stock with the Debenture
Issuer's capital stock or rights to acquire such capital stock) or (v) any
declaration of a dividend in connection with the implementation of a shareholder
rights plan, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto), or make guarantee
payments (other than payments under the Capital Securities Guarantee and the
Common Securities Guarantee for the Trust) with respect to the foregoing, and
(b) the Debenture Issuer shall not make any payment of interest or principal on
or repay, repurchase or redeem any debt securities issued by the Debenture
Issuer that rank pari passu with or junior to such Debentures. Prior to the
termination of any such Extension Period in respect of the Debentures, the
Debenture Issuer may further extend the interest payment period; provided that
each such Extension Period in respect of the Debentures, together with all such
previous and further extensions thereof, may not exceed 20 consecutive quarterly
periods or extend beyond the maturity of the Debentures. Upon the termination
of any Extension Period in respect of the Debentures and the payment of all
amounts then due, the Debenture
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Issuer may commence a new Extension Period, subject to the above requirements.
If Distributions are deferred, the Distributions due shall be paid on the date
that the related Extension Period terminates, or, if such date is not a
Distribution Payment Date, on the immediately following Distribution Payment
Date, to Holders of the Securities as they appear on the books and records of
the Trust on the record date immediately preceding such date. Distributions on
the Securities must be paid on the dates payable (after giving effect to any
Extension Period) to the extent that the Trust has funds available for the
payment of such distributions in the Property Account of the Trust. The Trust's
funds available for Distribution to the Holders of the Securities will be
limited to payments received from the Debenture Issuer. The payment of
Distributions out of moneys held by the Trust is guaranteed by the Guarantor
pursuant to the Securities Guarantees.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates. While the Capital Securities are held solely in book-entry only
form, the relevant record dates shall be one Business Day prior to the relevant
payment dates which payment dates correspond to the interest payment dates on
the Debentures. Such Distributions will be paid through the Institutional
Trustee who will hold amounts received in respect of the Debentures in the
Property Account for the benefit of the Holders of the Securities. Subject to
any applicable laws and regulations and the provisions of the Declaration, each
such payment in respect of the Capital Securities will be made as described
under the heading "Description of the Capital Securities -- Book-Entry Only
Issuance -- The Depository Trust Company" in the Offering Memorandum dated
January 29, 1997 of the Trust as amended or supplemented form time to time (the
"Offering Memorandum"). The relevant record dates for the Common Securities
shall be the same record dates as for the Capital Securities. At any time when
the Capital Securities are not held solely in book-entry only form, the relevant
record dates shall be selected by the Administrators, which dates shall be 15
days before the relevant payment dates. Distributions payable on any Securities
that are not punctually paid on any Distribution Payment Date, as a result of
the Debenture Issuer having failed to make a payment under the Debentures, as
the case may be, when due (taking into account any Extension Period), will cease
to be payable to the Person in whose name such Securities are registered on the
relevant record date, and such defaulted Distribution will instead be payable to
the Person in whose name such Securities are registered on the special record
date or other specified date determined in accordance with the Indenture. If
any date on which Distributions are payable on the Securities is not a Business
Day, then payment of the Distribution 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) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such payment date.
(d) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
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3. Liquidation Distribution Upon Dissolution. In the event of the
voluntary or involuntary liquidation, dissolution, winding-up or termination of
the Trust (each a "Liquidation") other than in connection with a redemption of
the Debentures, the Holders of the Securities will be entitled to receive out of
the assets of the Trust available for distribution to Holders of the Securities,
after satisfaction of liabilities to creditors of the Trust (to the extent not
satisfied by the Company), distributions equal to the aggregate of the stated
liquidation amount of $1,000 per Security plus accrued and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless in connection with such Liquidation, the Debentures in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of such Securities, with an interest rate equal to the Coupon Rate of,
and bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on, and having the same record date as, such Securities,
after paying or making reasonable provision to pay all claims and obligations of
the Trust in accordance with Section 3808(e) of the Business Trust Act, shall be
distributed on a Pro Rata basis to the Holders of the Securities in exchange for
such Securities.
The Sponsor, as the Holder of all of the Common Securities, has the
right at any time to dissolve the Trust (including without limitation upon the
occurrence of a Tax Event or Capital Treatment Event), subject to the receipt by
the Company of prior approval from the Board of Governors of the Federal Reserve
System (the "Federal Reserve"), if then required under applicable capital
guidelines or policies of the Federal Reserve and, after satisfaction of
liabilities to creditors of the Trust, cause the Debentures to be distributed to
the Holders of the Securities on a Pro Rata basis in accordance with the
aggregate stated liquidation amount thereof.
The Trust shall dissolve on the first to occur of (i) February 4,
2052, the expiration of the term of the Trust, (ii) a Bankruptcy Event with
respect to the Sponsor, Trust or the Debenture Issuer, (iii) (other than in
connection with a merger, consolidation or similar transaction not prohibited by
the Indenture, this Declaration or the Securities Guarantees, as the case may
be) the filing of a certificate of dissolution or its equivalent with respect to
the Trust; upon the consent of the Holders of a Majority in liquidation amount
of the Securities voting together as a single class to file a certificate of
cancellation with respect to the Trust, or upon the revocation of the charter of
the Sponsor and the expiration of 90 days after the date of revocation without a
reinstatement thereof, (iv) the distribution to the Holders of the Securities of
the Debentures, upon exercise of the right of the Holder of all of the
outstanding Common Securities to terminate Trust as described above, (v) the
entry of a decree of a judicial dissolution of the Sponsor or the Trust, or (vi)
when all of the Securities shall have been called for redemption and the amounts
necessary for redemption thereof shall have been paid to the Holders in
accordance with the terms of the Securities. As soon as practicable after the
dissolution of the Trust and upon completion of the winding up of the Trust, the
Trust shall terminate upon the filing of a certificate of cancellation with the
Secretary of State of the State of Delaware.
If a Liquidation of the Trust occurs as described in clause (i), (ii),
(iii) or (v) in the immediately preceding paragraph, the Trust shall be
liquidated by the Trustees of the Trust as expeditiously as such Trustees
determine to be possible by distributing, after
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satisfaction of liabilities to creditors of the Trust, to the Holders of the
Trust Securities, the Debentures on a Pro Rata basis to the extent not satisfied
by the Company, unless such distribution is determined by the Institutional
Trustee not to be practical, in which event such Holders will be entitled to
receive out of the assets of the Trust available for distribution to the
Holders, after satisfaction of liabilities of creditors of the Trust to the
extent not satisfied by the Company, an amount equal to the Liquidation
Distribution. An early Liquidation of the Trust pursuant to clause (iv) above
shall occur if the Institutional Trustee determines that such Liquidation is
possible by distributing, after satisfaction of liabilities to creditors of
Trust, to the Holders of the Trust Securities on a Pro Rata basis, the
Debentures, and such distribution occurs.
If, upon any such Liquidation the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on such Capital Securities shall be paid to the Holders of the Trust
Securities on a Pro Rata basis, except that if an Event of Default has occurred
and is continuing, the Capital Securities shall have a preference over the
Common Securities with regard to such distributions.
Upon any such Liquidation of the Trust involving a distribution of the
Debentures, if at the time of such Liquidation, the Capital Securities were
rated by at least one nationally-recognized statistical rating organization, the
Debenture Issuer will use its reasonable best efforts to obtain from at least
one such or other rating organization a rating for the Debentures.
After the date for any distribution of the Debentures upon dissolution
of the Trust, (i) the Securities of the Trust will be deemed to be no longer
outstanding, (ii) the Depositary or its nominee, as the record holder of the
Capital Securities, will receive a registered security in global form or
certificates representing the Debentures to be delivered upon such distribution,
and (iii) any certificates representing the Capital Securities not held by the
Depositary or its nominee will be deemed to represent undivided beneficial
interests in such of the Debentures as have an aggregate principal amount equal
to the aggregate stated liquidation amount of, with an interest rate identical
to the distribution rate of, and bearing accrued and unpaid interest equal to
accrued and unpaid distributions on, the Securities until such certificates are
presented to the Debenture Issuer or its agent for transfer or reissuance.
4. Redemption and Distribution.
(a) The Debentures will mature on February 1, 2027. The Debentures
may be redeemed by the Debenture Issuer, in whole or in part, at any time and
from time to time on or after February 1, 2007, at par, plus accrued and unpaid
interest thereon to the date of redemption (the "Redemption Price"). In
addition, the Debentures may be redeemed by the Debenture Issuer, in whole or in
part, at any time, upon the occurrence and continuation of a Tax Event or a
Capital Treatment Event, at par, together with accrued and unpaid interest
thereon to the date of redemption, within 90 days following the occurrence of
such Tax Event or Capital Treatment Event, as the case may be, upon not less
than 30 nor more than 60 days' notice to Holders of such Debentures so long as
such Tax Event or
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Capital Treatment Event, as the case may be, is continuing. In each case, the
right of the Debenture Issuer to redeem the Debentures is subject to the
Debenture Issuer having received prior approval from the Federal Reserve, if
then required under applicable capital guidelines or policies of the Federal
Reserve.
(b) "Tax Event" means that the Trustees shall have received an
opinion of a nationally recognized independent tax counsel to the Debenture
Issuer experienced in such matters to the effect that, as a result of (a) any
amendment to, clarification of 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, (b) any judicial
decision, official administrative pronouncement, ruling, regulatory procedure,
notice or announcement, including any notice or announcement of intent to adopt
such procedures or regulations (an "Administrative Action"), or (c) any
amendment to, clarification of, or change in the official position or the
interpretation of any Administrative Action or judicial decision that differs
from the theretofore generally accepted position, in each case, by any
legislative body, court, governmental authority or regulatory body, irrespective
of the manner in which such amendment, clarification or change is made known,
which amendment, clarification, or change is effective or such Administrative
Action or decision is announced, in each case, on or after the date of the
Offering Memorandum, there is more than an insubstantial risk that (i) the Trust
is, or will be within 90 days of the date thereof, subject to United States
federal income tax with respect to interest accrued or received on the
Debentures or subject to more than a de minimus amount of other taxes, duties or
other governmental changes or (ii) any portion of interest payable by the
Debenture Issuer to the Trust on the Debentures is not, or within 90 days of the
date thereof will not be, deductible by the Debenture Issuer for United States
federal income tax purposes.
(c) "Capital Treatment Event" means the Debenture Issuer shall have
received an opinion of independent bank regulatory counsel experienced in such
matters to the effect that, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any rules or
regulations thereunder) of the United States or any rules, guidelines or
policies of the Federal Reserve or (b) any official or administrative
pronouncement or action or judicial decision interpreting or applying such laws
or regulations, which amendment or change is effective or such pronouncement,
action or decision is announced on or after the date of original issuance of the
Capital Securities, the Debenture Issuer will not be entitled to treat the
Capital Securities or the Debentures, if the Debenture Issuer were to be
distributed following the occurrence of a Tax Event as described in the proviso
to this paragraph, as "Tier 1 Capital" (or the equivalent thereof) for purposes
of the risk-based capital adequacy guidelines of the Federal Reserve, as then in
effect and applicable to the Debenture Issuer; provided, however, that the
distribution of the Debentures in connection with the Liquidation of the Trust
by the Debenture Issuer shall not in and of itself constitute a Capital
Treatment Event unless such Liquidation shall have occurred in connection with a
Tax Event.
(d) Upon the repayment in full at maturity or redemption in whole or
in part of the Debenture (other than following the distribution of the Debenture
to the Holders of the Trust Securities), the proceeds from such repayment or
payment shall concurrently be
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applied to redeem Pro Rata at the applicable Redemption Price, Trust Securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the Debenture so repaid or redeemed; provided, however, that holders of such
Trust Securities shall be given not less than 30 nor more than 60 days' notice
of such redemption (other than at the scheduled maturity of the Debenture).
(e) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Capital Securities will be redeemed Pro
Rata and the Capital Securities to be redeemed will be as described in Section
4(g)(ii) below.
(f) The Trust may not redeem fewer than all the outstanding Capital
Securities unless all accrued and unpaid Distributions have been paid on all
Capital Securities for all semiannual Distribution periods terminating on or
before the date of redemption.
(g) Redemption or Distribution Procedures.
(i) Notice of any redemption of, or notice of distribution of
the Debentures in exchange for, the Securities (a
"Redemption/Distribution Notice") will be given by the Trust by mail
to each Holder of Securities to be redeemed or exchanged not fewer
than 30 nor more than 60 days before the date fixed for redemption or
exchange thereof which, in the case of a redemption, will be the date
fixed for redemption of the Debentures. For purposes of the
calculation of the date of redemption or exchange and the dates on
which notices are given pursuant to this Section 4(g)(i), a
Redemption/Distribution Notice shall be deemed to be given on the day
such notice is first mailed by first-class mail, postage prepaid, to
Holders of such Securities. Each Redemption/Distribution Notice shall
be addressed to the Holders of such Securities at the address of each
such Holder appearing on the books and records of the Trust. No defect
in the Redemption/Distribution Notice or in the mailing thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be redeemed shall be
redeemed Pro Rata from each Holder of Capital Securities; provided,
however, that, in respect of the Capital Securities registered in the
name of and held of record by the Depositary or its nominee (or any
successor Clearing Agency or its nominee), the Capital Securities
shall be redeemed Pro Rata in accordance with the procedures of the
Depositary, and the distribution of the proceeds of such redemption
will be made to each Clearing Agency Participant (or Person on whose
behalf such nominee holds such Securities) in accordance with the
procedures applied by such Clearing Agency or nominee.
(iii) If the Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if
the
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Debentures are redeemed as set out in this Section 4 (which notice
will be irrevocable), then (A) with respect to the Capital Securities,
while the Capital Securities are in book-entry only form, provided
that the Institutional Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the Debentures,
the Institutional Trustee will deposit irrevocably with the Depositary
or its nominee (or successor Clearing Agency or its nominee), by 12:00
noon, New York City time, on the redemption date, funds sufficient to
pay the applicable Redemption Price with respect to the Capital
Securities and will give the Depositary irrevocable instructions and
authority to pay the Redemption Price to the Holders of the Capital
Securities, and (B) with respect to Capital Securities issued in
definitive form and Common Securities, provided that the Institutional
Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, the Institutional Trustee
will pay the relevant Redemption Price to the Holders of such
Securities by check mailed to the address of each such Holder
appearing on the books and records of the Trust on the redemption
date. If a Redemption/Distribution Notice shall have been given and
funds deposited as required then immediately prior to the close of
business on the date of such deposit Distributions will cease to
accrue on the Securities so called for redemption and all rights of
Holders of such Securities so called for redemption will cease, except
the right of the Holders of such Securities to receive the applicable
Redemption Price specified in Section 4(a), but without interest on
such Redemption Price. If any date fixed for redemption of Securities
is not a Business Day, then payment of any such redemption price
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) except that, if such Business Day falls in the next
calendar year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as if made
on such date fixed for redemption. If payment of the Redemption Price
in respect of any Securities is improperly withheld or refused and not
paid either by the Trust or by the Debenture Issuer as guarantor
pursuant to the relevant Securities Guarantee, Distributions on such
Securities will continue to accrue at the then applicable rate from
the original redemption date to the actual date of payment, in which
case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price. In the
event of any redemption of the Capital Securities issued by the Trust
in part, the Trust shall not be required to (i) issue, register the
transfer of or exchange any Security during a period beginning at the
opening of business 15 days before any selection for redemption of the
Capital Securities and ending at the close of business on the earliest
date on which the relevant notice of redemption is deemed to have been
given to all Holders of the Capital Securities to be so redeemed or
(ii) register the transfer of or exchange any Capital Securities so
selected for redemption, in whole or in part, except for the
unredeemed portion of any Capital Securities being redeemed in part.
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(iv) Redemption/Distribution Notices shall be sent by the
Administrators on behalf of the Trust to (A) in respect of the Capital
Securities, the Depositary or its nominee (or any successor Clearing
Agency or its nominee) if the Global Capital Securities have been
issued or, if Definitive Capital Securities have been issued, to the
Holders thereof, and (B) in respect of the Common Securities, to the
Holder thereof.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), provided
that the acquiror is not the Holder of the Common Securities or the
obligor under the Indenture, the Sponsor or any of its subsidiaries
may at any time and from time to time purchase outstanding Capital
Securities by tender, in the open market or by private agreement.
5. Voting Rights - Capital Securities. (a) Except as provided under
Sections 5(b) and 7 and as otherwise required by law and the Declaration, the
Holders of the Capital Securities will have no voting rights. The
Administrators are required to call a meeting of the Holders of the Capital
Securities if directed to do so by Holders of at least 10% in liquidation amount
of the Capital Securities.
(b) Subject to the requirements of obtaining a tax opinion by the
Institutional Trustee in certain circumstances set forth in the last sentence of
this paragraph, the Holders of a Majority in liquidation amount of the Capital
Securities, voting separately as a class, have the right to direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct the
Institutional Trustee, as holder of the Debentures, to (i) exercise the remedies
available under the Indenture as the holder of the Debentures, (ii) waive any
past default that is waivable under the Indenture, or (iii) exercise any right
to rescind or annul a declaration that the principal of all the Debentures shall
be due and payable or (iv) consent on behalf of all the Holders of the Capital
Securities to any amendment, modification or termination of the Indenture or the
Debentures where such consent shall be required, provided, however, that, where
a consent or action under the Indenture would require the consent or act of the
holders of greater than a simple majority in principal amount of Debentures (a
"Super Majority") affected thereby, the Institutional Trustee may only give such
consent or take such action at the written direction of the Holders of at least
the proportion in liquidation amount of the Capital Securities outstanding which
the relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding. If the Institutional Trustee fails to enforce its rights
under the Debentures after the Holders of a Majority in liquidation amount of
such Capital Securities have so directed the Institutional Trustee, to the
fullest extent permitted by law, a Holder of the Capital Securities may
institute a legal proceeding directly against the Debenture Issuer to enforce
the Institutional Trustee's rights under the Debentures without first
instituting any legal proceeding against the Institutional Trustee or any other
person or entity. Notwithstanding the foregoing, if an Event of Default has
occurred and is continuing and such event is attributable to the failure of the
Debenture Issuer to pay interest or principal on the Debentures on the date the
interest or principal is payable (or in the case of
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redemption, the redemption date), then a Holder of record of the Capital
Securities may directly institute a proceeding for enforcement of payment, on or
after the respective due dates specified in the Debentures, to such Holder
directly of the principal of or interest on the Debentures having an aggregate
principal amount equal to the aggregate liquidation amount of the Capital
Securities of such Holder. The Institutional Trustee shall notify all Holders of
the Capital Securities of any default actually known to the Institutional
Trustee with respect to the Debentures unless (x) such default has been cured
prior to the giving of such notice or (y) the Institutional Trustee determines
in good faith that the withholding of such notice is in the interest of the
Holders of such Capital Securities, except where the default relates to the
payment of principal of or interest on any of the Debentures. Such notice shall
state that such Indenture Event of Default also constitutes an Event of Default
hereunder. Except with respect to directing the time, method and place of
conducting a proceeding for a remedy, the Institutional Trustee shall not take
any of the actions described in clauses (i), (ii) or (iii) above unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that,
as a result of such action, the Trust will not be classified as other than a
grantor trust for United States federal income tax purposes.
In the event the consent of the Institutional Trustee, as the holder
of the Debentures is required under the Indenture with respect to any amendment,
modification or termination of the Indenture, the Institutional Trustee shall
request the direction of the Holders of the Securities with respect to such
amendment, modification or termination and shall vote with respect to such
amendment, modification or termination as directed by a Majority in liquidation
amount of the Securities voting together as a single class; provided, however,
that where a consent under the Indenture would require the consent of a Super-
Majority, the Institutional Trustee may only give such consent at the direction
of the Holders of at least the proportion in liquidation amount of such Trust
Securities outstanding which the relevant Super-Majority represents of the
aggregate principal amount of the Debentures outstanding. The Institutional
Trustee shall not take any such action in accordance with the directions of the
Holders of the Securities unless the Institutional Trustee has obtained an
opinion of tax counsel to the effect that, as a result of such action, the Trust
will not be classified as other than a grantor trust for United States federal
income tax purposes.
A waiver of an Indenture Event of Default will constitute a waiver of
the corresponding Event of Default hereunder. Any required approval or
direction of Holders of the Capital Securities may be given at a separate
meeting of Holders of the Capital Securities convened for such purpose, at a
meeting of all of the Holders of the Securities in the Trust or pursuant to
written consent. The Institutional Trustee will cause a notice of any meeting
at which Holders of the Capital Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of the Capital Securities. Each such notice
will include a statement setting forth the following information (i) the date of
such meeting or the date by which such action is to be taken, (ii) a description
of any resolution proposed for adoption at such meeting on which such Holders
are entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents. No vote or consent
of the Holders of the Capital Securities will be required for the Trust to
redeem and cancel Capital
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Securities or to distribute the Debentures in accordance with the Declaration
and the terms of the Securities.
Notwithstanding that Holders of the Capital Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Capital Securities that are owned by the Sponsor or any Affiliate of the Sponsor
shall not entitle the Holder thereof to vote or consent and shall, for purposes
of such vote or consent, be treated as if such Capital Securities were not
outstanding.
In no event will Holders of the Capital Securities have the right to
vote to appoint, remove or replace the Administrators, which voting rights are
vested exclusively in the Sponsor as the Holder of all of the Common Securities
of the Trust. Under certain circumstances as more fully described in the
Declaration, Holders of Capital Securities have the right to vote to appoint,
remove or replace the Institutional Trustee and the Delaware Trustee.
6. Voting Rights - Common Securities. (a) Except as provided under
Sections 6(b), 6(c) and 7 and as otherwise required by law and the Declaration,
the Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Administrators.
(c) Subject to Section 2.6 of the Declaration and only after each
Event of Default (if any) with respect to the Capital Securities has been cured,
waived, or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a Majority in liquidation amount
of the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under the Indenture, or (iii) exercise any right
to rescind or annul a declaration that the principal of all the Debentures shall
be due and payable, provided, however, that, where a consent or action under the
Indenture would require a Super Majority, the Institutional Trustee may only
give such consent or take such action at the written direction of the Holders of
at least the proportion in liquidation amount of the Common Securities which the
relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding. Notwithstanding this Section 6(c), the Institutional
Trustee shall not revoke any action previously authorized or approved by a vote
or consent of the Holders of the Capital Securities. Other than with respect to
directing the time, method and place of conducting any proceeding for any remedy
available to the Institutional Trustee or the Debenture Trustee as set forth
above, the Institutional Trustee shall not take any action described in (i),
(ii) or (iii) above, unless the Institutional Trustee has obtained an opinion of
tax counsel to the effect that for the purposes of United States federal income
tax the Trust will not be
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classified as other than a grantor trust on account of such action. If the
Institutional Trustee fails to enforce its rights under the Declaration to the
fullest extent permitted by law, any Holder of the Common Securities may
institute a legal proceeding directly against any Person to enforce the
Institutional Trustee's rights under the Declaration, without first instituting
a legal proceeding against the Institutional Trustee or any other Person.
Any approval or direction of Holders of the Common Securities may be
given at a separate meeting of Holders of the Common Securities convened for
such purpose, at a meeting of all of the Holders of the Securities in the Trust
or pursuant to written consent. The Administrators will cause a notice of any
meeting at which Holders of the Common Securities are entitled to vote, or of
any matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of the Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture. (a) In addition to any
requirements under Section 12.1 of the Declaration, if any proposed amendment to
the Declaration provides for, or the Trustees otherwise propose to effect, (i)
any action that would adversely affect the powers, preferences or special rights
of the Securities, whether by way of amendment to the Declaration or otherwise,
or (ii) the Liquidation of the Trust, other than as described in Section 8.1 of
the Declaration, then the Holders of outstanding Securities, voting together as
a single class, will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of the
Holders of at least a Majority in liquidation amount of the Securities, affected
thereby; provided, however, if any amendment or proposal referred to in clause
(i) above would adversely affect only the Capital Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities.
(b) In the event the consent of the Institutional Trustee as the
holder of the Debentures is required under the Indenture with respect to any
amendment, modification or termination of the Indenture, the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification, or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
a Super Majority, the Institutional Trustee may only give such consent at the
direction of the Holders of at least the proportion in liquidation amount of the
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding.
I-12
<PAGE>
(c) Notwithstanding the foregoing, no amendment or modification may
be made to a Declaration if such amendment or modification would (i) cause the
Trust to be classified for purposes of United States federal income taxation as
other than a grantor trust, (ii) reduce or otherwise adversely affect the powers
of the Institutional Trustee or (iii) cause the Trust to be deemed an
"investment company" which is required to be registered under the Investment
Company Act.
(d) Notwithstanding any provision of the Declaration, the right of
any Holder of the Capital Securities to receive payment of distributions and
other payments upon redemption or otherwise, on or after their respective due
dates, or to institute a suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of such Holder. For the protection and enforcement of the foregoing
provision, each and every Holder of the Capital Securities shall be entitled to
such relief as can be given either at law or equity.
8. Pro Rata. A reference in these terms of the Securities to any
payment, distribution or treatment as being "Pro Rata" shall mean pro rata to
each Holder of the Securities according to the aggregate liquidation amount of
the Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities outstanding unless, in relation to a
payment, an Event of Default has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Capital Securities Pro Rata according to the aggregate liquidation amount of the
Capital Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Capital Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Capital Securities, to
each Holder of the Common Securities Pro Rata according to the aggregate
liquidation amount of the Common Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Common Securities outstanding.
9. Ranking. The Capital Securities rank pari passu with and payment
thereon shall be made Pro Rata with the Common Securities except that, where an
Event of Default has occurred and is continuing, the rights of Holders of the
Common Securities to receive payment of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights of the
Holders of the Capital Securities with the result that no payment of any
Distribution on, or Redemption Price of, any Common Security, and no other
payment on account of redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions on all outstanding Capital Securities for all distribution
periods terminating on or prior thereto, or in the case of payment of the
Redemption Price the full amount of such Redemption Price on all outstanding
Capital Securities then called for redemption, shall have been made or provided
for, and all funds immediately available to the Institutional Trustee shall
first be applied to the payment in full in cash of all Distributions on, or the
Redemption Price of, the Capital Securities then due and payable.
10. Acceptance of Securities Guarantee and Indenture. Each Holder of
the Capital Securities and the Common Securities, by the acceptance of such
Securities, agrees to the provisions of the Capital Securities Guarantee and the
Common Securities Guarantee,
I-13
<PAGE>
respectively, including the subordination provisions therein and to the
provisions of the Indenture.
11. No Preemptive Rights. The Holders of the Securities shall have
no preemptive or similar rights to subscribe for any additional securities.
12. Miscellaneous. These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Capital Securities
Guarantee or the Common Securities Guarantee (as may be appropriate), and the
Indenture to a Holder without charge on written request to the Sponsor at its
principal place of business.
I-14
<PAGE>
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[Include the following Restricted Securities Legend on all Capital
Securities, including Rule 144A Global Capital Securities and Restricted
Definitive Capital Securities, unless otherwise determined by the Sponsor in
accordance with applicable law ----THIS SECURITY HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE WHICH IS THREE YEARS AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH
MERCANTILE BANCORPORATION INC. (THE "COMPANY") OR MERCANTILE CAPITAL TRUST I
(THE "TRUST") OR ANY AFFILIATE OF THE COMPANY OR THE TRUST WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE "RESALE RESTRICTIONS
TERMINATION DATE") ONLY (A) TO THE COMPANY OR THE TRUST, (B) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1),
(2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUST'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES
(D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE
DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY OR THE
TRUST. THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH THE
A-1-1
<PAGE>
FOREGOING RESTRICTIONS. SECURITIES OWNED BY A PURCHASER THAT IS NOT A QUALIFIED
INSTITUTIONAL BUYER MAY NOT BE HELD IN BOOK-ENTRY FORM. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTIONS TERMINATION
DATE.]
[Include if Capital Security is in the form of a Restricted Definitive
Capital Security -- IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO
THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATE AND OTHER INFORMATION MAY BE
REQUIRED BY THE DECLARATION TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS.]
[Include if Capital Security is in global form and The Depository
Trust Company is the Clearing Agency -- UNLESS THIS CERTIFICATE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE TRUST OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OF TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
[Include if Capital Security is in global form -- TRANSFERS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE DECLARATION REFERRED TO
BELOW.]
Certificate Number Number of Capital Securities
CUSIP NO ___________
Certificate Evidencing Capital Securities
of
MERCANTILE CAPITAL TRUST I
Floating Rate Capital Pass-through Securities/SM/ (TRUPS/SM/)
(liquidation amount $1,000 per Capital Security)
A-1-2
<PAGE>
MERCANTILE CAPITAL TRUST I, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that
______________ (the "Holder") is the registered owner of securities of the Trust
representing undivided beneficial interests in the assets of the Trust,
designated the Floating Rate Capital Trust Pass-through Securities/SM/
(liquidation amount $1,000 per Capital Security) (the "Capital Securities").
Subject to the Declaration (as defined below), the Capital Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this Certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities represented
hereby are issued pursuant to, and shall in all respects be subject to, the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of February 4, 1997, among John Q. Arnold, Kenneth E. Schutte and Jon W.
Bilstrom as Administrators, Chase Manhattan Bank Delaware, as Delaware Trustee,
The Chase Manhattan Bank, as Institutional Trustee, Mercantile Bancorporation
Inc., as Sponsor, and the holders from time to time of undivided beneficial
interests in the assets of the Trust, including the designation of the terms of
the Capital Securities as set forth in Annex I to the Declaration, as the same
may be amended from time to time (the "Declaration"). Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Capital Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration, the
Capital Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture to the Holder without charge upon written
request to the Trust at its principal place of business.
Upon receipt of this Security, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance of this Security, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as indebtedness and the
Capital Securities as evidence of beneficial ownership in the Debentures.
This Capital Security is governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to principles of
conflict of laws.
A-1-3
<PAGE>
IN WITNESS WHEREOF, the Trust has duly executed this certificate.
MERCANTILE CAPITAL TRUST I
By:________________________________
Name:
Title: Administrator
Dated:_____________
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Capital Securities referred to in the within-
mentioned Declaration.
THE CHASE MANHATTAN BANK, as the Institutional
Trustee
By: __________________________________________
Authorized Officer
A-1-4
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be payable at a
variable annual rate of LIBOR plus 0.85% (the "Coupon Rate") of the stated
liquidation amount of $1,000 per Capital Security, such rate being the rate of
interest payable on the Debentures to be held by the Institutional Trustee.
Except as set forth below in respect of an Extension Period, Distributions in
arrears for more than a quarterly period will bear interest thereon compounded
quarterly at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes cash distributions and any such
compounded interest payable on the Debentures unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of the actual number of days elapsed in a year of twelve 30-
day months.
Except as otherwise described below, Distributions on the Capital
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears on the first day of February, May,
August and November of each year, commencing on May 1, 1997. The Debenture
Issuer has the right under the Indenture to defer payments of interest by
extending the interest payment period (each an "Extension Period") at any time
and from time to time on the Debentures, subject to certain conditions, although
such interest would continue to accrue on the Debentures at a variable annual
rate of LIBOR plus 0.85%, compounded quarterly to the extent permitted by law
during any Extension Period. If such right is exercised, quarterly Distributions
on the Capital Securities will also be deferred (though such Distributions would
continue to accrue at the variable annual rate of LIBOR plus 0.85%, compounded
quarterly to the extent permitted by law) during any Extension Period. Such
right to extend any extension period is limited to Extension Periods, each not
exceeding 20 consecutive quarterly periods, provided, however, that no Extension
Period shall be initiated while accrued interest from a prior, completed
Extension Period is unpaid or while the Debenture Issuer is in default in the
payment of interest that has become due and payable on the Debentures, and no
Extension Period may extend beyond the maturity of the Debentures. Prior to the
termination of any such Extension Period in respect of the Debentures, the
Debenture Issuer may further extend the interest payment period; provided that
each such Extension Period in respect of the Debentures, together with all such
previous and further extensions thereof, may not exceed 20 consecutive quarterly
periods or extend beyond the maturity of the Debentures. If Distributions are
deferred, the Distributions due shall be paid on the date that the related
Extension Period terminates, or, if such date is not a Distribution Payment
Date, on the immediately following Distribution Payment Date, to Holders of the
Capital Securities as they appear on the books and records of the Trust on the
record date immediately preceding such date. Distributions on the Capital
Securities must be paid on the dates payable (after giving effect to any
Extension Period) to the extent that the Trust has funds available for the
payment of such Distributions in the Property Account of the Trust. The Trust's
funds available for distribution to the Holders of the Securities will be
limited to payments received from the Debenture Issuer. The payment of
Distributions out of moneys held by the Trust is guaranteed by the Guarantor
pursuant to the Capital Securities Guarantee.
A-1-5
<PAGE>
The Capital Securities shall be redeemable as provided in the
Declaration.
A-1-6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital
Security Certificate to:
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
(Insert assignee's social security or tax identification number)
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
(Insert address and zip code of assignee) and irrevocably appoints
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
agent to transfer this Capital Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
------------------------------------------------------
Signature:
--------------------------------------------------
(Sign exactly as your name appears on the other side of this Capital
Security Certificate)
Signature Guarantee: *
-----------------------------------------
- -------------------------
* Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Security registrar, which
requirements include membership or participation in the Securities
Transfer Agents Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Security registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-1-7
<PAGE>
EXHIBIT A-2
FORM OF EXCHANGE CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[Include if Capital Security is in global form and The Depository
Trust Company is the Clearing Agency -- UNLESS THIS CERTIFICATE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE TRUST OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OF TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
[Include if Capital Security is in global form -- TRANSFERS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE DECLARATION REFERRED TO
BELOW.]
Certificate Number Number of Capital Securities
CUSIP NO ___________
Certificate Evidencing Capital Securities
of
MERCANTILE CAPITAL TRUST I
Floating Rate Capital Pass-through Securities/SM/ (TRUPS/SM/)
(liquidation amount $1,000 per Capital Security)
MERCANTILE CAPITAL TRUST I, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that
______________ (the
A-2-1
<PAGE>
"Holder") is the registered owner of securities of the Trust representing
undivided beneficial interests in the assets of the Trust, designated the
Floating Rate Capital Trust Pass-through Securities/SM/ (liquidation amount
$1,000 per Capital Security) (the "Capital Securities"). Subject to the
Declaration (as defined below), the Capital Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this Certificate duly endorsed and in proper form for transfer. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Capital Securities represented hereby are issued pursuant to,
and shall in all respects be subject to, the provisions of the Amended and
Restated Declaration of Trust of the Trust dated as of February 4, 1997, among
John Q. Arnold, Kenneth E. Schutte and Jon W. Bilstrom as Administrators, Chase
Manhattan Bank Delaware, as Delaware Trustee, The Chase Manhattan Bank, as
Institutional Trustee, Mercantile Bancorporation Inc., as Sponsor, and the
holders from time to time of undivided beneficial interests in the assets of the
Trust, including the designation of the terms of the Capital Securities as set
forth in Annex I to the Declaration, as the same may be amended from time to
time (the "Declaration"). Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Capital Securities Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Capital Securities Guarantee
or the Common Securities Guarantee (as may be appropriate) and the Indenture to
the Holder without charge upon written request to the Trust at its principal
place of business.
Upon receipt of this Security, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance of this Security, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as indebtedness and the
Capital Securities as evidence of beneficial ownership in the Debentures.
This Capital Security is governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to principles of
conflict of laws.
A-2-2
<PAGE>
IN WITNESS WHEREOF, the Trust has duly executed this certificate.
MERCANTILE CAPITAL TRUST I
By:
--------------------------------
Name:
Title: Administrator
Dated:
----------------
CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in the within-
mentioned Declaration.
THE CHASE MANHATTAN BANK, as the Institutional
Trustee
By:
-------------------------------
Authorized Officer
A-2-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be payable at a
variable annual rate of LIBOR plus 0.85% (the "Coupon Rate") of the stated
liquidation amount of $1,000 per Capital Security, such rate being the rate of
interest payable on the Debentures to be held by the Institutional Trustee.
Except as set forth below in respect of an Extension Period, Distributions in
arrears for more than a quarterly period will bear interest thereon compounded
quarterly at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes cash distributions and any such
compounded interest payable on the Debentures unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. The amount of Distributions
payable for any period will be computed on the basis of the actual number of
days elapsed in a year of twelve 30-day months.
Except as otherwise described below, Distributions on the Capital
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears on the first day of February, May,
August and November of each year, commencing on May 1, 1997. Distributions will
be made by the Institutional Trustee, except as otherwise described. The
Debenture Issuer has the right under the Indenture to defer payments of interest
by extending the interest payment period (each an "Extension Period") at any
time and from time to time on the Debentures, subject to certain conditions,
although such interest will continue to accrue on the Debentures at a variable
annual rate of LIBOR plus 0.85%, compounded quarterly (to the extent permitted
by law) during any Extension Period. If such right is exercised, quarterly
Distributions on the Capital Securities will also be deferred (though such
Distributions would continue to accrue at the variable annual rate of LIBOR plus
0.85%, compounded quarterly (to the extent permitted by law)) during any
Extension Period. Such right to extend any interest payment period is limited to
Extension Periods, each not exceeding 20 consecutive quarterly periods,
provided, however, that no Extension Period may be initiated while accrued
interest from a prior, completed Extension Period is unpaid or while the
Debenture Issuer is in default in the payment of interest that has become due
and payable on the Debentures, and no Extension Period may extend beyond the
maturity of the Debentures. Prior to the termination of any such Extension
Period in respect of the Debentures, the Debenture Issuer may further extend the
interest payment period; provided that each such Extension Period in respect of
the Debentures, together with all such previous and further extensions thereof,
may not exceed 20 consecutive quarterly periods or extend beyond the maturity of
the Debentures. If Distributions are deferred, the Distributions due shall be
paid on the date that the related Extension Period terminates, or, if such date
is not a Distribution Payment Date, on the immediately following Distribution
Payment Date, to Holders of the Capital Securities as they appear on the books
and records of the Trust on the record date immediately preceding such date.
Distributions on the Capital Securities must be paid on the dates payable (after
giving effect to any Extension Period) to the extent that the Trust has funds
available for the payment of such Distributions in the Property Account of the
Trust. The Trust's funds available for distribution to the Holders of the
Securities will be limited to payments received from the Debenture Issuer.
A-2-4
<PAGE>
The payment of Distributions out of moneys held by the Trust is guaranteed by
the Sponsor pursuant to the Capital Securities Guarantee.
The Capital Securities shall be redeemable as provided in the
Declaration.
A-2-5
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital
Security Certificate to:
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
(Insert assignee's social security or tax identification number)
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
(Insert address and zip code of assignee) and irrevocably appoints
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
agent to transfer this Capital Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
-------------------------------------------------------
Signature:
--------------------------------------------------
(Sign exactly as your name appears on the other side of this Capital
Security Certificate)
Signature Guarantee: *
--------------------------------
- ---------------------
* Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Security registrar, which
requirements include membership or participation in the Securities
Transfer Agents Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Security registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-2-6
<PAGE>
EXHIBIT A-3
FORM OF COMMON SECURITY CERTIFICATE
[THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN EFFECTIVE
REGISTRATION STATEMENT.]
[THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED.]
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
MERCANTILE CAPITAL TRUST I
MERCANTILE CAPITAL TRUST I, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that
Mercantile Bancorporation Inc. (the "Holder") is the registered owner of common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust (the "Common Securities"). The designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Common Securities represented hereby are issued pursuant to, and shall in all
respects be subject to, the provisions of the Amended and Restated Declaration
of Trust of the Trust dated as of February 4, 1997, among John W. Arnold,
Kenneth E. Schutte and Jon W. Bilstrom, as Administrators, Chase Manhattan Bank
Delaware, as Delaware Trustee, The Chase Manhattan Bank, as Institutional
Trustee, Mercantile Bancorporation Inc. as Sponsor and the holders from time to
time of undivided beneficial interest in the assets of the Trust including the
designation of the terms of the Common Securities as set forth in Annex I to the
Declaration, as the same may be amended from time to time (the "Declaration").
Capitalized terms used herein but not defined shall have the meaning given them
in the Declaration. The Holder is entitled to the benefits of the Common
Securities Guarantee to the extent provided therein. The Sponsor will provide a
copy of the Declaration, the Common Securities Guarantee and the Indenture to
the Holder without charge upon written request to the Sponsor at its principal
place of business.
As set forth in the Declaration, where an Event of Default has
occurred and continuing, the rights of Holders of Common securities to payment
in respect of Distributions
A-3-1
<PAGE>
and payments upon Liquidation, redemption or otherwise are subordinated to the
rights of payment of Holders of the Capital Securities.
Upon receipt of this Certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance of this Certificate, the Holder agrees to treat, for
United States federal income tax purposes, the Debentures as indebtedness and
the Common Securities as evidence of undivided beneficial ownership in the
Debentures.
This Common Security is governed by, and construed in accordance with,
the laws of the State of Delaware, without regard to principles of conflict of
laws.
A-3-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of February, 1997.
MERCANTILE CAPITAL TRUST I
By:
------------------------------
Name:
Title: Administrator
A-3-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be identical in
amount to the Distributions payable on each Capital Security, which is at a
variable annual rate of LIBOR plus 0.85% (the "Coupon Rate") of the stated
liquidation amount of $1,000 per Capital Security, such rate being the rate of
interest payable on the Debentures to be held by the Institutional Trustee.
Except as set forth below in respect of an Extension Period, Distributions in
arrears for more than one quarterly period will bear interest thereon compounded
quarterly at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes cash distributions and any such
compounded distribution payable on the Debentures unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the actual number of days elapsed in a year of twelve 30-day months.
Except as otherwise described below, Distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears on the first day of February, May,
August and November of each year, commencing on May 1, 1997. The Debenture
Issuer has the right under the Indenture to defer payments of interest by
extending interest payment period (each an "Extension Period") at any time and
from time to time on the Debentures, subject to certain conditions, although
such interest would continue to accrue on the Debentures at a variable annual
rate of LIBOR plus 0.85%, compounded quarterly to the extent permitted by law
during any Extension Period. If such right is exercised, quarterly distributions
on the Common Securities will also be deferred (though such Distributions would
continue to accrue at the variable annual rate of LIBOR plus 0.85%, compounded
quarterly to the extent permitted by law) during any Extension Period. Such
right to extend any extension period is limited to Extension Periods, each not
exceeding 20 consecutive quarterly periods, provided, however, that no Extension
Period shall be initiated while accrued interest from a prior, completed
Extension Period is unpaid or while the Debenture Issuer is in default in the
payment of interest that has become due and payable on the Debentures; and no
Extension Period shall extend beyond the date of maturity of the Debentures.
Prior to the termination of any such Extension Period in respect of the
Debentures, the Debenture Issuer may further extend the interest payment period;
provided that each such Extension Period in respect of the Debentures, together
with all such previous and further extensions thereof, may not exceed 20
consecutive quarterly periods or extend beyond the maturity of the Debentures.
Upon the termination of any Extension Period of the Debentures and the payment
of all amounts then due, the Debenture Issuer may commence a new Extension
Period, subject to the above requirements. If Distributions are deferred, the
Distributions due shall be paid on the date that the related Extension Period
terminates, or, if such date is not a Distribution Payment Date, on the
immediately following Distribution Payment Date, to Holders of the Common
Securities as they appear on the books and records of the Trust on the record
date immediately preceding such date. Distributions on the Common Securities
must be paid on the dates payable (after giving effect to any Extension Period)
to the extent that the Trust has funds available for the payment of such
Distributions in the Property Account of the Trust. The Trust's funds available
for
A-3-4
<PAGE>
distribution to the Holders of the Common Securities will be limited to payments
received from the Debenture Issuer. The payment of Distributions out of moneys
held by the Trust is guaranteed by the Guarantor pursuant to the Common
Securities Guarantee.
The Common Securities shall be redeemable as provided in the
Declaration.
A-3-5
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common
Security Certificate to:
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
(Insert assignee's social security or tax identification number)
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
-----------------------------------------------------------
-----------------------------------------------------------
----------------------------------------------------- agent to
transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
------------------------------------------------------
Signature:
-------------------------------------------------
(Sign exactly as your name appears on the other side of this Common
Security Certificate)
Signature:
-------------------------------------------------
(Sign exactly as your name appears on the other side of this common
Security Certificate)
Signature Guarantee: *
------------------------------------
- ----------------------
* Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the
A-3-6
<PAGE>
EXHIBIT B
FORM OF TRANSFEREE CERTIFICATE
TO BE EXECUTED BY IAIs
__________, 199__
Mercantile Bancorporation Inc.
Mercantile Capital Trust I
c/o Mercantile Bancorporation Inc.
One Mercantile Center
P.O. Box 524
St. Louis, Missouri 63166-0524
Re: Purchase of $1,000 stated liquidation amount of Floating Rate Capital
Trust Pass-through Securities/SM/(TruPS)/SM/(the "Capital
Securities") of Mercantile Capital Trust I (the "Trust")
---------------------------------------------------------------------
Ladies and Gentlemen:
In connection with our purchase of the Capital Securities we confirm
that:
1. We understand that the Floating Rate Capital Trust Pass-through
Securities/SM/ (the "Capital Securities") (including the guarantees (the
"Guarantees") of Mercantile Bancorporation Inc. ("Mercantile") executed in
connection therewith) and the Floating Rate Junior Subordinated Deferrable
Interest Debentures due 2027 (the "Subordinated Debt Securities") of Mercantile,
the Capital Securities, the Guarantees, and Subordinated Debt Securities
together being referred to herein as "Offered Securities") have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and may not be offered or sold except as permitted in the following sentence. We
agree on our own behalf and on behalf of any investor account for which we are
purchasing the Offered Securities that, if, prior to the date which is three
years after the later of the date of original issue of the Offered Securities
and the last date on which Mercantile, the Trust or any affiliate of Mercantile
or the Trust was the owner of such Offered Securities (the "Resale Restriction
Termination Date"), we decide to offer, sell or otherwise transfer any such
Offered Securities, such offer, sale or transfer will be made only (a) to
Mercantile or the Trust, (b) pursuant to an effective registration statement
under the Securities Act, (c) so long as the Offered Securities are eligible for
resale pursuant to Rule 144A under the Securities
- --------------------------
requirements of the Security registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Security registrar in addition
to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
B-1
<PAGE>
Act, to a person we reasonably believe is a qualified institutional buyer under
Rule 144A (a "QIB") that purchases for its own account or for the account of a
QIB and to whom notice is given that the transfer is being made in reliance on
Rule 144A, (d) to an institutional "accredited investor" with the meaning of
subparagraph (a) (1), (2), (3) or (7) of Rule 501 under the Securities Act that
is acquiring Offered Securities for its own account or for the account of such
an institutional accredited investor for investment purposes and not with a view
to, or for offer or sale in connection with, any distribution thereof in
violation of the Securities Act, or (e) pursuant to another available exemption
from the registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirements of law that the disposition of our property
or compliance with any applicable state securities laws. The foregoing
restrictions on resale will not apply subsequent to the Resale Restriction
Termination Date. If any resale or other transfer of the Offered Securities is
proposed to be made pursuant to clause (d) above prior to the Resale Restriction
Termination Date, the transferor shall deliver a letter from the transferee
substantially in the form of this letter to The Chase Manhattan Bank as Transfer
Agent, which shall provide as applicable, among other things, that the
transferee is an institutional "accredited investor" within the meaning of
subparagraph (a)1 (1), (2), (3) or (7) of Rule 501 under the Securities Act that
is acquiring such Securities for investment purposes and not for distribution in
violation of the Securities Act. We acknowledge on our behalf and on behalf of
any investor account for which we are purchasing Securities that the Trust and
Mercantile reserve the right prior to any offer, sale or other transfer pursuant
to clauses (d) or (e) prior to the Resale Restriction Termination Date of the
Securities to require the delivery of any opinion of counsel, certifications
and/or other information satisfactory to the Trust and Mercantile. We understand
that the certificates for any Offered Security that we receive will bear a
legend substantially to the effect of the foregoing.
2. We are an institutional "accredited investor" with the meaning of
subparagraph (a) (1), (2), (3) or (7) of Rule 501 under the Securities Act
purchasing for our own account or for the account of such an institutional
"accredited investor," and we are acquiring the Offered Securities for the
investment purposes and not with view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act and we have such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of our investment in the Offered Securities, and
we and any account for which we are acting are each able to bear the economic
risks of our or its investment.
3. We are acquiring the Offered Securities purchased by us for our
own account (or for one or more accounts as to each of which we exercise sole
investment discretion and have authority to make, and do make, the statements
contained in this letter) and not with a view to any distribution of the Offered
Securities, subject, nevertheless, to the understanding that the disposition of
our property will at all times be and remain within our control.
4. In the event that we purchase any Capital Securities or any
Subordinated Debt Securities, we will acquire such Capital Securities having an
aggregate stated liquidation amount of not less than $100,000 or such
Subordinated Debt Securities
B-2
<PAGE>
having an aggregate principal amount not less than $100,000, for our own account
and for each separate account for which we are acting.
5. We acknowledge that we either (A) are not a fiduciary of a
pension, profit-sharing or other employee benefit plan subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") (a "Plan"), or an
entity whose assets include "plan assets" by reason of any Plan's investment in
the entity and are not purchasing the Offered Securities on behalf of or with
"plan assets" by reason of any Plan's investment in the entity and is not
purchasing the Offered Securities on behalf of or with "plan assets" of any Plan
or (B) are eligible for the exemptive relief available under one ore more of the
following prohibited transaction class exemptions ("PTCEs") issued by the U.S.
Department of Labor: PTCE 96-23, 95-60, 91-38, 90-1 or 84-14.
6. We acknowledge that Mercantile and the Trust and others will rely
upon the truth and accuracy of the foregoing acknowledges, representations,
warranties and agreements and agrees that if any of the acknowledgments,
representations, warranties and agreements deemed to have been made by our
purchase of the Offered Securities are no longer accurate, we shall promptly
notify the Initial Purchasers. If we are acquiring any Offered Securities as a
fiduciary or agent for one or more investor accounts, we represent that we have
sole discretion with respect to each such investor account and that we have full
power to make the foregoing acknowledgments, representations and agreement on
behalf of each such investor account.
Very truly yours,
----------------------------------------
(Name of Purchaser)
By:
-------------------------------------
Date:
-----------------------------------
Upon transfer of the Offered Securities would be registered in the
name of the new beneficial owner as follows.
Name:
--------------------------------------------------------------------------
Address:
-----------------------------------------------------------------------
Taxpayer ID Number:
B-3
<PAGE>
EXHIBIT C
FORM OF TRANSFEREE CERTIFICATE
TO BE EXECUTED FOR QIBs
__________, 199__
Mercantile Bancorporation Inc.
Mercantile Capital Trust I
c/o Mercantile Bancorporation Inc.
One Mercantile Center
P.O. Box 524
St. Louis, Missouri 63166-0524
Re: Purchase of $1,000 stated liquidation amount of Floating Rate Capital
Trust Pass-through Securities /SM/(TRUPS)/ SM /(the "Capital
Securities") of Mercantile Capital Trust I (the "Trust")
---------------------------------------------------------------------
Reference is hereby made to the Amended and Restated Declaration dated
as of February 4, 1997 (the "Declaration") among John W. Arnold, Kenneth E.
Schutte and Jon W. Bilstrom, as Administrators, Chase Manhattan Bank Delaware,
as Delaware Trustee, The Chase Manhattan Bank, as Institutional Trustee,
Mercantile Bancorporation Inc., as Sponsor, and the holders from time to time of
undivided beneficial interest in the assets of the Trust. Capitalized terms used
but not defined herein shall have the meanings given them in the Declaration.
This letter relates to $150,000,000 aggregate liquidation amount of
Capital Securities which are held in the name of [name of transferor] (the
"Transferor") to effect the transfer of such Capital Securities in exchange for
an equivalent beneficial interest in the Rule 144A Global Capital Security.
In connection with such request, and in respect to such Capital
Securities, the transferor does hereby certify that such Capital Securities are
being transferred in accordance with (i) the transfer restrictions set forth in
the Capital Securities and (ii) Rule 144A under the United States Securities Act
of 1933, as amended ("Rule 144A"), to a transferee that the Transferor
reasonably believes is purchasing the Capital Securities for its own account or
an account with respect to which the transferee exercises sole investment
discretion and the transferee and any such account is a "qualified institutional
buyer" within the meaning of Rule 144A, in a transaction meeting the
requirements of Rule 144A and in accordance with applicable securities laws of
any state of the United States or any other jurisdiction.
C-1
<PAGE>
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
---------------------------------------
(Name of Transferor)
By:
------------------------------------
Name:
Title:
Date:
-------------------------------
C-2
<PAGE>
EXHIBIT D
SPECIMEN OF INITIAL DEBENTURE
D-1
<PAGE>
EXHIBIT E
PURCHASE AGREEMENT
E-1
<PAGE>
EXHIBIT F
REGISTRATION RIGHTS AGREEMENT
F-1
<PAGE>
Exhibit 4.5
================================================================================
MERCANTILE BANCORPORATION INC.
as Issuer
INDENTURE
Dated as of February 4, 1997
THE CHASE MANHATTAN BANK
as Trustee
SUBORDINATED DEBT SECURITIES
================================================================================
<PAGE>
TIE-SHEET
of provisions of Trust Indenture Act of 1939 with Indenture dated as of February
4, 1997 between Mercantile Bancorporation Inc., as Issuer, and The Chase
Manhattan Bank, as Trustee:
<TABLE>
<CAPTION>
ACT SECTION INDENTURE SECTION
<S> <C>
310(a)(1)............................................ 6.09
310(a)(2)............................................ 6.09
310(a)(3)............................................ N.A.
310(a)(4)............................................ N.A.
310(a)(5)............................................ 6.09
310(b)............................................... 6.08; 6.10(a)(b) and (d)
310(c)............................................... N.A.
311(a) and (b)....................................... 6.13
311(c)............................................... N.A.
312(a)............................................... 4.01; 4.02(a)
312(b) and (c)....................................... 4.02(b) and (c)
313(a)............................................... 4.04(a)
313(b)(1)............................................ N.A.
313(b)(2)............................................ 4.04(a)
313(c)............................................... 4.04(a)
313(d)............................................... 4.04(b)
314(a)............................................... 4.03
314(b)............................................... N.A.
314(c)(1) and (2).................................... 13.06
314(c)(3)............................................ N.A.
314(d)............................................... N.A.
314(e)............................................... 13.06
314(f)............................................... N.A.
315(a)(c) and (d).................................... 6.01
315(b)............................................... 5.08
315(e)............................................... 5.09
316(a)(1)............................................ 5.01; 5.07
316(a)(2)............................................ N.A.
316(a) last sentence................................. 7.04
316(b)............................................... 5.04
317(a)............................................... 5.02
317(b)............................................... 3.04(a)
318(a)............................................... 13.08
</TABLE>
THIS TIE-SHEET IS NOT PART OF THE INDENTURE AS EXECUTED.
i
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions................................................... 1
ARTICLE II
DEBT SECURITIES
SECTION 2.01. Forms Generally............................................... 7
SECTION 2.02. Form of Trustee's Certificate of Authentication............... 8
SECTION 2.03. Amount Unlimited; Issuable in Series.......................... 8
SECTION 2.04. Authentication and Dating..................................... 10
SECTION 2.05. Date and Denomination of Debt Securities...................... 11
SECTION 2.06. Execution of Debt Securities.................................. 13
SECTION 2.07. Exchange and Registration of Transfer of Debt Securities...... 14
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Debt Securities.......... 16
SECTION 2.09. Temporary Debt Securities..................................... 17
SECTION 2.10. Cancellation of Debt Securities Paid, etc..................... 17
SECTION 2.11. Global Securities............................................. 17
SECTION 2.12. CUSIP Numbers................................................. 18
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.01. Payment of Principal, Premium and Interest.................... 19
SECTION 3.02. Offices for Notices and Payments, etc......................... 19
SECTION 3.03. Appointments to Fill Vacancies in Trustee's Office............ 20
SECTION 3.04. Provision as to Paying Agent.................................. 20
SECTION 3.05. Certificate to Trustee........................................ 21
SECTION 3.06. Compliance with Consolidation Provisions...................... 21
SECTION 3.07. Limitation on Dividends....................................... 21
SECTION 3.08. Covenants as to Mercantile Trusts............................. 22
SECTION 3.09. Calculation of Original Issue Discount........................ 22
ARTICLE IV
SECURITYHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 4.01. Securityholders' Lists........................................ 23
SECTION 4.02. Preservation and Disclosure of Lists.......................... 23
SECTION 4.03. [Reserved].................................................... 24
SECTION 4.04. Reports by the Trustee........................................ 24
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
UPON AN EVENT OF DEFAULT
SECTION 5.01. Events of Default............................................. 25
SECTION 5.02. Payment of Debt Securities on Default; Suit Therefor.......... 27
SECTION 5.03. Application of Moneys Collected by Trustee.................... 29
SECTION 5.04. Proceedings by Securityholders................................ 29
SECTION 5.05. Proceedings by Trustee........................................ 30
SECTION 5.06. Remedies Cumulative and Continuing............................ 30
SECTION 5.07. Direction of Proceedings and Waiver of Defaults by Majority
of Securityholders............................................ 30
SECTION 5.08. Notice of Defaults............................................ 31
SECTION 5.09. Undertaking to Pay Costs...................................... 32
ARTICLE VI
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of Trustee........................ 32
SECTION 6.02. Reliance on Documents, Opinions, etc.......................... 33
SECTION 6.03. No Responsibility for Recitals, etc........................... 35
SECTION 6.04. Trustee, Authenticating Agent, Paying Agents, Transfer
Agents or Registrar May Own Debt Securities................... 35
SECTION 6.05. Moneys to be Held in Trust.................................... 35
SECTION 6.06. Compensation and Expenses of Trustee.......................... 35
SECTION 6.07. Officers' Certificate as Evidence............................. 36
SECTION 6.08. Conflicting Interest of Trustee............................... 36
SECTION 6.09. Eligibility of Trustee........................................ 37
SECTION 6.10. Resignation or Removal of Trustee............................. 37
SECTION 6.11. Acceptance by Successor Trustee............................... 38
SECTION 6.12. Succession by Merger, etc..................................... 39
SECTION 6.13. Limitation on Rights of Trustee as a Creditor................. 40
SECTION 6.14. Authenticating Agents......................................... 40
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Action by Securityholders..................................... 41
SECTION 7.02. Proof of Execution by Securityholders......................... 42
SECTION 7.03. Who Are Deemed Absolute Owners................................ 42
SECTION 7.04. Debt Securities Owned by Company Deemed Not Outstanding....... 43
SECTION 7.05. Revocation of Consents; Future Holders Bound.................. 43
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ARTICLE VIII
SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purposes of Meetings.......................................... 43
SECTION 8.02. Call of Meetings by Trustee................................... 44
SECTION 8.03. Call of Meetings by Company or Securityholders................ 44
SECTION 8.04. Qualifications for Voting..................................... 44
SECTION 8.05. Regulations................................................... 44
SECTION 8.06. Voting........................................................ 45
SECTION 8.07. Quorum; Actions............................................... 46
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures without Consent of Securityholders.... 47
SECTION 9.02. Supplemental Indentures with Consent of Securityholders....... 48
SECTION 9.03. Compliance with Trust Indenture Act; Effect of Supplemental
Indentures.................................................... 49
SECTION 9.04. Notation on Debt Securities................................... 50
SECTION 9.05. Evidence of Compliance of Supplemental Indenture to be
Furnished to Trustee.......................................... 50
ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 10.01. Company May Consolidate, etc., on Certain Terms............... 50
SECTION 10.02. Successor Entity to be Substituted............................ 51
SECTION 10.03. Opinion of Counsel to be Given to Trustee..................... 51
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 11.01. Discharge of Indenture....................................... 52
SECTION 11.02. Deposited Moneys to be Held in Trust by Trustee.............. 52
SECTION 11.03. Paying Agent to Repay Moneys Held............................ 52
SECTION 11.04. Return of Unclaimed Moneys................................... 53
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01. Indenture and Debt Securities Solely Corporate Obligations... 53
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01. Successors................................................... 53
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
SECTION 13.02. Official Acts by Successor Entity............................ 53
SECTION 13.03. Surrender of Company Powers.................................. 54
SECTION 13.04. Addresses for Notices, etc................................... 54
SECTION 13.05. Governing Law................................................ 54
SECTION 13.06. Evidence of Compliance with Conditions Precedent............. 54
SECTION 13.07. Non-Business Days............................................ 55
SECTION 13.08. Trust Indenture Act to Control............................... 55
SECTION 13.09. Table of Contents, Headings, etc............................. 55
SECTION 13.10. Execution in Counterparts.................................... 55
SECTION 13.11. Separability................................................. 55
SECTION 13.12. Assignment................................................... 55
SECTION 13.13. Acknowledgment of Rights..................................... 56
ARTICLE XIV
REDEMPTION OF SECURITIES -- MANDATORY AND
OPTIONAL SINKING FUND
SECTION 14.01. Applicability of Article..................................... 56
SECTION 14.02. Notice of Redemption; Selection of Debt Securities........... 56
SECTION 14.03. Payment of Debt Securities Called for Redemption............. 57
SECTION 14.04. Mandatory and Optional Sinking Fund.......................... 58
ARTICLE XV
SUBORDINATION OF DEBT SECURITIES
SECTION 15.01. Agreement to Subordinate..................................... 60
SECTION 15.02. Default on Senior Indebtedness............................... 60
SECTION 15.03. Liquidation; Dissolution; Bankruptcy......................... 61
SECTION 15.04. Subrogation.................................................. 62
SECTION 15.05. Trustee to Effectuate Subordination.......................... 63
SECTION 15.06. Notice by the Company........................................ 63
SECTION 15.07. Rights of the Trustee; Holders of Senior Indebtedness........ 64
SECTION 15.08. Subordination May Not Be Impaired............................ 64
</TABLE>
v
<PAGE>
THIS INDENTURE, dated as of February 4, 1997, between Mercantile
Bancorporation Inc., a Missouri corporation (hereinafter sometimes called the
"Company"), and The Chase Manhattan Bank, a New York banking corporation, as
trustee (hereinafter sometimes called the "Trustee"),
W I T N E S S E T H :
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue from time to time of its subordinated unsecured debentures,
notes or other evidence of indebtedness to be issued in one or more series (the
"Debt Securities") up to such principal amount or amounts as may from time to
time be authorized in accordance with the terms of this Indenture and, to
provide the terms and conditions upon which the Debt Securities are to be
authenticated, issued and delivered, the Company has duly authorized the
execution of this Indenture; and
WHEREAS, all acts and things necessary to make this Indenture a valid
agreement according to its terms, have been done and performed;
NOW, THEREFORE, This Indenture Witnesseth:
In consideration of the premises, and the purchase of the Debt
Securities by the holders thereof, the Company covenants and agrees with the
Trustee for the equal and proportionate benefit of the respective holders from
time to time of the Debt Securities or of a series thereof, as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01. Definitions.
The terms defined in this Section 1.01 (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes of
this Indenture and of any indenture supplemental hereto shall have the
respective meanings specified in this Section 1.01. All other terms used in this
Indenture which are defined in the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), or which are by reference therein defined in the
Securities Act of 1933, as amended (the "Securities Act"), shall (except as
herein otherwise expressly provided or unless the context otherwise requires)
have the meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of this Indenture as originally executed.
All accounting terms used herein and not expressly defined shall have the
meanings assigned to such terms in accordance with generally accepted accounting
principles and the term "generally accepted accounting principles" means such
accounting principles as are generally accepted at the time of any computation.
The words "herein," "hereof" and "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section or
other subdivision.
"Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding with power to vote 10% or
more of the outstanding voting securities or other ownership interests of the
specified Person, (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person,
<PAGE>
(c) any Person directly or indirectly controlling, controlled by, or under
common control with the specified Person, (d) a partnership in which the
specified Person is a general partner, (e) any executive officer or director of
the specified Person, and (f) if the specified Person is an individual, any
entity of which the specified Person is an executive officer, director or
general partner.
"Authenticating Agent" shall mean any agent or agents of the Trustee
which at the time shall be appointed and acting pursuant to Section 6.14.
"Bankruptcy Law" shall mean Title 11, U.S. Code, or any similar
federal or state law for the relief of debtors.
"Board of Directors" shall mean the board of directors or the
executive committee or any other duly authorized designated officers of the
Company.
"Board Resolution" shall mean a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Business Day" shall mean, with respect to any series of Debt
Securities, any day other than a Saturday, Sunday or any other day on which
banking institutions in New York City (in the State of New York) and St. Louis
(in the State of Missouri) are permitted or required by any applicable law to
close.
"Capital Securities" shall mean undivided beneficial interests in the
assets of a Mercantile Trust which rank pari passu with Common Securities issued
by such Mercantile Trust; provided, however, that upon the occurrence of an
Event of Default (as defined in the Declaration with respect to such Mercantile
Trust), the rights of holders of such Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of such Capital Securities.
"Capital Securities Guarantee" shall mean, in respect of any
Mercantile Trust, any guarantee that the Company may enter into with The Chase
Manhattan Bank or other Persons that operates directly or indirectly for the
benefit of holders of Capital Securities of such Mercantile Trust.
"Certificate" shall mean a certificate signed by any one of the
principal executive officer, the principal financial officer or the principal
accounting officer of the Company.
"Common Securities" shall mean undivided beneficial interests in the
assets of a Mercantile Trust which rank pari passu with Capital Securities
issued by such Mercantile Trust; provided, however, that upon the occurrence of
an Event of Default (as defined in the Declaration with respect to such
Mercantile Trust), the rights of holders of such Common Securities to payment in
respect of distributions and payments upon liquidation, redemption
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and otherwise are subordinated to the rights of holders of such Capital
Securities.
"Common Securities Guarantee" shall mean, in respect of any Mercantile
Trust, any guarantee that the Company may enter into with any Person or Persons
and that operates directly or indirectly for the benefit of holders of Common
Securities of such Mercantile Trust.
"Company" shall mean Mercantile Bancorporation Inc., a Missouri
corporation, and, subject to the provisions of Article X, shall include its
successors and assigns.
"Custodian" shall mean any receiver, trustee, assignee, liquidator, or
similar official under any Bankruptcy Law.
"Debt Security" or "Debt Securities" shall have the meaning stated in
the first recital of this Indenture and more particularly means any debt
security or debt securities, as the case may be, authenticated and delivered
under this Indenture.
"Debt Security Register" shall have the meaning specified in Section
2.07.
"Declaration," with respect to a Mercantile Trust, shall mean the
Amended and Restated Declaration of Trust of such Mercantile Trust, as amended
or supplemented from time to time.
"Default" means any event, act or condition that with notice or lapse
of time, or both, would constitute an Event of Default.
"Depositary" shall mean, with respect to Debt Securities of any series
for which the Company shall determine that such Debt Securities will be issued
as a Global Security, The Depository Trust Company, New York, New York, another
clearing agency, or any successor registered as a clearing agency under the
Exchange Act, or other applicable statute or regulation, which, in each case,
shall be designated by the Company pursuant to either Section 2.03 or 2.11.
"Event of Default" shall mean any event specified in Section 5.01,
continued for the period of time, if any, and after the giving of the notice, if
any, therein designated.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Global Security" shall mean, with respect to any series of Debt
Securities, a Debt Security executed by the Company and delivered by the Trustee
to the Depositary or pursuant to the Depositary's instruction, all in accordance
with this Indenture, which shall be registered in the name of the Depositary or
its nominee.
"Indenture" shall mean this instrument as originally executed or, if
amended or supplemented as herein provided, as so amended or supplemented, or
both, and shall include
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the form and terms of particular series of Debt Securities established as
contemplated hereunder.
"Institutional Trustee" has the meaning set forth in the Declaration
of the applicable Mercantile Trust.
"Interest" shall mean, when used with respect to noninterest bearing
Debt Securities, interest payable after maturity.
"Interest Payment Date," when used with respect to any installment of
interest on a Debt Security of a particular series, shall mean the date
specified in such Debt Security or in a Board Resolution or in an indenture
supplemental hereto with respect to such series as the fixed date on which an
installment of interest with respect to Debt Securities of that series is due
and payable.
"Mercantile Trust" shall mean a Delaware business trust, or any other
similar trust created for the purpose of issuing Capital Securities in
connection with the issuance of Debt Securities under this Indenture, of which
the Company is the sponsor.
"Mortgage" shall mean and include any mortgage, pledge, lien, security
interest, conditional sale or other title retention agreement or other similar
encumbrance.
"Officers' Certificate" shall mean a certificate signed by the
Chairman of the Board, the Vice Chairman, the President, any Managing Director
or any Vice President, and by the Treasurer, an Assistant Treasurer, the
Comptroller, an Assistant Comptroller, the Secretary or an Assistant Secretary
of the Company, and delivered to the Trustee. Each such certificate shall
include the statements provided for in Section 13.06 if and to the extent
required by the provisions of such Section.
"Opinion of Counsel" shall mean an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company, or may be other
counsel satisfactory to the Trustee. Each such opinion shall include the
statements provided for in Section 13.06 if and to the extent required by the
provisions of such Section.
"Original Issue Date" of any Debt Security (or any portion thereof)
shall mean the earlier of (a) the date of such Debt Security or (b) the date of
any Debt Security (or portion thereof) for which such Debt Security was issued
(directly or indirectly) on registration of transfer, exchange or substitution.
"Original Issue Discount Security" shall mean any Debt Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof pursuant to
Section 5.01.
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The term "outstanding," when used with reference to Debt Securities,
shall, subject to the provisions of Section 7.04, mean, as of any particular
time, all Debt Securities authenticated and delivered by the Trustee or the
Authenticating Agent under this Indenture, except
(a) Debt Securities theretofore canceled by the Trustee or the
Authenticating Agent or delivered to the Trustee for cancellation;
(b) Debt Securities, or portions thereof, for the payment or
redemption of which moneys in the necessary amount shall have been
deposited in trust with the Trustee or with any paying agent (other than
the Company) or shall have been set aside and segregated in trust by the
Company (if the Company shall act as its own paying agent); provided that,
if such Debt Securities, or portions thereof, are to be redeemed prior to
maturity thereof, notice of such redemption shall have been given as
provided in Article Fourteen or provision satisfactory to the Trustee shall
have been made for giving such notice; and
(c) Debt Securities paid pursuant to Section 2.08 or in lieu of or in
substitution for which other Debt Securities shall have been authenticated
and delivered pursuant to the terms of Section 2.08 unless proof
satisfactory to the Company and the Trustee is presented that any such Debt
Securities are held by bona fide holders in due course.
(d) In determining whether the holders of the requisite principal
amount of outstanding Debt Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the
principal amount of an Original Issue Discount Security that shall be
deemed to be outstanding for such purposes shall be the amount of the
principal thereof that would be due and payable as of the date of such
determination upon a declaration of acceleration of the maturity thereof
pursuant to Section 5.01.
"Person" shall mean any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Security" of any particular Debt Security means every
previous Debt Security evidencing all or a portion of the same debt as that
evidenced by such particular Debt Security; and, for the purposes of this
definition, any Debt Security authenticated and delivered under Section 2.08 in
lieu of a lost, destroyed or stolen Debt Security shall be deemed to evidence
the same debt as the lost, destroyed or stolen Debt Security.
"Principal Office of the Trustee", or other similar term, shall mean
the office of the Trustee, at which at any particular time its corporate trust
business shall be principally administered, which at the time of the execution
of this Indenture shall be 450 West 33rd Street -- 15th Floor, New York, New
York 10004.
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"Responsible Officer" shall mean, with respect to the Trustee, any
officer within the Principal Office of the Trustee, including any vice-
president, any assistant vice-president, any secretary, any assistant secretary,
the treasurer, any assistant treasurer, any trust officer or other officer of
the Principal Trust Office of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Securityholder," "holder of Debt Securities", or other similar terms,
shall mean any Person in whose name at the time a particular Debt Security is
registered on the register kept by the Company or the Trustee for that purpose
in accordance with the terms hereof.
"Senior Indebtedness" means, with respect to the Company (except any
other obligations which rank pari passu with the Debt Securities of a series),
(i) the principal, premium, if any, and interest in respect of (A) indebtedness
of the Company for money borrowed and (B) indebtedness evidenced by securities,
debentures, notes, bonds or other similar instruments issued by the Company,
including, without limitation, any current or future indebtedness under any
indenture (other than this Indenture) to which the Company is a party; (ii) all
capital lease obligations of the Company; (iii) all obligations of the Company
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of the Company and all obligations of the Company under any
title retention agreement (but excluding trade accounts payable arising in the
ordinary course of business); (iv) all obligations of the Company for the
reimbursement of any letter of credit, any banker's acceptance, any security
purchase facility, any repurchase agreement or similar arrangement, any interest
rate swap, any other hedging arrangement, any obligation under options or any
similar credit or other transaction; (v) all obligations of the type referred to
in clauses (i) through (iv) above of other Persons for the payment of which the
Company is responsible or liable as obligor, guarantor or otherwise; and (vi)
all obligations of the type referred to in clauses (i) through (v) above of
other Persons secured by any lien on any property or asset of the Company
(whether or not such obligation is assumed by the Company), except for (1) any
indebtedness between or among the Company or any Affiliate of the Company and
(2) any series of Debt Securities issued pursuant to this Indenture and
guarantees in respect of any such series of Debt Securities. Senior Indebtedness
does not include the Debt Securities of any series or any junior subordinated
debt securities issued in the future with subordination terms substantially
similar to the Debt Securities of any series. Senior Indebtedness shall continue
to be Senior Indebtedness and be entitled to the subordination provisions
irrespective of any amendment, modification or waiver of any term of such Senior
Indebtedness.
"Subsidiary" shall mean with respect to any Person, (i) any
corporation at least a majority of the outstanding voting stock of which is
owned, directly or indirectly, by such Person or by one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries, (ii) any
general partnership, joint venture or similar entity, at least a majority of the
outstanding partnership or similar interests of which shall at the time be owned
by such
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Person, or by one or more of its Subsidiaries, or by such Person and one or more
of its Subsidiaries and (iii) any limited partnership of which such Person or
any of its Subsidiaries is a general partner. For the purposes of this
definition, "voting stock" means shares, interests, participations or other
equivalents in the equity interest (however designated) in such Person having
ordinary voting power for the election of a majority of the directors (or the
equivalent) of such Person, other than shares, interests, participations or
other equivalents having such power only by reason of the occurrence of a
contingency.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939 as in
force at the date of execution of this Indenture, except as provided in Section
9.03; provided, however, that, in the event the Trust Indenture Act of 1939 is
amended after such date, Trust Indenture Act shall mean, to the extent required
by any such amendment, the Trust Indenture Act of 1939 as so amended.
"Trust Securities" shall mean Common Securities and Capital Securities
of a Mercantile Trust.
"Trustee" shall mean the Person identified as "Trustee" in the first
paragraph hereof, and, subject to the provisions of Article VI hereof, shall
also include its successors and assigns as Trustee hereunder. The term "Trustee"
as used with respect to a particular series of Debt Securities shall mean the
trustee with respect to that series.
"Yield to Maturity" shall mean the yield to maturity on a series of
Debt Securities, calculated at the time of issuance of such series of Debt
Securities, or if applicable, at the most recent predetermination of interest on
such series and calculated in accordance with accepted financial practice.
ARTICLE II.
DEBT SECURITIES
SECTION 2.01. Forms Generally.
The Debt Securities of each series shall be in substantially the form
as shall be established by or pursuant to a Board Resolution and as set forth in
an Officers' Certificate of the Company or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with any law or with any rules made pursuant thereto or with any rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the Debt
Securities.
In the event the Debt Securities are issued in definitive form
pursuant to this Indenture, such Debt Securities shall be typed, printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Debt Securities,
as evidenced by their execution of such Debt Securities.
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SECTION 2.02. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication on all Debt Securities
shall be in substantially the following form:
This is one of the Debt Securities of the series designated therein
referred to in the within-mentioned Indenture.
The Chase Manhattan Bank, as Trustee
By
---------------------------------
Authorized Officer
SECTION 2.03. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Debt Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Debt Securities may be issued in one or more series up to the
aggregate principal amount of Debt Securities of that series from time to time
authorized by or pursuant to a Board Resolution of the Company or pursuant to
one or more indentures supplemental hereto. Prior to the initial issuance of
Debt Securities of any series, there shall be established in or pursuant to a
Board Resolution of the Company and set forth in an Officers' Certificate of the
Company or established in one or more indentures supplemental hereto:
(1) the title of the Debt Securities of the series (which shall
distinguish Debt Securities of the series from all other Debt Securities);
(2) any limit upon the aggregate principal amount of the Debt
Securities of the series which may be authenticated and delivered under
this Indenture (except for Debt Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Debt
Securities of the series pursuant to Section 2.07, 2.08, 2.09, 9.04 or
14.03);
(3) the date or dates on which the principal of and premium, if
any, on the Debt Securities of the series is payable;
(4) the rate or rates at which the Debt Securities of the series
shall bear interest, if any, or the method by which such interest may be
determined, the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest shall be payable or the
manner of determination of such Interest Payment Dates and the record dates
for the determination of holders to whom interest is payable on any such
Interest Payment Dates;
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(5) the place or places where the principal of, and premium, if
any, and any interest on Debt Securities of the series shall be payable;
(6) the right, if any, to extend the interest payment periods
and the duration of such extension;
(7) the price or prices at which, the period or periods within
which and the terms and conditions upon which Debt Securities of the series
may be redeemed, in whole or in part, at the option of the Company,
pursuant to any sinking fund or otherwise;
(8) the obligation, if any, of the Company to redeem, purchase
or repay Debt Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Securityholder thereof and the
price or prices at which and the period or periods within which, and the
terms and conditions upon which Debt Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such
obligation;
(9) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Debt Securities of the series
shall be issuable;
(10) if other than the principal amount thereof, the portion of
the principal amount of Debt Securities of the series which shall be
payable upon declaration of acceleration of the maturity thereof pursuant
to Section 5.01 or provable in bankruptcy pursuant to Section 5.02;
(11) any Events of Default with respect to the Debt Securities
of a particular series, if not set forth herein;
(12) the form of the Debt Securities of the series including the
form of the certificate of authentication of such series;
(13) any trustee, authenticating or paying agents, warrant
agents, transfer agents or registrars with respect to the Debt Securities
of such series;
(14) whether the Debt Securities of the series shall be issued
in whole or in part in the form of one or more Global Securities and, in
such case, the Depositary for such Global Security or Securities, and
whether beneficial owners of interests in any such Global Securities may
exchange such interests for other Debt Securities of such series in the
manner provided in Section 2.07, and the manner and the circumstances under
which and the place or places where any such exchanges may occur if other
than in the manner provided in Section 2.07, and any other terms of the
series relating to the global nature of the Global Securities of such
series and the exchange, registration or transfer thereof and the payment
of any principal thereof, or interest or premium, if any, thereon;
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(15) if the Debt Securities of the series are issued pursuant to
an exemption from registration under the Securities Act; and
(16) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Debt Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to such resolution of the Board of Directors or in any such indenture
supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution of the Company, a copy of an appropriate record
of such action shall be certified by the Secretary or an Assistant Secretary of
the Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate of the Company setting forth the terms of the series.
SECTION 2.04. Authentication and Dating.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debt Securities of any series executed
by the Company to the Trustee for authentication, and the Trustee shall
thereupon authenticate and make available for delivery said Debt Securities to
or upon the written order of the Company, signed by its Chairman of the Board of
Directors, Vice Chairman, the President, one of its Managing Directors or one of
its Vice Presidents and by its Secretary, any Assistant Secretary, Treasurer or
any Assistant Treasurer, without any further action by the Company hereunder. In
authenticating such Debt Securities, and accepting the additional
responsibilities under this Indenture in relation to such Debt Securities, the
Trustee shall be entitled to receive, and (subject to Section 6.01) shall be
fully protected in relying upon:
(1) a copy of any Board Resolution or Board Resolutions relating
thereto and, if applicable, an appropriate record of any action taken
pursuant to such resolution, in each case certified by the Secretary or an
Assistant Secretary of the Company as the case may be;
(2) an executed supplemental indenture, if any;
(3) an Officers' Certificate prepared in accordance with Section
13.06 setting forth the form and terms of the Debt Securities if and as
required pursuant to Sections 2.01 and 2.03, respectively; and
(4) an Opinion of Counsel prepared in accordance with Section
13.06 which shall also state:
(a) that the form of such Debt Securities has been established by or
pursuant to a Board Resolution or by a supplemental indenture as permitted
by Section 2.01 in conformity with the provisions of this Indenture;
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(b) that the terms of such Debt Securities have been established by
or pursuant to a resolution of the Board of Directors or by a supplemental
indenture as permitted by Section 2.03 in conformity with the provisions of
this Indenture;
(c) that such Debt Securities, when authenticated and delivered by
the Trustee and issued by the Company in each case in the manner and
subject to any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the Company; and
(d) that all laws and requirements in respect of the execution and
delivery by the Company of the Debt Securities, have been complied with and
that authentication and delivery of the Debt Securities by the Trustee will
not violate the terms of this Indenture.
The Trustee shall have the right to decline to authenticate and
deliver any Debt Securities under this Section if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken or if a
Responsible Officer of the Trustee in good faith shall determine that such
action would expose the Trustee to personal liability to existing holders.
SECTION 2.05. Date and Denomination of Debt Securities.
The Debt Securities shall be issuable as registered Debt Securities
without coupons and in such denominations as shall be specified as contemplated
by Section 2.03. In the absence of any such specification with respect to the
Debt Securities of any series, the Debt Securities of such series shall be
issuable in the denominations of $1,000 and any multiple thereof. The Debt
Securities shall be numbered, lettered, or otherwise distinguished in such
manner or in accordance with such plans as the officers executing the same may
determine with the approval of the Trustee as evidenced by the execution and
authentication thereof.
Every Debt Security shall be dated the date of its authentication,
shall bear interest, if any, from such date and shall be payable on such dates,
in each case, as contemplated by Section 2.03. The interest installment on any
Security that is payable, and is punctually paid or duly provided for, on any
Interest Payment Date for Debt Securities of that series shall be paid to the
Person in whose name said Debt Security (or one or more Predecessor Securities)
is registered at the close of business on the regular record date for such
interest installment. In the event that any Debt Security of a particular series
or portion thereof is called for redemption and the redemption date is
subsequent to a regular record date with respect to any Interest Payment Date
and prior to such Interest Payment Date, interest on such Debt Security will be
paid upon presentation and surrender of such Debt Security as provided in
Section 14.03.
Any interest on any Debt Security that is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date for a Debt
Security of the same series (herein called "Defaulted Interest") shall forthwith
cease to be payable to the registered holder on the relevant regular record date
by virtue of having been such holder; and such
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Defaulted Interest shall be paid by the Company, at its election, as provided in
clause (1) or clause (2) below:
(A) The Company may make payment of any Defaulted Interest on Debt
Securities to the Persons in whose names such Debt Securities (or their
respective Predecessor Securities) are registered at the close of business
on a special record date for the payment of such Defaulted Interest, which
shall be fixed in the following manner: the Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each such Debt Security and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such Defaulted Interest
which shall not be more than 15 nor less than ten days prior to the date of
the proposed payment and not less than ten days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such special record date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the special record date therefor to be mailed, first
class postage prepaid, to each Securityholder at his or her address as it
appears in the Debt Security Register, not less than ten days prior to such
special record date. Notice of the proposed payment of such Defaulted
Interest and the special record date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names such Debt Securities (or their respective Predecessor Securities) are
registered on such special record date and shall be no longer payable
pursuant to the following clause (2).
(B) The Company may make payment of any Defaulted Interest on any
Debt Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by the
Trustee.
In respect of any series of Debt Securities in which the right to
extend the interest payment periods has been provided pursuant to Section
2.03(6), any interest scheduled to become payable on an Interest Payment Date
occurring during a valid extension of an interest payment period shall not be
Defaulted Interest and shall be payable on such other date as may be specified
in the terms of such Debt Securities.
Unless otherwise set forth in a Board Resolution of the Company or one
or more indentures supplemental hereto establishing the terms of any series of
Debt Securities pursuant to Section 2.01 hereof, the term "regular record date"
as used in this Section with respect to a series of Debt Securities with respect
to any Interest Payment Date for such
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series shall mean either the fifteenth day of the month immediately preceding
the month in which an Interest Payment Date established for such series pursuant
to Section 2.01 hereof shall occur, if such Interest Payment Date is the first
day of a month, or the last day of the month immediately preceding the month in
which an Interest Payment Date established for such series pursuant to Section
2.01 hereof shall occur, if such Interest Payment Date is the fifteenth day of a
month, whether or not such date is a Business Day.
Subject to the foregoing provisions of this Section, each Debt
Security of a series delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Debt Security of such
series shall carry the rights to interest accrued and unpaid, and to accrue,
that were carried by such other Debt Security.
SECTION 2.06. Execution of Debt Securities.
The Debt Securities shall be signed in the name and on behalf of the
Company by the manual or facsimile signature of its Chairman of the Board of
Directors, Vice Chairman, President, one of its Managing Directors or one of its
Executive Vice Presidents, Senior Vice Presidents or Vice Presidents and by the
manual or facsimile signature of its Secretary, one of its Assistant
Secretaries, its Treasurer or one of its Assistant Treasurers, under its
corporate seal which may be affixed thereto or printed, engraved or otherwise
reproduced thereon, by facsimile or otherwise, and which need not be attested.
Only such Debt Securities as shall bear thereon a certificate of authentication
substantially in the form herein before recited, executed by the Trustee or the
Authenticating Agent by the manual signature of an authorized officer, shall be
entitled to the benefits of this Indenture or be valid or obligatory for any
purpose. Such certificate by the Trustee or the Authenticating Agent upon any
Debt Security executed by the Company shall be conclusive evidence that the Debt
Security so authenticated has been duly authenticated and delivered hereunder
and that the holder is entitled to the benefits of this Indenture.
In case any officer of the Company who shall have signed any of the
Debt Securities shall cease to be such officer before the Debt Securities so
signed shall have been authenticated and delivered by the Trustee or the
Authenticating Agent, or disposed of by the Company, such Debt Securities
nevertheless may be authenticated and delivered or disposed of as though the
Person who signed such Debt Securities had not ceased to be such officer of the
Company; and any Debt Security may be signed on behalf of the Company by such
Persons as, at the actual date of the execution of such Debt Security, shall be
the proper officers of the Company, although at the date of the execution of
this Indenture any such person was not such an officer.
SECTION 2.07. Exchange and Registration of Transfer of Debt
Securities.
Subject to Section 2.03(14), Debt Securities of any series may be
exchanged for a like aggregate principal amount of Debt Securities of the same
series of other authorized denominations. Debt Securities to be exchanged may be
surrendered at the principal corporate trust office of the Trustee or at any
office or agency to be maintained by the Company for such purpose as provided in
Section 3.02, and the Company shall execute,
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the Company or the Trustee shall register and the Trustee or the Authenticating
Agent shall authenticate and make available for delivery in exchange therefor
the Debt Security or Debt Securities which the Securityholder making the
exchange shall be entitled to receive. Subject to Section 2.03(14), upon due
presentment for registration of transfer of any Debt Security of any series at
the principal corporate trust office of the Trustee or at any office or agency
of the Company maintained for such purpose as provided in Section 3.02, the
Company shall execute, the Company or the Trustee shall register and the Trustee
or the Authenticating Agent shall authenticate and make available for delivery
in the name of the transferee or transferees a new Debt Security or Debt
Securities of the same series for a like aggregate principal amount.
Registration or registration of transfer of any Debt Security by the Trustee or
by any agent of the Company appointed pursuant to Section 3.02, and delivery of
such Debt Security, shall be deemed to complete the registration or registration
of transfer of such Debt Security.
The Company shall cause to be kept, at the office or agency maintained
for the purpose of registration of transfer and for exchange as provided in
Section 3.02, a register (the "Debt Security Register") for each series of Debt
Securities issued hereunder in which, subject to such reasonable regulations as
it may prescribe, the Company shall provide for the registration and transfer of
all Debt Securities as in this Article Two provided. Such register shall be in
written form or in any other form capable of being converted into written form
within a reasonable time.
All Debt Securities presented for registration of transfer or for
exchange or payment shall (if so required by the Company or the Trustee or the
Authenticating Agent) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company and
the Trustee or the Authenticating Agent duly executed by, the holder or his
attorney duly authorized in writing.
No service charge shall be made for any exchange or registration of
transfer of Debt Securities, but the Company or the Trustee may require payment
of a sum sufficient to cover any tax, fee or other governmental charge that may
be imposed in connection therewith.
The Company or the Trustee shall not be required to exchange or
register a transfer of (a) any Debt Security for a period of 15 days next
preceding the date of selection of Debt Securities of such series for
redemption, or (b) any Debt Securities of any series selected, called or being
called for redemption in whole or in part, except in the case of any Debt
Securities of any series to be redeemed in part, the portion thereof not so to
be redeemed.
Notwithstanding the foregoing, if pursuant to Section 2.03, a series
of Debt Securities are issued pursuant to an exemption from registration under
the Securities Act, such Debt Securities may not be transferred except in
compliance with the restricted securities legend set forth below (the
"Restrictive Securities Legend"), unless otherwise determined by the Company
pursuant to Section 2.03 and in accordance with applicable law:
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THE DEBT SECURITIES HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS.
NEITHER THIS DEBT SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. THE HOLDER OF THIS DEBT SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH DEBT SECURITY PRIOR TO THE DATE WHICH IS THREE
YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH MERCANTILE BANCORPORATION INC. (THE "COMPANY") OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS DEBT SECURITY OR ANY PREDECESSOR OF THIS DEBT
SECURITY (THE "RESALE RESTRICTIONS TERMINATION DATE") ONLY (A) TO THE COMPANY,
(B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
(C) FOR SO LONG AS THE DEBT SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO
AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)
(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE
DEBT SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH
MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS DEBT SECURITY AGREES THAT
IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS. DEBT SECURITIES OWNED BY A
PURCHASER THAT IS NOT A QUALIFIED INSTITUTIONAL BUYER MAY NOT BE HELD IN BOOK-
ENTRY FORM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE
RESALE RESTRICTIONS TERMINATION DATE.
Prior to any distribution of the Debt Securities to the holders of
Capital Securities in accordance with the related Declaration, the Company and
the Trustee shall enter into a supplemental indenture pursuant to Article IX to
provide for transfer procedures and restrictions with respect to the Debt
Securities substantially similar to those contained in the Declaration with
respect to Capital Securities of the corresponding series to the extent
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applicable in the circumstances existing at the time of such distribution for
purposes of assuring, if applicable, that no registration of such Debt
Securities is required under the Securities Act of 1933, as amended.
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Debt Securities.
In case any temporary or definitive Debt Security shall become
mutilated or be destroyed, lost or stolen, the Company shall execute, and upon
its written request the Trustee shall authenticate and deliver, a new Debt
Security of the same series bearing a number not contemporaneously outstanding,
in exchange and substitution for the mutilated Debt Security, or in lieu of and
in substitution for the Debt Security so destroyed, lost or stolen. In every
case the applicant for a substituted Debt Security shall furnish to the Company
and the Trustee such security or indemnity as may be required by them to save
each of them harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Company and the Trustee evidence to their
satisfaction of the destruction, loss or theft of such Debt Security and of the
ownership thereof.
The Trustee may authenticate any such substituted Debt Security and
deliver the same upon the written request or authorization of any officer of the
Company. Upon the issuance of any substituted Debt Security, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith. In case any Debt Security which has matured or is about to mature or
has been called for redemption in full shall become mutilated or be destroyed,
lost or stolen, the Company may, instead of issuing a substitute Debt Security,
pay or authorize the payment of the same (without surrender thereof except in
the case of a mutilated Debt Security) if the applicant for such payment shall
furnish to the Company and the Trustee such security or indemnity as may be
required by them to save each of them harmless and, in case of destruction, loss
or theft, evidence satisfactory to the Company and to the Trustee of the
destruction, loss or theft of such Security and of the ownership thereof.
Every substituted Debt Security of any series issued pursuant to the
provisions of this Section 2.08 by virtue of the fact that any such Debt
Security is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Debt
Security shall be found at any time, and shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other Debt
Securities of the same series duly issued hereunder. All Debt Securities shall
be held and owned upon the express condition that, to the extent permitted by
applicable law, the foregoing provisions are exclusive with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Debt Securities
and shall preclude any and all other rights or remedies notwithstanding any law
or statute existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.
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SECTION 2.09. Temporary Debt Securities.
Pending the preparation of definitive Debt Securities of any series,
the Company may execute and the Trustee shall authenticate and make available
for delivery temporary Debt Securities that are typed, printed or lithographed.
Temporary Debt Securities shall be issuable in any authorized denomination, and
substantially in the form of the definitive Debt Securities but with such
omissions, insertions and variations as may be appropriate for temporary Debt
Securities, all as may be determined by the Company. Every such temporary Debt
Security shall be executed by the Company and be authenticated by the Trustee
upon the same conditions and in substantially the same manner, and with the same
effect, as the definitive Debt Securities. Without unreasonable delay the
Company will execute and deliver to the Trustee or the Authenticating Agent
definitive Debt Securities and thereupon any or all temporary Debt Securities of
such series may be surrendered in exchange therefor, at the principal corporate
trust office of the Trustee or at any office or agency maintained by the Company
for such purpose as provided in Section 3.02, and the Trustee or the
Authenticating Agent shall authenticate and make available for delivery in
exchange for such temporary Debt Securities a like aggregate principal amount of
such definitive Debt Securities. Such exchange shall be made by the Company at
its own expense and without any charge therefor except that in case of any such
exchange involving a registration of transfer the Company may require payment of
a sum sufficient to cover any tax, fee or other governmental charge that may be
imposed in relation thereto. Until so exchanged, the temporary Debt Securities
of any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Debt Securities of the same series authenticated and
delivered hereunder.
SECTION 2.10. Cancellation of Debt Securities Paid, etc.
All Debt Securities surrendered for the purpose of payment,
redemption, exchange or registration of transfer, shall, if surrendered to the
Company or any paying agent, be surrendered to the Trustee and promptly canceled
by it, or, if surrendered to the Trustee or any Authenticating Agent, shall be
promptly canceled by it, and no Debt Securities shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. All
Debt Securities canceled by any Authenticating Agent shall be delivered to the
Trustee. The Trustee shall destroy all canceled Debt Securities unless the
Company otherwise directs the Trustee in writing. If the Company shall acquire
any of the Debt Securities, however, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Debt
Securities unless and until the same are surrendered to the Trustee for
cancellation.
SECTION 2.11. Global Securities.
(a) If the Company shall establish pursuant to Section 2.03 that the
Debt Securities of a particular series are to be issued as a Global Security,
then the Company shall execute and the Trustee shall, in accordance with Section
2.04, authenticate and deliver, a Global Security that (i) shall represent, and
shall be denominated in an amount equal to the aggregate principal amount of,
all or a specified portion of the outstanding Debt Securities of
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such series, (ii) shall be registered in the name of the Depositary or its
nominee, (iii) shall be delivered by the Trustee to the Depositary or pursuant
to the Depositary's instruction and (iv) shall bear a legend substantially to
the following effect: "Except as otherwise provided in Section 2.11 of the
Indenture, this Debt Security may be transferred, in whole but not in part, only
to another nominee of the Depositary or to a successor Depositary or to a
nominee of such successor Depositary."
(b) Notwithstanding the provisions of Section 2.07, the Global
Security of a series may be transferred, in whole but not in part and only in
the manner provided in Section 2.07, only to another nominee of the Depositary
for such series, or to a successor Depositary for such series selected or
approved by the Company or to a nominee of such successor Depositary.
(c) If at any time the Depositary for a series of the Debt Securities
notifies the Company that it is unwilling or unable to continue as Depositary
for such series or if at any time the Depositary for such series shall no longer
be registered or in good standing under the Exchange Act, or other applicable
statute or regulation, and a successor Depositary for such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, as the case may be, this Section 2.11 shall
no longer be applicable to the Debt Securities of such series and the Company
will execute, and subject to Section 2.07, the Trustee, upon written request of
the Company, will authenticate and make available for delivery the Debt
Securities of such series in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Security of such series in exchange for such
Global Security. In addition, the Company may at any time determine that the
Debt Securities of any series shall no longer be represented by a Global
Security and that the provisions of this Section 2.11 shall no longer apply to
the Debt Securities of such series. In such event the Company will execute and
subject to Section 2.07, the Trustee, upon receipt of an Officers' Certificate
evidencing such determination by the Company, will authenticate and make
available for delivery the Debt Securities of such series in definitive
registered form without coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global Security
of such series in exchange for such Global Security. Upon the exchange of the
Global Security for such Debt Securities in definitive registered form without
coupons, in authorized denominations, the Global Security shall be canceled by
the Trustee. Such Debt Securities in definitive registered form issued in
exchange for the Global Security pursuant to this Section 2.11(c) shall be
registered in such names and in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. The Trustee shall deliver such Debt Securities to
the Depositary for delivery to the Persons in whose names such Debt Securities
are so registered.
SECTION 2.12. CUSIP Numbers.
The Company in issuing the Debt Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Securityholders; provided that any
such notice may state that
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no representation is made as to the correctness of such numbers either as
printed on the Debt Securities or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Debt Securities, and any such redemption shall not be affected by any defect
in or omission of such numbers. The Company will promptly notify the Trustee in
writing of any change in the CUSIP numbers.
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.01. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Debt Securities that it will duly and punctually pay or cause to be paid the
principal of and premium, if any, and interest on each of the Debt Securities of
that series at the place, at the respective times and in the manner provided in
such Debt Securities. At the option of the Company, each installment of interest
on the Debt Securities of any series may be paid (i) by mailing checks for such
interest payable to the order of the holders of Debt Securities entitled thereto
as they appear on the registry books of the Company or (ii) if so specified with
respect to the Debt Securities of such series as contemplated by Section 2.03,
by wire transfer to any account with a banking institution located in the United
States designated by such Person to the paying agent no later than the related
record date.
SECTION 3.02. Offices for Notices and Payments, etc.
So long as any of the Debt Securities remain outstanding, the Company
will maintain in the Borough of Manhattan, The City of New York, an office or
agency where the Debt Securities of each series may be presented for payment, an
office or agency where the Debt Securities of that series may be presented for
registration of transfer and for exchange as in this Indenture provided and an
office or agency where notices and demands to or upon the Company in respect of
the Debt Securities of that series or of this Indenture may be served. The
Company will give to the Trustee written notice of the location of any such
office or agency and of any change of location thereof. Until otherwise
designated from time to time by the Company in a notice to the Trustee, or
specified as contemplated by Section 2.03, such office or agency for all of the
above purposes shall be the office or agency of the Trustee. In case the Company
shall fail to maintain any such office or agency in the Borough of Manhattan,
The City of New York, or shall fail to give such notice of the location or of
any change in the location thereof, presentations and demands may be made and
notices may be served at the principal corporate trust office of the Trustee.
In addition to any such office or agency, the Company may from time to
time designate one or more offices or agencies outside the Borough of Manhattan,
The City of New York, where the Debt Securities may be presented for
registration of transfer and for exchange in the manner provided in this
Indenture, and the Company may from time to time rescind such designation, as
the Company may deem desirable or expedient; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain any such office or agency in the Borough of Manhattan,
The City
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of New York, for the purposes above mentioned. The Company will give to the
Trustee prompt written notice of any such designation or rescission thereof.
SECTION 3.03. Appointments to Fill Vacancies in Trustee's Office.
The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint, in the manner provided in Section 6.10, a
Trustee, so that there shall at all times be a Trustee hereunder.
SECTION 3.04. Provision as to Paying Agent.
(a) If the Company shall appoint a paying agent other than the
Trustee with respect to the Debt Securities of any series, it will cause such
paying agent to execute and deliver to the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provision of this Section
3.04,
(1) that it will hold all sums held by it as such agent for the
payment of the principal of and premium, if any, or interest, if any,
on the Debt Securities of such series (whether such sums have been
paid to it by the Company or by any other obligor on the Debt
Securities of such series) in trust for the benefit of the holders of
the Debt Securities of such series;
(2) that it will give the Trustee prompt written notice of any
failure by the Company (or by any other obligor on the Debt Securities
of such series) to make any payment of the principal of and premium,
if any, or interest, if any, on the Debt Securities of such series
when the same shall be due and payable; and
(3) that it will, at any time during the continuance of any
Event of Default, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such paying agent.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of and premium, if any, or interest, if
any, on the Debt Securities of any series, set aside, segregate and hold in
trust for the benefit of the holders of the Debt Securities of such series a sum
sufficient to pay such principal, premium or interest so becoming due and will
notify the Trustee in writing of any failure to take such action and of any
failure by the Company (or by any other obligor under the Debt Securities of
such series) to make any payment of the principal of and premium, if any, or
interest, if any, on the Debt Securities of such series when the same shall
become due and payable.
Whenever the Company shall have one or more paying agents for any
series of Debt Securities, it will, on or prior to each due date of the
principal of and premium, if any, or interest, if any, on any Debt Securities of
such series, deposit with a paying agent a sum sufficient to pay the principal,
premium or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled thereto and (unless such paying agent is the
Trustee) the Company shall promptly notify the Trustee in writing of its action
or failure to act.
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(c) Anything in this Section 3.04 to the contrary notwithstanding,
the Company may, at any time, for the purpose of obtaining a satisfaction and
discharge with respect to one or more or all series of Debt Securities
hereunder, or for any other reason, pay, or direct any paying agent to pay to
the Trustee all sums held in trust for any such series by the Company or any
such paying agent, such sums to be held by the Trustee upon the trusts herein
contained.
(d) Anything in this Section 3.04 to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section 3.04 is subject
to Sections 11.03 and 11.04.
SECTION 3.05. Certificate to Trustee.
The Company will deliver to the Trustee on or before 120 days after
the end of each fiscal year in each year, so long as Debt Securities of any
series are outstanding hereunder, a Certificate stating that in the course of
the performance by the signers of their duties as officers of the Company they
would normally have knowledge of any default by the Company in the performance
of any covenants contained herein, stating whether or not they have knowledge of
any such default and, if so, specifying each such default of which the signers
have knowledge and the nature thereof.
SECTION 3.06. Compliance with Consolidation Provisions.
The Company will not, while any of the Debt Securities remain
outstanding, consolidate with, or merge into, or merge into itself, or sell or
convey all or substantially all of its property to any other Person unless the
provisions of Article X hereof are complied with.
SECTION 3.07. Limitation on Dividends.
If Debt Securities of a series are initially issued to a Mercantile
Trust or a trustee of such trust in connection with the issuance of Trust
Securities by such Mercantile Trust (regardless of whether Debt Securities
continue to be held by such trust) and (i) there shall have occurred and be
continuing any event that would constitute an Event of Default, (ii) the Company
shall be in default with respect to its payment of any obligations under a
Capital Securities Guarantee or a Common Securities Guarantee with respect to
securities issued by such trust, or (iii) the Company shall have given notice of
its election to defer payments of interest on the Debt Securities of such series
by extending the interest payment period as provided herein and such period, or
any extension thereof, shall be continuing, then (a) the Company shall not
declare or pay any dividend on, make a distribution with respect to, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of its
capital stock or rights to acquire such capital stock (other than (i) purchases
or acquisitions of shares of any such capital stock or rights to acquire such
capital stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plans, (ii) as a result of a
reclassification of the Company's capital stock or rights to acquire such
capital stock or the exchange or conversion of one class or series of the
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Company's capital stock or rights to acquire such capital stock for another
class or series of the Company's capital stock or rights to acquire such capital
stock, (iii) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (iv) dividends and
distributions made on the Company's capital stock or rights to acquire such
capital stock with the Company's capital stock or rights to acquire such capital
stock, or (v) any declaration of a dividend in connection with the
implementation of a shareholder rights plan, or the issuance of stock under any
such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto), or make any guarantee payments (other than payments under a
Capital Securities Guarantee or a Common Securities Guarantee) with respect to
the foregoing and (b) the Company shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Company that rank pari passu with or junior to the Debt
Securities of such series.
SECTION 3.08. Covenants as to Mercantile Trusts.
In the event Debt Securities of a series are initially issued to a
Mercantile Trust or the Institutional Trustee of such Mercantile Trust in
connection with the issuance of Trust Securities by such Mercantile Trust, for
so long as such Trust Securities remain outstanding, the Company shall maintain
100% ownership of the Common Securities of such Mercantile Trust; provided,
however, that any permitted successor of the Company under this Indenture may
succeed to the Company's ownership of such Common Securities. The Company, as
owner of a majority of the Common Securities of such Mercantile Trust, shall use
its reasonable efforts to cause such Mercantile Trust (a) to remain a statutory
business trust, except in connection with a distribution of Debt Securities of
such series to the holders of such Trust Securities in liquidation of such
Mercantile Trust, the redemption of all of the Trust Securities of such
Mercantile Trust or certain mergers, consolidations or amalgamations, each as
permitted by the Declaration of such Mercantile Trust, and (b) to otherwise
continue to be classified as a grantor trust for United States federal income
tax purposes and (c) to use its reasonable efforts to cause each holder of Trust
Securities issued by such Mercantile Trust to be treated as owning an undivided
beneficial interest in the Debt Securities of such series issued to such
Mercantile Trust.
SECTION 3.09. Calculation of Original Issue Discount.
The Company shall file with the Trustee promptly at the end of each
calendar year a written notice specifying the amount of original issue discount
(including daily rates and accrual periods), if any, accrued on outstanding Debt
Securities as of the end of such year.
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ARTICLE IV.
SECURITYHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 4.01. Securityholders' Lists.
The Company covenants and agrees that it will furnish or caused to be
furnished to the Trustee:
(a) on each regular record date for each series of Debt Securities, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Securityholders of such series of Debt Securities as of such
record date (and on dates to be determined pursuant to Section 2.03 for non-
interest bearing securities in each year); and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished;
(c) except that no such lists need be furnished under this Section
4.01 so long as the Trustee is in possession thereof by reason of its acting as
Debt Security registrar for such series.
SECTION 4.02. Preservation and Disclosure of Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
each series of Debt Securities (1) contained in the most recent list furnished
to it as provided in Section 4.01 or (2) received by it in the capacity of Debt
Securities registrar (if so acting) hereunder. The Trustee may destroy any list
furnished to it as provided in Section 4.01 upon receipt of a new list so
furnished.
(b) In case three or more holders of Debt Securities of any series
(hereinafter referred to as "applicants") apply in writing to the Trustee and
furnish to the Trustee reasonable proof that each such applicant has owned a
Debt Security of such series for a period of at least six months preceding the
date of such application, and such application states that the applicants desire
to communicate with other holders of Debt Securities of such series or with
holders of all Debt Securities with respect to their rights under this Indenture
or under such Debt Securities and is accompanied by a copy of the form of proxy
or other communication which such applicants propose to transmit, then the
Trustee shall within five Business Days after the receipt of such application,
at its election, either:
(1) afford such applicants access to the information preserved
at the time by the Trustee in accordance with the provisions of subsection
(a) of this Section 4.02, or
(2) inform such applicants as to the approximate number of
holders of such series or all Debt Securities, as the case may be, whose
names and addresses
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appear in the information preserved at the time by the Trustee in
accordance with the provisions of subsection (a) of this Section 4.02, and
as to the approximate cost of mailing to such Securityholders the form of
proxy or other communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder of such series or all Debt Securities,
as the case may be, whose name and address appear in the information preserved
at the time by the Trustee in accordance with the provisions of subsection (a)
of this Section 4.02 a copy of the form of proxy or other communication which is
specified in such request with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender, the Trustee shall mail to such applicants and file with the
Securities and Exchange Commission, if permitted or required by applicable law,
together with a copy of the material to be mailed, a written statement to the
effect that, in the opinion of the Trustee, such mailing would be contrary to
the best interests of the holders of Debt Securities of such series or all Debt
Securities, as the case may be, or would be in violation of applicable law. Such
written statement shall specify the basis of such opinion. If said Commission,
as permitted or required by applicable law, after opportunity for a hearing upon
the objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, said Commission shall find, after
notice and opportunity for hearing, that all the objections so sustained have
been met and shall enter an order so declaring, the Trustee shall mail copies of
such material to all such Securityholders with reasonable promptness after the
entry of such order and the renewal of such tender; otherwise the Trustee shall
be relieved of any obligation or duty to such applicants respecting their
application.
(c) Each and every holder of Debt Securities, by receiving and
holding the same, agrees with Company and the Trustee that neither the Company
nor the Trustee nor any paying agent shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the holders
of Debt Securities in accordance with the provisions of subsection (b) of this
Section 4.02, regardless of the source from which such information was derived,
and that the Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under said subsection (b).
SECTION 4.03. [Reserved]
SECTION 4.04. Reports by the Trustee.
(a) The Trustee shall transmit to Securityholders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto. If required by Section 313(a) of the Trust Indenture Act, the
Trustee shall, within 60 days after each May 15 following the date of this
Indenture deliver to Securityholders a brief report, dated as of such May 15,
which complies with the provisions of such Section 313(a).
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(b) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with each stock
exchange, if any, upon which the Securities are listed, with the Commission, if
required by applicable law, and with the Company. The Company will promptly
notify the Trustee when the Debt Securities are listed on any stock exchange.
ARTICLE V.
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
UPON AN EVENT OF DEFAULT
SECTION 5.01. Events of Default.
The following Events of Default with respect to Debt Securities of any
series or such other events as may be established with respect to the Debt
Securities of that series as contemplated by Section 2.03 hereof shall be
"Events of Default" with respect to Debt Securities of that series:
(a) the Company defaults in the payment of any interest upon any Debt
Securities of that series when it becomes due and payable, and continuance of
such default for a period of 30 days; provided, however, that a valid extension
of an interest payment period by the Company in accordance with the terms of
such Debt Securities shall not constitute a default in the payment of interest
for this purpose; or
(b) the Company defaults in the payment of all or any part of the
principal of (or premium, if any, on) any Debt Securities of that series as and
when the same shall become due and payable either at maturity, upon redemption
(including redemption for any sinking fund), by declaration of acceleration or
otherwise; provided, however, that a valid extension of the maturity of such
Debt Securities shall not constitute a default for this purpose; or
(c) the Company defaults with respect to indebtedness for money
borrowed resulting in acceleration of such indebtedness having an aggregate
principal amount in excess of $25 million and such acceleration is not rescinded
or annulled within 30 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the Trustee
by the holders of at least 25% in aggregate principal amount of the outstanding
Debt Securities of that series, a written notice specifying such acceleration
and stating that such Notice is a "Notice of Default" hereunder; or
(d) the Company defaults in the performance of, or breaches, any of
its covenants or agreements in this Indenture or in the terms of that series of
Debt Securities established as contemplated in this Indenture (other than a
covenant or agreement a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with), and continuance of such
default or breach for a period of 90 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the holders of at least 25% in aggregate principal amount of
the outstanding Debt
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Securities of that series, a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is
a "Notice of Default" hereunder; or
(e) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of the Company in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Company or for any substantial part of
its property, or ordering the winding-up or liquidation of its affairs and such
decree or order shall remain unstayed and in effect for a period of 90
consecutive days; or
(f) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, shall
consent to the entry of an order for relief in an involuntary case under any
such law, or shall consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Company or of any substantial part of its property, or
shall make any general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due; or
(g) as to Debt Securities of any series issued to a Mercantile Trust,
such Mercantile Trust shall have voluntarily or involuntarily liquidated,
dissolved, wound-up its business or otherwise terminated its existence except in
connection with (i) the distribution of the Debt Securities of such series to
holders of such Trust Securities in liquidation of their interests in such
Mercantile Trust, (ii) the redemption of all of the outstanding Trust Securities
of such Mercantile Trust or (iii) certain mergers, consolidations or
amalgamations, each as permitted by the Declaration of such Mercantile Trust.
If an Event of Default occurs and is continuing with respect to any
series of Debt Securities, then, and in each and every such case, unless the
principal of all of the Debt Securities of that series shall have already become
due and payable, either the Trustee or the holders of not less than 25% in
aggregate principal amount of the Debt Securities of that series then
outstanding hereunder, by notice in writing to the Company (and to the Trustee
if given by Securityholders), may declare the entire principal (or, if the Debt
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) of all
Debt Securities of that series and the interest accrued thereon, if any, to be
due and payable immediately, and upon any such declaration the same shall become
immediately due and payable.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal (or, if the Debt Securities are Original
Issue Discount Securities, such portion of the principal as may be specified in
the terms thereof) of the Debt Securities of any series (or of all the Debt
Securities, as the case may be) shall have been so declared due and payable, and
before any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest upon all the Debt Securities of such series (or of all the Debt
Securities, as the case may be) and the
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principal of and premium, if any, on any and all Debt Securities of such series
(or of all the Debt Securities, as the case may be) which shall have become due
otherwise than by acceleration (with interest upon such principal and premium,
if any, and, to the extent that payment of such interest is enforceable under
applicable law, on overdue installments of interest, at the same rate as the
rate of interest or Yield to Maturity (in the case of Original Issue Discount
Securities) specified in the Debt Securities of such series (or at the
respective rates of interest or Yields to Maturity of all the Debt Securities,
as the case may be) to the date of such payment or deposit) and such amount as
shall be sufficient to cover reasonable compensation to the Trustee and each
predecessor Trustee, their respective agents, attorneys and counsel, and all
other amounts due to the Trustee pursuant to Section 6.06, and if any and all
Events of Default under this Indenture, other than the non-payment of the
principal of or premium, if any, on Debt Securities which shall have become due
by acceleration, shall have been cured, waived or otherwise remedied as provided
herein -- then and in every such case the holders of a majority in aggregate
principal amount of the Debt Securities of such series (or of all the Debt
Securities, as the case may be) then outstanding, by written notice to the
Company and to the Trustee, may waive all defaults with respect to that series
(or with respect to all Debt Securities, as the case may be, in such case,
treated as a single class) and rescind and annul such declaration and its
consequences, but no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default or shall impair any right consequent
thereon.
In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the Trustee and the holders of the Debt Securities shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the Trustee and the holders of the Debt
Securities shall continue as though no such proceeding had been taken.
SECTION 5.02. Payment of Debt Securities on Default; Suit Therefor.
The Company covenants that (a) in case default shall be made in the
payment of any installment of interest upon any of the Debt Securities of any
series as and when the same shall become due and payable, and such default shall
have continued for a period of 30 days, or (b) in case default shall be made in
the payment of the principal of or premium, if any, on any of the Debt
Securities of any series as and when the same shall have become due and payable,
whether at maturity of the Debt Securities of that series or upon redemption or
by declaration of acceleration or otherwise -- then, upon demand of the Trustee,
the Company will pay to the Trustee, for the benefit of the holders of the Debt
Securities of that series the whole amount that then shall have become due and
payable on all such Debt Securities of that series for principal and premium, if
any, or interest, or both, as the case may be, with interest upon the overdue
principal and premium, if any, and (to the extent that payment of such interest
is enforceable under applicable law) upon the overdue installments of interest
at the rate or Yield to Maturity (in the case of Original Issue Discount
Securities) borne by the Debt Securities of that series; and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including a reasonable
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compensation to the Trustee, its agents, attorneys and counsel, and any other
amounts due to the Trustee under Section 6.06. In case the Company shall fail
forthwith to pay such amounts upon such demand, the Trustee, in its own name and
as trustee of an express trust, shall be entitled and empowered to institute any
actions or proceedings at law or in equity for the collection of the sums so due
and unpaid, and may prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against the Company or
any other obligor on such Debt Securities and collect in the manner provided by
law out of the property of the Company or any other obligor on such Debt
Securities wherever situated the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Debt Securities of
any series under Title 11, United States Code, or any other applicable law, or
in case a receiver or trustee shall have been appointed for the property of the
Company or such other obligor, or in the case of any other similar judicial
proceedings relative to the Company or other obligor upon the Debt Securities of
any series, or to the creditors or property of the Company or such other
obligor, the Trustee, irrespective of whether the principal of the Debt
Securities of any series shall then be due and payable as therein expressed or
by declaration of acceleration or otherwise and irrespective of whether the
Trustee shall have made any demand pursuant to the provisions of this Section
5.02, shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount of principal
and interest (or, if the Debt Securities of that series are Original Issue
Discount Securities such portion of the principal amount as may be specified in
the terms of that series) owing and unpaid in respect of the Debt Securities of
such series and, in case of any judicial proceedings, to file such proofs of
claim and other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for reasonable compensation
to the Trustee and each predecessor Trustee, and their respective agents,
attorneys and counsel, and for reimbursement of all other amounts due to the
Trustee under Section 6.06 and of the Securityholders allowed in such judicial
proceedings relative to the Company or any other obligor on the Debt Securities
of any series, or to the creditors or property of the Company or such other
obligor, unless prohibited by applicable law and regulations, to vote on behalf
of the holders of the Debt Securities or any series in any election of a trustee
or a standby trustee in arrangement, reorganization, liquidation or other
bankruptcy or insolvency proceedings or Person performing similar functions in
comparable proceedings, and to collect and receive any moneys or other property
payable or deliverable on any such claims, and to distribute the same after the
deduction of its charges and expenses; and any receiver, assignee or trustee in
bankruptcy or reorganization is hereby authorized by each of the Securityholders
to make such payments to the Trustee, and, in the event that the Trustee shall
consent to the making of such payments directly to the Securityholders, to pay
to the Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Trustee, each predecessor Trustee and their respective
agents, attorneys and counsel, and all other amounts due to the Trustee under
Section 6.06.
Nothing herein contained shall be construed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Securityholder
any plan of
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reorganization, arrangement, adjustment or composition affecting the Debt
Securities of any series or the rights of any holder thereof or to authorize the
Trustee to vote in respect of the claim of any Securityholder in any such
proceeding.
All rights of action and of asserting claims under this Indenture, or
under any of the Debt Securities, may be enforced by the Trustee without the
possession of any of the Debt Securities, or the production thereof at any trial
or other proceeding relative thereto, and any such suit or proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall be for the ratable benefit of the holders of
the Debt Securities.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Debt Securities, and it shall not be necessary to make any holders of the
Debt Securities parties to any such proceedings.
SECTION 5.03. Application of Moneys Collected by Trustee.
Any moneys collected by the Trustee shall be applied in the following
order, at the date or dates fixed by the Trustee for the distribution of such
moneys, upon presentation of the several Debt Securities in respect of which
moneys have been collected, and stamping thereon the payment, if only partially
paid, and upon surrender thereof if fully paid:
First: To the payment of costs and expenses of collection applicable
to such series and reasonable compensation to the Trustee, its agents, attorneys
and counsel, and of all other amounts due to the Trustee under Section 6.06;
Second: To the payment of all Senior Indebtedness of the Company if
and to the extent required by Article XV;
Third: To the payment of the amounts then due and unpaid upon Debt
Securities of such series for principal (and premium, if any), and interest on
the Debt Securities of such series, in respect of which or for the benefit of
which money has been collected, ratably, without preference or priority of any
kind, according to the amounts due on such Debt Securities for principal (and
premium, if any) and interest, respectively; and
Fourth: The balance, if any, to the Company.
SECTION 5.04. Proceedings by Securityholders.
No holder of any Debt Security of any series shall have any right to
institute any suit, action or proceeding for any remedy hereunder, unless such
holder previously shall have given to the Trustee written notice of an Event of
Default with respect to the Debt Securities of such series and unless the
holders of not less than 25% in aggregate principal amount of the Debt
Securities of that series then outstanding shall have given the Trustee a
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written request to institute such action, suit or proceeding and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred thereby, and the Trustee for 60
days after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such action, suit or proceeding; provided that no holder
of Debt Securities of any series shall have any right to prejudice the rights of
any other holder of Debt Securities of such series, obtain priority or
preference over any other such holder or enforce any right under this Indenture
except in the manner herein provided and for the equal, ratable and common
benefit of all holders of Debt Securities of the applicable series.
Notwithstanding any other provisions in this Indenture, however, the
right of any holder of any Debt Security to receive payment of the principal of,
premium, if any, and interest, on such Debt Security when due, or to institute
suit for the enforcement of any such payment, shall not be impaired or affected
without the consent of such holder. For the protection and enforcement of the
provisions of this Section, each and every Securityholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
SECTION 5.05. Proceedings by Trustee.
In case of an Event of Default hereunder the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either by suit in
equity or by action at law or by proceeding in bankruptcy or otherwise, whether
for the specific enforcement of any covenant or agreement contained in this
Indenture or in aid of the exercise of any power granted in this Indenture, or
to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
SECTION 5.06. Remedies Cumulative and Continuing.
Except as otherwise provided in Section 2.08, all powers and remedies
given by this Article V to the Trustee or to the Securityholders shall, to the
extent permitted by law, be deemed cumulative and not exclusive of any other
powers and remedies available to the Trustee or the holders of the Debt
Securities, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to such series, and no delay or omission of
the Trustee or of any holder of any of the Debt Securities to exercise any right
or power accruing upon any Event of Default occurring and continuing as
aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or an acquiescence therein; and, subject to the
provisions of Section 5.04, every power and remedy given by this Article V or by
law to the Trustee or to the Securityholders may be exercised from time to time,
and as often as shall be deemed expedient, by the Trustee or by the
Securityholders.
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SECTION 5.07. Direction of Proceedings and Waiver of Defaults by
Majority of Securityholders.
The holders of a majority in aggregate principal amount of the Debt
Securities of any or all series affected (voting as one class) at the time
outstanding shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee with respect to such series;
provided, however, that (subject to the provisions of Section 6.01) the Trustee
shall have the right to decline to follow any such direction if the Trustee
shall determine that the action so directed would be unjustly prejudicial to the
holders not taking part in such direction or if the Trustee being advised by
counsel determines that the action or proceeding so directed may not lawfully be
taken or if a Responsible Officer of the Trustee shall determine that the action
or proceedings so directed would involve the Trustee in personal liability.
Prior to any declaration accelerating the maturity of any series of the Debt
Securities, or of all the Debt Securities, as the case may be, the holders of a
majority in aggregate principal amount of the Debt Securities of that series at
the time outstanding may on behalf of the holders of all of the Debt Securities
of such series waive (or modify any previously granted waiver of) any past
default or Event of Default, including any default or Event of Default the
conditions for the occurrence of which are established pursuant to Section 2.03,
and its consequences, except a default (a) in the payment of principal of,
premium, if any, or interest on any of the Debt Securities, (b) in respect of
covenants or provisions hereof which cannot be modified or amended without the
consent of the holder of each Debt Security affected, or (c) in respect of the
covenants contained in Section 3.08; provided, however, that if the Debt
Securities of such series are held by a Mercantile Trust or a trustee of such
trust, such waiver or modification to such waiver shall not be effective until
the holders of a majority in liquidation preference of Trust Securities of the
applicable Mercantile Trust shall have consented to such waiver or modification
to such waiver; provided, further, that if the consent of the holder of each
outstanding Debt Security is required, such waiver shall not be effective until
each holder of the Trust Securities of the applicable Mercantile Trust shall
have consented to such waiver. Upon any such waiver, the default covered thereby
shall be deemed to be cured for all purposes of this Indenture and the Company,
the Trustee and the holders of the Debt Securities of such series shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon. Whenever any default or Event of Default
hereunder shall have been waived as permitted by this Section 5.07, said default
or Event of Default shall for all purposes of the Debt Securities of that series
(or of all Securities, as the case may be) and this Indenture be deemed to have
been cured and to be not continuing.
SECTION 5.08. Notice of Defaults.
The Trustee shall, within 90 days after the occurrence of a default
with respect to the Debt Securities of any series, mail to all Securityholders
of that series, as the names and addresses of such holders appear upon the Debt
Security Register, notice of all defaults with respect to that series known to
the Trustee, unless such defaults shall have been cured before the giving of
such notice (the term "defaults" for the purpose of this Section 5.08
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being hereby defined to be the events specified in clauses (a), (b), (c), (d),
(e) and (f) of Section 5.01, not including periods of grace, if any, provided
for therein, and irrespective of the giving of written notice specified in
clause (c) of Section 5.01); and provided that, except in the case of default in
the payment of the principal of, premium, if any, or interest on any of the Debt
Securities of such series, the Trustee shall be protected in withholding such
notice if and so long as a Responsible Officer of the Trustee in good faith
determines that the withholding of such notice is in the interests of the
Securityholders of such series; and provided further, that in the case of any
default of the character specified in Section 5.01(c) no such notice to
Securityholders of such series shall be given until at least 60 days after the
occurrence thereof but shall be given within 90 days after such occurrence.
SECTION 5.09. Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any Debt
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees and expenses, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 5.09 shall not apply to any suit instituted
by the Trustee, to any suit instituted by any Securityholder, or group of
Securityholders of any series, holding in the aggregate more than 10% in
principal amount of the Debt Securities of that series outstanding, or to any
suit instituted by any Securityholder for the enforcement of the payment of the
principal of (or premium, if any) or interest on any Debt Security against the
Company on or after the same shall have become due and payable.
ARTICLE VI
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of Trustee.
With respect to the holders of any series of Debt Securities issued
hereunder, the Trustee, prior to the occurrence of an Event of Default with
respect to Debt Securities of that series and after the curing or waiving of all
Events of Default which may have occurred, with respect to Debt Securities of
that series, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default with
respect to the Debt Securities of a series has occurred (which has not been
cured or waived) the Trustee shall exercise such of the rights and powers vested
in it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
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No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default with respect to
Debt Securities of a series and after the curing or waiving of all Events of
Default with respect to that series which may have occurred
(1) the duties and obligations of the Trustee with respect to
Debt Securities of such series shall be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable except
for the performance of such duties and obligations with respect to such
series as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee, and
(2) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but, in the case of any such certificates or opinions which
by any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers of the Trustee, unless it shall
be proved that the Trustee was negligent in ascertaining the pertinent facts;
and
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith, in accordance with the direction of
the Securityholders pursuant to Section 5.07, relating to the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is ground for believing that the repayment of
such funds or liability is not assured to it under the terms of this Indenture
or indemnity satisfactory to the Trustee against such risk is not reasonably
assured to it.
SECTION 6.02. Reliance on Documents, Opinions, etc.
Except as otherwise provided in Section 6.01:
(a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion,
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report, notice, request, consent, order, bond, note, debenture or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof be herein specifically prescribed); and any Board
Resolution may be evidenced to the Trustee by a copy thereof certified by the
Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its selection and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders, pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the discretion
or rights or powers conferred upon it by this Indenture; nothing contained
herein shall, however, relieve the Trustee of the obligation, upon the
occurrence of an Event of Default with respect to a series of the Debt
Securities (that has not been cured or waived) to exercise with respect to Debt
Securities of that series such of the rights and powers vested in it by this
Indenture, and to use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, debenture,
coupon or other paper or document, unless requested in writing to do so by the
holders of not less than a majority in principal amount of the outstanding Debt
Securities of the series affected thereby; provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expense or liability as a condition to so
proceeding;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents (including
any Authenticating Agent) or attorneys, and the Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent or attorney
appointed by it with due care; and
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(h) the Trustee shall not be charged with knowledge of any Default or
Event of Default with respect to the Debt Securities unless either (1) a
Responsible Officer shall have actual knowledge of such Default or Event of
Default or (2) written notice of such Default or Event of Default shall have
been given to the Trustee by the Company or any other obligor on the Debt
Securities or by any holder of the Debt Securities.
SECTION 6.03. No Responsibility for Recitals, etc.
The recitals contained herein and in the Debt Securities (except in
the certificate of authentication of the Trustee or the Authenticating Agent)
shall be taken as the statements of the Company and the Trustee and the
Authenticating Agent assume no responsibility for the correctness of the same.
The Trustee and the Authenticating Agent make no representations as to the
validity or sufficiency of this Indenture or of the Debt Securities. The Trustee
and the Authenticating Agent shall not be accountable for the use or application
by the Company of any Debt Securities or the proceeds of any Debt Securities
authenticated and delivered by the Trustee or the Authenticating Agent in
conformity with the provisions of this Indenture.
SECTION 6.04. Trustee, Authenticating Agent, Paying Agents, Transfer
Agents or Registrar May Own Debt Securities.
The Trustee or any Authenticating Agent or any paying agent or any
transfer agent or any Debt Security registrar, in its individual or any other
capacity, may become the owner or pledgee of Debt Securities with the same
rights it would have if it were not Trustee, Authenticating Agent, paying agent,
transfer agent or Debt Security registrar.
SECTION 6.05. Moneys to be Held in Trust.
Subject to the provisions of Section 11.04, all moneys received by the
Trustee or any paying agent shall, until used or applied as herein provided, be
held in trust for the purpose for which they were received, but need not be
segregated from other funds except to the extent required by law. The Trustee
and any paying agent shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
So long as no Event of Default shall have occurred and be continuing, all
interest allowed on any such moneys shall be paid from time to time upon the
written order of the Company, signed by the Chairman of the Board of Directors,
the President, a Managing Director, a Vice President, the Treasurer or an
Assistant Treasurer of the Company.
SECTION 6.06. Compensation and Expenses of Trustee.
The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, such reasonable compensation as
shall be agreed to in writing between the Company and the Trustee (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust), and the Company will pay or reimburse the Trustee
upon its request for all reasonable expenses, disbursements and
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advances incurred or made by the Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all Persons not regularly in
its employ) except any such expense, disbursement or advance as may arise from
its negligence or bad faith. The Company also covenants to indemnify each of the
Trustee or any predecessor Trustee (and its officers, agents, directors and
employees) for, and to hold it harmless against, any and all loss, damage,
claim, liability or expense including taxes (other than taxes based on the
income of the Trustee) incurred without negligence or bad faith on the part of
the Trustee and arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim of liability in the premises. The obligations of the
Company under this Section 6.06 to compensate and indemnify the Trustee and to
pay or reimburse the Trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder. Such additional indebtedness shall
be secured by a lien prior to that of the Debt Securities upon all property and
funds held or collected by the Trustee as such, except funds held in trust for
the benefit of the holders of particular Debt Securities.
Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.01(d), Section
5.01(e) or Section 5.01(f), the expenses (including the reasonable charges and
expenses of its counsel) and the compensation for the services are intended to
constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law.
The provisions of this Section shall survive the resignation or
removal of the Trustee and the defeasance or other termination of this
Indenture.
SECTION 6.07. Officers' Certificate as Evidence.
Except as otherwise provided in Sections 6.01 and 6.02, whenever in
the administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
omitting any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of negligence or
bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee, and such
certificate, in the absence of negligence or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken or omitted by
it under the provisions of this Indenture upon the faith thereof.
SECTION 6.08. Conflicting Interest of Trustee.
If the Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act, subject to the penultimate paragraph of such section.
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SECTION 6.09. Eligibility of Trustee.
The Trustee hereunder shall at all times be a corporation organized
and doing business under the laws of the United States of America or any state
or territory thereof or of the District of Columbia or a corporation or other
Person permitted to act as trustee by the Securities and Exchange Commission
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million U.S. dollars ($50,000,000) and
subject to supervision or examination by federal, state, territorial, or
District of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 6.09 the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
records of condition so published.
The Company may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Company, serve as
Trustee; provided such corporation shall be otherwise eligible and qualified
under this Article.
In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.09, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.10.
SECTION 6.10. Resignation or Removal of Trustee.
(a) The Trustee, or any trustee or trustees hereafter appointed, may
at any time resign with respect to one or more or all series of Debt Securities
by giving written notice of such resignation to the Company and by mailing
notice thereof, at the Company's expense, to the holders of the applicable
series of Debt Securities at their addresses as they shall appear on the Debt
Security Register. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee or trustees with respect to the applicable
series by written instrument, in duplicate, executed by order of its Board of
Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor Trustee. If no successor Trustee shall
have been so appointed with respect to any series of Debt Securities and have
accepted appointment within 30 days after the mailing of such notice of
resignation to the affected Securityholders, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor Trustee,
or any Securityholder who has been a bona fide holder of a Debt Security or Debt
Securities of the applicable series for at least six months may, subject to the
provisions of Section 5.09, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor Trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor Trustee.
(b) In case at any time any of the following shall occur --
(1) the Trustee shall fail to comply with the provisions of
Section 6.08 after written request therefor by the Company or by any
Securityholder who has been a bona
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fide holder of a Debt Security or Debt Securities for at least six months, or
(2) the Trustee shall cease to be eligible in accordance with
the provisions of Section 6.09 and shall fail to resign after written request
therefor by the Company or by any such Securityholder, or
(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, the Company may remove the
Trustee and appoint a successor Trustee by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall
be delivered to the Trustee so removed and one copy to the successor Trustee,
or, subject to the provisions of Section 5.09, any Securityholder who has been a
bona fide holder of a Debt Security or Debt Securities of the applicable series
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe, remove the
Trustee and appoint successor Trustee.
(c) Upon prior written notice to the Company and the Trustee, the
holders of a majority in aggregate principal amount of the Debt Securities of
any series at the time outstanding may at any time remove the Trustee with
respect to such series and nominate a successor Trustee with respect to the
applicable series of Debt Securities, which shall be deemed appointed as
successor Trustee with respect to the applicable series unless within ten
Business Days after such nomination the Company objects thereto, in which case
the Trustee so removed or any Securityholder of the applicable series, upon the
terms and conditions and otherwise as in subsection (a) of this Section 6.10
provided, may petition any court of competent jurisdiction for an appointment of
a successor Trustee with respect to such series.
(d) Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 6.10 shall
become effective upon acceptance of appointment by the successor Trustee as
provided in Section 6.11.
SECTION 6.11. Acceptance by Successor Trustee.
Any successor Trustee appointed as provided in Section 6.10 shall
execute, acknowledge and deliver to the Company and to its predecessor Trustee
an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the retiring Trustee with respect to all or any
applicable series shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations with respect to such series of its predecessor
hereunder, with like effect as if originally named as Trustee herein; but,
nevertheless, on the written request of the Company or of the successor Trustee,
the Trustee ceasing to act shall, upon payment of any amounts then due it
pursuant to the provisions of Section 6.06, execute and deliver an instrument
transferring to such successor Trustee all the rights and powers of
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the Trustee so ceasing to act and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
thereunder. Upon request of any such successor Trustee, the Company shall
execute any and all instruments in writing for more fully and certainly vesting
in and confirming to such successor Trustee all such rights and powers. Any
Trustee ceasing to act shall, nevertheless, retain a lien upon all property or
funds held or collected by such Trustee to secure any amounts then due it
pursuant to the provisions of Section 6.06.
If a successor Trustee is appointed with respect to the Debt
Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Debt Securities of any
applicable series shall execute and deliver an indenture supplemental hereto
which shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Debt Securities of any series as to which the predecessor
Trustee is not retiring shall continue to be vested in the predecessor Trustee,
and shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the Trust hereunder
by more than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same
trust and that each such Trustee shall be Trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Trustee.
No successor Trustee shall accept appointment as provided in this
Section 6.11 unless at the time of such acceptance such successor Trustee shall
be qualified under the provisions of Section 6.08 and eligible under the
provisions of Section 6.09.
In no event shall a retiring Trustee be liable for the acts or
omissions of any successor Trustee hereunder.
Upon acceptance of appointment by a successor Trustee as provided in
this Section 6.11, the Company shall mail notice of the succession of such
Trustee hereunder to the holders of Debt Securities of any applicable series at
their addresses as they shall appear on the Debt Security Register. If the
Company fails to mail such notice within ten Business Days after the acceptance
of appointment by the successor Trustee, the successor Trustee shall cause such
notice to be mailed at the expense of the Company.
SECTION 6.12. Succession by Merger, etc.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder without
the execution or filing of any paper or any further act on the part of any of
the parties hereto; provided such corporation shall be otherwise eligible and
qualified under this Article.
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In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Debt Securities of any series shall
have been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee, and deliver
such Debt Securities so authenticated; and in case at that time any of the Debt
Securities of any series shall not have been authenticated, any successor to the
Trustee may authenticate such Debt Securities either in the name of any
predecessor hereunder or in the name of the successor Trustee; and in all such
cases such certificates shall have the full force which it is anywhere in the
Debt Securities of such series or in this Indenture provided that the
certificate of the Trustee shall have; provided, however, that the right to
adopt the certificate of authentication of any predecessor Trustee or
authenticate Debt Securities of any series in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
SECTION 6.13. Limitation on Rights of Trustee as a Creditor.
The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship described in Section 311(b) of the
Trust Indenture Act. A Trustee who has resigned or been removed shall be subject
to Section 311(a) of the Trust Indenture Act to the extent included therein.
SECTION 6.14. Authenticating Agents.
There may be one or more Authenticating Agents appointed by the
Trustee upon the request of the Company with power to act on its behalf and
subject to its direction in the authentication and delivery of Debt Securities
of any series issued upon exchange or registration of transfer thereof as fully
to all intents and purposes as though any such Authenticating Agent had been
expressly authorized to authenticate and deliver Debt Securities of such series;
provided that the Trustee shall have no liability to the Company for any acts or
omissions of the Authenticating Agent with respect to the authentication and
delivery of Debt Securities of any series. Any such Authenticating Agent shall
at all times be a corporation organized and doing business under the laws of the
United States or of any state or territory thereof or of the District of
Columbia authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of at least $5,000,000 and being subject to
supervision or examination by federal, state, territorial or District of
Columbia authority. If such corporation publishes reports of condition at least
annually pursuant to law or the requirements of such authority, then for the
purposes of this Section 6.14 the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect herein specified in this Section.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or
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any corporation succeeding to all or substantially all of the corporate trust
business of any Authenticating Agent, shall be the successor of such
Authenticating Agent hereunder, if such successor corporation is otherwise
eligible under this Section 6.14 without the execution or filing of any paper or
any further act on the part of the parties hereto or such Authenticating Agent.
Any Authenticating Agent may at any time resign with respect to one or
more or all series of Debt Securities by giving written notice of resignation to
the Trustee and to the Company. The Trustee may at any time terminate the agency
of any Authenticating Agent with respect to one or more or all series of Debt
Securities by giving written notice of termination to such Authenticating Agent
and to the Company. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible under this Section 6.14, the Trustee may, and upon the request of the
Company shall, promptly appoint a successor Authenticating Agent with respect to
the applicable series eligible under this Section 6.14, shall give written
notice of such appointment to the Company and shall mail notice of such
appointment to all holders of the applicable series of Debt Securities as the
names and addresses of such holders appear on the Debt Security Register. Any
successor Authenticating Agent with respect to all or any series upon acceptance
of its appointment hereunder shall become vested with all rights, powers, duties
and responsibilities with respect to such series of its predecessor hereunder,
with like effect as if originally named as Authenticating Agent herein.
The Company agrees to pay to any Authenticating Agent from time to
time reasonable compensation for its services. Any Authenticating Agent shall
have no responsibility or liability for any action taken by it as such in
accordance with the directions of the Trustee.
ARTICLE VII.
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Action by Securityholders.
Whenever in this Indenture it is provided that the holders of a
specified percentage in aggregate principal amount of the Debt Securities of any
or all series may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action) the fact that at the time of taking any such action the holders of such
specified percentage have joined therein may be evidenced (a) by any instrument
or any number of instruments of similar tenor executed by such Securityholders
in person or by agent or proxy appointed in writing, or (b) by the record of
such holders of Debt Securities voting in favor thereof at any meeting of such
Securityholders duly called and held in accordance with the provisions of
Article Eight, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of such Securityholders or (d) by any other method
the Trustee deems satisfactory.
If the Company shall solicit from the Securityholders of any series
any request, demand, authorization, direction, notice, consent, waiver or other
action or
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revocation of the same, the Company may, at its option, as evidenced by an
Officers' Certificate, fix in advance a record date for such series for the
determination of Securityholders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other action or revocation
of the same, but the Company shall have no obligation to do so. If such a record
date is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other action or revocation of the same may be given before or after
the record date, but only the Securityholders of record at the close of business
on the record date shall be deemed to be Securityholders for the purposes of
determining whether Securityholders of the requisite proportion of outstanding
Debt Securities of that series have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other
action or revocation of the same, and for that purpose the outstanding Debt
Securities of that series shall be computed as of the record date; provided,
however, that no such authorization, agreement or consent by such
Securityholders on the record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than six
months after the record date.
SECTION 7.02. Proof of Execution by Securityholders.
Subject to the provisions of Section 6.01, 6.02 and 8.05, proof of the
execution of any instrument by a Securityholder or his agent or proxy shall be
sufficient if made in accordance with such reasonable rules and regulations as
may be prescribed by the Trustee or in such manner as shall be satisfactory to
the Trustee. The ownership of Debt Securities shall be proved by the Debt
Security Register or by a certificate of the Debt Security registrar. The
Trustee may require such additional proof of any matter referred to in this
Section as it shall deem necessary.
The record of any Securityholders' meeting shall be proved in the
manner provided in Section 8.06.
SECTION 7.03. Who Are Deemed Absolute Owners.
Prior to due presentment for registration of transfer of any Debt
Security, the Company, the Trustee, any Authenticating Agent, any paying agent,
any transfer agent and any Debt Security registrar may deem the Person in whose
name such Debt Security shall be registered upon the Debt Security Register to
be, and may treat him as, the absolute owner of such Debt Security (whether or
not such Debt Security shall be overdue) for the purpose of receiving payment of
or on account of the principal of, premium, if any, and (subject to Section
2.05) interest on such Debt Security and for all other purposes; and neither the
Company nor the Trustee nor any Authenticating Agent nor any paying agent nor
any transfer agent nor any Debt Security registrar shall be affected by any
notice to the contrary. All such payments so made to any holder for the time
being or upon his order shall be valid, and, to the extent of the sum or sums so
paid, effectual to satisfy and discharge the liability for moneys payable upon
any such Debt Security.
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SECTION 7.04. Debt Securities Owned by Company Deemed Not
Outstanding.
In determining whether the holders of the requisite aggregate
principal amount of Debt Securities have concurred in any direction, consent or
waiver under this Indenture, Debt Securities which are owned by the Company or
any other obligor on the Debt Securities or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any other obligor on the Debt Securities shall be disregarded and
deemed not to be outstanding for the purpose of any such determination; provided
that for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, consent or waiver, only Debt Securities which a
Responsible Officer of the Trustee actually knows are so owned shall be so
disregarded. Debt Securities so owned which have been pledged in good faith may
be regarded as outstanding for the purposes of this Section 7.04 if the pledgee
shall establish to the satisfaction of the Trustee the pledgee's right to vote
such Debt Securities and that the pledgee is not the Company or any such other
obligor or Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or any such other obligor. In
the case of a dispute as to such right, any decision by the Trustee taken upon
the advice of counsel shall be full protection to the Trustee.
SECTION 7.05. Revocation of Consents; Future Holders Bound.
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 7.01, of the taking of any action by the holders of the
percentage in aggregate principal amount of the Debt Securities specified in
this Indenture in connection with such action, any holder (in cases where no
record date has been set pursuant to Section 7.01) or any holder as of an
applicable record date (in cases where a record date has been set pursuant to
Section 7.01) of a Debt Security (or any Debt Security issued in whole or in
part in exchange or substitution therefor) the serial number of which is shown
by the evidence to be included in the Debt Securities the holders of which have
consented to such action may, by filing written notice with the Trustee at the
Principal Office of the Trustee and upon proof of holding as provided in Section
7.02, revoke such action so far as concerns such Debt Security (or so far as
concerns the principal amount represented by any exchanged or substituted Debt
Security). Except as aforesaid any such action taken by the holder of any Debt
Security shall be conclusive and binding upon such holder and upon all future
holders and owners of such Debt Security, and of any Debt Security issued in
exchange or substitution therefor or on registration of transfer thereof,
irrespective of whether or not any notation in regard thereto is made upon such
Debt Security or any Debt Security issued in exchange or substitution therefor.
ARTICLE VIII.
SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purposes of Meetings.
A meeting of Securityholders of any or all series may be called at any
time and from time to time pursuant to the provisions of this Article Eight for
any of the
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following purposes:
(a) to give any notice to the Company or to the Trustee, or to give
any directions to the Trustee, or to consent to the waiving of any default
hereunder and its consequences, or to take any other action authorized to be
taken by Securityholders pursuant to any of the provisions of Article V;
(b) to remove the Trustee and nominate a successor trustee pursuant
to the provisions of Article VI;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 9.02; or
(d) to take any other action authorized to be taken by or on behalf
of the holders of any specified aggregate principal amount of such Debt
Securities under any other provision of this Indenture or under applicable law.
SECTION 8.02. Call of Meetings by Trustee.
The Trustee may at any time call a meeting of Securityholders of any
or all series to take any action specified in Section 8.01, to be held at such
time and at such place in the Borough of Manhattan, The City of New York, as the
Trustee shall determine. Notice of every meeting of the Securityholders of any
or all series, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be mailed
to holders of Debt Securities of each series affected at their addresses as they
shall appear on the Debt Securities Register for each series affected. Such
notice shall be mailed not less than 20 nor more than 180 days prior to the date
fixed for the meeting.
SECTION 8.03. Call of Meetings by Company or Securityholders.
In case at any time the Company pursuant to a Board Resolution, or the
holders of at least 10% in aggregate principal amount of the Debt Securities of
any or all series, as the case may be, then outstanding, shall have requested
the Trustee to call a meeting of Securityholders of any or all series, as the
case may be, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have mailed the
notice of such meeting within 20 days after receipt of such request, then the
Company or such Securityholders may determine the time and the place in said
Borough of Manhattan for such meeting and may call such meeting to take any
action authorized in Section 8.01, by mailing notice thereof as provided in
Section 8.02.
SECTION 8.04. Qualifications for Voting.
To be entitled to vote at any meeting of Securityholders a Person
shall (a) be a holder of one or more Debt Securities with respect to which the
meeting is being held or (b) a Person appointed by an instrument in writing as
proxy by a holder of one or more such Debt Securities. The only Persons who
shall be entitled to be present or to speak at any
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meeting of Securityholders shall be the Persons entitled to vote at such meeting
and their counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
SECTION 8.05. Regulations.
Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting of
Securityholders, in regard to proof of the holding of Debt Securities and of the
appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Securityholders as provided in Section 8.03, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by majority vote of the meeting.
Subject to the provisions of Section 7.04, at any meeting each holder
of Debt Securities with respect to which such meeting is being held or proxy
therefor shall be entitled to one vote for each $1,000 principal amount (in the
case of Original Issue Discount Securities, such principal amount to be
determined as provided in the definition "outstanding") of Debt Securities held
or represented by him; provided, however, that no vote shall be cast or counted
at any meeting in respect of any Debt Security challenged as not outstanding and
ruled by the chairman of the meeting to be not outstanding. The chairman of the
meeting shall have no right to vote other than by virtue of Debt Securities held
by him or instruments in writing as aforesaid duly designating him as the Person
to vote on behalf of other Securityholders. Any meeting of Securityholders duly
called pursuant to the provisions of Section 8.02 or 8.03 may be adjourned from
time to time by a majority of those present, whether or not constituting a
quorum, and the meeting may be held as so adjourned without further notice.
SECTION 8.06. Voting.
The vote upon any resolution submitted to any meeting of holders of
Debt Securities with respect to which such meeting is being held shall be by
written ballots on which shall be subscribed the signatures of such holders or
of their representatives by proxy and the serial number or numbers of the Debt
Securities held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in triplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Securityholders shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits
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by one or more Persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that said notice was mailed as provided in
Section 8.02. The record shall show the serial numbers of the Debt Securities
voting in favor of or against any resolution. The record shall be signed and
verified by the affidavits of the permanent chairman and secretary of the
meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 8.07. Quorum; Actions.
The Persons entitled to vote a majority in principal amount of the
Debt Securities of a series shall constitute a quorum for a meeting of
Securityholders of such series; provided, however, that if any action is to be
taken at such meeting with respect to a consent, waiver, request, demand,
notice, authorization, direction or other action which may be given by the
holders of not less than a specified percentage in principal amount of the Debt
Securities of a series, the Persons holding or representing such specified
percentage in principal amount of the Debt Securities of such series will
constitute a quorum. In the absence of a quorum within 30 minutes of the time
appointed for any such meeting, the meeting shall, if convened at the request of
Securityholders of such series, be dissolved. In any other case the meeting may
be adjourned for a period of not less than 10 days as determined by the
permanent chairman of the meeting prior to the adjournment of such meeting. In
the absence of a quorum at any such adjourned meeting, such adjourned meeting
may be further adjourned for a period of not less than 10 days as determined by
the permanent chairman of the meeting prior to the adjournment of such adjourned
meeting. Notice of the reconvening of any adjourned meeting shall be given as
provided in Section 8.02, except that such notice need be given only once not
less than five days prior to the date on which the meeting is scheduled to be
reconvened. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage, as provided above, of the principal amount of the Debt
Securities of such series which shall constitute a quorum.
Except as limited by the proviso in the first paragraph of Section
9.02, any resolution presented to a meeting or adjourned meeting duly reconvened
at which a quorum is present as aforesaid may be adopted by the affirmative vote
of the Holders of a majority in principal amount of the Debt Securities of that
series; provided, however, that, except as limited by the proviso in the first
paragraph of Section 9.02, any resolution with respect to any consent, waiver,
request, demand, notice, authorization, direction or other action which this
Indenture expressly provides may be given by the holders of not less than a
specified percentage in principal amount of the Debt Securities of a series may
be adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid only by the affirmative vote of the holders of a
not less than such specified percentage in principal amount of the Debt
Securities of that series.
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Any resolution passed or decision taken at any meeting of holders of
Debt Securities of any series duly held in accordance with this Section shall be
binding on all the Securityholders of such series, whether or not present or
represented at the meeting.
ARTICLE IX.
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures without Consent of
Securityholders.
The Company, when authorized by a Board Resolution, and the Trustee
may from time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as then in effect), without the consent of the Securityholders,
for one or more of the following purposes:
(a) to evidence the succession of another corporation to the Company,
or successive successions, and the assumption by the successor corporation of
the covenants, agreements and obligations of the Company, pursuant to Article X
hereof;
(b) to add to the covenants of the Company such further covenants,
restrictions or conditions for the protection of the holders of all or any
series of Debt Securities (and if such covenants are to be for the benefit of
less than all series of Debt Securities stating that such covenants are
expressly being included for the benefit of such series) as the Board of
Directors shall consider to be for the protection of the holders of such Debt
Securities, and to make the occurrence, or the occurrence and continuance, of a
default in any of such additional covenants, restrictions or conditions a
default or an Event of Default permitting the enforcement of all or any of the
several remedies provided in this Indenture as herein set forth; provided,
however, that in respect of any such additional covenant, restriction or
condition such supplemental indenture may provide for a particular period of
grace after default (which period may be shorter or longer than that allowed in
the case of other defaults) or may provide for an immediate enforcement upon
such default or may limit the remedies available to the Trustee upon such
default;
(c) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
arising under this Indenture; provided that any such action shall not adversely
affect the interests of the holders of the Debt Securities of any series;
(d) to add to, delete from, or revise the terms of Debt Securities of
any series, including, without limitation, any terms relating to the issuance,
exchange, registration or transfer of Debt Securities, including to provide for
transfer procedures and restrictions substantially similar to those applicable
to the Capital Securities relating to such series as required by Section 2.07
(for purposes of assuring that no registration of Debt Securities of a series
subject to transfer restrictions is required under the Securities Act of 1933,
as amended); provided that any such action shall not adversely affect the
interests of
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the holders of the Debt Securities of any series then outstanding (it being
understood, for purposes of this proviso, that transfer restrictions on Debt
Securities of a series substantially similar to those that were applicable to
Capital Securities of the related series shall not be deemed to adversely affect
the holders of the Debt Securities);
(e) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Debt Securities of one or
more series and to add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section
6.11;
(f) to make any change (other than as elsewhere provided in this
paragraph) that does not adversely affect the rights of any Securityholder in
any material respect; or
(g) to provide for the issuance of and establish the form and terms
and conditions of the Debt Securities of any series, to establish the form of
any certifications required to be furnished pursuant to the terms of this
Indenture or any series of Debt Securities, or to add to the rights of the
holders of any series of Debt Securities.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer and assignment of any property thereunder, but the Trustee
shall not be obligated to, but may in its discretion, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section 9.01 may be executed by the Company and the Trustee without the consent
of the holders of any of the Debt Securities at the time outstanding,
notwithstanding any of the provisions of Section 9.02.
SECTION 9.02. Supplemental Indentures with Consent of
Securityholders.
With the consent (evidenced as provided in Section 7.01) of the
holders of not less than a majority in aggregate principal amount of the Debt
Securities at the time outstanding of all series affected by such supplemental
indenture (voting as a class), the Company, when authorized by a Board
Resolution, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act, then in effect, applicable to indentures
qualified thereunder) for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of the holders
of the Debt Securities of each series so affected; provided, however, that no
such supplemental indenture shall without the consent of the holders of each
Debt Security then outstanding and affected thereby (i) extend the fixed
maturity of any Debt Security of any series, or reduce the principal amount
thereof or any premium thereon, or reduce the rate or extend the time of payment
of interest thereon, or
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reduce any amount payable on redemption thereof or make the principal thereof or
any interest or premium thereon payable in any coin or currency other than that
provided in the Debt Securities, or reduce the amount of the principal of an
Original Issue Discount Security that would be due and payable upon an
acceleration of the maturity thereof pursuant to Section 5.01 or the amount
thereof provable in bankruptcy pursuant to Section 5.02, or impair or affect the
right of any Securityholder to institute suit for payment thereof or impair the
right of repayment, if any, at the option of the holder, or (ii) reduce the
aforesaid percentage of Debt Securities the holders of which are required to
consent to any such supplemental indenture; provided, further, that if the Debt
Securities of such series are held by a Mercantile Trust or a trustee of such
trust, such supplemental indenture shall not be effective until the holders of a
majority in liquidation preference of Trust Securities of the applicable Trust
shall have consented to such supplemental indenture; provided further, that if
the consent of the Securityholder of each outstanding Debt Security is required,
such supplemental indenture shall not be effective until each holder of the
Trust Securities of the applicable Mercantile Trust shall have consented to such
supplemental indenture.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Debt Securities, or which
modifies the rights of Securityholders of such series with respect to such
covenant or provision, shall be deemed not to affect the rights under this
Indenture or the Securityholders of any other series.
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Securityholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, prepared by the
Company, setting forth in general terms the substance of such supplemental
indenture, to the Securityholders of all series affected thereby as their names
and addresses appear upon the Debt Security Register. Any failure of the Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under
this Section 9.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
SECTION 9.03. Compliance with Trust Indenture Act; Effect of
Supplemental Indentures.
Any supplemental indenture executed pursuant to the provisions of this
Article IX shall comply with the Trust Indenture Act, as then in effect to the
extent applicable to
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indentures qualified under the Trust Indenture Act. Upon the execution of any
supplemental indenture pursuant to the provisions of this Article IX, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the holders
of Debt Securities of each series affected thereby shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 9.04. Notation on Debt Securities.
Debt Securities of any series authenticated and delivered after the
execution of any supplemental indenture affecting such series pursuant to the
provisions of this Article IX may bear a notation as to any matter provided for
in such supplemental indenture. If the Company or the Trustee shall so
determine, new Debt Securities of any series so modified as to conform, in the
opinion of the Board of Directors of the Company, to any modification of this
Indenture contained in any such supplemental indenture may be prepared and
executed by the Company, authenticated by the Trustee or the Authenticating
Agent and delivered in exchange for the Debt Securities of any series then
outstanding.
SECTION 9.05. Evidence of Compliance of Supplemental Indenture to be
Furnished to Trustee.
The Trustee, subject to the provisions of Sections 6.01 and 6.02,
shall, in addition to the documents required by Section 13.06, receive an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant hereto complies with the requirements
of this Article IX. The Trustee shall receive an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant to this
Article IX is authorized or permitted by, and conforms to, the terms of this
Article IX and that it is proper for the Trustee under the provisions of this
Article IX to join in the execution thereof.
ARTICLE X.
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 10.01. Company May Consolidate, etc., on Certain Terms.
Nothing contained in this Indenture or in the Debt Securities of any
series shall prevent any consolidation or merger of the Company with or into any
other corporation or corporations (whether or not affiliated with the Company)
or successive consolidations or mergers in which the Company or its successor or
successors shall be a party or parties, or shall prevent any sale, conveyance,
transfer or other disposition of the property of the Company or its successor or
successors as an entirety, or substantially as an entirety, to any other
corporation (whether or not affiliated with the Company, or its successor or
successors) authorized to acquire and operate the same; provided, however, that
the Company hereby
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covenants and agrees that, upon any such consolidation, merger (where the
Company is not the surviving corporation), sale, conveyance, transfer or other
disposition, the due and punctual payment of the principal of (and premium, if
any) and interest on all of the Debt Securities of all series in accordance with
the terms of each series, according to their tenor, and the due and punctual
performance and observance of all the covenants and conditions of this Indenture
with respect to each series or established with respect to such series to be
kept or performed by the Company, shall be expressly assumed by supplemental
indenture (which shall conform to the provisions of the Trust Indenture Act, as
then in effect, applicable to indentures qualified thereunder) satisfactory in
form to the Trustee executed and delivered to the Trustee by the entity formed
by such consolidation, or into which the Company shall have been merged, or by
the entity which shall have acquired such property.
SECTION 10.02. Successor Entity to be Substituted.
In case of any such consolidation, merger, sale, conveyance, transfer
or other disposition and upon the assumption by the successor entity, by
supplemental indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the due and punctual payment of the principal of and
premium, if any, and interest on all of the Debt Securities and the due and
punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed or observed by the Company, such successor entity
shall succeed to and be substituted for the Company, with the same effect as if
it had been named herein as the Company, and thereupon the predecessor entity
shall be relieved of any further liability or obligation hereunder or upon the
Debt Securities. Such successor entity thereupon may cause to be signed, and may
issue either in its own name or in the name of Mercantile Bancorporation Inc.,
any or all of the Debt Securities issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee or the
Authenticating Agent; and, upon the order of such successor entity instead of
the Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee or the Authenticating Agent shall authenticate
and deliver any Debt Securities which previously shall have been signed and
delivered by the officers of the Company, to the Trustee or the Authenticating
Agent for authentication, and any Debt Securities which such successor entity
thereafter shall cause to be signed and delivered to the Trustee or the
Authenticating Agent for that purpose. All the Debt Securities so issued shall
in all respects have the same legal rank and benefit under this Indenture as the
Debt Securities theretofore or thereafter issued in accordance with the terms of
this Indenture as though all of such Debt Securities had been issued at the date
of the execution hereof.
SECTION 10.03. Opinion of Counsel to be Given to Trustee.
The Trustee, subject to the provisions of Sections 6.01 and 6.02,
shall receive, in addition to the Opinion of Counsel required by Section 9.05,
an Opinion of Counsel as conclusive evidence that any consolidation, merger,
sale, conveyance, transfer or other disposition, and any assumption, permitted
or required by the terms of this Article X complies with the provisions of this
Article X.
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ARTICLE XI.
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 11.01. Discharge of Indenture.
When (a) the Company shall deliver to the Trustee for cancellation
all Debt Securities theretofore authenticated (other than any Debt Securities
which shall have been destroyed, lost or stolen and which shall have been
replaced or paid as provided in Section 2.08) and not theretofore canceled, or
(b) all the Debt Securities not theretofore canceled or delivered to the Trustee
for cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption, and the Company shall deposit with the Trustee, in trust, funds,
which shall be immediately due and payable, sufficient to pay at maturity or
upon redemption all of the Debt Securities (other than any Debt Securities which
shall have been destroyed, lost or stolen and which shall have been replaced or
paid as provided in Section 2.08) not theretofore canceled or delivered to the
Trustee for cancellation, including principal and premium, if any, and interest
due or to become due to such date of maturity or redemption date, as the case
may be, but excluding, however, the amount of any moneys for the payment of
principal of, and premium, if any, or interest on the Debt Securities (1)
theretofore repaid to the Company in accordance with the provisions of Section
11.04, or (2) paid to any state or to the District of Columbia pursuant to its
unclaimed property or similar laws, and if in the case of either clause (a) or
clause (b) the Company shall also pay or cause to be paid all other sums payable
hereunder by the Company, then this Indenture shall cease to be of further
effect except for the provisions of Sections 2.05, 2.07, 2.08, 3.01, 3.02, 3.04,
6.06, 6.10 and 11.04 hereof shall survive until such Debt Securities shall
mature and be paid. Thereafter, Sections 6.10 and 11.04 shall survive, and the
Trustee, on demand of the Company accompanied by an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture have been
complied with, and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture, the
Company, however, hereby agreeing to reimburse the Trustee for any costs or
expenses thereafter reasonably and properly incurred by the Trustee in
connection with this Indenture or the Debt Securities.
SECTION 11.02. Deposited Moneys to be Held in Trust by Trustee.
Subject to the provisions of Section 11.04, all moneys deposited with
the Trustee pursuant to Section 11.01 shall be held in trust and applied by it
to the payment, either directly or through any paying agent (including the
Company if acting as its own paying agent), to the holders of the particular
Debt Securities for the payment of which such moneys have been deposited with
the Trustee, of all sums due and to become due thereon for principal, and
premium, if any, and interest.
SECTION 11.03. Paying Agent to Repay Moneys Held.
Upon the satisfaction and discharge of this Indenture all moneys then
held by
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any paying agent of the Debt Securities (other than the Trustee) shall, upon
demand of the Company, be repaid to it or paid to the Trustee, and thereupon
such paying agent shall be released from all further liability with respect to
such moneys.
SECTION 11.04. Return of Unclaimed Moneys.
Any moneys deposited with or paid to the Trustee or any paying agent
for payment of the principal of, and premium, if any, or interest on Debt
Securities and not applied but remaining unclaimed by the holders of Debt
Securities for two years after the date upon which the principal of, and
premium, if any, or interest on such Debt Securities, as the case may be, shall
have become due and payable, shall be repaid to the Company by the Trustee or
such paying agent on written demand; and the holder of any of the Debt
Securities shall thereafter look only to the Company for any payment which such
holder may be entitled to collect and all liability of the Trustee or such
paying agent with respect to such moneys shall thereupon cease.
ARTICLE XII.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01. Indenture and Debt Securities Solely Corporate
Obligations.
No recourse for the payment of the principal of or premium, if any, or
interest on any Debt Security, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in this Indenture or in any supplemental indenture, or
in any such Debt Security, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder, officer
or director, as such, past, present or future, of the Company or of any
successor corporation of the Company, either directly or through the Company or
any successor corporation of the Company, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that all such liability is hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issue of the Debt Securities.
ARTICLE XIII.
MISCELLANEOUS PROVISIONS
SECTION 13.01. Successors.
All the covenants, stipulations, promises and agreements in this
Indenture contained by the Company shall bind its successors and assigns whether
so expressed or not.
SECTION 13.02. Official Acts by Successor Entity.
Any act or proceeding by any provision of this Indenture authorized or
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required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee, officer or other authorized Person of any entity that
shall at the time be the lawful successor of the Company.
SECTION 13.03. Surrender of Company Powers.
The Company by instrument in writing executed by authority of 2/3
(two-thirds) of its Board of Directors and delivered to the Trustee may
surrender any of the powers reserved to the Company and thereupon such power so
surrendered shall terminate both as to the Company, and as to any permitted
successor.
SECTION 13.04. Addresses for Notices, etc.
Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the holders of
Debt Securities on the Company may be given or served in writing by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company, with the
Trustee for the purpose) to the Company, One Mercantile Center, P.O. Box 524,
St. Louis, Missouri 63166-0524, Attention: Jon W. Bilstrom, General Counsel. Any
notice, direction, request or demand by any Securityholder or the Company to or
upon the Trustee shall be deemed to have been sufficiently given or made, for
all purposes, if given or made in writing at the office of the Trustee,
addressed to the Trustee, 450 West 33rd Street, New York, New York 10001,
Attention: Global Trust Services.
SECTION 13.05. Governing Law.
This Indenture and each Debt Security shall be deemed to be a contract
made under the laws of the State of New York, and for all purposes shall be
governed by and construed in accordance with the laws of said State, without
regard to conflict of laws principles thereof.
SECTION 13.06. Evidence of Compliance with Conditions Precedent.
Upon any application or demand by the Company to the Trustee to take
any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that in the opinion of
the signers all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such
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certificate or opinion are based; (3) a statement that, in the opinion of such
person, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with.
SECTION 13.07. Non-Business Days.
Subject to Section 2.03, in any case where the date of payment of
interest on or principal of the Debt Securities will be a Saturday, Sunday or a
day on which banking institutions in New York City (in the State of New York)
and St. Louis (in the State of Missouri) are permitted or required by any
applicable law to close, the payment of such interest on or principal of the
Debt Securities need not be made on such date but may be made on the next
succeeding day not a Saturday, Sunday or a day on which banking institutions in
such cities are permitted or required by any applicable law to close, with the
same force and effect as if made on the date of payment and no interest shall
accrue for the period from and after such date.
SECTION 13.08. Trust Indenture Act to Control.
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 13.09. Table of Contents, Headings, etc.
The table of contents and the titles and headings of the articles and
sections of this Indenture have been inserted for convenience of reference only,
are not to be considered a part hereof, and shall in no way modify or restrict
any of the terms or provisions hereof.
SECTION 13.10. Execution in Counterparts.
This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instrument.
SECTION 13.11. Separability.
In case any one or more of the provisions contained in this Indenture
or in the Debt Securities of any series shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Indenture or of
such Debt Securities, but this Indenture and such Debt Securities shall be
construed as if such invalid or illegal or unenforceable provision had never
been contained herein or therein.
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SECTION 13.12. Assignment.
The Company will have the right at all times to assign any of its
rights or obligations under this Indenture to a direct or indirect wholly owned
Subsidiary of the Company, provided that, in the event of any such assignment,
the Company will remain liable for all such obligations. Subject to the
foregoing, this Indenture is binding upon and inures to the benefit of the
parties hereto and their respective successors and assigns. This Indenture may
not otherwise be assigned by the parties thereto.
SECTION 13.13. Acknowledgment of Rights.
The Company acknowledges that, with respect to any Debt Securities
held by any Mercantile Trust or the Institutional Trustee of such Mercantile
Trust, if the Institutional Trustee of such Mercantile Trust fails to enforce
its rights under this Indenture as the holder of the series of Debt Securities
held as the assets of such Mercantile Trust after the holders of a majority in
liquidation amount of the Capital Securities of such Mercantile Trust have so
directed such Institutional Trustee, a holder of record of such Capital
Securities may to the fullest extent permitted by law institute legal
proceedings directly against the Company to enforce such Institutional Trustee's
rights under this Indenture without first instituting any legal proceedings
against such Institutional Trustee or any other Person. Notwithstanding the
foregoing, if an Event of Default has occurred and is continuing and such event
is attributable to the failure of the Company to pay interest (or premium, if
any) or principal on the applicable series of Debt Securities on the date such
interest (or premium, if any) or principal is otherwise payable (or in the case
of redemption, on the redemption date), the Company acknowledges that a holder
of record of Capital Securities of the Mercantile Trust that purchased the
applicable series of Debt Securities may directly institute a proceeding against
the Company for enforcement of payment to such holder directly of the principal
of (or premium, if any) or interest on the applicable series of Debt Securities
having an aggregate principal amount equal to the aggregate liquidation amount
of the Capital Securities of such holder on or after the respective due date
specified in the applicable series of Debt Securities.
ARTICLE XIV.
REDEMPTION OF SECURITIES -- MANDATORY AND
OPTIONAL SINKING FUND
SECTION 14.01. Applicability of Article.
The provisions of this Article shall be applicable to the Debt
Securities of any series which are redeemable before their maturity or to any
sinking fund for the retirement of Debt Securities of a series except as
otherwise specified as contemplated by Section 2.03 for Debt Securities of such
series.
SECTION 14.02. Notice of Redemption; Selection of Debt Securities.
In case the Company shall desire to exercise the right to redeem all,
or, as the
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case may be, any part of the Debt Securities of any series in accordance with
their terms, it shall fix a date for redemption and shall mail a notice of such
redemption at least 30 and not more than 60 days prior to the date fixed for
redemption to the holders of Debt Securities of such series so to be redeemed as
a whole or in part at their last addresses as the same appear on the Debt
Security Register. Such mailing shall be by first class mail. The notice if
mailed in the manner herein provided shall be conclusively presumed to have been
duly given, whether or not the holder receives such notice. In any case, failure
to give such notice by mail or any defect in the notice to the holder of any
Debt Security of a series designated for redemption as a whole or in part shall
not affect the validity of the proceedings for the redemption of any other Debt
Security of such series.
Each such notice of redemption shall specify the CUSIP number of the
Debt Securities to be redeemed, the date fixed for redemption, the redemption
price at which Debt Securities of such series are to be redeemed, the place or
places of payment, that payment will be made upon presentation and surrender of
such Debt Securities, that interest accrued to the date fixed for redemption
will be paid as specified in said notice, and that on and after said date
interest thereon or on the portions thereof to be redeemed will cease to accrue.
If less than all the Debt Securities of such series are to be redeemed the
notice of redemption shall specify the numbers of the Debt Securities of that
series to be redeemed. In case any Debt Security of a series is to be redeemed
in part only, the notice of redemption shall state the portion of the principal
amount thereof to be redeemed and shall state that on and after the date fixed
for redemption, upon surrender of such Debt Security, a new Debt Security or
Debt Securities of that series in principal amount equal to the unredeemed
portion thereof will be issued.
On or prior to the redemption date specified in the notice of
redemption given as provided in this Section, the Company will deposit with the
Trustee or with one or more paying agents an amount of money sufficient to
redeem on the redemption date all the Debt Securities so called for redemption
at the appropriate redemption price, together with accrued interest to the date
fixed for redemption.
If all, or less than all, the Debt Securities of a series are to be
redeemed, the Company will give the Trustee notice not less than 45 nor more
than 60 days, respectively, prior to the redemption date as to the aggregate
principal amount of Debt Securities of that series to be redeemed and the
Trustee shall select, in such manner as in its sole discretion it shall deem
appropriate and fair, the Debt Securities of that series or portions thereof (in
integral multiples of $1,000, except as otherwise set forth in the applicable
form of Debt Security) to be redeemed.
SECTION 14.03. Payment of Debt Securities Called for Redemption.
If notice of redemption has been given as provided in Section 14.02 or
Section 14.04, the Debt Securities or portions of Debt Securities of the series
with respect to which such notice has been given shall become due and payable on
the date and at the place or places stated in such notice at the applicable
redemption price, together with interest accrued to the date fixed for
redemption, and on and after said date (unless the Company shall default
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in the payment of such Debt Securities at the redemption price, together with
interest accrued to said date) interest on the Debt Securities or portions of
Debt Securities of any series so called for redemption shall cease to accrue. On
presentation and surrender of such Debt Securities at a place of payment
specified in said notice, the said Debt Securities or the specified portions
thereof shall be paid and redeemed by the Company at the applicable redemption
price, together with interest accrued thereon to the date fixed for redemption.
Upon presentation of any Debt Security of any series redeemed in part
only, the Company shall execute and the Trustee shall authenticate and make
available for delivery to the holder thereof, at the expense of the Company, a
new Debt Security or Debt Securities of such series of authorized denominations,
in principal amount equal to the unredeemed portion of the Debt Security so
presented.
SECTION 14.04. Mandatory and Optional Sinking Fund.
The minimum amount of any sinking fund payment provided for by the
terms of Debt Securities of any series is herein referred to as a "mandatory
sinking fund payment," and any payment in excess of such minimum amount provided
for by the terms of Debt Securities of any series is herein referred to as an
"optional sinking fund payment." The last date on which any such payment may be
made is herein referred to as a "sinking fund payment date."
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any Debt Securities of a series in cash, the Company may
at its option (a) deliver to the Trustee Debt Securities of that series
theretofore purchased by the Company and (b) may apply as a credit Debt
Securities of that series which have been redeemed either at the election of the
Company pursuant to the terms of such Debt Securities or through the application
of optional sinking fund payments pursuant to the next succeeding paragraph, in
each case in satisfaction of all or any part of any mandatory sinking fund
payment, provided that such Debt Securities have not been previously so
credited. Each such Debt Security so delivered or applied as a credit shall be
credited at the sinking fund redemption price for such Debt Securities and the
amount of any mandatory sinking fund shall be reduced accordingly. If the
Company intends so to deliver or credit such Debt Securities with respect to any
mandatory sinking fund payment it shall deliver to the Trustee at least 60 days
prior to the next succeeding sinking fund payment date for such series (a) a
certificate signed by the Secretary, an Assistant Secretary, the Treasurer or an
Assistant Treasurer of the Company specifying the portion of such sinking fund
payment, if any, to be satisfied by payment of cash and the portion of such
sinking fund payment, if any, which is to be satisfied by delivering and
crediting such Debt Securities and the basis for such credit and stating that
such Debt Securities have not been previously so credited and (b) any Debt
Securities to be so delivered. All Debt Securities so delivered to the Trustee
shall be canceled by the Trustee and no Debt Securities shall be authenticated
in lieu thereof. If the Company fails to deliver such certificate and Debt
Securities at or before the time provided above, the Company shall not be
permitted to satisfy any portion of such mandatory sinking fund payment by
delivery or credit of Debt Securities.
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At its option the Company may pay into the sinking fund for the
retirement of Debt Securities of any particular series, on or before each
sinking fund payment date for such series, any additional sum in cash as
specified by the terms of such series of Debt Securities. If the Company intends
to exercise its right to make any such optional sinking fund payment, it shall
deliver to the Trustee at least 60 days prior to the next succeeding sinking
fund payment date for such series a certificate signed by the Secretary, an
Assistant Secretary, the Treasurer or an Assistant Treasurer of the Company
stating that the Company intends to exercise such optional right and specifying
the amount which the Company intends to pay on such sinking fund payment date.
If the Company fails to deliver such certificate at or before the time provided
above, the Company shall not be permitted to make any optional sinking fund
payment with respect to such sinking fund payment date. To the extent that such
right is not exercised in any year it shall not be cumulative or carried forward
to any subsequent year.
If the sinking fund payment or payments (mandatory or optional) made
in cash plus any unused balance of any preceding sinking fund payments made in
cash shall exceed $50,000 (or a lesser sum if the Company shall so request) with
respect to the Debt Securities of any particular series, it shall be applied by
the Trustee or one or more paying agents on the next succeeding sinking fund
payment date to the redemption of Debt Securities of such series at the sinking
fund redemption price together with accrued interest to the date fixed for
redemption. The Trustee shall select, in the manner provided in Section 14.02,
for redemption on such sinking fund payment date a sufficient principal amount
of Debt Securities of such series to absorb said cash, as nearly as may be, and
the Trustee shall, at the expense and in the name of the Company, thereupon
cause notice of redemption of Debt Securities of such series to be given in
substantially the manner and with the effect provided in Sections 14.02 and
14.03 for the redemption of Debt Securities of that series in part at the option
of the Company, except that the notice of redemption shall also state that the
Debt Securities of such series are being redeemed for the sinking fund. Any
sinking fund moneys not so applied or allocated by the Trustee or any paying
agent to the redemption of Debt Securities of that series shall be added to the
next cash sinking fund payment received by the Trustee or such paying agent and,
together with such payment, shall be applied in accordance with the provisions
of this Section 14.04. Any and all sinking fund moneys held by the Trustee or
any paying agent on the maturity date of the Debt Securities of any particular
series, and not held for the payment or redemption of particular Debt Securities
of such series, shall be applied by the Trustee or such paying agent, together
with other moneys, if necessary, to be deposited sufficient for the purpose, to
the payment of the principal of the Debt Securities of that series at maturity.
On or before 10:00 a.m. on each sinking fund payment date, the Company
shall pay to the Trustee or to one or more paying agents in cash a sum equal to
all interest accrued to the date fixed for redemption on Debt Securities to be
redeemed on the next following sinking fund payment date pursuant to this
Section.
Neither the Trustee nor any paying agent shall redeem any Debt
Securities of a series with sinking fund moneys, and the Trustee shall not mail
any notice of redemption of Debt Securities for such series by operation of the
sinking fund, during the continuance of a
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default in payment of interest on such Debt Securities or of any Event of
Default (other than an Event of Default occurring as a consequence of this
paragraph), except that if the notice of redemption of any Debt Securities shall
theretofore have been mailed in accordance with the provisions hereof, the
Trustee or any paying agent shall redeem such Debt Securities if cash sufficient
for that purpose shall be deposited with the Trustee or such paying agent for
that purpose in accordance with the terms of this Article XIV. Except as
aforesaid, any moneys in the sinking fund for such series at the time when any
such default or Event of Default shall occur and any moneys thereafter paid into
the sinking fund shall, during the continuance of such default or Event of
Default, be held as security for the payment of all such Debt Securities;
provided, however, that in case such Event of Default or default, shall have
been cured or waived as provided herein, such moneys shall thereafter be applied
on the next succeeding sinking fund payment date on which such moneys may be
applied pursuant to the provisions of this Section 14.04.
ARTICLE XV
SUBORDINATION OF DEBT SECURITIES
SECTION 15.01. Agreement to Subordinate.
The Company covenants and agrees, and each holder of Debt Securities
issued hereunder and under any supplemental indenture or by any Board Resolution
("Additional Provisions") by such Securityholder's acceptance thereof likewise
covenants and agrees, that all Debt Securities shall be issued subject to the
provisions of this Article XV; and each holder of a Debt Security, whether upon
original issue or upon transfer or assignment thereof, accepts and agrees to be
bound by such provisions.
The payment by the Company of the principal of, and premium, if any,
and interest on all Debt Securities issued hereunder and under any Additional
Provisions shall, to the extent and in the manner hereinafter set forth, be
subordinated and junior in right of payment to the prior payment in full of all
Senior Indebtedness of the Company, whether outstanding at the date of this
Indenture or thereafter incurred.
No provision of this Article XV shall prevent the occurrence of any
default or Event of Default hereunder.
SECTION 15.02. Default on Senior Indebtedness.
In the event and during the continuation of any default by the Company
in the payment of principal, premium, interest or any other payment due on any
Senior Indebtedness of the Company following any grace period, or in the event
that the maturity of any Senior Indebtedness of the Company has been accelerated
because of a default, then, in either case, no payment shall be made by the
Company with respect to the principal (including redemption and sinking fund
payments) of, or premium, if any, or interest on the Debt Securities.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section
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15.02, such payment shall, subject to Section 15.06, be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the extent
that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing within 90 days of
such payment of the amounts then due and owing on the Senior Indebtedness and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of Senior Indebtedness.
SECTION 15.03. Liquidation; Dissolution; Bankruptcy.
Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all Senior Indebtedness
of the Company shall first be paid in full, or payment thereof provided for in
money in accordance with its terms, before any payment is made by the Company,
on account of the principal (and premium, if any) or interest on the Debt
Securities; and upon any such dissolution or winding-up or liquidation or
reorganization, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the Securityholders or the Trustee would be entitled to receive from the
Company, except for the provisions of this Article XV, shall be paid by the
Company, or by any receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, or by the Securityholders
or by the Trustee under this Indenture if received by them or it, directly to
the holders of Senior Indebtedness of the Company (pro rata to such holders on
the basis of the respective amounts of Senior Indebtedness held by such holders,
as calculated by the Company) or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay such Senior Indebtedness in
full, in money or money's worth, after giving effect to any concurrent payment
or distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Securityholders or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee before all Senior Indebtedness of the Company is paid in full, or
provision is made for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, as calculated by
the Company, for application to the payment of all Senior Indebtedness of the
Company, remaining unpaid to the extent necessary to pay such Senior
Indebtedness in full in money in accordance with its terms, after giving effect
to any concurrent payment or distribution to or for the benefit of the
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holders of such Senior Indebtedness.
For purposes of this Article XV, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article XV with respect
to the Debt Securities to the payment of all Senior Indebtedness of the Company,
that may at the time be outstanding, provided that (i) such Senior Indebtedness
is assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of such
Senior Indebtedness are not, without the consent of such holders, altered by
such reorganization or readjustment. The consolidation of the Company with, or
the merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another corporation upon the
terms and conditions provided for in Article X of this Indenture shall not be
deemed a dissolution, winding-up, liquidation or reorganization for the purposes
of this Section 15.03 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions stated
in Article X of this Indenture. Nothing in Section 15.02 or in this Section
15.03 shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 6.06 of this Indenture.
SECTION 15.04. Subrogation.
Subject to the payment in full of all Senior Indebtedness of the
Company, the Securityholders shall be subrogated to the rights of the holders of
such Senior Indebtedness to receive payments or distributions of cash, property
or securities of the Company, applicable to such Senior Indebtedness until the
principal of (and premium, if any) and interest on the Debt Securities shall be
paid in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of such Senior Indebtedness of any cash, property
or securities to which the Securityholders or the Trustee would be entitled
except for the provisions of this Article XV, and no payment over pursuant to
the provisions of this Article XV to or for the benefit of the holders of such
Senior Indebtedness by Securityholders or the Trustee, shall, as between the
Company, its creditors other than holders of Senior Indebtedness of the Company,
and the holders of the Debt Securities be deemed to be a payment or distribution
by the Company to or on account of such Senior Indebtedness. It is understood
that the provisions of this Article XV are and are intended solely for the
purposes of defining the relative rights of the holders of the Securities, on
the one hand, and the holders of such Senior Indebtedness, on the other hand.
Nothing contained in this Article XV or elsewhere in this Indenture,
any Additional Provisions or in the Debt Securities is intended to or shall
impair, as between the Company, its creditors other than the holders of Senior
Indebtedness of the Company, and the holders of the Debt Securities, the
obligation of the Company, which is absolute and unconditional, to pay to the
holders of the Debt Securities the principal of (and premium, if any) and
interest on the Debt Securities as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the
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holders of the Debt Securities and creditors of the Company, other than the
holders of Senior Indebtedness of the Company, nor shall anything herein or
therein prevent the Trustee or the holder of any Debt Security from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XV of the holders
of such Senior Indebtedness in respect of cash, property or securities of the
Company, received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article XV, the Trustee, subject to the provisions of Article VI of this
Indenture, and the Securityholders shall be entitled to conclusively rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Securityholders, for the purposes of ascertaining the Persons
entitled to participate in such distribution, the holders of Senior Indebtedness
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XV.
SECTION 15.05. Trustee to Effectuate Subordination.
Each Securityholder by such Securityholder's acceptance thereof
authorizes and directs the Trustee on such Securityholder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article XV and appoints the Trustee such Securityholder's
attorney-in-fact for any and all such purposes.
SECTION 15.06. Notice by the Company.
The Company shall give prompt written notice to a Responsible Officer
of the Trustee at the Principal Office of the Trustee of any fact known to the
Company that would prohibit the making of any payment of monies to or by the
Trustee in respect of the Debt Securities pursuant to the provisions of this
Article XV. Notwithstanding the provisions of this Article XV or any other
provision of this Indenture or any Additional Provisions, the Trustee shall not
be charged with knowledge of the existence of any facts that would prohibit the
making of any payment of monies to or by the Trustee in respect of the Debt
Securities pursuant to the provisions of this Article XV, unless and until a
Responsible Officer of the Trustee at the Principal Office of the Trustee shall
have received written notice thereof from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and before the receipt of any
such written notice, the Trustee, subject to the provisions of Article VI of
this Indenture, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the notice
provided for in this Section 15.06 at least two Business Days prior to the date
upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Debt Security), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purposes for which they were
received, and shall not be affected by any notice to the contrary that may be
received by it
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within two Business Days prior to such date.
The Trustee, subject to the provisions of Article VI of this
Indenture, shall be entitled to conclusively rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness of the Company (or a trustee or representative on behalf of such
holder), to establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee or representative on behalf of any such holder or
holders. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of such
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article XV, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article XV, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
SECTION 15.07. Rights of the Trustee; Holders of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XV in respect of any Senior Indebtedness at any
time held by it, to the same extent as any other holder of Senior Indebtedness,
and nothing in this Indenture or any Additional Provisions shall deprive the
Trustee of any of its rights as such holder.
With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article XV, and no implied
covenants or obligations with respect to the holders of such Senior Indebtedness
shall be read into this Indenture or any Additional Provisions against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of such Senior Indebtedness and, subject to the provisions of Article VI
of this Indenture, the Trustee shall not be liable to any holder of such Senior
Indebtedness if it shall pay over or deliver to Securityholders, the Company or
any other Person money or assets to which any holder of such Senior Indebtedness
shall be entitled by virtue of this Article XV or otherwise.
Nothing in this Article XV shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.06.
SECTION 15.08. Subordination May Not Be Impaired.
No right of any present or future holder of any Senior Indebtedness of
the Company to enforce subordination as herein provided shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of the
Company, or by any act or failure to act, in good faith, by any such holder, or
by any noncompliance by the Company, with the terms, provisions and covenants of
this Indenture, regardless of any knowledge thereof that any such holder may
have or otherwise be charged with.
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Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness of the Company may, at any time and from time
to time, without the consent of or notice to the Trustee or the Securityholders,
without incurring responsibility to the Securityholders and without impairing or
releasing the subordination provided in this Article XV or the obligations
hereunder of the holders of the Debt Securities to the holders of such Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, such
Senior Indebtedness, or otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any agreement under which
such Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of such Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company, and any other Person.
The Chase Manhattan Bank hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions herein above set forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed by their respective officers thereunto duly authorized, as of
the day and year first above written.
MERCANTILE BANCORPORATION INC.
By /s/ Kenneth E. Schutte
----------------------------------------------
Name: Kenneth E. Schutte
Title: Senior Vice President and
Treasurer
THE CHASE MANHATTAN BANK, as Trustee
By /s/ R.J. Halleran
----------------------------------------------
Name: R.J. Halleran
Title: Second Vice President
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Exhibit 4.6
- --------------------------------------------------------------------------------
FIRST SUPPLEMENTAL INDENTURE
between
MERCANTILE BANCORPORATION INC., as Issuer,
and
THE CHASE MANHATTAN BANK, as Trustee
Dated as of February 4, 1997
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS ............................................... 2
SECTION 1.1 ............................................... 2
ARTICLE II GENERAL TERMS AND CONDITIONS OF THE DEBENTURES ............ 4
SECTION 2.1 ............................................... 4
SECTION 2.2 ............................................... 5
SECTION 2.3 ............................................... 5
SECTION 2.4 ............................................... 5
SECTION 2.5 ............................................... 7
SECTION 2.6 ............................................... 9
ARTICLE III REDEMPTION OF THE DEBENTURES .............................. 9
SECTION 3.1 ............................................... 9
SECTION 3.2 ............................................... 9
ARTICLE IV EXTENSION OF INTEREST PAYMENT PERIOD ...................... 10
SECTION 4.1 ............................................... 10
SECTION 4.2 ............................................... 10
ARTICLE V EXPENSES AND GUARANTEE .................................... 11
SECTION 5.1 ............................................... 11
SECTION 5.2 ............................................... 12
ARTICLE VI FORM OF DEBENTURE ......................................... 12
ARTICLE VII MISCELLANEOUS ............................................. 20
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of February 4, 1997 (the "First
Supplemental Indenture"), between Mercantile Bancorporation Inc., a Missouri
corporation (the "Company") and The Chase Manhattan Bank, as trustee (the
"Trustee"), under the Indenture dated as of February 4, 1997 between the Company
and the Trustee (the "Indenture").
WHEREAS, the Company executed and delivered the Indenture to the Trustee to
provide for the issuance of the Company's unsecured junior subordinated debt
securities to be issued from time to time in one or more series as might be
determined by the Company under the Indenture, in an unlimited aggregate
principal amount which may be authenticated and delivered as provided in the
Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company desires to
provide for the establishment of a series of its Debt Securities to be known as
Floating Rate Junior Subordinated Deferrable Interest Debentures due 2027 (the
"Initial Debentures"), and to provide for, if and when issued in exchange for
the Initial Debentures pursuant to the Indenture and the Registration Agreement,
a series of its Debt Securities to be known as Floating Rate Junior Subordinated
Deferrable Interest Debentures due 2027 (the "Exchange Debentures" and together
with the Initial Debentures, the "Debentures"), the form and substance of each
such series of Debentures and the terms, provisions and conditions thereof to be
set forth as provided in the Indenture and this First Supplemental Indenture;
WHEREAS, Mercantile Capital Trust I, a Delaware statutory business trust
(the "Trust"), has offered for sale pursuant to an exemption from the
registration requirements of the Securities Act of 1933, $150,000,000 aggregate
liquidation amount of Floating Rate Capital Trust Pass-through Securities (the
"Initial Capital Securities"), representing undivided beneficial interests in
the assets of the Trust and proposes to invest the proceeds from such offering,
together with the proceeds of the issuance and sale by the Trust to the Company
of its common securities, in $154,640,000 aggregate principal amount of the
Debentures;
WHEREAS, the Trust may offer and issue Floating Rate Capital Trust Pass-
through Securities (the "Exchange Capital Securities") in exchange for the
Initial Capital Securities; and
WHEREAS, the Company has requested that the Trustee execute and deliver
this First Supplemental Indenture; all requirements necessary to make this First
Supplemental Indenture a valid instrument in accordance with its terms, and to
make the Debentures, when executed by the Company and authenticated and
delivered by the Trustee, the valid obligations of the Company, have been
performed; and the execution and delivery of this First Supplemental Indenture
has been duly authorized in all respects;
NOW THEREFORE, in consideration of the purchase and acceptance of the
Initial Debentures by the holders thereof, and for the purpose of setting forth,
as provided in the Indenture, the form and substance of each series of
Debentures and the terms, provisions and conditions thereof, the Company
covenants and agrees with the Trustee as follows:
<PAGE>
ARTICLE I
DEFINITIONS
SECTION 1.1
- -----------
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning when used in this
First Supplemental Indenture;
(b) a term defined anywhere in this First Supplemental Indenture has the
same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) a reference to a Section or Article is to a Section or Article of this
First Supplemental Indenture;
(e) headings are for convenience of reference only and do not affect
interpretation;
(f) the following terms have the meanings given to them in the
Declaration:
(i) Administrators;
(ii) Business Day;
(iii) Capital Security Certificate;
(iv) Capital Treatment Event;
(v) Clearing Agency;
(vi) Delaware Trustee;
(vii) Depositary;
(viii) Distribution;
(ix) Institutional Trustee;
(x) Purchase Agreement; and
(xi) Tax Event; the following terms have the meanings given to them
in this Section 1.1(g):
"Additional Interest" shall have the meaning set forth in Section 2.5(d).
"Calculation Agent" means any Person authorized by the Company to determine the
interest rate of the Debentures, which shall be The Chase Manhattan Bank, until
a successor is appointed.
"Compounded Interest" shall have the meaning set forth in Section 4.1.
2
<PAGE>
"Declaration" means the Amended and Restated Declaration of Trust of the Trust,
dated as of February 4, 1997, as amended or supplemented from time to time.
"Deferred Interest" shall have the meaning set forth in Section 4.1.
"Determination Date" means, with respect to any interest period, the date that
is two London Business Days prior to the first day of such interest period.
"Dissolution Event" means that, subject to the receipt by the Company of prior
approval from the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve, the Trust is to be dissolved in
accordance with the Declaration, and the Debentures held by the Institutional
Trustee are to be distributed to the holders of the Trust Securities issued by
the Trust pro rata in accordance with the Declaration.
"Extension Period" shall have the meaning set forth in Section 4.1.
"Federal Reserve" means the Board of Governors of the Federal Reserve System.
"Global Debenture" shall have the meaning set forth in Section 2.4(a)(i).
"interest" shall include all interest payable on a series of Debentures
including any Additional Interest, Compounded Interest and Special Interest, if
applicable.
"LIBOR" means, with respect to a quarterly interest period relating to an
Interest Payment Date (in the following order of priority):
(i) the rate (expressed as a percentage per annum) for Eurodollar
deposits having a three-month maturity that appears on Telerate Page 3750
as of 11:00 a.m. (London time) on the related Determination Date;
(ii) if such rate does not appear on Telerate Page 3750 as of 11:00 a.m.
(London time) on the related Determination Date, LIBOR will be the
arithmetic mean (if necessary rounded upwards to the nearest whole multiple
of .00001%) of the rates (expressed as percentages per annum) for
Eurodollar deposits having a three-month maturity that appear on Reuters
Monitor Money Rates Page LIBO ("Reuters Page LIBO") as of 11:00 a.m.
(London time) on such Determination Date;
(iii) if such rate does not appear on Reuters Page LIBO as of 11:00 a.m.
(London time) on the related Determination Date, the Calculation Agent will
request the principal London offices of four leading banks in the London
interbank market to provide such banks' offered quotations (expressed as
percentages per annum) to prime banks in the London interbank market for
Eurodollar deposits having a three-month maturity as of 11:00 a.m. (London
time) on such Determination Date. If at least two
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quotations are provided, LIBOR will be the arithmetic mean (if necessary
rounded upwards to the nearest whole multiple of .00001%) of such
quotations;
(iv) if fewer than two such quotations are provided as requested in
clause (iii) above, the Calculation Agent will request four major New
York City banks to provide such banks' offered quotations (expressed as
percentages per annum) to leading European banks for loans in Eurodollars
as of 11:00 a.m. (London time) on such Determination Date. If at least
two such quotations are provided, LIBOR will be the arithmetic mean (if
necessary rounded upwards to the nearest whole multiple of .00001%) of
such quotations; and
(v) if fewer than two such quotations are provided as requested in
clause (iv) above, LIBOR will be LIBOR determined with respect to the
interest period immediately preceding such current interest period.
If the rate for Eurodollar deposits having a three-month maturity that initially
appears on Telerate Page 3750 or Reuters Page LIBO, as the case may be, as of
11:00 a.m. (London time) on the related Determination Date is superseded on
Telerate Page 3750 or Reuters Page LIBO, as the case may be, by a corrected rate
before 12:00 noon (London time) on such Determination Date, the corrected rate
as so substituted on the applicable page will be the applicable LIBOR for such
Determination Date.
"London Business Day" means any day, other than a Saturday or Sunday, on which
banks are open for business in London.
"Maturity Date" means February 1, 2027.
"Non-Book-Entry Capital Securities" shall have the meaning set forth in Section
2.4(a)(ii).
"Record Date" shall have the meaning set forth in the Debentures.
"Redemption Price" shall have the meaning set forth in Section 3.1.
"Registration Agreement" means the Registration Rights Agreement, dated January
29, 1997, relating to the Debentures and the other securities described therein
among the Company, the Trust and the initial purchasers named therein.
"Registered Exchange Offer" has the meaning set forth in the Registration
Agreement.
"Special Interest" has the meaning set forth in Section 2.5(f)(iii).
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ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1
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The Initial Debentures and the Exchange Debentures are hereby authorized as two
series of Debt Securities. The aggregate principal amount of Debentures
outstanding at any time shall not exceed $154,640,000 (except as set forth in
Section 2.03(2) of the Indenture). Upon receipt of a written order of the
Company for the authentication and delivery of a series of Debentures and
satisfaction of the requirements of Section 2.04 of the Indenture, the Trustee
shall authenticate (a) Initial Debentures for original issuance in an aggregate
principal amount not to exceed $154,640,000 (except as set forth in Section
2.03(2) of the Indenture) or (b) Exchange Debentures for issuance pursuant to a
Registered Exchange Offer for Initial Debentures in a principal amount equal to
the principal amount of Initial Debentures exchanged in such Registered Exchange
Offer.
The Initial Debentures shall be issued pursuant to an exemption from
registration under the Securities Act and the Restricted Securities Legend shall
appear thereon, unless otherwise determined by the Company in accordance with
applicable law. The Initial Debentures may not be transferred except in
compliance with the Restricted Securities Legend set forth in Section 2.07 of
the Indenture, unless otherwise determined by the Company in accordance with
applicable law. The Initial Debentures shall be issued in minimum denominations
of $100,000 and any integral multiple of $1,000 in excess thereof, and the
Exchange Debentures shall be issuable in minimum denominations of $1,000 and any
integral multiple thereof.
SECTION 2.2
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At the Maturity Date, the Debentures shall mature and the principal thereof
shall be due and payable together with all accrued and unpaid interest thereon
including Compounded Interest, Additional Interest and Special Interest thereon,
if any.
SECTION 2.3
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Except as provided in Section 2.4, Debentures of a series shall be issued in
fully registered certificated form without interest coupons. Principal and
interest on Debentures of a series issued in certificated form will be payable,
the transfer of such Debentures will be registrable and such Debentures will be
exchangeable for Debentures of such series bearing identical terms and
provisions at the office or agency of the Company in the Borough of Manhattan,
The City of New York, which office or agency shall initially be the corporate
trust office of the Trustee; provided, however, that payment of interest may be
made at the option of the Company by check mailed to the holder of any Debenture
at such address as shall appear in the Debt Security Register for such series of
Debentures or by wire transfer to an account appropriately designated by such
holder. Notwithstanding the foregoing, so long as the holder of any Debentures
of a series is the Institutional Trustee, the payment of the principal of and
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interest (including Compounded Interest, Additional Interest and Special
Interest, if any) on the Debentures held by the Institutional Trustee will be
made at such place and to such account as may be designated by the Institutional
Trustee.
SECTION 2.4
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(a) In connection with a Dissolution Event,
(i) except as provided in clause (ii) of this sentence, Debentures
of a series in certificated form may be presented to the Trustee by the
Institutional Trustee in exchange for a Global Security for such series in
an aggregate principal amount equal to the aggregate principal amount of
all outstanding Debentures of such series (a "Global Debenture"), to be
registered in the name of The Depository Trust Company, New York, New York,
or its nominee (hereby designated to be the Depositary for Debentures of
such series), and delivered by the Trustee to the Depositary or its
custodian for crediting to the accounts of the Depositary's participants
pursuant to the instructions of the Administrators of the Trust, which
instructions shall be provided in accordance with the terms of the
Declaration; the Company upon any such presentation shall execute a Global
Debenture for such series in such aggregate principal amount and deliver
the same to the Trustee for authentication and delivery in accordance with
the Indenture and this First Supplemental Indenture; payments on the
Debentures of a series issued as a Global Debenture will be made to the
Depositary;
(ii) if any Capital Securities of a series are not held by the
Clearing Agency or its nominee ("Non-Book-Entry Capital Securities"), the
Debentures in certificated form of the series held by the Trust
corresponding to such Capital Securities of such series may be presented to
the Trustee by the Institutional Trustee and any Capital Security
Certificate which represents such Non-Book-Entry Capital Securities will be
deemed to represent beneficial interests in Debentures so presented to the
Trustee by the Institutional Trustee having an aggregate principal amount
equal to the aggregate liquidation amount of such Non-Book-Entry Capital
Securities until such Capital Security Certificates are presented to the
Debt Security registrar for registration of transfer or reissuance at which
time such Capital Security Certificates will be canceled and a Debenture of
the series previously held by the Trust registered in the name of the
holder of the Capital Security Certificate or the transferee of the holder
of such Capital Security Certificate, as the case may be, with an aggregate
principal amount equal to the aggregate liquidation amount of the Capital
Security Certificate canceled, will be executed by the Company and
delivered to the Trustee for authentication and delivery in accordance with
the Indenture and this First Supplemental Indenture; upon issue of such
Debentures of such series, Debentures of such series with an equivalent
aggregate principal amount that were presented by the Institutional Trustee
to the Trustee will be deemed to have been canceled; and
(iii) prior to the distribution of Debentures of a series held by the
Institutional Trustee to the holders of Trust Securities, the Company and
the Trustee shall enter into a supplemental indenture pursuant to Article
IX of the Indenture to provide for
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transfer procedures and restrictions with respect to such Debentures of
such series substantially similar to those contained in the Declaration
with respect to Capital Securities of the corresponding series to the
extent applicable in the circumstances existing at the time of distribution
of Debentures of such series in connection with a Dissolution Event for
purposes of assuring that no registration of Debentures of such series is
required under the Securities Act of 1933, as amended.
(b) A Global Debenture may be transferred, in whole but not in part, only
by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary, or to a
successor Depositary selected or approved by the Company or to a nominee of such
successor Depositary.
(c) If at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary or if at any time the Depositary
shall no longer be registered or in good standing under the Securities Exchange
Act of 1934, as amended, or other applicable statute or regulation, and a
successor Depositary is not appointed by the Company within 90 days after the
Company receives such notice or becomes aware of such condition, as the case may
be, the Company will execute, and, subject to Article II of the Indenture, the
Trustee, upon written request of the Company, will authenticate and make
available for delivery, Debentures of each series in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Debenture of such series in
exchange for such Global Debenture. In addition, the Company may at any time
determine that the Debentures of a series shall no longer be represented by a
Global Debenture. In such event the Company will execute, and subject to Section
2.07 of the Indenture, the Trustee, upon receipt of an Officers' Certificate
evidencing such determination by the Company, will authenticate and deliver
Debentures of such series in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Debenture of such series in exchange for such
Global Debenture. A Global Debenture shall also be exchangeable for Debentures
in definitive form upon the occurrence of an Event of Default. Upon the exchange
of a Global Debenture for Debentures in definitive registered form without
coupons, in authorized denominations, such Global Debenture shall be canceled by
the Trustee. Such Debentures in definitive registered form issued in exchange
for such Global Debenture shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee. The
Trustee shall deliver such Debentures to the Depositary for delivery to the
Persons in whose names such Debentures are so registered.
SECTION 2.5
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(a) The Company shall appoint a Calculation Agent, which may be the
Trustee, to determine LIBOR as of the Determination Date for each quarterly
interest period and to calculate the interest rate and the amount of interest
due for each such interest period. Absent manifest error, the Calculation
Agent's determination of LIBOR and its calculation of the
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interest rate for each interest period shall be final and binding on the holders
of the Debentures.
(b) The amount of interest payable for any period will be computed on the
basis of the actual number of days elapsed in a year of twelve 30-day months. In
the event that any date on which interest is payable on the Debentures of a
series is not a Business Day, then payment of 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), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
(c) The indebtedness evidenced by all Debentures of a series is
subordinate and junior in right of payment to the prior payment in full of all
present and future Senior Indebtedness and pari passu in right of payment with
all Debentures of each other series.
(d) If, at any time while the holder of any Debentures of a series is the
Institutional Trustee, the Trust is required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, then, in any
such case, the Company shall pay as additional interest ("Additional Interest")
on the Debentures held by the Institutional Trustee, such additional amounts as
shall be required so that the net amounts received and retained by the Trust
after paying any such taxes, duties, assessments or other governmental charges
will be equal to the amounts the Trust and the Institutional Trustee would have
received had no such taxes, duties, assessments or other governmental charges
been imposed.
(e) If an Initial Debenture is exchanged in a Registered Exchange Offer
prior to the Record Date for the first Interest Payment Date following such
exchange, accrued and unpaid interest, if any, on such Initial Debenture, up to
but not including the date of issuance of the Exchange Debenture or Exchange
Debentures issued in exchange for such Initial Debenture, shall be paid on the
first Interest Payment Date for such Exchange Debenture or Exchange Debentures
to the Securityholder or Securityholders of such Exchange Debenture or Exchange
Debentures on the first Record Date with respect to such Exchange Debenture or
Exchange Debentures. If an Initial Debenture is exchanged in a Registered
Exchange Offer subsequent to the Record Date for the first Interest Payment Date
following such exchange but on or prior to such Interest Payment Date, then any
such accrued and unpaid interest with respect to such Initial Debenture and any
accrued and unpaid interest on the Exchange Debenture or Exchange Debentures
issued in exchange for such Initial Debenture, through the day before such
Interest Payment Date, shall be paid on such Interest Payment Date to the
Securityholder of such Initial Debenture on such Record Date.
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(f) The following terms relate to Special Interest:
(i) In the event that either
(A) the Exchange Offer Registration Statement (as such term is
defined in the Registration Agreement) is not filed with the
Securities and Exchange Commission (the "Commission") on or prior to
the 90th day following the Closing Date (as such term is defined in
the Registration Agreement),
(B) the Exchange Offer Registration Statement is not declared
effective by the Commission on or prior to the 120th day following the
Closing Date or (C) the Registered Exchange Offer (as such term is
defined in the Registration Agreement) is not consummated or a Shelf
Registration Statement (as such term is defined in the Registration
Agreement) with respect to the Initial Debentures is not declared
effective by the Commission on or prior to the 150th day following the
Closing Date, interest shall accrue (in addition to the stated
interest on Initial Debentures) from and including the next day
following each of (1) such 90-day period in the case of clause (A)
above, (2) such 120-day period in the case of clause (B) above and (3)
such 150-day period in the case of clause (C) above. In each case,
such additional interest shall accrue at a rate per annum equal to
0.25% of the principal amount of the Initial Debentures (determined
daily). The aggregate amount of additional interest payable pursuant
to the above provisions will in no event exceed 0.75% per annum of the
principal amount of the Initial Debentures (determined daily). Upon
(X) the filing of the Exchange Offer Registration Statement after the
90-day period described in clause (A) above, (Y) the effectiveness of
the Exchange Offer Registration Statement after the 120-day period
described in clause (B) above or (Z) the consummation of the
Registered Exchange Offer or the effectiveness of a Shelf Registration
Statement, as the case may be, after the 150-day period described in
clause (C) above, the additional interest payable on the Initial
Debentures, with respect to such clause (A), (B) or (C), as the case
may be, from the date of such filing, effectiveness or consummation,
as the case may be, shall cease to accrue.
(ii) In the event that a Shelf Registration Statement filed with
respect to the Initial Debentures is declared effective pursuant to the
terms of the Registration Agreement, if the Company or the Trust fails to
keep such Shelf Registration Statement continuously effective for the
period required by the Registration Agreement, then from the next day
following such time as the Shelf Registration Statement is no longer
effective until the earlier of (A) the date that the Shelf Registration
Statement is again deemed effective, (B) the date that is the third
anniversary of the effective date or (C) the date as of which all of the
Initial Debentures are sold pursuant to the Shelf Registration Statement or
may be sold without registration pursuant to Rule 144 under the Securities
Act of 1933, interest shall accrue on the Initial Debentures (in addition
to the stated interest on the Initial Debentures) at a rate per annum equal
to 0.25% of the principal amount of the Initial Debentures (determined
daily), to be increased to 0.50% per annum of the principal amount of the
Initial Debentures
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(determined daily) if and when such Shelf Registration Statement is no
longer effective for 30 days or more.
(iii) Any additional interest that accrues with respect to the
Initial Debentures as provided in this paragraph is referred to as "Special
Interest." For all purposes of the Indenture, this Supplemental Indenture
and the Initial Debentures, Special Interest shall be treated as interest
and shall be payable on the same Interest Payment Dates and to the
Securityholders of record on the same record dates as would be the case for
stated interest.
SECTION 2.6
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If at any time the holder of all Debentures of a series ceases to be the
Institutional Trustee and, at such time, the Capital Securities issued by the
Trust are rated by at least one nationally recognized statistical rating agency,
then the Company shall use its best efforts to obtain from at least one
nationally recognized statistical rating agency a rating for the Debentures of
such series.
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1
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If a Tax Event or a Capital Treatment Event shall occur and be continuing, the
Company shall have the right, subject to the receipt by the Company of prior
approval from the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve, to redeem, upon not less than 30
days' nor more than 60 days' notice, the Debentures in whole or in part, at any
time, within 90 days following the occurrence of such Tax Event or Capital
Treatment Event, as the case may be, at a redemption price equal to 100% of the
principal amount to be redeemed plus accrued but unpaid interest to the date of
such redemption (the "Redemption Price"). If Debentures are only partially
redeemed pursuant to this Section 3.1, Debentures shall be redeemed pro rata or
by lot or by any other method utilized by the Trustee. The Redemption Price
shall be paid prior to 11:00 a.m., New York City time, on the date of such
redemption or such earlier time as the Company determines, provided that the
Company shall deposit with the Trustee an amount sufficient to pay the
Redemption Price by 10:00 a.m., New York City time, on the date the Redemption
Price is to be paid.
SECTION 3.2
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At any time on or after February 1, 2007, the Company shall have the right,
subject to the provisions of Article XIV of the Indenture and to the receipt by
the Company of prior approval from the Federal Reserve if then required under
applicable capital guidelines or policies of the Federal Reserve, to redeem the
Debentures, in whole or in part, from time to time, at the Redemption Price. Any
redemption pursuant to this Section 3.2 will be made upon not less than 30 days'
nor more than 60 days' notice to the holders of the relevant
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Debentures. If Debentures are only partially redeemed pursuant to this Section
3.2, Debentures shall be redeemed pro rata or by lot or by any other method
utilized by the Trustee. The Redemption Price shall be paid prior to 11:00 a.m.,
New York City time, on the date of such redemption or such earlier time as the
Company determines, provided that the Company shall deposit with the Trustee an
amount sufficient to pay the Redemption Price by 10:00 a.m., New York City time,
on the date the Redemption Price is to be paid. The Debentures are not entitled
to the benefit of any sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1
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The Company shall have the right, subject to the conditions set forth herein, to
defer payments of interest on the Debentures of a series by extending the
interest payment period on the Debentures of a series at any time and from time
to time during the term of the Debentures, for up to 20 consecutive quarterly
periods (each such extended interest payment period, an "Extension Period"),
during which Extension Period no interest shall be due and payable; provided
that (i) no Extension Period may extend beyond the Maturity Date and (ii) no
Extension Period may commence or be extended so long as the Company is in
default in the payment of any interest upon any Debentures of such series or has
not paid all Deferred Interest from a prior completed Extension Period. At the
termination of an Extension Period for the Debentures of a series or, if not an
Interest Payment Date, on the Interest Payment Date immediately following
termination of such Extension Period for the Debentures of such series, the
Company shall pay all interest then accrued and unpaid on the Debentures,
together with interest thereon at a variable annual rate equal to LIBOR plus
0.85%, compounded quarterly (to the extent permitted by applicable law)
("Compounded Interest") and any Additional Interest (together with Compounded
Interest, "Deferred Interest"), which Deferred Interest shall be payable to the
holders of the Debentures of such series in whose names the Debentures are
registered in the Debt Security Register on the record date for the payment of
interest on such Interest Payment Date. Before the termination of any Extension
Period, the Company may further extend such period, provided that such period
together with all such previous and further consecutive extensions thereof shall
not exceed 20 consecutive quarterly periods, or extend beyond the Maturity Date.
Upon the termination of any Extension Period and upon the payment of all
Deferred Interest then due, the Company may commence a new Extension Period,
subject to the foregoing requirements.
SECTION 4.2
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(a) If the Institutional Trustee is the only registered holder of the
Debentures of a series at the time the Company initiates an Extension Period,
the Company shall give written notice to the Administrators, the Institutional
Trustee and the Trustee of its initiation of such Extension Period one Business
Day before the earlier of (i) the date on which distributions on the Capital
Securities of the corresponding series are payable, or (ii) the date the
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Administrators are required to give notice to holders of the Capital Securities
of the corresponding series (or any national securities exchange or other
organization on which such Capital Securities are listed, if any) of the record
date or the distribution payment date, in each case with respect to
distributions on the Trust Securities the payment of which is being deferred.
(b) If the Institutional Trustee is not the only registered holder of the
Debentures of a series at the time the Company initiates an Extension Period,
the Company shall give the holders of the Debentures of such series and the
Trustee written notice of its initiation of such Extension Period at least ten
Business Days before the earlier of (i) the next succeeding Interest Payment
Date or (ii) the date the Company is required to give notice to holders of the
Debentures of such series (or any national securities exchange or other
organization on which the Capital Securities of the corresponding series are
listed, if any) of the record or payment date of such interest, in each case
with respect to interest payments the payment of which is being deferred.
ARTICLE V
EXPENSES AND GUARANTEE
SECTION 5.1
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In connection with the offering, sale and issuance of the Debentures of a series
and in connection with the sale of any Trust Securities by the Trust, the
Company, in its capacity as borrower with respect to the Debentures of such
series, shall:
(a) pay all costs and expenses relating to the offering, sale and issuance
of Debentures of such series, including commissions to the underwriters payable
pursuant to the Purchase Agreement and compensation of the Trustee under the
Indenture in accordance with the provisions of Section 6.06 of the Indenture;
(b) pay all debts and other obligations (other than with respect to the
Trust Securities) and costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of the Trust, the
offering, sale and issuance of the Trust Securities (including commissions to
the underwriters in connection therewith), the fees and expenses, if any, of the
Institutional Trustee, the Delaware Trustee and each Administrator, the costs
and expenses relating to the operation of the Trust, including, without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses and
costs and expenses incurred in connection with the acquisition, financing, and
disposition of Trust assets of the Trust);
(c) be primarily and fully liable for any indemnification obligations
arising with respect to the Declaration or the Purchase Agreement or the
Registration Agreement; and
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(d) pay any and all taxes, duties, assessments or governmental charges
of whatever nature and all liabilities, costs and expenses with respect thereto
(other than United States withholding taxes attributable to the Trust or assets
of the Trust) to which the Trust may become subject.
SECTION 5.2
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Upon termination of the Declaration or the removal or resignation of the
Delaware Trustee or the Institutional Trustee, as the case may be, pursuant to
Section 5.7 of the Declaration, the Company shall pay to the Delaware Trustee or
the Institutional Trustee, as the case may be, all amounts owing to the Delaware
Trustee or the Institutional Trustee, as the case may be, under Sections 10.4
and 10.6 of the Declaration accrued to the date of such termination, removal or
resignation.
ARTICLE VI
FORM OF DEBENTURE
The Debentures and the Trustee's certificate of authentication to be
endorsed thereon are to be substantially in the following forms and are
expressly made a part of this First Supplemental Indenture:
(FACE OF DEBENTURE)
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT: This Debenture is a
Global Debenture within the meaning of the Indenture hereinafter referred to and
is registered in the name of a Depositary or a nominee of a Depositary. This
Debenture is exchangeable for Debentures of this series registered in the name
of a person other than the Depositary or its nominee only in the limited
circumstances described in the Indenture, and no transfer of this Debenture may
be registered except in limited circumstances. Except as otherwise provided in
Section 2.11 of the Indenture, this Debenture may be transferred, in whole but
not in part, only to another nominee of the Depositary or to a successor
Depositary or to a nominee of such successor Depositary.
Unless this Debenture is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any Debenture
of this series issued is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.]
[IF THIS DEBENTURE IS ONE OF A SERIES ORIGINALLY ISSUED PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, AS SPECIFIED PURSUANT TO
SECTION 2.03 OF THE INDENTURE, INSERT THE FOLLOWING UNLESS OTHERWISE DETERMINED
BY THE COMPANY -- THIS
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DEBENTURE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS. NEITHER THIS
DEBENTURE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF
THIS DEBENTURE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH DEBENTURE PRIOR TO THE DATE WHICH IS THREE YEARS AFTER THE LATER
OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH MERCANTILE
BANCORPORATION INC. (THE "COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE
OWNER OF THIS DEBENTURE OR ANY PREDECESSOR OF THIS DEBENTURE (THE "RESALE
RESTRICTIONS TERMINATION DATE") ONLY (A) TO THE COMPANY, (B) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE DEBENTURES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1),
(2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE
DEBENTURE FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH
MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS DEBENTURE AGREES THAT IT
WILL COMPLY WITH THE FOREGOING RESTRICTIONS. DEBENTURES OWNED BY A PURCHASER
THAT IS NOT A QUALIFIED INSTITUTIONAL BUYER MAY NOT BE HELD IN BOOK-ENTRY FORM.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE
RESTRICTIONS TERMINATION DATE.]
No. _________________
MERCANTILE BANCORPORATION INC.
FLOATING RATE JUNIOR SUBORDINATED DEFERRABLE
INTEREST DEBENTURE DUE 2027
14
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MERCANTILE BANCORPORATION INC., a Missouri corporation (the "Company,"
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ____________ or
registered assigns, the principal sum of ________________ Dollars ($_________ )
on February 1, 2027, and to pay interest on said principal sum from February 4,
1997, or from the most recent interest payment date (each such date, an
"Interest Payment Date") to which interest has been paid or duly provided for,
quarterly (subject to deferral as set forth herein) in arrears on the first day
of February, May, August and November of each year commencing May 1, 1997, at a
variable annual rate equal to LIBOR plus 0.85% until the principal hereof shall
have become due and payable, and on any overdue principal and (without
duplication and to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at a variable annual rate
equal to LIBOR plus 0.85% compounded quarterly. The amount of interest payable
on any Interest Payment Date shall be computed on the basis of the actual number
of days elapsed in a year of twelve 30-day months. In the event that any date on
which interest is payable on this Debenture is not a Business Day, then payment
of interest payable on such date 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), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the Person
in whose name this Debenture (or one or more Predecessor Securities, as defined
in said Indenture) is registered at the close of business on the Record Date for
such interest installment, [which shall be the close of business on the Business
Day next preceding such Interest Payment Date]. [IF PURSUANT TO THE PROVISIONS
OF THE INDENTURE THE DEBENTURES OF THIS SERIES ARE NO LONGER REPRESENTED SOLELY
BY A GLOBAL DEBENTURE, SUBSTITUTE THE FOLLOWING FOR THE FOREGOING BRACKETED
TEXT -- which shall be the close of business on the 15th day next preceding such
Interest Payment Date.] Any such interest installment not punctually paid or
duly provided for shall forthwith cease to be payable to the registered holders
on such Record Date and may be paid to the Person in whose name this Debenture
(or one or more Predecessor Securities) is registered at the close of business
on a special record date to be fixed by the Trustee for the payment of such
defaulted interest, notice whereof shall be given to the registered holders of
this series of Debentures not less than 10 days prior to such special record
date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Debentures of this
series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in the Indenture. In the event the Debentures of this
series are issued in non-book entry form, the principal of and interest on this
Debenture shall be payable at the office or agency of the Trustee (or other
paying agent appointed by the Company) maintained for that purpose in any coin
or currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts; provided, however, that payment
of interest may be made at the option of the Company by check mailed to the
registered holder at such address as shall appear in the Debt Security Register
or by wire transfer to an account appropriately
15
<PAGE>
designated by the holder hereof. Notwithstanding the foregoing, so long as the
holder of this Debenture is the Institutional Trustee, the payment of the
principal of and interest on this Debenture will be made in immediately
available funds at such place and to such account as may be designated by the
Institutional Trustee.
The indebtedness evidenced by this Debenture is, to the extent provided in
the Indenture, subordinate and junior in right of payment to the prior payment
in full of all Senior Indebtedness, and this Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each holder of this Debenture,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his or her behalf to take such action as
may be necessary or appropriate to acknowledge or effectuate the subordination
so provided and (c) appoints the Trustee his or her attorney-in-fact for any and
all such purposes. Each holder hereof, by his or her acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
said provisions.
If this Debenture is exchanged in a Registered Exchange Offer prior to the
Record Date for the first Interest Payment Date following such exchange, accrued
and unpaid interest, if any, on this Debenture, up to but not including the date
of issuance of the Exchange Debenture or Exchange Debentures issued in exchange
for this Debenture, shall be paid on the first Interest Payment Date for such
Exchange Debenture or Exchange Debentures to the Securityholder or
Securityholders of such Exchange Debenture or Exchange Debentures on the first
Record Date with respect to such Exchange Debenture or Exchange Debentures. If
this Debenture is exchanged in a Registered Exchange Offer subsequent to the
Record Date for the first Interest Payment Date following such exchange but on
or prior to such Interest Payment Date, then any such accrued and unpaid
interest with respect to this Debenture and any accrued and unpaid interest on
the Exchange Debenture or Exchange Debentures issued in exchange for this
Debenture, through the day before such Interest Payment Date, shall be paid on
such Interest Payment Date to the Securityholder of this Debenture on such
Record Date.
If any time the Trust shall be required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States or any other taxing authority, then, in any
such case, the Company shall pay as additional interest on the Debentures held
by the Institutional Trustee such additional amounts as shall be required so
that the net amounts received and retained by the Trust after paying any such
taxes, duties, assessments or other governmental charges will equal the amounts
the Trust and the Institutional Trustee would have received had no such taxes,
duties, assessments or other governmental charges been imposed. [IF THIS
DEBENTURE IS AN INITIAL DEBENTURE INSERT -- In addition, the interest rate
payable on the Debentures of this series is subject to increase as provided in
the Indenture if, pursuant to the Registration Agreement either (A) the Exchange
Offer Registration Statement (as such term is defined in the Registration
Agreement) is not filed with the Securities and Exchange Commission (the
"Commission") on or prior to the 90th day following the Closing Date (as such
term is
16
<PAGE>
defined in the Registration Agreement), (B) the Exchange Offer Registration
Statement is not declared effective by the Commission on or prior to the 120th
day following the Closing Date or (C) the Registered Exchange Offer (as such
term is defined in the Registration Agreement) is not consummated or a Shelf
Registration Statement (as such term is defined in the Registration Agreement)
with respect to the Initial Debentures is not declared effective by the
Commission on or prior to the 150th day following the Closing Date.
The interest rate payable on the Debentures of this series is also subject
to adjustment in certain circumstances if a Shelf Registration Statement filed
pursuant to the Registration Agreement is not kept continuously effective for a
specified period, as provided in the Indenture.]
This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been signed by or on behalf of
the Trustee.
The provisions of this Debenture are continued on the reverse side hereof
and such continued provisions shall for all purposes have the same effect as
though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed.
Dated ________________
MERCANTILE BANCORPORATION INC.
By:________________________________
Name:
Title
THE CHASE MANHATTAN BANK
By:________________________________
Name:
Title
17
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, as Trustee
By___________________________________
Authorized Officer
18
<PAGE>
(REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Debt Securities of the
Company, all issued or to be issued in one or more series under and pursuant to
an Indenture dated as of February 4, 1997, duly executed and delivered between
the Company and The Chase Manhattan Bank, as Trustee (the "Trustee"), as
supplemented by the First Supplemental Indenture dated as of February 4, 1997,
between the Company and the Trustee (the Indenture as so supplemented, the
"Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the series of Debt Securities (referred to herein as the
"Debentures") of which this Debenture is a part. The summary of the terms of
this Debenture contained herein does not purport to be complete and is qualified
by reference to the Indenture. By the terms of the Indenture, the Debt
Securities are issuable in series that may vary as to amount, date of maturity,
rate of interest and in other respects as provided in the Indenture. This series
of Debentures is limited in aggregate principal amount as specified in said
First Supplemental Indenture.
Upon the occurrence and continuation of a Tax Event or a Capital Treatment
Event, this Debenture may become due and payable, in whole or in part, at any
time, within 90 days following the occurrence of such Tax Event or Capital
Treatment Event, as the case may be, at a redemption price equal to 100% of the
principal amount being redeemed together with any accrued and unpaid interest
thereon. The Company shall also have the right to redeem this Debenture at the
option of the Company, in whole or in part, at any time or from time to time on
or after February 1, 2007, at par plus accrued and unpaid interest to the
redemption date.
Any redemption pursuant to the preceding paragraph will be made, subject to
the receipt by the Company of prior approval from the Board of Governors of the
Federal Reserve System (the "Federal Reserve") if then required under applicable
capital guidelines or policies of the Federal Reserve, upon not less than 30
days' nor more than 60 days' notice. If the Debentures are only partially
redeemed by the Company, the Debentures will be redeemed pro rata or by lot or
by any other method utilized by the Trustee; provided that if, at the time of
redemption, the Debentures are registered as a Global Debenture, the Depositary
shall determine the principal amount of such Debentures held by each of its
direct participants to be redeemed pro rata in accordance with its procedures.
In the event of redemption of this Debenture in part only, a new Debenture
or Debentures of this series for the unredeemed portion hereof will be issued in
the name of the holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared due and payable, and upon such declaration of acceleration shall become
due and payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.
19
<PAGE>
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the Debt Securities of any series at the time outstanding
affected thereby, as specified in the Indenture, to execute supplemental
indentures for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the Indenture or of any supplemental
indenture or of modifying in any manner the rights of the holders of the Debt
Securities; provided, however, that no such supplemental indenture shall, among
other things, without the consent of the holders of each Debt Security then
outstanding and affected thereby (i) extend the fixed maturity of any Debt
Securities of any series, or reduce the principal amount thereof or any
redemption premium thereon, or reduce the rate or extend the time of payment of
interest thereon, or make the principal of, or interest or premium on, the Debt
Securities payable in any coin or currency other than that provided in the Debt
Securities, or impair or affect the right of any holder of Debt Securities to
institute suit for the payment thereof, or (ii) reduce the aforesaid percentage
of Debt Securities, the holders of which are required to consent to any such
supplemental indenture. The Indenture also contains provisions permitting the
holders of a majority in aggregate principal amount of the Debt Securities of a
series at the time outstanding affected thereby as provided in the Indenture, on
behalf of all of the holders of the Debt Securities of such series, to waive any
past default in the performance of any of the covenants contained in the
Indenture, or established pursuant to the Indenture with respect to such series,
and its consequences, except a default in the payment of the principal of or
premium, if any, or interest on any of the Debt Securities of such series. Any
such consent or waiver by the registered holder of this Debenture (unless
revoked as provided in the Indenture) shall be conclusive and binding upon such
holder and upon all future holders and owners of this Debenture and of any
Debenture issued in exchange herefor or in place hereof (whether by registration
of transfer or otherwise), irrespective of whether or not any notation of such
consent or waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this Debenture or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Debenture at the time and place and at the rate and in the
money herein prescribed.
The Company shall have the right at any time during the term of the
Debentures and from time to time, subject to certain conditions, to defer
payment of interest on the Debentures of a series by extending the interest
payment period for Extension Periods, each not exceeding 20 consecutive
quarterly periods as provided in the Indenture. Notwithstanding the foregoing,
no Extension Period may extend beyond the maturity date of the Debentures. In
the event that the Company exercises its right to extend an interest payment
period, then during any Extension Period (a) the Company shall not declare or
pay any dividends on, make any distribution with respect to, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of its
capital stock or rights to acquire such capital stock (other than (i) purchases
or acquisitions of shares of any such capital stock or rights to acquire such
capital stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plans, (ii) as a result of a
reclassification of the Company's capital stock or
20
<PAGE>
rights to acquire such capital stock or the exchange or conversion of one class
or series of the Company's capital stock or rights to acquire such capital stock
for another class or series of the Company's capital stock or rights to acquire
such capital stock, (iii) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (iv) dividends
and distributions made on the Company's capital stock or rights to acquire such
capital stock with the Company's capital stock or rights to acquire such capital
stock, or (v) any declaration of a dividend in connection with the
implementation of a shareholder rights plan, or the issuance of stock under any
such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto), or make guarantee payments (other than payments under the
Capital Securities Guarantee or the Common Securities Guarantee for the Trust)
with respect to the foregoing and (b) the Company shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Company that rank pari passu with or junior to the
Debentures. Prior to the termination of any such Extension Period, the Company
may further defer payments of interest by extending the interest payment period;
provided, however, that each such Extension Period, including all such previous
and further extensions thereof, may not exceed 20 consecutive quarterly periods
or extend beyond the maturity of the Debentures. Upon the termination of any
Extension Period and the payment of all amounts then due, the Company may
commence a new Extension Period, subject to the terms set forth in the
Indenture. No interest during an Extension Period, except on the date on which
such Extension Period terminates (or if such date is not an Interest Payment
Date, on the immediately following Interest Payment Date), shall be due and
payable.
As provided in the Indenture and subject to certain limitations herein and
therein set forth, this Debenture is transferable by the registered holder
hereof on the Debt Security Register of the Company, upon surrender of this
Debenture for registration of transfer at the office or agency of the Trustee in
the City and State of New York accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company or the Trustee duly
executed by the registered holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Debentures of authorized denominations
and for the same aggregate principal amount and series will be issued to the
designated transferee or transferees. No service charge will be made for any
such registration of transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this Debenture,
the Company, the Trustee, any Authenticating Agent, any paying agent, any
transfer agent and the Debt Security registrar may deem and treat the registered
holder hereof as the absolute owner hereof (whether or not this Debenture shall
be overdue and notwithstanding any notice of ownership or writing hereon) for
the purpose of receiving payment of or on account of the principal hereof and
interest due hereon and for all other purposes, and neither the Company nor the
Trustee nor any Authenticating Agent nor any paying agent nor any transfer agent
nor any Debt Security registrar shall be affected by any notice to the contrary.
21
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No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Debentures of this series are issuable only in registered form without
coupons. A Global Debenture is exchangeable for Debentures in definitive form
only under certain limited circumstances set forth in the Indenture. As provided
in the Indenture and subject to certain limitations herein and therein set
forth, Debentures of this series are exchangeable for a like aggregate principal
amount of Debentures of this series of a different authorized denomination, as
requested by the holder surrendering the same.
[IF THIS DEBENTURE IS AN INITIAL DEBENTURE INSERT -- The Debentures of this
series are issuable only in minimum denominations of $100,000 and any integral
multiple of $1,000 in excess thereof. The Debentures of this series may be
transferred only in blocks having an aggregate principal amount of not less than
$100,000. Any transfer of Debentures of this series in a block having an
aggregate principal amount of less than $100,000 shall be deemed to be void and
of no legal effect whatsoever. Any transferee of Debentures of this series
having an aggregate principal amount of less than $100,000 shall be deemed not
to be the holder of such Debentures for any purpose, including, but not limited
to, the receipt of payments on such Debentures, and such transferee shall be
deemed to have no interest whatsoever in such Debentures.]
All terms used in this Debenture that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND
THE DEBENTURES, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1
The Indenture, as supplemented by this First Supplemental Indenture, is in
all respects ratified and confirmed, and this First Supplemental Indenture shall
be deemed part of the Indenture in the manner and to the extent herein and
therein provided.
SECTION 7.2
The recitals herein contained are made by the Company and not by the
Trustee, and
22
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the Trustee assumes no responsibility for the correctness thereof. The Trustee
makes no representation as to the validity or sufficiency of this First
Supplemental Indenture.
SECTION 7.3
This First Supplemental Indenture and each Debenture shall be deemed to be
a contract made under the internal laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of said State without
regard to conflict of laws principles thereof.
SECTION 7.4
In case any one or more of the provisions contained in this First
Supplemental Indenture or in a series of Debentures shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
First Supplemental Indenture or of such series of the Debentures, but this First
Supplemental Indenture and such series of the Debentures shall be construed as
if such invalid or illegal or unenforceable provision had never been contained
herein or therein.
This First Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed as of the day and year first above written.
MERCANTILE BANCORPORATION INC.
By: /s/ Kenneth E. Schutte
-----------------------------------
Name: Kenneth E. Schutte
Title: Senior Vice President and
Treasurer
THE CHASE MANHATTAN BANK, as Trustee
By: /s/ R.J. Halleran
-----------------------------------
Name: R.J. Halleran
Title: Second Vice President
23
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Exhibit 4.8
- --------------------------------------------------------------------------------
CAPITAL SECURITIES GUARANTEE AGREEMENT
Mercantile Capital Trust I
Dated as of February 4, 1997
- --------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE*
- ----------------------
Section of Trust Indenture Section of Capital Securities Guarantee
Act of 1939, as amended Agreement
310(a) ........................................................... 4.1(a)
310(b) ........................................................... 4.1(c)
310(c) ........................................................... Inapplicable
311(a) ........................................................... 2.2(a)
311(b) ........................................................... 2.2(b)
311(c) ........................................................... Inapplicable
312(a) ........................................................... 2.2(a)
312(b) ........................................................... 2.2(b)
312(c) ........................................................... 2.2(c)
313 ........................................................... 2.3
314(a) ........................................................... 2.4
314(b) ........................................................... Inapplicable
314(c) ........................................................... 2.5
314(d) ........................................................... Inapplicable
314(e) ........................................................... 2.5
314(f) ........................................................... Inapplicable
315(a) ........................................................... 3.1(b)
315(b) ........................................................... 2.7
315(c) ........................................................... 3.1(c)
315(d) ........................................................... 3.1(d)
316(a) ........................................................... 5.4(a), 2.6
318(a) ........................................................... 2.1(c)
_____________
* This Cross-Reference Table does not constitute part of this Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
i
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<S> <C>
Page
CROSS-REFERENCE TABLE*......................................... i
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation ................... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.................. 5
SECTION 2.2 Lists of Holders of Securities.................... 5
SECTION 2.3 Reports by the Guarantee Trustee.................. 5
SECTION 2.4 Periodic Reports to Guarantee Trustee............. 6
SECTION 2.5 Evidence of Compliance with Conditions Precedent.. 6
SECTION 2.6 Events of Default; Waiver......................... 6
SECTION 2.7 Events of Default; Notice......................... 6
SECTION 2.8 Conflicting Interests............................. 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee........ 7
SECTION 3.2 Certain Rights of Guarantee Trustee............... 9
SECTION 3.3 Not Responsible for Recitals or Issuance of
Capital Securities Guarantee...................... 11
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility .................... 11
SECTION 4.2 Appointment, Removal and Resignation of
Guarantee Trustee ................................ 12
ARTICLE V
GUARANTEE
SECTION 5.1 Capital Securities Guarantee....................... 13
SECTION 5.2 Waiver of Notice and Demand........................ 13
SECTION 5.3 Obligations Not Affected........................... 13
SECTION 5.4 Rights of Holders.................................. 14
SECTION 5.5 Guarantee of Payment............................... 15
</TABLE>
<PAGE>
<TABLE>
<S> <C>
SECTION 5.6 Subrogation...................................... 15
SECTION 5.7 Independent Obligations.......................... 15
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions....................... 15
SECTION 6.2 Ranking.......................................... 16
ARTICLE VII
TERMINATION
SECTION 7.1 Termination...................................... 17
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation....................................... 17
SECTION 8.2 Indemnification................................... 18
SECTION 8.3 Compensation; Reimbursement of Expenses........... 18
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns............................ 18
SECTION 9.2 Amendments........................................ 19
SECTION 9.3 Notices........................................... 19
SECTION 9.4 Benefit........................................... 20
SECTION 9.5 Governing Law..................................... 20
</TABLE>
<PAGE>
GUARANTEE AGREEMENT
-------------------
This GUARANTEE AGREEMENT (the "Capital Securities Guarantee"), dated
as of February 4, 1997, is executed and delivered by Mercantile Bancorporation
Inc., a Missouri corporation (the "Guarantor"), and The Chase Manhattan Bank, a
New York banking corporation, as trustee (the "Guarantee Trustee"), for the
benefit of the Holders (as defined herein) from time to time of the Capital
Securities (as defined herein) of Mercantile Capital Trust I, a Delaware
statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of February 4, 1997, among the trustees named therein
of the Issuer, Mercantile Bancorporation Inc., as sponsor, and the holders from
time to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof securities, having an aggregate liquidation
amount of up to $150,000,000, designated the Floating Rate Capital Trust Pass-
through Securities/SM/ (the "Initial Capital Securities") and may issue in the
future, pursuant to the Registration Rights Agreement (as defined in the
Declaration) securities solely to be exchanged for Initial Capital Securities,
with terms that are substantially identical to those of the Initial Capital
Securities (the "Exchange Capital Securities" and together with the Initial
Capital Securities, the "Capital Securities");
WHEREAS, as incentive for the Holders to purchase the Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Capital Securities Guarantee, to pay to the Holders
of Capital Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Capital Securities Guarantee for the benefit of the holders of the
Common Securities (as defined in the Declaration) of the Issuer, except that if
a Declaration Event of Default (as defined herein), has occurred and is
continuing, the rights of holders of the Common Securities to receive payments
under the Common Securities Guarantee are subordinated to the rights of Holders
of the Capital Securities to receive Guarantee Payments under this Capital
Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of the
Capital Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Capital Securities
Guarantee for the benefit of the Holders.
<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
- -------------------------------------------
In this Capital Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Capital Securities Guarantee but
not defined in the preamble above have the respective meanings assigned to
them in this Section 1.1;
(b) a term defined anywhere in this Capital Securities Guarantee has
the same meaning throughout;
(c) all references to "the Capital Securities Guarantee" or "this
Capital Securities Guarantee" are to this Capital Securities Guarantee as
modified, supplemented or amended from time to time;
(d) all references in this Capital Securities Guarantee to Articles
and Sections are to Articles and Sections of this Capital Securities
Guarantee, unless otherwise specified;
(e) terms defined in the Declaration as at the date of execution of
this Capital Securities Guarantee or in the Trust Indenture Act, as the
case may be, have the same meanings when used in this Capital Securities
Guarantee, unless otherwise defined in this Capital Securities Guarantee or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Corporate Trust Office" means the office of the Guarantee Trustee at
which the corporate trust business of the Guarantee Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Guarantee Agreement is located at 450 West 33rd Street, 15th
Floor, New York, New York 10001.
"Covered Person" means any Holder of Capital Securities.
"Debentures" means the junior subordinated debentures of the
Mercantile Bancorporation Inc. designated the Floating Rate Junior Subordinated
Deferrable Interest Debentures due 2027, held by the Institutional Trustee (as
defined in the Declaration) of the Issuer.
"Declaration Event of Default" means an "Event of Default" as defined
in the Declaration.
"Event of Default" has the meaning set forth in Section 2.6.
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"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Declaration) which are required to be paid on such Capital Securities to
the extent the Issuer shall have funds available therefor, (ii) the redemption
price, including all accrued and unpaid Distributions to the date of redemption
(the "Redemption Price") to the extent the Issuer has funds available therefor,
with respect to any Capital Securities called for redemption by the Issuer, and
(iii) upon a voluntary or involuntary liquidation, dissolution, winding-up or
termination of the Issuer (other than in connection with the distribution of
Debentures to the Holders of the Capital Securities in exchange therefor as
provided in the Declaration), the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid Distributions on the Capital Securities to the
date of payment, to the extent the Issuer shall have funds available therefor,
and (b) the amount of assets of the Issuer remaining available for distribution
to Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution").
"Guarantees" means the Common Securities Guarantee and this Capital
Securities Guarantee, collectively.
"Guarantee Trustee" means The Chase Manhattan Bank, a New York banking
corporation, until a Successor Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Capital Securities
Guarantee and thereafter means each such Successor Guarantee Trustee.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Capital Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Capital
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Guarantee Trustee, any Affiliate of the
Guarantee Trustee, or any officers, directors, shareholders, members, partners,
employees, representatives, nominees, custodians or agents of the Guarantee
Trustee.
"Indenture" means the Indenture dated as of February __, 1997, between
the Guarantor and The Chase Manhattan Bank, not in its individual capacity but
solely as trustee, and any indenture supplemental thereto pursuant to which the
Debentures are to be issued to the Institutional Trustee of the Issuer.
"Liquidation Distribution" has the meaning set forth in the definition
of "Guarantee Payments" herein.
"Majority in liquidation amount of the Capital Securities" means
Holder(s) of outstanding Capital Securities, voting together as a class, but
separately from the holders of Common Securities, of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus
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accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all Capital Securities then outstanding.
"Officer's Certificate" means, with respect to any Person, a
certificate signed by one Authorized Officer of such Person. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Capital Securities Guarantee shall include:
(a) a statement that each officer signing the Officer's Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officer's
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Redemption Price" has the meaning set forth in the definition of "
Guarantee Payments" herein.
"Responsible Officer" means, with respect to the Guarantee Trustee,
any officer within the Corporate Trust Office of the Guarantee Trustee including
any Vice President, Assistant Vice President, Secretary, Assistant Secretary or
any other officer of the Guarantee Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of that officer's knowledge of and familiarity
with the particular subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trust Securities" means the Common Securities and the Capital
Securities.
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
- ---------------------------------------------
(a) This Capital Securities Guarantee is subject to the provisions of
the Trust Indenture Act that would be required to be part of this Capital
Securities Guarantee if this Capital Securities Guarantee were qualified
under the Trust Indenture Act and shall, to the extent applicable, be
governed by such provisions;
(b) This Capital Securities Guarantee will be qualified under the
Trust Indenture Act upon effectiveness of a Registration Statement with
respect to this Capital Securities Guarantee; and
(c) If and to the extent that any provision of this Capital
Securities Guarantee limits, qualifies or conflicts with the duties imposed
by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
SECTION 2.2 Lists of Holders of Securities
- -------------------------------------------
(a) The Guarantor shall provide the Guarantee Trustee (i) within 14
days after each record date for payment of Distributions, a list, in such
form as the Guarantee Trustee may reasonably require, of the names and
addresses of the Holders of the Capital Securities ("List of Holders") as
of such record date, provided that the Guarantor shall not be obligated to
provide such List of Holders at any time the List of Holders does not
differ from the most recent List of Holders given to the Guarantee Trustee
by the Guarantor, and (ii) at any other time within 30 days of receipt by
the Guarantor of a written request for a List of Holders as of a date no
more than 14 days before such List of Holders is given to the Guarantee
Trustee. The Guarantee Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Guarantee Trustee
- ---------------------------------------------
Within 60 days after May 15 of each year, the Guarantee Trustee shall
provide to the Holders of the Capital Securities such reports as are required by
Section 313(a) of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the requirements of Sections 313(b), 313(c) and 313(d) of the
Trust Indenture Act. The Guarantor will notify the Guarantee Trustee if and
when any Capital Securities are listed on any stock exchange.
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SECTION 2.4 Periodic Reports to Guarantee Trustee
- ---------------------------------------------------
The Guarantor shall provide to the Guarantee Trustee such documents,
reports and information (if any) as required by Section 314 and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act,
provided that such compliance certificate shall be delivered on or before 120
days after the end of the fiscal year of the Guarantor.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
- -------------------------------------------------------------
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with any conditions precedent provided for in this Capital Securities
Guarantee that relate to any of the matters set forth in Section 314(c) of the
Trust Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) of the Trust Indenture Act may be given in
the form of an Officer's Certificate.
SECTION 2.6 Events of Default; Waiver
- --------------------------------------
(a) An Event of Default under this Capital Securities Guarantee will
occur upon the failure of the Guarantor to perform any of its payment or other
obligations hereunder.
(b) The Holders of a Majority in liquidation amount of Capital
Securities may, voting or consenting as a class, on behalf of the Holders of all
of the Capital Securities, waive any past Event of Default and its consequences.
Upon such waiver, any such Event of Default shall cease to exist, and shall be
deemed to have been cured, for every purpose of this Capital Securities
Guarantee, but no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon.
SECTION 2.7 Events of Default; Notice
- --------------------------------------
(a) The Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to
the Holders of the Capital Securities, notices of all Events of Default
actually known to a Responsible Officer of the Guarantee Trustee, unless
such defaults have been cured before the giving of such notice, provided,
however, that the Guarantee Trustee shall be protected in withholding such
notice if and so long as a Responsible Officer of the Guarantee Trustee in
good faith determines that the withholding of such notice is in the
interests of the Holders of the Capital Securities.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have received
written notice from the Guarantor or a Holder of the Capital Securities
(except
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in the case of a payment default), or a Responsible Officer of the
Guarantee Trustee charged with the administration of this Capital
Securities Guarantee shall have obtained actual knowledge, thereof.
SECTION 2.8 Conflicting Interests
- ----------------------------------
The Indenture, the Debentures issued or to be issued thereunder, the
Declaration, the Trust Securities issued or to be issued thereunder and the
Capital Securities Guarantee and the Common Securities Guarantee in connection
therewith shall be deemed to be specifically described in this Capital
Securities Guarantee for the purposes of clause (i) of the proviso contained in
Section 310(b)(1) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee
- -------------------------------------------------------
(a) This Capital Securities Guarantee shall be held by the Guarantee
Trustee for the benefit of the Holders of the Capital Securities, and the
Guarantee Trustee shall not transfer this Capital Securities Guarantee to
any Person except a Holder of Capital Securities exercising his or her
rights pursuant to Section 5.4 (b) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the
Guarantee Trustee shall automatically vest in any Successor Guarantee
Trustee, and such vesting and cessation of title shall be effective whether
or not conveyancing documents have been executed and delivered pursuant to
the appointment of such Successor Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Guarantee Trustee has occurred and is continuing, the Guarantee Trustee
shall enforce this Capital Securities Guarantee for the benefit of the
Holders of the Capital Securities.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after curing all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth
in this Capital Securities Guarantee, and no implied covenants shall be
read into this Capital Securities Guarantee against the Guarantee Trustee.
In case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6) and is actually known to a Responsible Officer of
the Guarantee Trustee, the Guarantee Trustee shall exercise such of the
rights and powers vested in it by this Capital Securities Guarantee, and
use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of his
or her own affairs.
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(d) No provision of this Capital Securities Guarantee shall be
construed to relieve the Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee Trustee
shall be determined solely by the express provisions of this
Capital Securities Guarantee, and the Guarantee Trustee shall not
be liable except for the performance of such duties and
obligations as are specifically set forth in this Capital
Securities Guarantee, and no implied covenants or obligations
shall be read into this Capital Securities Guarantee against the
Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively rely,
as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Guarantee Trustee and conforming to the
requirements of this Capital Securities Guarantee; but in the
case of any such certificates or opinions furnished to the
Guarantee Trustee, the Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Capital Securities Guarantee;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that such Responsible Officer of
the Guarantee Trustee or the Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Capital Securities relating to
the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee, or exercising any trust or power
conferred upon the Guarantee Trustee under this Capital Securities
Guarantee; and
(iv) no provision of this Capital Securities Guarantee shall
require the Guarantee Trustee to expend or risk its own funds or
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otherwise incur personal financial liability in the performance of any
of its duties or in the exercise of any of its rights or powers, if
the Guarantee Trustee shall have reasonable grounds for believing that
the repayment of such funds is not reasonably assured to it under the
terms of this Capital Securities Guarantee or indemnity, reasonably
satisfactory to the Guarantee Trustee, against such risk or liability
is not reasonably assured to it.
SECTION 3.2 Certain Rights of Guarantee Trustee
- ------------------------------------------------
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely, and shall be
fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Capital Securities Guarantee shall be sufficiently evidenced by an
Officer's Certificate.
(iii) Whenever, in the administration of this Capital Securities
Guarantee, the Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting any
action hereunder, the Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on
its part, request and conclusively rely upon an Officer's Certificate
which, upon receipt of such request, shall be promptly delivered by
the Guarantor.
(iv) The Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to
legal matters shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in
good faith and in accordance with such advice or opinion. Such
counsel may be counsel to the Guarantor or any of its Affiliates and
may include any of its employees. The Guarantee Trustee shall have
the right at any time to seek instructions concerning the
administration of this Guarantee from any court of competent
jurisdiction.
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(vi) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Capital
Securities Guarantee at the request or direction of any Holder, unless
such Holder shall have provided to the Guarantee Trustee such security
and indemnity, reasonably satisfactory to the Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses
and the expenses of the Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying
with such request or direction, including such reasonable advances as
may be requested by the Guarantee Trustee; provided, however, that
nothing contained in this Section 3.2(a) (vi) shall be taken to
relieve the Guarantee Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and powers vested in
it by this Capital Securities Guarantee.
(vii) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit.
(viii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the
Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due
care by it hereunder.
(ix) Any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders of the Capital Securities, and the
signature of the Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party
shall be required to inquire as to the authority of the Guarantee
Trustee to so act or as to its compliance with any of the terms and
provisions of this Capital Securities Guarantee, both of which shall
be conclusively evidenced by the Guarantee Trustee's or its agent's
taking such action.
(x) Whenever in the administration of this Capital Securities
Guarantee the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Guarantee Trustee (i) may request
instructions from the Holders of a Majority in liquidation amount of
the Capital Securities, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are
received, and
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(iii) shall be protected in conclusively relying on or acting in
accordance with such instructions.
(xi) The Guarantee Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Capital Securities
Guarantee.
(b) No provision of this Capital Securities Guarantee shall be deemed
to impose any duty or obligation on the Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred or
imposed on it, in any jurisdiction in which it shall be illegal or in which
the Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority
available to the Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Capital Securities
- ---------------------------------------------------------------------------
Guarantee
- ---------
The recitals contained in this Capital Securities Guarantee shall be
taken as the statements of the Guarantor, and the Guarantee Trustee does not
assume any responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Capital Securities
Guarantee.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility
- -------------------------------------------
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or Person permitted by the Securities
and Exchange Commission to act as an institutional trustee under the
Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50
million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then, for the
purposes of this Section 4.1(a) (ii), the combined capital and surplus
of such corporation
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shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible
to so act under Section 4.1(a), the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act,
the Guarantee Trustee and Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Guarantee Trustee
- ----------------------------------------------------------------------
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor except during an
Event of Default.
(b) The Guarantee Trustee shall not be removed in accordance with
Section 4.2(a) until a Successor Guarantee Trustee has been appointed and
has accepted such appointment by written instrument executed by such
Successor Guarantee Trustee and delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold office until
a Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in
writing executed by the Guarantee Trustee and delivered to the Guarantor,
which resignation shall not take effect until a Successor Guarantee Trustee
has been appointed and has accepted such appointment by an instrument in
writing executed by such Successor Guarantee Trustee and delivered to the
Guarantor and the resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery of an instrument of removal or resignation, the Guarantee Trustee
resigning or being removed may petition any court of competent jurisdiction
for appointment of a Successor Guarantee Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper,
appoint a Successor Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts or omissions to
act of any Successor Guarantee Trustee.
(f) Upon termination of this Capital Securities Guarantee or removal
or resignation of the Guarantee Trustee pursuant to this Section 4.2,
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the Guarantor shall pay to the Guarantee Trustee all amounts owing to the
Guarantee Trustee under Sections 8.2 and 8.3 accrued to the date of such
termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Capital Securities Guarantee
- -----------------------------------------
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by the Issuer), as and when due, regardless of any defense (except as defense of
payment by the Issuer), right of set-off or counterclaim that the Issuer may
have or assert. Such Guarantee Payments shall rank pari passu with any payments
made in respect of the Common Securities; provided, however, if a Declaration
Event of Default resulting from an Indenture Event of Default has occurred and
is continuing, the rights of holders of the Common Securities to receive
Guarantee Payments are subordinated to the right of Holders of the Capital
Securities to receive any payments under this Capital Securities Guarantee. Such
obligations will not be discharged except by payment of the Guarantee Payments
in full. The Guarantor's obligation to make a Guarantee Payment may be satisfied
by direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
- ----------------------------------------
The Guarantor hereby waives notice of acceptance of this Capital Securities
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 5.3 Obligations Not Affected
- -------------------------------------
The obligations, covenants, agreements and duties of the Guarantor under
this Capital Securities Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Capital Securities
to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or
any other sums payable under the terms of the Capital Securities or the
extension of time for the performance of any other obligation under,
arising out of, or in
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connection with, the Capital Securities (other than an extension of time
for payment of Distributions, Redemption Price, Liquidation Distribution or
other sum payable that results from the extension of any interest payment
period on the Debentures or any extension of the maturity date of the
Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Capital
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Issuer
or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the
intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
(h) shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of
the foregoing.
SECTION 5.4 Rights of Holders
- ------------------------------
(a) The Holders of a Majority in liquidation amount of the Capital
Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee
in respect of this Capital Securities Guarantee or to direct the exercise
of any trust or power conferred upon the Guarantee Trustee under this
Capital Securities Guarantee; provided however, that (subject to Section
3.1) the Guarantee Trustee shall have the right to decline to follow any
such direction if the Guarantee Trustee shall determine that the actions so
directed would be unjustly prejudicial to the Holders not taking part in
such direction or if the Guarantee Trustee being advised by counsel
determines that the action or proceeding so directed may not lawfully be
taken or if the Guarantor Trustee in good faith by its board of
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directors or trustees, executive committees or a trust committee of
directors or trustees and/or Responsible Officers shall determine that the
action or proceedings so directed would involve the Guarantee Trustee in
personal liability.
(b) Any Holder of Capital Securities may institute a legal proceeding
directly against the Guarantor to enforce the Guarantee Trustee's rights
under this Capital Securities Guarantee, without first instituting a legal
proceeding against the Issuer, the Guarantee Trustee or any other Person.
The Guarantor waives any right or remedy to require that any such action be
brought first against the Issuer, the Guarantee Trustee or any other Person
before so proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
- ---------------------------------
This Capital Securities Guarantee creates a guarantee of payment and not of
collection.
SECTION 5.6 Subrogation
- ------------------------
The Guarantor shall be subrogated to all (if any) rights of the Holders of
Capital Securities against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this Capital Securities Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Capital Securities
Guarantee, if, after giving effect to any such payment, any amounts are due and
unpaid under this Capital Securities Guarantee. If any amount shall be paid to
the Guarantor in violation of the preceding sentence, the Guarantor agrees to
hold such amount in trust for the Holders and to pay over such amount to the
Holders.
SECTION 5.7 Independent Obligations
- ------------------------------------
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Capital Securities and that
the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Capital Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
- ---------------------------------------
So long as any Capital Securities remain outstanding, if (i) the Guarantor
shall be in default with respect to its Guarantee Payments or other obligations
hereunder, (ii) there
15
<PAGE>
shall have occurred and be continuing an Event of Default or a Declaration Event
of Default or (iii) the Guarantor shall have selected an Extension Period as
provided in the Declaration and such period, or any extension thereof, shall be
continuing, then (a) the Guarantor shall not declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase, or make a
liquidation payment with respect to, any of the Guarantor's capital stock or
rights to acquire such capital stock (other than (i) purchases or acquisitions
of shares of the Guarantor's capital stock or rights to acquire such capital
stock in connection with the satisfaction by the Guarantor of its obligations
under any employee benefit plans, (ii) as a result of a reclassification of the
Guarantor's capital stock or rights to acquire such capital stock or the
exchange or conversion of one class or series of the Guarantor's capital stock
or rights to acquire such capital stock for another class or series of the
Guarantor's capital stock or rights to acquire any such stock, (iii) the
purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (iv) dividends and distributions made on
the Guarantor's capital stock or rights to acquire such capital stock with the
Guarantor's capital stock or rights to acquire such capital stock, or (v) any
declaration of a dividend in connection with the implementation of a shareholder
rights plan, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto), or make any
guarantee payments (other than payments under this Capital Securities Guarantee
and the Common Securities Guarantee) with respect to the foregoing and (b) the
Guarantor shall not make any payment of interest, principal or premium, if any,
on or repay, repurchase or redeem any debt securities issued by the Guarantor
which rank pari passu with or junior to the Debentures.
SECTION 6.2 Ranking
- --------------------
This Capital Securities Guarantee will constitute an unsecured obligation
of the Guarantor and will rank subordinate and junior in right of payment to all
present and future Senior Indebtedness (as defined in the Indenture) of the
Guarantor. By their acceptance thereof, each Holder of Capital Securities agrees
to the foregoing provisions of this Capital Securities Guarantee and the other
terms set forth herein.
The right of the Guarantor to participate in any distribution of assets of
any of its subsidiaries upon any such subsidiary's liquidation or reorganization
or otherwise is subject to the prior claims of creditors of that subsidiary,
except to the extent the Guarantor may itself be recognized as a creditor of
that subsidiary. Accordingly, the Guarantor's obligations under this Capital
Securities Guarantee will be effectively subordinated to all existing and future
liabilities of the Guarantor's subsidiaries, and claimants should look only to
the assets of the Guarantor for payments thereunder. This Capital Securities
Guarantee does not limit the incurrence or issuance of other secured or
unsecured debt of the Guarantor, including Senior Indebtedness of the Guarantor,
under any indenture that the Guarantor may enter into in the future or
otherwise.
If a Declaration Event of Default has occurred and is continuing, the
rights of holders of the Common Securities of the Issuer to receive payments
under the Common
16
<PAGE>
Securities Guarantee are subordinated to the rights of Holders of Capital
Securities to receive Guarantee Payments.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
- ------------------------
This Capital Securities Guarantee shall terminate as to the Capital
Securities (i) upon full payment of the Redemption Price of all Capital
Securities, (ii) upon the distribution of the Debentures to the Holders of all
of the Capital Securities or (iii) upon full payment of the amounts payable in
accordance with the Declaration upon dissolution of the Issuer. This Capital
Securities Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder of Capital Securities must restore
payment of any sums paid under the Capital Securities or under this Capital
Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
- ------------------------
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith in accordance with this
Capital Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on
such Indemnified Person by this Capital Securities Guarantee or by law,
except that an Indemnified Person shall be liable for any such loss, damage
or claim incurred by reason of such Indemnified Person's negligence or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Issuer or the Guarantor and upon such
information, opinions, reports or statements presented to the Issuer or the
Guarantor by any Person as to matters the Indemnified Person reasonably
believes are within such other Person's professional or expert competence
and who, if selected by such Indemnified Person, has been selected with
reasonable care by such Indemnified Person, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence
and amount of assets from which Distributions to Holders of Capital
Securities might properly be paid.
17
<PAGE>
SECTION 8.2 Indemnification
- ----------------------------
The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person harmless against, any and all loss, liability, damage,
claim or expense incurred without negligence or bad faith on the part of the
Indemnified Person, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of the Indemnified
Person defending itself against, or investigating, any claim or liability in
connection with the exercise or performance of any of the Indemnified Person's
powers or duties hereunder. The obligation to indemnify as set forth in this
Section 8.2 shall survive the resignation or removal of the Guarantee Trustee
and the termination of this Capital Securities Guarantee.
SECTION 8.3 Compensation; Reimbursement of Expenses
- ----------------------------------------------------
The Guarantor agrees:
(a) to pay to the Guarantee Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust); and
(b) except as otherwise expressly provided herein, to reimburse the
Guarantee Trustee upon request for all reasonable expenses, disbursements
and advances incurred or made by it in accordance with any provision of
this Capital Securities Guarantee (including the reasonable compensation
and the expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to its
negligence or bad faith.
The provisions of this Section 8.3 shall survive the resignation or removal
of the Guarantee Trustee and the termination of this Capital Securities
Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
- -----------------------------------
All guarantees and agreements contained in this Capital Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Capital Securities then outstanding. Except in connection with any merger
or consolidation of the Guarantor with or into another entity or any sale,
transfer or lease of the Guarantor's assets to another entity, in each case, to
the extent permitted under the Indenture, the Guarantor may not assign its
rights or
18
<PAGE>
delegate its obligations under this Capital Securities Guarantee without the
prior approval of the Holders of at least a Majority in liquidation amount of
the Capital Securities.
SECTION 9.2 Amendments
- -----------------------
Except with respect to any changes that do not adversely affect the rights
of Holders of the Capital Securities in any material respect (in which case no
consent of Holders will be required), this Capital Securities Guarantee may be
amended only with the prior approval of the Holders of not less than a Majority
in liquidation amount of the Capital Securities. The provisions of the
Declaration with respect to amendments thereof apply to the giving of such
approval.
SECTION 9.3 Notices
- --------------------
All notices provided for in this Capital Securities Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) If given to the Guarantee Trustee, at the Guarantee Trustee's
mailing address set forth below (or such other address as the Guarantee
Trustee may give notice of to the Holders of the Capital Securities):
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Global Trust Services
Telecopy: (212) 946-8159 or 8160
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to
the Holders of the Capital Securities and to the Guarantee Trustee):
Mercantile Bancorporation Inc.
One Mercantile Center
P.O. Box 524
St. Louis, Missouri 63166-0524
Attention: Secretary
Telecopy: (314) 425-1386
(c) If given to any Holder of the Capital Securities, at the address
set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no
notice was
19
<PAGE>
given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
SECTION 9.4 Benefit
- --------------------
This Capital Securities Guarantee is solely for the benefit of the
Holders of the Capital Securities and, subject to Section 3.1(a), is not
separately transferable from the Capital Securities.
SECTION 9.5 Governing Law
- --------------------------
THIS CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
THIS CAPITAL SECURITIES GUARANTEE is executed as of the day and year
first above written.
MERCANTILE BANCORPORATION INC.,
as Guarantor
By: /s/ John Q. Arnold
--------------------------
Name: John Q. Arnold
Title: Senior Executive Vice President
and Chief Financial Officer
THE CHASE MANHATTAN BANK,
as Guarantee Trustee
By: /s/ R.J. Halleran
--------------------------
Name: R.J. Halleran
Title: Second Vice President
20
<PAGE>
Exhibit 4.9
MERCANTILE CAPITAL TRUST I
$150,000,000 FLOATING RATE CAPITAL TRUST PASS-THROUGH SECURITIES/sm/ (TRUPS/sm/)
FULLY AND UNCONDITIONALLY GUARANTEED AS TO DISTRIBUTIONS
AND OTHER PAYMENTS BY
MERCANTILE BANCORPORATION INC.
REGISTRATION RIGHTS AGREEMENT
-----------------------------
New York, New York
January 29, 1997
Salomon Brothers Inc
As Representative of the several Initial Purchasers
Seven World Trade Center
New York, New York 10048
Dear Sirs:
Mercantile Capital Trust I (the "Trust"), a statutory business trust
formed under the laws of the state of Delaware by Mercantile Bancorporation Inc.
(the "Company"), proposes to issue and sell to the Initial Purchasers (the
"Initial Purchasers") named in the Purchase Agreement of even date herewith (the
"Purchase Agreement"), for whom you are acting as representative (the
"Representative"), the Floating Rate Capital Trust Pass-through Securities (the
"Capital Securities") of the Trust. The issue and sale of the Capital
Securities pursuant to the Purchase Agreement is referred to herein as the
"Initial Placement." The Capital Securities, together with the guarantee of the
Company with respect thereto (the "Guarantee") and the Floating Rate Junior
Subordinated Deferrable Interest Debentures due 2027 of the Company (the
"Subordinated Debt Securities"), are collectively referred to herein as the
"Registrable Securities." As an inducement to the Initial Purchasers to enter
into the Purchase Agreement and in satisfaction of a condition to the
obligations of the Initial Purchasers thereunder, the Company and the Trust
agree with you, (i) for your benefit and the benefit of the other Initial
Purchasers and (ii) for the benefit of the holders from time to time of the
Registrable Securities and the Exchange Securities (as defined below), including
the Initial Purchasers (each of the foregoing a "Holder" and together the
"Holders"), as follows:
1. Definitions. Capitalized terms used herein without definition
shall have their respective meanings set forth in the Purchase Agreement. As
used in this Agreement, the following capitalized defined terms shall have the
following meanings:
"Act" means the Securities Act of 1933, as amended, and the rules and
<PAGE>
regulations of the Commission promulgated thereunder.
"Affiliate" of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such specified person. For purposes of this definition, control
of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Capital Securities" has the meaning set forth in the preamble hereto.
"Closing Date" has the meaning set forth in the Purchase Agreement.
"Commission" means the Securities and Exchange Commission.
"Company" has the meaning set forth in the preamble hereto.
"DTC" means the Depository Trust Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Exchange Offer Prospectus" means the Prospectus contained in the
Exchange Offer Registration Statement, as it may be amended or supplemented from
time to time.
"Exchange Offer Registration Period" means the 1-year period following
the consummation of the Registered Exchange Offer, exclusive of any period
during which any stop order shall be in effect suspending the effectiveness of
the Exchange Offer Registration Statement, or the Company otherwise fails to
maintain continuous effectiveness of the Exchange Offer Registration Statement.
"Exchange Offer Registration Statement" means a registration statement
of the Company and the Trust on an appropriate form under the Act with respect
to the Registered Exchange Offer, all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Exchange Securities" means the securities of the Company and the
Trust issued pursuant to a Registered Exchange Offer in the same aggregate
principal amount or in the same number or liquidation amount, as the case may
be, and containing terms that are identical in all material respects to the
terms of the Registrable Securities except (i) the Exchange Securities shall
have been registered for sale under the Act to Holders and (ii) the interest
rate step-up provisions and the transfer restrictions in the Registrable
Securities will be modified or eliminated, as appropriate, in the Exchange
Securities.
2
<PAGE>
"Exchanging Dealer" means any Holder (which may include the Initial
Purchasers) which is a broker-dealer electing to exchange Registrable
Securities, acquired for its own account as a result of market-making activities
or other trading activities, for Exchange Securities.
"Final Offering Memorandum" means the final Offering Memorandum issued
in connection with the Initial Placement and dated as of January 29, 1997
relating to the Registrable Securities.
"Guarantee" has the meaning set forth in the preamble hereto.
"Holder" has the meaning set forth in the preamble hereto.
"Initial Placement" has the meaning set forth in the preamble hereto.
"Initial Purchasers" has the meaning set forth in the preamble hereto.
"Interest Payment Date" has the meaning set forth in Section 3(c)
hereof.
"Managing Underwriters" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering.
"Prospectus" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities or the Exchange
Securities, covered by such Registration Statement, and all amendments and
supplements to the Prospectus, including post-effective amendments.
"Purchase Agreement" has the meaning set forth in the preamble hereto.
"Registered Exchange Offer" means the offer to the Holders to issue
and deliver to such Holders, in exchange for the Registrable Securities, a like
principal amount, stated liquidation preference or number, as the case may be,
of the Exchange Securities.
"Registrable Securities" has the meaning set forth in the preamble
hereto.
"Registration Statement" means any Exchange Offer Registration
Statement or Shelf Registration Statement that covers any of the Registrable
Securities or the Exchange Securities pursuant to the provisions of this
Agreement, amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
3
<PAGE>
"Representative" has the meaning set forth in the preamble hereto.
"Shelf Registration" means a registration effected pursuant to
Section 3 hereof.
"Shelf Registration Event" has the meaning set forth in Section 2(g)
hereof.
"Shelf Registration Period" has the meaning set forth in Section 3(b)
hereof.
"Shelf Registration Statement" means a "shelf" registration statement
of the Company and the Trust pursuant to the provisions of Section 3 hereof
which covers some or all of the Registrable Securities or Exchange Securities,
as applicable, on an appropriate form under Rule 415 under the Act, or any
similar rule that may be adopted by the Commission, amendments and supplements
to such registration statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Special Payment" has the meaning set forth in Section 3(c) hereof.
"Subordinated Debt Securities" has the meaning set forth in the
preamble hereto.
"Trust" has the meaning set forth in the preamble hereto.
"underwriter" means any underwriter of Registrable Securities or
Exchange Securities in connection with an offering thereof under a Shelf
Registration Statement.
2. Registered Exchange Offer; Resales of Exchange Securities by
Exchanging Dealers; Private Exchange.
(a) Except as otherwise provided herein, the Company and the Trust
shall prepare and, not later than 90 days following the Closing Date, shall file
with the Commission the Exchange Offer Registration Statement with respect to
the Registered Exchange Offer. The Company and the Trust shall use their best
efforts to cause the Exchange Offer Registration Statement be declared effective
under the Act within 120 days of the Closing Date. The Company and the Trust
shall use their best efforts to consummate the Registered Exchange Offer within
150 days of the Closing Date.
(b) Upon the date the Exchange Offer Registration Statement is
declared effective, the Company and the Trust shall promptly commence the
Registered Exchange Offer, it being the objective of such Registered Exchange
Offer to enable each Holder electing to exchange Registrable Securities for
Exchange Securities (assuming that such Holder is not an affiliate of the
Company within the meaning of the Act, acquires the Exchange Securities in the
ordinary course of such Holder's business and has no arrangements with any
person to participate in a public distribution (within the meaning of the Act)
of the Exchange Securities) to trade such Exchange Securities from and after
their receipt without any limitations or
4
<PAGE>
restrictions under the Act and without material restrictions under the
securities laws of a substantial proportion of the several states of the United
States.
(c) In connection with the Registered Exchange Offer, the Company and
the Trust shall:
(i) mail to each Holder a copy of the Prospectus forming part of
the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(ii) keep the Registered Exchange Offer open for not less than 30
days (or longer if required by applicable law) after the date notice
thereof is mailed to the Holders;
(iii) utilize the services of a depositary for the Registered
Exchange Offer with an address in the Borough of Manhattan, The City
of New York; and
(iv) comply in all respects with all applicable laws.
(d) As soon as practicable after the close of the Registered Exchange
Offer, the Company and the Trust shall:
(i) accept for exchange and cancel all Registrable Securities
tendered and not validly withdrawn pursuant to the Registered Exchange
Offer;
(ii) issue Exchange Securities to each Holder in a principal
amount, stated liquidation preference or number, as the case may be,
equal to the Registrable Securities accepted for exchange and canceled
pursuant to the Registered Exchange Offer; and
(iii) issue Exchange Securities to each Initial Purchaser at its
request in exchange for Registrable Securities acquired by it as part
of the Initial Placement containing terms that are identical to the
Exchange Securities issued to Holders in the Registered Exchange Offer
(except that such Exchange Securities may contain the transfer
restrictions contained in the Registrable Securities for which they
are exchanged) and use best effort to cause the CUSIP Service Bureau
to issue the same CUSIP number for such Exchange Securities as is
issued for the Exchange Securities issued in the Registered Exchange
Offer.
(e) The Company, the Trust and the Initial Purchasers on behalf of
the Holders hereby acknowledge that, in order to effect a Registered Exchange
Offer and to comply with clause (d)(iii) above, (i) the Company will be required
to issue new subordinated debt securities to the Trust in exchange for a like
principal amount of Subordinated Debt Securities and (ii) the Trust will be
required to issue new capital securities in exchange for a like amount of stated
liquidation preference of Capital Securities. The parties hereto acknowledge
that the Guarantee by its express terms covers the Exchange Securities
5
<PAGE>
corresponding to the Capital Securities as well as such Capital Securities. The
parties hereto further acknowledge that the new subordinated debt securities,
capital securities and guarantee issuable as described in this paragraph, which
collectively constitute the Exchange Securities, shall be identical in all
material respects to the securities they replace, except that (x) such Exchange
Securities issued pursuant to the Exchange Offer shall be registered for sale
under the Act to Holders and (y) the interest rate step-up provisions and the
transfer restrictions in the securities being replaced by the Exchange
Securities will be modified and eliminated, as appropriate, in the Exchange
Securities.
(f) The Initial Purchasers, the Company and the Trust acknowledge
that, pursuant to current interpretations by the staff of the Commission of
Section 5 of the Act, and in the absence of an applicable exemption therefrom,
each Exchanging Dealer may be deemed an "underwriter" within the meaning of the
Act and, therefore, is required to deliver a Prospectus in connection with any
resales of any Exchange Securities received by such Exchanging Dealer pursuant
to the Registered Exchange Offer in exchange for Registrable Securities acquired
for its own account as a result of market-making activities or other trading
activities. Accordingly, the Company and the Trust shall:
(i) include the information set forth in Annex A hereto on the
cover of the Prospectus forming a part of the Exchange Offer
Registration Statement, in Annex B hereto in the forepart of the
Prospectus forming a part of the Exchange Offer Registration Statement
in a section setting forth details of the Exchange Offer, and in Annex
C hereto in the underwriting or plan of distribution section of the
Prospectus forming a part of the Exchange Offer Registration
Statement, and such other information with respect to resales of the
Exchange Securities by Exchanging Dealers that the Commission may
require in connection therewith and include the information set forth
in Annex D hereto in the Letter of Transmittal delivered pursuant to
the Registered Exchange Offer; and
(ii) use their best efforts to keep the Exchange Offer
Registration Statement continuously effective under the Act during the
Exchange Offer Registration Period for delivery by Exchanging Dealers
in connection with sales of Exchange Securities received pursuant to
the Registered Exchange Offer, as contemplated by Section 4(i) below.
(g) In the event that applicable law or applicable interpretations of
the staff of the Commission do not permit the Company and the Trust to effect
the Registered Exchange Offer (a "Shelf Registration Event"), the Company and
the Trust may elect, in lieu of the commencement of such Registered Exchange
Offer, to effect a Shelf Registration of the Registrable Securities pursuant to
Section 3 hereof.
3. Shelf Registration.
(i) If, because of any change in law or applicable
interpretations thereof by the staff of the Commission, the Company
and the Trust determine upon the advice of their outside counsel that
they are not permitted to effect the Registered Exchange Offer as
contemplated by Section 2 hereof, (ii) if for any other reason the
Exchange Offer Registration
6
<PAGE>
Statement is not declared effective by the Commission within 120 days of the
Closing Date, (iii) if any Initial Purchaser so requests with respect to
Registrable Securities held by it following consummation of the Registered
Exchange Offer that are not "freely tradable" Exchange Securities, (iv) if any
Holder that is a broker-dealer, is not an affiliate of the Company or the Trust
and is not eligible to participate in the Registered Exchange Offer so requests
with respect to Registrable Securities held by it following the consummation of
the Registered Exchange Offer that are not "freely tradable" Exchange Securities
(it being understood that, for purposes of this Section 3, (x) the requirement
that an Initial Purchaser deliver a Prospectus containing the information
required by Items 507 and/or 508 of Regulation S-K under the Act in connection
with sales of Exchange Securities acquired in exchange for such Registrable
Securities shall result in such Exchange Securities being not "freely tradable"
but (y) the requirement that an Exchanging Dealer deliver a Prospectus in
connection with sales of Exchange Securities acquired in the Registered Exchange
Offer in exchange for Registrable Securities acquired as a result of market-
making activities or other trading activities shall not result in such Exchange
Securities being not "freely tradable"), the following provisions shall apply:
(a) The Company and the Trust shall, as promptly as practicable, file
with the Commission the Shelf Registration Statement covering resales of the
Registrable Securities or the Exchange Securities, as applicable, by the Holders
from time to time in accordance with the methods of distribution elected by such
Holders and set forth in such Shelf Registration Statement, and use their best
efforts to cause the Shelf Registration Statement to be declared effective under
the Act by the 150th day (or, if a Shelf Registration Event exists on the 150th
day following the Closing Date, by the 180th day) after the Closing Date (or
promptly in the event of a request by an Initial Purchaser); provided that with
respect to Exchange Securities received by an Initial Purchaser in exchange for
Registrable Securities constituting any portion of an unsold allotment, the
Company and the Trust may, if permitted by current interpretations by the
Commission's staff, file a post-effective amendment to the Exchange Offer
Registration Statement containing the information required by Regulation S-K
Items 507 and/or 508, as applicable, in satisfaction of their obligations under
this paragraph (a) with respect thereto, and any such Exchange Offer
Registration Statement, as so amended, shall be referred to herein as, and
governed by the provisions herein applicable to, a Shelf Registration Statement;
and provided further, that with respect to a Shelf Registration Statement
required pursuant to clause (ii) of the preceding paragraph, the consummation of
a Registered Exchange Offer shall relieve the Company and the Trust of their
obligations under this Section 3(a) but only in respect of their obligations
under such clause (ii).
(b) The Company and the Trust shall each use its best efforts to keep
effective the Shelf Registration Statement continuously effective in order to
permit the Prospectus forming part thereof to be usable by Holders for a period
of three years from the date the Shelf Registration Statement is declared
effective by the Commission, or such shorter period that will terminate upon the
earlier of the following: (A) when all the Registrable Securities or Exchange
Securities, as applicable, covered by such Shelf Registration Statement have
been sold pursuant to the Shelf Registration Statement, (B) when all the
Subordinated Debt Securities or the Exchange Securities relating to such
Subordinated Debt Securities or
7
<PAGE>
the Exchange Securities relating to such Subordinated Debt Securities issued to
Holders in respect of Capital Securities or Exchange Securities that had not
been sold pursuant to the Shelf Registration Statement have been sold pursuant
to the Shelf Registration Statement or (C) when in the written opinion of
counsel to the Company and the Trust, all outstanding Registrable Securities or
Exchange Securities held by persons that are not affiliates of the Company or
the Trust may be resold without registration under the Act pursuant to Rule
144(k) under the Act or any successor provision. Furthermore, the Company and
the Trust shall each use its best efforts, upon the effectiveness of the Shelf
Registration Statement, to promptly upon the request of any Holder to take any
action reasonably necessary to register the sale of any Registrable Securities
or Exchange Securities of such Holder and compliance by such Holder with the
terms hereof and to identify such Holder as a selling securityholder, provided
that such Holder provides the Company with all information reasonably necessary
to effect such registration. The Company and the Trust shall be deemed not to
have used their best efforts to keep the Shelf Registration Statement effective
during the requisite period if either the Company or the Trust voluntarily takes
any action that would result in Holders of securities covered thereby not being
able to offer and sell such securities during that period, unless (i) such
action is required by applicable law, or (ii) such action is taken by the
Company in good faith and for valid business reasons (not including avoidance of
the Company's obligations hereunder), including the acquisition or divestiture
of assets, so long as the Company promptly thereafter complies with the
requirements of Section 4(l) hereof, if applicable.
(c) Except as described below, in the event that either (a) the
Exchange Offer Registration Statement is not filed with the Commission on or
prior to the 90th day following the Closing Date, (b) the Exchange Offer
Registration Statement is not declared effective on or prior to the 120th day
following the Closing Date or (c) the Exchange Offer is not consummated or a
Shelf Registration Statement with respect to the Registrable Securities is not
declared effective on or prior to the 150th day following the Closing Date,
interest will accrue (in addition to the stated interest on the Registrable
Securities) from and including the next day following each of (i) such 90-day
period in the case of clause (a) above, (ii) such 120-day period in the case of
clause (b) above, and (iii) such 150-day period in the case of clause (c) above.
In each case such additional interest (the "Special Payment") will be payable in
cash semiannually in arrears on the first day of February, May, August and
November (each an "Interest Payment Date"), at a rate per annum equal to 0.25%
of the principal amount or liquidation amount, as applicable, of the Registrable
Securities. The aggregate amount of Special Payment payable pursuant to the
above provisions will in no event exceed 0.75% per annum of the principal amount
or the liquidation amount, as applicable, of the Registrable Securities.
(d) If a Shelf Registration Event shall exist on or before the 90th
day following the Closing Date, then clauses (a) and (i) of the preceding
paragraph shall not apply. To the extent that such a Shelf Registration Event
exists and the Company has filed a Shelf Registration Statement covering resales
of the Registrable Securities by the 120th day following the Closing Date, then
clauses (b) and (ii) of the preceding paragraph shall not apply, and to the
extent a Shelf Registration Event exists on the 150th day following the
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Closing Date, the period specified in clauses (c) and (iii) of the preceding
paragraph will be 180 days. Upon (x) the filing of the Exchange Offer
Registration Statement or the occurrence of a Shelf Registration Event, if
applicable, as described above, after the 90-day period described in clause (a)
of the preceding paragraph, (y) the effectiveness of the Exchange Offer
Registration Statement (if applicable) (or the filing of a Shelf Registration
Statement, in the event of a Shelf Registration Event, if applicable, as
described above) after the 120-day period described in clause (b) of the
preceding paragraph or (z) the consummation of the Exchange Offer or the
effectiveness of a Shelf Registration Statement after the 150-day period
described in clause (c) of the preceding paragraph (or the effectiveness of a
Shelf Registration Statement after the 180-day period specified above, in the
event of a Shelf Registration Event, if applicable, as described above), the
Special Payment payable on the Registrable Securities from the date of such
filing, effectiveness or consummation, as the case may be, will cease to accrue
and all accrued and unpaid Special Payments as of the occurrence of (x), (y) or
(z) shall be paid to the holders of the Registrable Securities on the next
Interest Payment Date.
(e) In the event that a Shelf Registration Statement is declared
effective hereunder, if the Company or the Trust fails to keep such Shelf
Registration Statement continuously effective for the period required hereby,
then from the next day following such time as the Shelf Registration Statement
is no longer effective until the earlier of (i) the date that the Shelf
Registration Statement is again deemed effective, (ii) the date that is the
third anniversary of the date of the original issuance of the Registrable
Securities or (iii) the date as of which all of the Registrable Securities
covered by the Shelf Registration Statement are sold pursuant thereto or may
sold without registration pursuant to Rule 144 under the Securities Act, Special
Payments shall accrue at a rate per annum equal to 0.25% of the principal amount
or liquidation amount, as applicable, of the Registrable Securities and shall be
payable in cash, in arrears on each Interest Payment Date; it being understood
that after the Registered Exchange Offer has been consummated, no Special
Payments shall accrue in respect of Registrable Securities (to be increased to
0.50% when the Shelf Registration Statement is no longer effective for 30 days
or more), without prejudice to any other claim that any Holder may have for any
failure by the Company to obtain or maintain continuous effectiveness of the
Exchange Offer Registration Statement or a Shelf Registration Statement in
accordance with the terms of this Agreement.
4. Registration Procedures. In connection with any Shelf Registration
Statement and, to the extent applicable, any Exchange Offer Registration
Statement, the following provisions shall apply:
(a) The Company and the Trust shall furnish to the Initial
Purchasers, prior to the filing thereof with the Commission, a copy of any
Registration Statement, and each amendment thereof and each amendment or
supplement, if any, to the Prospectus included therein and shall use their best
efforts to reflect in each such document, when so filed with the Commission,
such comments as the Initial Purchasers reasonably may propose.
(b) The Company and the Trust shall ensure that (i) any Registration
Statement and any amendment thereto and any Prospectus forming part thereof and
any
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<PAGE>
amendment or supplement thereto (and each document incorporated therein by
reference) complies in all material respects with the Act and the Exchange Act
and the respective rules and regulations thereunder, (ii) any Registration
Statement and any amendment thereto does not, when it becomes effective, 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
and (iii) any Prospectus forming part of any Registration Statement, and any
amendment or supplement to such Prospectus, does not as of the date thereof
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements, in the light of the circumstances
under which they were made, not misleading.
(c)
(1) The Company and the Trust shall advise the Initial Purchasers
and, in the case of a Shelf Registration Statement, the Holders of securities
covered thereby, and, if requested by the Initial Purchasers or any such Holder,
confirm such advice in writing:
(i) when the Registration Statement and any amendment thereto
has been filed with the Commission and when the Registration Statement
or any post-effective amendment thereto has become effective; and
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus included
therein or for additional information.
(2) The Company and the Trust shall advise the Initial
Purchasers and, in the case of a Shelf Registration Statement, the Holders of
securities covered thereby, and, in the case of an Exchange Offer Registration
Statement, any Exchanging Dealer that has provided in writing to the Company a
telephone or facsimile number and address for notices, and, if requested by the
Initial Purchasers or any such Holder or Exchanging Dealer, confirm such advice
in writing of:
(i) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose;
(ii) the receipt by the Company or the Trust of any
notification with respect to the suspension of the qualification of
the securities included therein for sale in any jurisdiction or the
initiation or overtly threatening of any proceeding for such purpose;
(iii) the happening of any event that requires the making of
any changes in the Registration Statement or the Prospectus so that,
as of such date, the statements therein are not misleading and do not
omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made)
not misleading (which advice shall be accompanied by an instruction to
suspend the use of the Prospectus until the requisite changes
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<PAGE>
have been made); and
(iv) the Company's or the Trust's determination that a post-
effective amendment to a Registration Statement would be appropriate.
(d) The Company and the Trust shall use their best efforts to prevent
the issuance, and if issued to obtain the withdrawal, of any order suspending
the effectiveness of any Registration Statement at the earliest possible time.
(e) On or prior to the time that an Exchange Offer Registration
Statement or Shelf Registration Statement is first effective under the
Securities Act, the Company shall have caused the Capital Securities or Exchange
Securities corresponding to such Capital Securities, respectively, to be duly
authorized for listing, subject in the case of an Exchange Offer Registration
Statement to official notice of issuance, on the New York Stock Exchange as a
fixed income security (or, if such listing is unavailable, as an equity
security) and thereafter shall maintain such listing; or, in the alternative,
the Company shall have taken such action satisfactory to the Initial Purchasers
as to have caused the Capital Securities or Exchange Securities corresponding to
such Capital Securities, respectively, to be freely tradable to the same extent
as if duly authorized for listing on the New York Stock Exchange as described
above.
(f) The Company and the Trust shall furnish to each Holder of
securities included within the coverage of any Shelf Registration Statement,
without charge, at least one copy of such Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and schedules,
and, if the Holder so requests in writing, all exhibits filed therewith
(including those incorporated by reference).
(g) The Company and the Trust shall, during the Shelf Registration
Period, deliver to each Holder of securities included within the coverage of any
Shelf Registration Statement, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto as such Holder may reasonably
request; and the Company and the Trust each consent to the use of the Prospectus
or any amendment or supplement thereto by each of the selling Holders of
securities in connection with the offering and sale of the securities covered by
the Prospectus or any amendment or supplement thereto.
(h) The Company and the Trust shall furnish to each Exchanging Dealer
that so requests, without charge, at least one copy of the Exchange Offer
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, any documents incorporated by reference
therein, and, if the Exchanging Dealer so requests in writing, all exhibits
filed therewith (including those incorporated by reference).
(i) The Company and the Trust shall, during the Exchange Offer
Registration Period, promptly deliver to each Exchanging Dealer, without charge,
as many copies of the final Prospectus included in such Exchange Offer
Registration Statement and
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<PAGE>
any amendment or supplement thereto as such Exchanging Dealer may reasonably
request for delivery by such Exchanging Dealer in connection with a sale of
Exchange Securities received by it pursuant to the Registered Exchange Offer;
and the Company and the Trust each consent to the use of the Prospectus or any
amendment or supplement thereto by any such Exchanging Dealer, as aforesaid.
(j) Prior to the Registered Exchange Offer or any other offering of
securities pursuant to any Registration Statement, the Company and the Trust
shall register or qualify or cooperate with the Holders of securities included
therein and their respective counsel in connection with the registration or
qualification of such securities for offer and sale under the securities or blue
sky laws of such jurisdictions as any such Holders reasonably request in writing
and do any and all other acts or things necessary or advisable to enable the
offer and sale in such jurisdictions of the securities covered by such
Registration Statement; provided, however, that in no event shall the Company or
the Trust be required to qualify generally to do business in any jurisdiction
where it is not then so qualified or to take any action which would subject it
to general service of process or to taxation in any such jurisdiction where it
is not then so subject.
(k) The Company and the Trust shall cooperate with the Holders of
Registrable Securities or Exchange Securities, as the case may be, to facilitate
the timely preparation and delivery within the times required by normal-way
settlement of certificates representing securities to be sold pursuant to any
Registration Statement free of any restrictive legends and in such denominations
and registered in such names as Holders may request prior to sales of securities
pursuant to such Registration Statement.
(l) If (a) Shelf Registration is filed pursuant to Section 3 hereof,
or (b) a Prospectus contained in the Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Act by any
Exchanging Dealer who seeks to sell Registrable Securities or Exchange
Securities during the Shelf Offer Registration Period or the Exchange Offer
Registration Period, as the case may be, upon the occurrence of any event
contemplated by paragraph 4(c)(2)(iii) or 4(c)(2)(iv) hereof, the Company and
the Trust as promptly as practicable, prepare and file with the Commission, at
the sole expense of the Company, a supplement or post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, or file any
other required document so that, as thereafter delivered to the purchasers of
the Registrable Securities being sold thereunder or to the purchasers of the
Exchange Securities to whom such Prospectus will be delivered by an Exchanging
Dealer, any such Prospectus 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, in light of the circumstances under which they
were made, not misleading.
(m) Not later than the effective date of any such Registration
Statement hereunder, the Company and the Trust shall provide a CUSIP number for
the Capital Securities or the Exchange Securities corresponding to the Capital
Securities, as the case may be, registered under such Registration Statement.
In the event of and at the time of any
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<PAGE>
distribution of the Subordinated Debt Securities to Holders, the Company and the
Trust shall provide a CUSIP number for the Subordinated Debt Securities or the
Exchange Securities corresponding to the Subordinated Debt Securities and
provide the applicable trustee with certificates for such securities, in a form
eligible for deposit with DTC. The Company and the Trust shall use their
reasonable best efforts to cause the CUSIP Service Bureau to issue the same
CUSIP number for all Exchange Securities or Registrable Securities, as the case
may be, delivered pursuant to a Registration Statement as was originally issued
for the Registrable Securities.
(n) The Company and the Trust shall use their best efforts to comply
with all applicable rules and regulations of the Commission to the extent and so
long as they are applicable to the Registered Exchange Offer, the Exchange Offer
Registration Statement or the Shelf Registration Statement and shall make
generally available to their security holders as soon as practicable after the
effective date of the applicable Registration Statement an earnings statement
satisfying the provisions of Section 11(a) of the Act.
(o) The Company and the Trust shall cause the indenture relating to
the Subordinated Debt Securities, the Capital Securities Guarantee and the
declaration of trust of the Trust pursuant to which the terms of the Capital
Securities are established, or any corresponding documents in respect of the
Exchange Securities, as the case may be, to be qualified under the Trust
Indenture Act in a timely manner.
(p) The Company and the Trust shall, if requested, promptly
incorporate in a Prospectus supplement or post effective amendment to a Shelf
Registration Statement, such information as the Managing Underwriters reasonably
agree should be included therein and shall make all required filings of such
Prospectus supplement or post effective amendment as soon as practicable after
they are notified of the matters to be incorporated in such Prospectus
supplement or post effective amendment.
(q) In the case of any Shelf Registration Statement, the Company and
the Trust shall enter into such agreements (including an underwriting agreement)
and take all other appropriate actions, if any, in order to facilitate the
registration or the disposition of the Registrable Securities or the Exchange
Securities, as the case may be, to be registered thereunder.
(r) In connection therewith, if an underwriting agreement is entered
into, the Company and the Trust shall cause the same to contain indemnification
provisions and procedures no less favorable than those set forth in Section 6
(or such other provisions and procedures acceptable to the Managing
Underwriters, if any), with respect to all parties to be indemnified pursuant to
Section 6.
(s) In the case of any underwritten offering under a Shelf
Registration Statement or at the request of an Initial Purchaser to the extent
that an Initial Purchaser has Registrable Securities or Exchange Securities
eligible for resale thereunder, the Company and the Trust shall (i) make
reasonably available for inspection by a representative of the Holders
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<PAGE>
of a majority of the securities to be registered thereunder, any Initial
Purchaser (if applicable) and any underwriter participating in any disposition
pursuant to such Registration Statement, and any attorney, accountant or other
agent retained by any such Holders, Initial Purchaser or underwriter all
relevant financial and other records, pertinent corporate documents and
properties of the Company, its subsidiaries and the Trust; (ii) cause the
Company's officers, directors and employees and the trustees of the Trust to
supply all relevant information reasonably requested by the representative of
the Holders, the Initial Purchaser (if applicable) or any such underwriter,
attorney, accountant or agent in connection with any such Registration Statement
as is customary for similar due diligence examinations; provided, however, that
any information that is designated in writing by the Company and the Trust, in
good faith, as confidential at the time of delivery of such information shall be
kept confidential by the Holders, the Initial Purchaser (if applicable) or any
such underwriter, attorney, accountant or agent, unless such disclosure is made
in connection with a court proceeding or required by law, or such information
becomes available to the public generally or through a third party without an
accompanying obligation of confidentiality; (iii) make such representations and
warranties to the Holders of securities registered thereunder, the Initial
Purchaser (if applicable) and the underwriters, if any, in form, substance and
scope as are customarily made by issuers to underwriters in primary underwritten
offerings and covering matters including , but not limited to, those set forth
in the Purchase Agreement; (iv) obtain opinions of counsel to the Company and
the Trust (who may be the general counsel of the Company) and updates thereof
(which counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the Managing Underwriters, if any) in customary form and scope
addressed to each selling Holder, Initial Purchaser (if applicable) and the
underwriters, if any, covering such matters as are customarily covered in
opinions requested in underwritten offerings and such other matters as may
reasonably requested by such Holders, Initial Purchasers (if applicable) and
underwriters; (v) obtain "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company (and if necessary, any
other independent certified accountants of any subsidiary of the Company or of
any business acquired by the Company for which financial statements and
financial data are, or are required to be, included in the Registration
Statement), addressed to each selling Holder of securities registered
thereunder, the Initial Purchaser (if applicable) and the underwriters, if any,
and covering matters of the type customarily covered in "cold comfort" letters
in connection with primary underwritten offerings; and (vi) deliver such
documents and certificates as may be reasonably requested by any such Holders,
the Initial Purchaser (if applicable) or the Managing Underwriters, if any,
including those to evidence compliance with Section 4(1) and with any customary
conditions contained in the underwriting agreement or other agreement entered
into by the Company and the Trust. The foregoing actions set forth in clauses
(iii), (iv), (v) and (vi) of this Section 4(s) shall be performed at (A) the
effectiveness of such Registration Statement and each post effective amendment
thereto and (B) each closing under any underwriting or similar agreement as and
to the extent required thereunder.
5. Registration Expenses. The Company shall bear all expenses
incurred in connection with the performance of its obligations under Sections 2,
3 and 4 hereof and, in the event of any Shelf Registration Statement, will
reimburse the Holders for the reasonable
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<PAGE>
fees and disbursements of one firm of counsel designated by the majority of the
Holders of the Registrable Securities or Exchange Securities, as the case may
be, covered by such Shelf Registration Statement to act as counsel for the
Holders in connection therewith, and, in the case of any Exchange Offer
Registration Statement, will reimburse the Initial Purchasers for the reasonable
fees and disbursements of one counsel acting in connection therewith.
6. Indemnification and Contribution. (a) In connection with any
Registration Statement, the Company agrees to indemnify and hold harmless the
Trust, each Holder of securities covered thereby (including each Initial
Purchaser and, with respect to any Prospectus delivery as contemplated in
Section 4(i) hereof, each Exchanging Dealer), the directors, officers, employees
and agents of each such Holder and each person who controls any such Holder
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (including all documents
incorporated by referenced therein) as originally filed or in any amendment
thereof, or in any preliminary prospectus or Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any such Holder specifically for inclusion
therein. This indemnity agreement will be in addition to any liability which
the Company may otherwise have.
(a) The Company also agrees to indemnify or contribute to Losses (as
defined herein) of, as provided in Section 6(d), any underwriters of Securities
registered under a Shelf Registration Statement, their officers and directors
and each person who controls such underwriters on substantially the same basis
as that of the indemnification of the Initial Purchasers and the selling Holders
provided in this Section 6(a) and shall, if requested by any Holder, enter into
an underwriting agreement reflecting such agreement, as provided in Section 4(q)
hereof.
(b) Each Holder of securities covered by a Registration Statement
(including each Initial Purchaser and, with respect to any Prospectus delivery
as contemplated in Section 4(i) hereof, each Exchanging Dealer) severally agrees
to indemnify and hold harmless the Company, the Trust, each of their directors,
trustees, administrators, officers and each person who controls the Company or
the Trust within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each such Holder,
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<PAGE>
but only with reference to written information relating to such Holder furnished
to the Company by or on behalf of such Holder specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
6 or notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent the
indemnifying party did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying party shall
be entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of one
such separate counsel (in addition to local counsel) designated by the
indemnified parties if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 6 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall have a joint and several
obligation to contribute to the aggregate losses, claims,
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<PAGE>
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) (collectively "Losses") to
which such indemnified party may be subject in such proportion as is appropriate
to reflect the relative benefits received by such indemnifying party, on the one
hand, and such indemnified party, on the other hand, from the Initial Placement
and the Registration Statement which resulted in such Losses; provided, however,
that in no case shall any Initial Purchaser or any subsequent Holder of any
Registrable Security or Exchange Security be responsible, in the aggregate, for
any amount in excess of the purchase discount or commission applicable to such
security, or in the case of an Exchange Security, applicable to the Registrable
Security which was exchangeable into such Exchange Security, as set forth on the
cover page of the Final Offering Memorandum, nor shall any underwriter be
responsible for any amount in excess of the underwriting discount or commission
applicable to the securities purchased by such underwriter under the
Registration Statement which resulted in such Losses. If the allocation provided
by the immediately preceding sentence is unavailable for any reason, the
indemnifying party and the indemnified party shall contribute in such proportion
as is appropriate to reflect not only such relative benefits but also the
relative fault of such indemnifying party, on the one hand, and such indemnified
party, on the other hand, in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the sum of (x)
the total net proceeds from the Initial Placement (before deducting expenses) as
set forth on the cover page of the Final Offering Memorandum and (y) the total
amount of additional interest which the Company was not required to pay as a
result of registering the securities covered by the Registration Statement which
resulted in such Losses. Benefits received by the Initial Purchasers shall be
deemed to be equal to the total purchase discounts and commissions as set forth
on the cover page of the Final Offering Memorandum, and benefits received by any
other Holders shall be deemed to be equal to the value of receiving Registrable
Securities or Exchange Securities, as applicable, registered under the Act.
Benefits received by any underwriter shall be deemed to be equal to the total
underwriting discounts and commissions, as set forth on the cover page of the
Prospectus forming a part of the Registration Statement which resulted in such
Losses. Relative fault shall be determined by reference to whether any alleged
untrue statement or omission relates to information provided by the indemnifying
party, on the one hand, or by the indemnified party, on the other hand. The
parties agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 6, each person who
controls a Holder within the meaning of either the Act or the Exchange Act and
each director, officer, employee and agent of such Holder shall have the same
rights to contribution as such Holder, and each person who controls the Company
and the Trust within the meaning of either the Act or the Exchange Act, each
officer of the Company or trustee of the Trust who shall have signed the
Registration Statement and each director of the Company or trustee of the Trust
shall have the same rights to contribution as the Company, subject in each case
to the applicable terms and conditions of this paragraph (d).
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(e) The provisions of this Section 6 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder, the
Company or the Trust any of the officers, directors or controlling persons
referred to in Section 6 hereof, and will survive the sale by a Holder of
securities covered by a Registration Statement.
7. Miscellaneous.
--------------
(a) No Inconsistent Agreements. The Company and the Trust have not,
as of the date hereof, entered into, nor shall they, on or after the date
hereof, enter into, any agreement with respect to their securities that is
inconsistent with the rights granted to the Holders herein or otherwise
conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company and the Trust have
obtained the written consent of the Holders of at least a majority in
liquidation amount of the Capital Securities then outstanding (or, after the
consummation of any Exchange Offer in accordance with Section 2 hereof, of
Exchange Securities then outstanding); provided that, with respect to any matter
that directly or indirectly affects the rights of any Initial Purchaser
hereunder, the Company shall obtain the written consent of each such Initial
Purchaser against which such amendment, qualification, supplement, waiver or
consent is to be effective. Notwithstanding the foregoing (except the foregoing
proviso), a waiver or consent to departure from the provisions hereof with
respect to a matter that relates exclusively to the rights of Holders whose
securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect the rights of other Holders may be given by the
majority of such affected Holders, determined on the basis of securities being
sold rather than registered under such Registration Statement.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier, or air courier guaranteeing overnight delivery:
(i) if to a Holder, at the most current address given by such
Holder to the Company;
(ii) if to the Initial Purchasers, initially at the respective
addresses set forth in the Purchase Agreement; and
(iii) if to the Company or the Trust, initially at their
addresses set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given when received. The Initial Purchasers, the Company or the Trust by notice
to the others may designate additional or different addresses for subsequent
notices or communications.
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(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without the need for an express assignment or any consent by
the Company and the Trust thereto, subsequent Holders of Registrable Securities
and/or Exchange Securities. The Company and the Trust hereby agree to extend
the benefits of this Agreement to any Holder of Registrable Securities and/or
Exchange Securities and any such Holder may specifically enforce the provisions
of this Agreement as if an original party hereto.
(e) Counterparts. This agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This agreement shall be governed by and construed
in accordance with the internal laws of the State of New York applicable to
agreements made and to be performed in said State.
(h) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
(i) Securities Held by the Company, etc. Whenever the consent or
approval of Holders of a specified number, or percentage of principal amount or
liquidation amount, as the case may be, of, Registrable Securities or Exchange
Securities is required hereunder, Registrable Securities or Exchange Securities,
as applicable, held by the Company or its Affiliates (other than subsequent
Holders of Registrable Securities or Exchange Securities if such subsequent
Holders are deemed to be Affiliates solely by reason of their holdings of such
Registrable Securities or Exchange Securities) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
19
<PAGE>
Please confirm your agreement by having your authorized officer sign a
copy of this Registration Agreement in the space set forth below and returning
the signed copy to us.
Very truly yours,
MERCANTILE BANCORPORATION INC.
By:/s/ Kenneth E. Schutte
----------------------------
Name: Kenneth E. Schutte
Title: Senior Vice President and
Treasurer
MERCANTILE CAPITAL TRUST I
By: MERCANTILE BANCORPORATION INC.,
as Sponsor
By:/s/ Kenneth E. Schutte
----------------------------
Name: Kenneth E. Schutte
Title: Senior Vice President and
Treasurer
Accepted:
SALOMON BROTHERS INC
By:/s/ Raymond Warner
---------------------------
Name: Raymond Warner
Title: Director
Date: January 29, 1997
20
<PAGE>
ANNEX A
Based on interpretations by the staff of the Securities and Exchange
Commission (the "Commission"), as set forth in no-action letters issued to third
parties, the Company and the Trust believe that the Exchange Securities issued
pursuant to the Exchange Offer may be offered for resale, resold or otherwise
transferred by holders thereof (other than any holder that is an "affiliate" of
the Company or the Trust as defined under Rule 405 of the Securities Act),
provided that such Exchange Securities are acquired in the ordinary course of
such holders' business and such holders are not engaged in, and do not intend to
engage in, a distribution of such Exchange Securities and have no arrangement or
understanding with any person to participate in the distribution of such
Exchange Securities. However, the staff of the Commission has not considered
the Exchange Offer in the context of a no-action letter, and there can be no
assurance that the staff of the Commission would make a similar determination
with respect to the Exchange Offer as in such other circumstances. By tendering
the Registrable Securities in exchange for Exchange Securities, each holder,
other than a broker-dealer, will represent to the Company and the Trust that:
(i) it is not an affiliate of the Company or the Trust (as defined under Rule
405 of the Securities Act); (ii) any Exchange Securities to be received by it
were acquired in the course of its ordinary business; and (iii) it is not
engaged in, and does not intend to engage in, a distribution of the Exchange
Securities and has no arrangement or understanding to participate in a
distribution of the Exchange Securities.
Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. The Letter
of Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Securities received in exchange for Registrable
Securities where such Registrable Securities were acquired by such broker-dealer
as a result of market-making activities or other trading activities. The Company
and the Trust have agreed that, starting on the date on which the Exchange Offer
is consummated and ending on the close of business one year after such date,
they will make this Prospectus available to any broker-dealer for use in
connection with any such resale. See "Plan of Distribution."
21
<PAGE>
ANNEX B
Based on interpretations by the staff of the Commission as set forth in no-
action letters issued to third parties, the Company and the Trust believe that
holders of Registrable Securities (other than any holder that is an "affiliate"
of the Company or the Trust as defined under Rule 405 of the Securities Act) who
exchange their Registrable Securities for Exchange Securities pursuant to the
Exchange Offer may offer such Exchange Securities for resale, resell such
Exchange Securities and otherwise transfer such Exchange Securities without
compliance with the registration and prospectus delivery provisions of the
Securities Act, provided that such Exchange Securities are acquired in the
ordinary course of such holders' business and such holders are not engaged in,
and do not intend to engage in, a distribution of such Exchange Securities and
have no arrangement or understanding with any person to participate in the
distribution of such Exchange Securities. However, the staff of the Commission
has not considered the Exchange Offer in the context of a no-action letter, and
there can be no assurance that the staff of the Commission would make a similar
determination with respect to the Exchange Offer. Each broker-dealer that
receives Exchange Securities for its own account in exchange for Registrable
Securities, where such Registrable Securities were acquired by such broker-
dealer as a result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Securities. See "Plan of Distribution."
22
<PAGE>
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Securities received in
exchange for Registrable Securities where such Registrable Securities were
acquired as a result of market-making activities or other trading activities.
The Company and the Trust have agreed that, starting on the date on which the
Exchange Offer is consummated and ending on the close of business one year after
such date, they will make this Prospectus, as amended or supplemented, available
to any broker-dealer for use in connection with any such resale. In addition,
until________, 199__, all dealers effecting transactions in the Exchange
Securities may be required to deliver a prospectus.
The Company and the Trust will not receive any proceeds from any sale of
Exchange Securities by broker-dealers. Exchange Securities received by broker-
dealers for their own account pursuant to the Exchange Offer may be sold from
time to time in one or more transactions in the over-the-counter market or the
New York Stock Exchange, in negotiated transactions, through the writing of
options on the Exchange Securities or a combination of such methods of resale,
at market prices prevailing at the time of resale, at prices related to such
prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such broker-
dealer and/or the purchasers of any such Exchange Securities. Any broker-dealer
that resells Exchange Securities that were received by it for its own account
pursuant to the Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Securities may be deemed to be an "underwriter"
within the meaning of the Securities Act and any profit on any such resale of
Exchange Securities and any commissions or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The Letter of Transmittal states that by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
For a period of one year after the date on which the Exchange Offer is
consummated, the Company and the Trust will promptly send additional copies of
this Prospectus and any amendment or supplement to this Prospectus to any
broker-dealer that requests such documents in the Letter of Transmittal. The
Company and the Trust have agreed to pay all expenses incident to the Exchange
Offer (including the expenses of one counsel for the Holders of the Registrable
Securities) other than commissions or concessions of any brokers or dealers and
will indemnify the Holders of the Registrable Securities (including any broker-
dealers) against certain liabilities, including liabilities under the Securities
Act.
[If applicable, add information required by Regulation S-K Items 507 and/or
508.]
23
<PAGE>
ANNEX D
Rider A
- -------
___ CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name: ___________________________________
Address: ___________________________________
___________________________________
Rider B
The undersigned acknowledges that this Exchange Offer is being made by
the Company and the Trust based upon the Company's and Trust's understanding of
an interpretation by the staff of the Securities and Exchange Commission (the
"Commission") as set forth in no-action letters issued to third parties, that
the Exchange Securities issued in exchange for Registrable Securities by holders
thereof (other than to holders that are "affiliates" of the Company or the Trust
within the meaning of Rule 405 under the Securities Act), may be so issued
without compliance with the registration and prospectus delivery provisions of
the Securities Act, provided that: (i) such holders are not affiliates of the
Company or the Trust within the meaning of Rule 405 under the Securities Act;
(ii) such Exchange Securities are acquired in the ordinary course of such
holders' business; and (iii) such holders are not engaged in, and do not intend
to engage in, a distribution of such Exchange Securities and have no arrangement
or understanding with any person to participate in the distribution of such
Exchange Securities. However, the staff of the Commission has not considered
the Exchange Offer in the context of a no-action letter and there can be no
assurance that the staff of the Commission would make a similar determination
with respect to the Exchange Offer as in other circumstances. If a holder of
Registrable Securities is an affiliate of the Company, or is engaged in or
intends to engage in a distribution of the Exchange Securities or has any
arrangement or understanding with respect to the distribution of the Exchange
Securities to be acquired pursuant to the Exchange Offer, such holder could not
rely on the applicable interpretations of the staff of the Commission and must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any secondary resale transaction. If the
undersigned is a broker-dealer that will receive Exchange Securities for its own
account in exchange for Registrable Securities, it represents that the
Registrable Securities to be exchanged for Exchange Securities were acquired by
it as a result of market-making activities or other trading activities and
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
24
<PAGE>
Exhibit 4.11
WAIVER OF CERTAIN OBLIGATIONS
UNDER
REGISTRATION RIGHTS AGREEMENT
WAIVER, dated as of April __, 1997 (the "Waiver"), of certain
obligations of Mercantile Bancorporation Inc., a Missouri corporation (the
"Company"), under the Registration Rights Agreement (the "Registration
Agreement"), dated January 29, 1997.
WHEREAS, the Company and Mercantile Capital Trust I (the "Trust")
heretofore executed and delivered the Registration Agreement to Salomon Brothers
Inc, as representative for several Initial Purchasers; and
WHEREAS, the Company has requested the Holders of the Capital
Securities to waive compliance with the Company's obligations under Section 4(e)
of the Registration Agreement to cause the Capital Securities and the Exchange
Securities to be listed on the New York Stock Exchange and to maintain such
listing (the "Listing Requirement Covenant"); and
WHEREAS, Section 7(b) of the Registration Agreement provides that,
with the consent of the Holders of not less than a majority in aggregate
liquidation amount of the Capital Securities at the time outstanding (the
"Requisite Consents"), the Company and the Trust may waive compliance with the
Company's obligations under the Registration Agreement; and
WHEREAS, the Company and the Trust have obtained the Requisite
Consents and this Waiver has been duly authorized by all necessary corporate
action on the part of the Company;
NOW, THEREFORE, the Company and the Trust agree as follows:
ARTICLE 1
WAIVER
Section 1.01 The Company's obligations under Section 4(e) of the
Registration Agreement is hereby irrevocably and permanently waived.
Section 1.02 The remaining provisions of the Registration Agreement
shall remain in full force and effect.
ARTICLE 2
MISCELLANEOUS
SECTION 2.01 Effect of Waiver. Upon the execution and delivery of
this Waiver by the Company and the Trust, this Waiver shall form a part of the
Registration Agreement for all purposes, and every Holder of Capital Securities
and the Exchange Securities heretofore or hereafter authenticated and delivered
under the Registration Agreement shall be bound thereby.
SECTION 2.02 Terms Defined in the Registration Agreement. All
capitalized terms not otherwise defined herein shall have the meanings ascribed
to them in the Registration Agreement.
<PAGE>
SECTION 2.03 Headings. The headings in this Waiver have been inserted
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
SECTION 2.04 Successors. This Waiver shall inure to the benefit of and
be binding upon the successors and assigns of each of the parties, including,
without the need for an express assignment or any consent by the Company and the
Trust thereto, subsequent Holders of Capital Securities and/or Exchange
Securities.
SECTION 2.05 Governing Law. This Waiver shall be governed by and
construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed in said State.
SECTION 2.06 Counterpart Originals. This Waiver may be executed in any
number of counterparts each of which shall be an original; but such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be
duly executed as of the date and year first above written.
MERCANTILE BANCORPORATION INC.
By:
---------------------------------
Name:
Title:
MERCANTILE CAPITAL TRUST I
By:
---------------------------------
Name:
Title:
-2-
<PAGE>
Exhibit 4.12
SUPPLEMENTAL INDENTURE
to
FIRST SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE, dated as of April __, 1997 (the "Supplemental
Indenture"), to First Supplemental Indenture, dated as of February 4, 1997 (the
"First Supplemental Indenture"), between Mercantile Bancorporation Inc., a
Missouri corporation (the "Company"), and The Chase Manhattan Bank, as trustee
(the "Trustee"), under the Indenture dated as of February 4, 1997 between the
Company and the Trustee (the "Indenture").
WHEREAS, the Company and the Trustee heretofore executed and delivered
the Indenture, as supplemented by the First Supplemental Indenture; and
WHEREAS, pursuant to the Indenture and the First Supplemental
Indenture, the Company issued and the Trustee authenticated and delivered
$154,640,000 aggregate principal amount of the Company's Floating Rate Junior
Subordinated Deferrable Interest Debentures due 2027 (the "Old Subordinated
Debentures"); and
WHEREAS, Section 9.02 of the Indenture provides that with the consent
of the Holders of not less than a majority in aggregate liquidation amount of
the Trust Securities at the time outstanding (the "Requisite Consents"), the
Company, when authorized by a resolution of its Board of Directors, and the
Trustee may enter into an amended or supplemental Indenture; and
WHEREAS, the Company has obtained the Requisite Consents to amend the
First Supplemental Indenture in certain respects; and
WHEREAS, this Supplemental Indenture has been duly authorized by all
necessary corporate action on the part of the Company;
NOW, THEREFORE, the Company and the Trustee agree as follows for the
equal and ratable benefit of the Holders of the Old Subordinated Debentures:
ARTICLE 1
AMENDMENTS TO CERTAIN PROVISIONS OF THE FIRST SUPPLEMENTAL INDENTURE
SECTION 1.01 Amendment of Certain Sections of the Indenture.
A. Subject to Section 2.01 hereof, the First Supplemental Indenture is
hereby amended by replacing the last sentence in Section 2.1 thereof with the
following:
"The Debentures shall be issued in minimum denominations of
$100,000 and any integral multiple of $1,000 in excess thereof and may be
transferred only in blocks having an aggregate principal amount of not less than
$100,000. Any transfer of the Debentures in a block having an aggregate
principal amount of less than $100,000 shall be deemed to be void and of no
legal effect whatsoever. Any transferee of the Debentures having an aggregate
principal amount of less than $100,000 shall be deemed not to be the holder of
such Debentures for any purpose, including, but not limited to, the receipt of
payments on such Debentures and such transferee shall be deemed to have no
interest whatsoever in such Debentures."
<PAGE>
B. Subject to Section 2.01 hereof, the First Supplemental Indenture is
hereby amended by deleting the following proviso and the corresponding end
bracket in the third to the last paragraph in Article VI:
"[IF THIS DEBENTURE IS AN INITIAL DEBENTURE INSERT --]"
ARTICLE 2
MISCELLANEOUS
SECTION 2.01 Effect of Supplemental Indenture. Upon the execution and
delivery of this Supplemental Indenture by the Company and the Trustee, the
First Supplemental Indenture shall be supplemented in accordance herewith, and
this Supplemental Indenture shall form a part of the First Supplemental
Indenture for all purposes, and every Holder of Debt Securities heretofore or
hereafter authenticated and delivered under the Indenture and the First
Supplemental Indenture shall be bound thereby. This Supplemental Indenture is an
indenture supplemental to and in implementation of the Indenture and the First
Supplemental Indenture, and the Indenture, the First Supplemental Indenture and
this Supplemental Indenture shall henceforth be read and construed together.
Except as supplemented hereby, all provisions in the Indenture and the First
Supplemental Indenture shall remain in full force and effect. The Indenture as
supplemented by the First Supplemental Indenture and this Supplemental Indenture
is in all respects confirmed and preserved.
SECTION 2.02 Conflict with Trust Indenture Act. If any provision of
this Supplemental Indenture limits, qualifies or conflicts with any provision of
the Trust Indenture Act of 1939, as amended (the "TIA"), that is required under
the TIA to be part of and govern any provision of this Supplemental Indenture,
the provision of the TIA shall control. If any provision of this Supplemental
Indenture modifies or excludes any provision of the TIA that may be so modified
or excluded, the provision of the TIA shall be deemed to apply to the Indenture
as so modified or to be excluded by this Supplemental Indenture, as the case may
be.
SECTION 2.03 Severability. In case any one or more of the provisions
contained in this Supplemental Indenture shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Supplemental
Indenture, but this Supplemental Indenture shall be construed as if such invalid
or illegal or unenforceable provision had never been contained herein or
therein.
SECTION 2.04 Terms Defined in the Indenture and the First Supplemental
Indenture. All capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Indenture and the First Supplemental Indenture.
SECTION 2.05 Headings. The Article and Section headings of this
Supplemental Indenture have been inserted for convenience of reference only, are
not to be considered a part of this Supplemental Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 2.06 Successors. All agreements of the Company in this
Supplemental Indenture shall bind its successors. All agreements of the Trustee
in this Supplemental Indenture shall bind its successors.
SECTION 2.07 Trustee Not Responsible for Recitals. The recitals herein
contained are made by the Company and not by the Trustee, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental Indenture.
-2-
<PAGE>
SECTION 2.08 Governing Law. This Supplemental Indenture and each
Debenture shall be deemed to be a contract made under the internal laws of the
State of New York, and for all purposes shall be construed in accordance with
the laws of said State without regard to conflict of laws principles thereof.
SECTION 2.09 Counterpart Originals. This Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date and year first above written.
MERCANTILE BANCORPORATION INC.
By:
------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as Trustee
By:
------------------------------
Name:
Title:
-3-
<PAGE>
Exhibit 5.1
[Thompson Coburn Letterhead]
April 14, 1997
Mercantile Capital Trust I
Mercantile Bancorporation Inc.
P. O. Box 524
St. Louis, Missouri 63166
Ladies and Gentlemen:
We have acted as counsel to Mercantile Bancorporation Inc., a Missouri
corporation (the "Company") and Sponsor of Mercantile Capital Trust I, a
Delaware statutory business trust (the "Trust"), in connection with a
Registration Statement on Form S-4 (the "Registration Statement") relating to:
(i) the proposed issuance by the Trust of $150,000,000 aggregate Liquidation
Amount of the Trust's Floating Rate Capital Securities (the "New Capital
Securities") registered under the Securities Act of 1933, as amended (the
"Securities Act"), in exchange for up to $150,000,000 aggregate Liquidation
Amount of the Trust's outstanding Floating Rate Capital Securities (the "Old
Capital Securities"); (ii) the proposed issuance by the Company to the Trust of
$154,640,000 aggregate principal amount of the Company's Floating Rate Junior
Subordinated Deferrable Interest Debentures due 2027 (the "New Subordinated Debt
Securities") registered under the Securities Act, in exchange for up to
$154,640,000 aggregate principal amount of the Company's outstanding Floating
Rate Junior Subordinated Deferrable Interest Debentures due 2027 (the "Old
Subordinated Debt Securities"); and (iii) the Company's guarantee (the "New
Guarantee"), which guarantees the payment of Distributions and payments on
liquidation or redemption of the New Capital Securities, registered under the
Securities Act, in exchange for the Company's guarantee (the "Old Guarantee")
which guarantees the payment of Distributions and payments on liquidation or
redemption of the Old Capital Securities.
The New Capital Securities are issuable under an Amended and Restated
Declaration of Trust, dated as of February 4, 1997, between Chase Manhattan
Bank, Delaware, as Delaware Trustee, The Chase Manhattan Bank, as Institutional
Trustee, John Q. Arnold, Kenneth E. Schutte and Jon W. Bilstrom, as
Administrators of the Trust, and the Company, as Sponsor; the New Subordinated
Debt Securities are issuable under an Indenture, dated February 4, 1997, between
the Company, as Issuer, and The Chase Manhattan Bank, as Trustee (the
"Indenture"); and the New Guarantee is issuable under the Capital Securities
Guarantee Agreement, dated as of February 4, 1997, between the Company and The
Chase Manhattan Bank, as Guarantee Trustee.
In rendering the opinions set forth herein, we have examined such
corporate records of the Company and the Trust, such laws and such other
information as we have deemed relevant, including the Company's Articles of
Incorporation, as amended, and By-laws; the resolutions adopted by the Company's
Board of Directors relating to the Exchange Offer; the Trust's Declaration of
Trust; the Trust's Amended and Restated Declaration of Trust ("Governing
Instrument"); the First Supplemental Indenture, dated February 4, 1997, between
the Company, as Issuer, and The Chase Manhattan Bank, as Trustee; the
Registration Rights Agreement, dated January 29, 1997, among the Company, the
Trust and Salomon Brothers Inc, as Representative of the several Initial
Purchasers (the "Registration Rights Agreement"); the Registration Statement;
certificates received from state officials; and statements we
<PAGE>
Mercantile Capital Trust I
Mercantile Bancorporation Inc.
April 14, 1997
Page 2
have received from officers and representatives of the Company and the Trust. In
delivering this opinion, the undersigned assumes: the genuineness of all
signatures; the authenticity of all documents submitted to us as originals; the
conformity to the originals of all documents submitted to us as certified,
photostatic or conformed copies; the authenticity of the originals of all such
latter documents; and the correctness of statements submitted to us by officers
and representatives of the Company and the Trust. Capitalized terms not
otherwise defined herein shall have the respective meanings ascribed to such
terms in the Indenture and/or the Registration Rights Agreement.
Based solely on the foregoing, the undersigned is of the opinion that:
1. The Trust is a duly created and validly existing business trust in
good standing under the laws of the State of Delaware;
2. The New Capital Securities, upon issuance pursuant to the Exchange
Offer, will constitute validly issued and, subject to the qualifications set
forth in paragraph 3 below, fully paid and nonassessable beneficial interests in
the assets of the Trust;
3. Under the Delaware Business Trust Act, 12 Del. C. (S)(S) 3801 et.
seq. (the "Delaware Act"), and the Governing Instrument, each New Capital
Securities Holder of the Trust, in such capacity, will be entitled to the same
limitation of personal liability extended to stockholders of private
corporations organized for profit under the General Corporation Law of the State
of Delaware; provided, however, we express no opinion with respect to the
liability of any New Capital Securities Holder who is, was or may become a named
Trustee of the Trust. Notwithstanding the forgoing, we note that pursuant to
Section 11.4 of the Governing Instrument, the Trust may withhold amounts
otherwise distributable to a Holder and pay over such amounts to the applicable
jurisdictions in accordance with federal, state and local law and any amount
withheld will be deemed to have been distributed to such Holder and that,
pursuant to the Governing Instrument, New Capital Securities Holders may be
obligated to make payments or provide indemnity or security under the
circumstances set forth herein;
4. The Company has been duly incorporated and is validly existing
under the laws of the State of Missouri;
5. The New Subordinated Debt Securities have been duly authorized by
all requisite corporate action and, when executed and authenticated as specified
in the Indenture and delivered against surrender Old Capital Security to the
Company and cancellation of a like amount of Old Subordinated Debt Securities in
the manner described in the Registration Statement, the New Subordinated Debt
Securities will constitute valid and binding obligations of the Company; and
6. The New Guarantee has been duly authorized by all requisite
corporate action of the Company and constitutes the valid and binding obligation
of the Company.
The opinions expressed herein by the undersigned are expressly limited
to the laws of the State of Missouri, the corporate and trust law of the State
of Delaware and the laws of the United States of
<PAGE>
Mercantile Capital Trust I
Mercantile Bancorporation Inc.
April 14, 1997
Page 3
America. We assume no responsibility as to the applicability or the effect of
the laws of any other domestic or foreign jurisdiction on the subject
transactions.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm in the section entitled
"Legal Matters" in the Prospectus constituting a part of the Registration
Statement. We expressly disavow any obligation to update this letter in the
future.
Very truly yours,
/s/ Thompson Coburn
<PAGE>
Exhibit 8.1
[LETTERHEAD OF WACHTELL, LIPTON, ROSEN & KATZ]
April 9, 1997
Mercantile Bancorporation Inc.
Mercantile Capital Trust I
P.O. Box 524
St. Louis, Missouri 63166
Re: Registration of $150,000,000 Floating Rate
Capital Trust Pass-through Securities
of Mercantile Capital Trust I
-------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Mercantile Bancorporation Inc., a
Delaware corporation ("Mercantile"), and Mercantile Capital Trust I, a Delaware
business trust ("Trust I"), in connection with the registration of $150,000,000
Floating Rate Capital Trust Pass-through Securities of Trust I (the "Capital
Securities"). All terms not otherwise defined herein shall have the meanings
ascribed to them in the Registration Statement filed on Form S-4 with the
Securities and Exchange Commission with respect to the Capital Securities (the
"Registration Statement").
We have reviewed the Registration Statement by which the Capital
Securities have been offered. We have also made such legal and factual
examinations and inquiries, including an examination of originals or copies
certified or otherwise identified to our satisfaction, of such documents,
corporate records and other instruments as we have deemed relevant, necessary or
appropriate for the purpose of this opinion. We
<PAGE>
WACHTELL, LIPTON, ROSEN & KATZ
Mercantile Bancorporation Inc.
Mercantile Capital Trust I
April 9, 1997
Page 2
have also examined the certificates and other documents delivered at the closing
for the sale of the Capital Securities. In such 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 documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such latter documents.
We have relied, insofar as such opinion involves factual matters, to
the extent we deem appropriate, upon certificates of officers of Mercantile and
Trust I and certificates of public officials, and insofar as such opinion
involves Delaware laws governing business trusts, we have relied, as to all
such matters, on the opinion of Richards, Layton & Finger, P.A., special
Delaware counsel to Mercantile and the Trust. We have not independently verified
such information and assumptions.
We are members of the Bar of the State of New York. We call your
attention to the fact that, in rendering an opinion, we are expressing our views
only as to the federal tax laws of the United States of America. In rendering
our opinion we have considered the applicable provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), Treasury Regulations thereunder,
and the portinent judicial authorities and interpretive rulings of the Internal
Revenue Service, all in effect as of the date of this opinion.
On the basis of the foregoing and in reliance thereon, we are of the
opinion that, as of the date hereof:
1. the exchange of the Old Capital Securities for New Capital
Securities should not be taxable for federal income tax purposes;
2. Trust I will be characterized as a grantor trust for United States
federal income tax purposes and not as a partnership or as an association
subject to tax as a corporation;
3. for United States federal income tax purposes the Subordinated
Debt Securities will constitute indebtedness of Mercantile; and
4. the statements made in the Registration Statement under the
caption "United States Federal Income Taxation,"
<PAGE>
WACHTELL, LIPTON, ROSEN & KATZ
Mercantile Bancorporation Inc.
Mercantile Capital Trust I
April 9, 1997
Page 3
insofar as they purport to describe the material United States federal
income tax consequences of the purchase, ownership and disposition of
Subordinated Debt Securities and Capital Securities, fairly summarize the
matters therein described.
In rendering our opinion, we have assumed that the New Capital
Securities have been duly authorized and that the signatures on all documents
examined by us are genuine, assumptions which we have not independently
varified. We have also assumed that the terms of the Indentures will be fully
complied with by all parties thereto.
We hereby consent to the filing of this opinion with the Securities
and Exchange Commission as an Exhibit to the Registration Statement, and to the
reference to this opinion therein. In giving such consent, we do not hereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended.
Very truly yours,
/s/ Wachtell, Lipton, Rosen & Katz
<PAGE>
Exhibit 12.1
MERCANTILE BANCORPORATION INC.
Ratio of Earnings to Fixed Charges
(dollars in thousands)
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Earnings:
Earnings before income taxes................. $290,036 $356,785 $305,239 $261,143 $205,425
Preferred stock dividends.................... 408 1,020 1,219 1,190 1,303
Junior subordinated debt expense............. 9,750 9,750 9,750 9,750 9,750
Interest on deposits......................... 514,764 495,863 374,031 393,842 495,307
Interest on indebtedness..................... 108,228 124,671 76,919 50,731 54,335
Rental expense............................... 8,979 8,752 8,435 8,751 8,603
One-third of rental expense.................. 2,993 2,917 2,812 2,917 2,868
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends (1):
Excluding Interest on Deposits............... 3.39 x 3.57 x 4.35 x 5.02 x 3.99 x
Including Interest on Deposits............... 1.46 x 1.56 x 1.65 x 1.57 x 1.36 x
</TABLE>
(1) For purposes of calculating the ratio of earnings to combined fixed charges
and preferred stock dividends, earnings consist of earnings before income
taxes plus interest and one-third of rental expense. Fixed charges,
excluding interest on deposits, consists of interest on indebtedness, one-
third of rental expense (which is deemed representative of the interest
factor), and preferred stock dividends. Fixed charges, including interest
on deposits, consists of both the foregoing items plus interest on
deposits.
<PAGE>
Exhibit 23.3
Independent Auditors' Consent
The Board of Directors and Stockholders
Mercantile Bancorporation Inc.:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
St. Louis, Missouri
April 9, 1997
<PAGE>
EXHIBIT 23.4
CONSENT OF ERNST & YOUNG LLP
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated January 15, 1997, with respect to the consolidated
financial statements of Mark Twain Bancshares, Inc. incorporated by reference in
the Registration Statement (Form S-4) and related Prospectus of Mercantile
Bancorporation Inc. and Mercantile Capital Trust I for the registration of
$150,000,000 Floating Rate Capital Trust Pass-through Securities (the "Capital
Securities") of Mercantile Capital Trust I, Floating Rate Junior Subordinated
Deferrable Interest Debentures due 2027 of Mercantile Bancorporation Inc. and
Mercantile Bancorporation Inc. Guarantee with respect to the Capital Securities.
/s/ Ernst & Young LLP
April 9, 1997
St. Louis, Missouri
<PAGE>
EXHIBIT 23.5
Independent Auditors' Consent
The Board of Directors and Stockholders
Roosevelt Financial Group, Inc.:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
St. Louis, Missouri
April 9, 1997
<PAGE>
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
___________________________________________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
________________________________________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
___________________________________________
MERCANTILE BANCORPORATION INC.
(Exact name of obligor as specified in its charter)
Missouri 43-0951744
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
One Mercantile Center
P.O. Box 524
St. Louis, Missouri (314) 425-2525 63166-0524
(Address of principal executive offices) (Zip Code)
-------------------------------------------
Debt Securities
Capital Securities Guarantee Agreement
(Title of the indenture securities)
----------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551.
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1) filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 7th day of April, 1997.
THE CHASE MANHATTAN BANK
By /s/ R.J. Halleran
--------------------------
R.J. Halleran
Second Vice President
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1996, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Millions
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin................................................. $ 11,095
Interest-bearing balances......................................... 4,998
Securities:
Held to maturity securities......................................... 3,231
Available for sale securities....................................... 38,078
Federal Funds sold and securities purchased under agreements to
resell in domestic offices of the bank and of its Edge and
Agreement subsidiaries, and in IBF's:
Federal funds sold................................................ 8,018
Securities purchased under agreements to resell................... 731
Loans and lease financing receivables:
Loans and leases, net of unearned income $130,513
Less: Allowance for loan and lease losses 2,938
Less: Allocated transfer risk reserve..... 27
Loans and leases, net of unearned income, --------
allowance, and reserve............................................ 127,548
Trading Assets...................................................... 48,576
Premises and fixed assets (including capitalized leases)............ 2,850
Other real estate owned............................................. 300
Investments in unconsolidated subsidiaries and
associated companies.............................................. 92
Customer's liability to this bank on acceptances outstanding........ 2,777
Intangible assets................................................... 1,361
Other assets........................................................ 12,204
-------
TOTAL ASSETS........................................................ $261,859
========
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C> <C>
Deposits
In domestic offices............................................ $ 80,163
Noninterest-bearing.................................... $30,596
Interest-bearing....................................... 49,567
-------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's...................................................... 65,173
Noninterest-bearing.................................... $ 3,616
Interest-bearing....................................... 61,557
Federal funds purchased and securities sold under agree-
ments to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased........................................ 14,594
Securities sold under agreements to repurchase................. 14,110
Demand notes issued to the U.S. Treasury.......................... 2,200
Trading liabilities............................................... 30,136
Other Borrowed money:
With a remaining maturity of one year or less.................. 16,895
With a remaining maturity of more than one year................ 449
Mortgage indebtedness and obligations under capitalized
leases......................................................... 49
Bank's liability on acceptances executed and outstanding.......... 2,764
Subordinated notes and debentures................................. 5,471
Other liabilities................................................. 13,997
TOTAL LIABILITIES................................................. 246,001
--------
Limited-Life Preferred stock and related surplus.................. 550
EQUITY CAPITAL
Common stock...................................................... 1,209
Surplus........................................................... 10,176
Undivided profits and capital reserves............................ 4,385
Net unrealized holding gains (Losses)
on available-for-sale securities.................................. (481)
Cumulative foreign currency translation adjustments............... 19
TOTAL EQUITY CAPITAL.............................................. 15,308
--------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL....................................... $261,859
========
I, Joseph L. Sclafani, S.V.P. & Controller of the
above-named bank, do hereby declare that this Report of
Condition has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true to the best of my knowledge and
belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER ) DIRECTORS
THOMAS G. LABRECQUE )
</TABLE>
-5-
<PAGE>
EXHIBIT 25.2
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
___________________________________________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
________________________________________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
_____________________________________________
MERCANTILE CAPITAL TRUST I
(Exact name of obligor as specified in its charter)
Delaware 43-1769411
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
One Mercantile Center
P.O. Box 524
St. Louis, Missouri (314) 425-2525 63166-0524
(Address of principal executive offices) (Zip Code)
-------------------------------------------------
Capital Trust Passthrough Securities
(Title of the indenture securities)
----------------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551.
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE>
- 2 -
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1) filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 7th day of April, 1997.
THE CHASE MANHATTAN BANK
By /s/ R.J. Halleran
-----------------------
R.J. Halleran
Second Vice President
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1996, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the problems of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Millions
<S> <C>
Cash and balances due from depositiory institutions:
Noninterest-bearing balances and
currency and coin ..................................... $ 11,095
Interest-bearing balances ................................... 4,998
Securities:
Held to maturity securities ...................................... 3,231
Available for sale securities .................................... 38,078
Federal Funds sold and securities purchased under agreements to
resell in domestic offices of the bank and of its Edge and
Agreement subsidiaries, and in IBF's:
Federal funds sold .......................................... 8,018
Securities purchased under agreements to resell ............. 731
Loans and lease financing receivables:
Loans and leases, net of unearned income.....$130,513
Less: Allowance for loan and lease losses.... 2,938
Less: Allocated transfer risk reserve........ 27
--------
Loans and leases, net of unearned income,
allowance, and reserve ................................ 127,548
Trading Assets ................................................... 48,576
Premises and fixed assets (including capitalized leases) ......... 2,850
Other real estate owned .......................................... 300
Investments in unconsolidated subsidiaries and
associated companies ....................................... 92
Customer's liability to this bank on acceptances
outstanding ................................................ 2,777
Intangible assets ................................................ 1,361
Other assets ..................................................... 12,204
--------
TOTAL ASSETS ..................................................... $261,859
========
</TABLE>
-4-
<PAGE>
LIABILITIES
Deposits
In domestic offices................................ $ 80,163
Noninterest-bearing.........................$30,596
Interest-bearing.............................49,567
-------
In foreign offices, Edge and Agreement
subsidiaries, and IBF's............................ 65,173
Noninterest-bearing.........................$ 3,616
Interest-bearing.............................61,557
Federal funds purchased and securities sold
under agreements to repurchase in domestic
offices of the bank and of its Edge and
Agreement subsidiaries, and in IBP's
Federal funds purchased............................ 14,594
Securities sold under agreements to
repurchase......................................... 14,110
Demand notes issued to the U.S. Treasury................ 2,200
Trading liabilities..................................... 30,136
Other Borrowed money:
With a remaining maturity of one year or
less............................................... 16,895
With a remaining maturity of more than one
year............................................... 449
Mortgage indebtedness and obligations under
capitalized leases................................. 49
Bank's liability on acceptances executed and outstanding 2,764
Subordinated notes and debentures....................... 5,471
Other liabilities....................................... 13,997
TOTAL LIABILITIES....................................... 246,001
--------
Limited-Life Preferred stock and related surplus 550
EQUITY CAPITAL
Common stock............................................ 1,209
Surplus................................................. 10,176
Undivided profits and capital reserves.................. 4,385
Net unrealized holding gains (Losses)
on available-for-sale securities........................ (481)
Cumulative foreign currency translation
adjustments............................................. 19
TOTAL EQUITY CAPITAL.................................... 15,308
--------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK
AND EQUITY CAPITAL..................................... $261,859
========
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the Instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
THOMAS G. LABRECQUE )
-5-
