<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 9, 1994
POST EFFECTIVE AMENDMENT NO. 1 (NO. 33-57034)
REGISTRATION STATEMENT NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT TO
FORM S-3
REGISTRATION STATEMENT AND
POST-EFFECTIVE AMENDMENTS
UNDER
THE SECURITIES ACT OF 1933
--------------
CORESTATES CAPITAL CORP CORESTATES FINANCIAL CORP
(EXACT NAMES OF REGISTRANTS AS SPECIFIED IN THEIR CHARTERS)
PENNSYLVANIA PENNSYLVANIA
(STATE OR OTHER JURISDICTION OF (STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION)
23-1946384 23-1899716
(I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.)
CENTRE SQUARE WEST CENTRE SQUARE WEST
1500 MARKET STREET 1500 MARKET STREET
PHILADELPHIA, PENNSYLVANIA 19101 PHILADELPHIA, PENNSYLVANIA 19101
215-973-3986 215-973-3986
(ADDRESS INCLUDING ZIP CODE, AND (ADDRESS INCLUDING ZIP CODE, AND
TELEPHONE NUMBER, INCLUDING AREA TELEPHONE NUMBER, INCLUDING AREA
CODE, OF REGISTRANT'S PRINCIPAL CODE, OF REGISTRANT'S PRINCIPAL
EXECUTIVE OFFICE) EXECUTIVE OFFICE)
DAVID T. WALKER, ESQ.
DEPUTY CHIEF COUNSEL
CORESTATES FINANCIAL CORP
BROAD AND CHESTNUT STREETS
PHILADELPHIA, PA 19107
(215) 973-5680
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPY TO:
NORMAN D. SLONAKER, ESQ.
BROWN & WOOD
ONE WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: At such
time after the effective date of this Registration Statement as the
registrants shall determine.
--------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X].
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED MAXIMUM AMOUNT OF
AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED(1) REGISTERED(2) PER SECURITY OFFERING PRICE FEE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
)))
Debt Securities and Warrants of CoreStates Capital Corp........ )
Guarantees constituting guarantees of the Debt Securities of )
CoreStates Capital Corp by CoreStates Financial Corp(3)....... )
Preferred Stock(6)............................................. )) $1,000,000,000 100%(4) $1,000,000,000(3) $335,359(5)
Depositary Shares(3)(7)........................................ )
Common Stock(3)(8)(10)......................................... )
Capital Securities(3)(9)....................................... )
)))
</TABLE>
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(1) This Registration Statement also covers contracts which may be issued by
the Registrant under which the counterparty may be required to purchase
Debt Securities, Preferred Stock or Depositary Shares. Such contracts
would be issued with the Debt Securities, Preferred Stock, Depositary
Shares and/or Securities Warrants. In addition, any other securities
registered hereunder may be sold separately or as units with other
securities registered hereunder.
(2) Or, if any Debt Securities are issued at an Original Issue Discount, such
greater amount as shall result. Any offering of Debt Securities and
Guarantees denominated other than in U.S. dollars will be treated as the
equivalent in U.S. dollars based on the official exchange rate applicable
to the purchase of Debt Securities and Guarantees from the Registrants.
(3) Estimated solely for the purpose of calculating the registration fee. The
aggregate public offering price of Securities sold will not exceed
$1,000,000,000.
(4) No additional consideration will be received for the Guarantees, the
Depositary Shares, the Common Stock or the Capital Securities.
(5) Includes an aggregate of $27,465,000 registered and not sold on Form S-3
Registration Statement No. 33-57034 under the Securities Act of 1933
effective March 10, 1993. This amount is included in the amount to be
registered and proposed maximum aggregate offering price, but excluded for
purposes of calculation of the amount of the registration fee.
(6) Such indeterminate number of shares of Preferred Stock of CoreStates
Financial Corp as may from time to time be issued at indeterminable
prices, but with an aggregate initial offering price not to exceed
$1,000,000,000, plus such indeterminate number of shares of Preferred
Stock as may be issued in exchange for, or upon conversion of, other
Preferred Stock registered hereunder for which no separate consideration
will be received.
(7) Such indeterminate number of Depositary Shares as may be issued in the
event CoreStates Financial Corp elects to offer fractional interests in
shares of Preferred Stock registered hereunder.
(8) Such indeterminate number of shares of Common Stock of CoreStates
Financial Corp as may be issued from time to time at indeterminable prices
plus such indeterminate number of shares of Common Stock as may be issued
upon conversion of Preferred Stock registered hereunder.
(9) Such indeterminate amount of Capital Securities of CoreStates Financial
Corp may be issued upon exchange for Subordinated Debt Securities or
conversion of the Preferred Stock issued hereunder.
(10) This Registration Statement also relates to an indeterminate number of
shares of common stock that may be issued to prevent dilution resulting
from stock splits, stock dividends or similar transactions in accordance
with Rule 416.
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUSES
INCLUDED IN THIS REGISTRATION STATEMENT ARE COMBINED PROSPECTUSES AND RELATE
TO THIS REGISTRATION STATEMENT, WHICH IS A NEW REGISTRATION STATEMENT, AND
REGISTRATION STATEMENT NO. 33-57034 (EFFECTIVE MARCH 10, 1993). EACH SUCH
POST-EFFECTIVE AMENDMENT SHALL HEREAFTER BECOME EFFECTIVE CONCURRENTLY WITH
THE EFFECTIVENESS OF THIS REGISTRATION STATEMENT IN ACCORDANCE WITH SECTION
8(C) OF THE SECURITIES ACT OF 1933.
--------------
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
PRELIMINARY PROSPECTUS SUPPLEMENT DATED JUNE 9, 1994
(TO PROSPECTUS DATED JUNE , 1994)
$1,000,000,000
[LOGO OF CORESTATES APPEARS HERE]
CORESTATES CAPITAL CORP
SENIOR/SUBORDINATED MEDIUM-TERM NOTES DUE NINE MONTHS
OR MORE FROM DATE OF ISSUE
UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL, PREMIUM,
IF ANY, AND INTEREST BY
CORESTATES FINANCIAL CORP
-----------
CoreStates Capital Corp, a Pennsylvania corporation (the "Issuer"), may offer
from time to time up to $1,000,000,000 aggregate initial offering price of its
Senior Medium-Term Notes (the "Senior Notes") and Subordinated Medium-Term
Notes (the "Subordinated Notes" and, together with the Senior Notes, the
"Notes"). The Senior Notes will be unconditionally guaranteed as to payment of
principal, premium, if any, and interest (the "Senior Guarantees") by
CoreStates Financial Corp (the "Guarantor"). The Subordinated Notes will be
unconditionally guaranteed, on a subordinated basis, as to payment of
principal, premium, if any, and interest (the "Subordinated Guarantees" and,
together with the Senior Guarantees, the "Guarantees") by the Guarantor. Each
Note will mature nine months or more from its date of issue, as selected by the
purchaser and agreed to by the Issuer. Unless otherwise indicated in the
applicable Pricing Supplement to this Prospectus Supplement, (a "Pricing
Supplement"), a Note may not be redeemed at the option of the Issuer or be
repaid at the option of the registered holder thereof prior to maturity and
will be issued in denominations of $1,000 and integral multiples thereof.
The interest rate, if any, or interest rate formula on each Note will be
established by the Issuer at the time of issuance of such Note and will be set
forth therein and specified in a Pricing Supplement. Interest rates and
interest rate formulae are subject to change by the Issuer, but no change will
affect any Note already issued or as to which an offer to purchase has been
accepted by the Issuer. Unless otherwise indicated in the applicable Pricing
Supplement, the Notes will bear interest at a fixed rate ("Fixed Rate Notes")
or at floating rates ("Floating Rate Notes") determined by reference to the
Certificate of Deposit Rate, Commercial Paper Rate, CMT Rate, Federal Funds
Rate, LIBOR, Prime Rate, Eleventh District Cost of Funds Rate, Treasury Rate or
any other interest rate basis or formula as may be set forth in the applicable
Pricing Supplement, as adjusted by any Spread and/or Spread Multiplier
applicable to such Notes. See "Description of Notes" in this Prospectus
Supplement and "Description of Debt Securities" in the accompanying Prospectus.
Interest on Fixed Rate Notes will accrue from their date of issue and, unless
otherwise provided in the applicable Pricing Supplement, will be payable semi-
annually on each March 15 and September 15 and at maturity or upon earlier
redemption or repayment, as the case may be. Interest on Floating Rate Notes
will accrue from their date of issue and will be payable on the dates indicated
therein and in the applicable Pricing Supplement and at maturity or upon
earlier redemption or repayment, as the case may be.
The Notes will be issued in fully registered certificated or book-entry form.
Ownership interests in Notes in book-entry form will be shown on, and transfers
thereof will be effected only through, records maintained by The Depository
Trust Company, as Depositary, and its participants. Owners of beneficial
interests in Notes issued in book-entry form will be entitled to physical
delivery of Notes in certificated form equal in principal amount to their
respective beneficial interests only under the limited circumstances described
herein. See "Description of Notes--Book-Entry Notes" in this Prospectus
Supplement.
THE SECURITIES BEING OFFERED WILL BE UNSECURED OBLIGATIONS OF THE ISSUER AND
WILL NOT BE SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK OR
SUBSIDIARY OF THE ISSUER AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE BANK INSURANCE FUND OR ANY OTHER GOVERNMENTAL AGENCY.
-----------
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 THE PROSPECTUS, THIS PROSPECTUS SUPPLEMENT OR ANY
SUPPLEMENT HERETO. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
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<TABLE>
<CAPTION>
PRICE TO AGENTS' DISCOUNTS PROCEEDS TO
PUBLIC(1) OR COMMISSIONS(2) ISSUER(2)(3)
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note........... 100% .125%-.750% 99.875%-99.250%
- ------------------------------------------------------------------------------
$1,250,000-- $998,750,000--
Total(4)........... $1,000,000,000 $7,500,000 $992,500,000
</TABLE>
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(1) Unless otherwise specified in the applicable Pricing Supplement, each Note
will be issued at 100% of its principal amount.
(2) The Issuer will pay a commission to Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, CS First Boston Corporation, Goldman,
Sachs & Co., Lehman Brothers, Lehman Brothers Inc., J.P. Morgan Securities
Inc. or Smith Barney Inc. (each, an "Agent" and collectively, the
"Agents"), in the form of a discount, ranging from .125% to .750% (or, in
the case of Notes with a stated maturity in excess of 30 years, such
commission as shall be agreed upon between the Issuer and the applicable
Agent at the time of sale), depending upon the maturity of the principal
amount of any Note sold through such Agent. The Issuer may also sell Notes
to an Agent as principal. Unless otherwise indicated in the applicable
Pricing Supplement, any Note sold to an Agent as principal will be
purchased by such Agent at a price equal to 100% of the principal amount
thereof less a percentage equal to the commission applicable to an agency
sale of a Note of identical maturity, and may be resold by such Agent to
investors and other purchasers at prevailing market prices at the time or
times of resale to be determined by such Agent or, if so agreed, on a fixed
public offering price basis. The Issuer and the Guarantor have agreed,
jointly and severally, to indemnify the Agents against and to make
contributions relating to certain liabilities, including liabilities under
the Securities Act of 1933, as amended.
(3) Before deducting expenses payable by the Issuer estimated at $605,359.
(4) Or the equivalent thereof in foreign currencies or foreign currency units.
-----------
The Notes are being offered on a continuous basis by the Issuer through the
Agents, each of which has agreed to use its reasonable best efforts to solicit
offers to purchase the Notes. The Notes may also be sold to an Agent, as
principal, for resale to investors and other purchasers. The Issuer may also
sell Notes directly to investors on its own behalf in those jurisdictions where
it is authorized to do so. The Issuer has reserved the right to appoint from
time to time additional agents as named in the appropriate pricing supplement.
The Notes will not be listed on any securities exchange, and there can be no
assurance that the Notes offered by this Prospectus Supplement will be sold or
that there will be a secondary market for the Notes. The Issuer reserves the
right to withdraw, cancel or modify the offer made hereby without notice and
may reject any offer in whole or in part. The Agents may reject, in their
discretion reasonably exercised, any proposed purchase of Notes in whole or in
part. See "Plan of Distribution" in this Prospectus Supplement.
-----------
MERRILL LYNCH & CO.
CS FIRST BOSTON
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
J.P. MORGAN SECURITIES INC.
SMITH BARNEY INC.
-----------
The date of this Prospectus Supplement is June , 1994.
<PAGE>
DESCRIPTION OF NOTES
The following description encompasses all the material terms and provisions
of the Notes offered hereby and supplements, and to the extent inconsistent
therewith replaces, the description of the general terms and provisions of the
Debt Securities (as defined in the accompanying Prospectus) set forth under the
heading "Description of Debt Securities" in the Prospectus, to which
description reference is hereby made. The following description will apply to
each Note unless otherwise specified in the applicable Pricing Supplement.
GENERAL
The Notes are to be issued as one or more series of Debt Securities, and will
be either Senior Debt Securities or Subordinated Debt Securities of the Issuer
(each as defined in the accompanying Prospectus). At the date hereof, the
maximum amount of Debt Securities authorized for issuance is $1,000,000,000.
Whether an offering of Notes will constitute Senior Debt Securities ("Senior
Notes") or Subordinated Debt Securities ("Subordinated Notes") will be set
forth in a Pricing Supplement hereto. The Senior Notes will be issued under an
Indenture between the Issuer, the Guarantor and NationsBank of Georgia,
National Association, as senior trustee and successor to Wachovia Bank of
Georgia, N.A. (formerly The First National Bank of Atlanta) (the "Senior
Trustee"), dated as of December 1, 1990 (the "Senior Indenture"), and the
Subordinated Notes will be issued under an Indenture between the Issuer, the
Guarantor and Bank One Columbus, N.A. dated as of December 1, 1990, as amended
by a First Supplemental Indenture dated as of March 1, 1993 and as further
amended by a Second Supplemental Indenture dated as of June 1, 1994 (together
the "Subordinated Indenture"), between the Issuer, the Guarantor, Bank One,
Columbus, N.A. and Citibank, N.A., as subordinated trustee (the "Subordinated
Trustee" and, together with the Senior Trustee, the "Trustees"). The Senior
Indenture and the Subordinated Indenture are collectively referred to herein as
"Indentures" and are more fully described in the accompanying Prospectus. The
following summaries of certain provisions of the Indentures encompass all their
material terms and provisions but are subject to, and are qualified in their
entirety by reference to, all of the provisions of the Indentures, including
the definitions therein of certain terms. The terms and conditions set forth
below will apply to each Note unless otherwise specified in the applicable
Pricing Supplement.
The Indentures do not limit the aggregate principal amount of Senior Debt
Securities or Subordinated Debt Securities that may be issued thereunder and
provide that such Debt Securities may be issued in one or more series up to the
aggregate principal amount that may be authorized from time to time by the
Issuer.
All Senior Debt Securities, including the Senior Notes, will be unsecured
obligations and will rank pari passu with all other unsecured and
unsubordinated indebtedness of the Issuer. At March 31, 1994, $1.7 billion of
senior debt securities of the Issuer was outstanding. All outstanding senior
debt securities were unsecured and ranked pari passu with all other unsecured
and unsubordinated indebtedness of the Issuer.
All Subordinated Debt Securities, including the Subordinated Notes, will be
unsecured, subordinated and subject to Senior CoreStates Capital Indebtedness
as set forth under "Certain Terms Relating to Subordinated Debt Securities" in
the accompanying Prospectus. Prior to the execution of the First Supplemental
Indenture, the Issuer issued indebtedness subordinated to a more narrowly
defined category of senior indebtedness. At March 31, 1994, $250 million of
such indebtedness was outstanding.
The Indentures do not contain provisions which would provide protection to
noteholders against a sudden and dramatic decline in credit quality resulting
from takeovers, recapitalizations or similar restructurings. See "Description
of Debt Securities--Restrictive Covenants" in the accompanying Prospectus.
The Notes will be offered on a continuous basis and will mature on any day
nine months or more from the date of issue, as selected by the purchaser and
agreed to by the Issuer. Floating Rate Notes will mature on an Interest Payment
Date (as hereinafter defined). Unless otherwise indicated in the Pricing
Supplement, the Notes will bear interest at a fixed rate or at floating rates
determined by reference to one or more of the Base Rates described below, which
may be adjusted by a Spread and/or Spread Multiplier (as hereinafter defined)
applicable to such Floating Rate Notes, until the principal thereof is paid or
made available for payment.
Unless otherwise indicated in an accompanying Prospectus Supplement, the
Notes will be issued only in fully-registered certificated or book-entry form
without coupons and, except as may otherwise be provided in
S-2
<PAGE>
the applicable Pricing Supplement, in denominations of $1,000 and integral
multiples thereof. Notes issued in certificated form may be transferred or
exchanged at the offices described in the immediately following paragraph. In
the event Notes are issued in book-entry form through the facilities of The
Depository Trust Company, New York, New York (the "Depository"), transfers or
exchanges may be similarly effected through a participating member of the
Depository. See "Description of Notes--Book-Entry Notes." No service charge
will be made for any registration of transfer or exchange of Notes issued in
certificated form, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith.
Payments on Notes issued in book-entry form will be made to the Depository or
its nominee in accordance with the arrangements then in effect between the
applicable Trustee and the Depository. See "Description of Notes--Book-Entry
Notes." In the case of Notes issued in certificated form, principal, premium,
if any, and interest will be payable, the transfer of such Notes will be
registrable, and such Notes will be exchangeable for Notes bearing identical
terms and provisions at the office or agency of the Issuer in The City of New
York designated for such purpose; provided, however, that payment of interest,
other than interest payable on the stated maturity date (or on the date of
redemption or repayment if a Note is redeemed or repaid prior to maturity)
(such stated maturity date or date of redemption or repayment, as the case may
be, being collectively referred to hereinafter as the "Maturity Date" with
respect to the principal amount payable on such date) may be made at the option
of the Issuer by check mailed to the address of the person in whose name the
applicable Note is registered at the close of business on the relevant Regular
Record Date (as hereinafter defined) as shown on the security register
maintained by CoreStates Bank, N.A. as Security Registrar. Interest will be
payable on each date specified in the Note on which an installment of interest
is due and payable (each, an "Interest Payment Date") and on the Maturity Date.
If the original issue date of a Note is between a Regular Record Date and an
Interest Payment Date, the initial interest payment will be made on the
Interest Payment Date following the next succeeding Regular Record Date to the
registered holder on such next succeeding Regular Record Date. Notwithstanding
the foregoing, a registered holder of $10,000,000 or more in aggregate
principal amount of Notes issued in certificated form (whether having identical
or different terms and provisions) shall be entitled to receive payments of
interest by the transfer of immediately available funds to an account at a bank
located in The City of New York (or other bank consented to by the Issuer)
designated by such holder (provided that such bank has appropriate facilities
therefor), but only if appropriate instructions have been received by
CoreStates Bank, N.A. (the "Paying Agent") at its corporate trust office in the
City of Philadelphia on or before the Regular Record Date immediately preceding
the applicable Interest Payment Date.
Interest payments will be in the amount of interest accrued from and
including the next preceding Interest Payment Date in respect of which interest
has been paid or duly provided for (or from and including the original issue
date if no interest has been paid with respect to such Note) to but excluding
the Interest Payment Date or the Maturity Date, as the case may be (each, an
"Interest Period").
In the case of Notes issued in certificated form, payment of principal,
premium, if any, and interest payable on the Maturity Date for each such Note
will be paid on such date in immediately available funds against presentation
of the Note in The City of New York at the office or agency of the Issuer
designated for such purpose. Interest payable on the Maturity Date will be
payable to the person to whom the principal of the Note shall be paid.
All references herein to registered holders will be, with respect to Book-
Entry Notes, to the Depository or its nominees. See "Description of Notes--
Book-Entry Notes."
Interest rates offered by the Issuer with respect to the Notes may differ
depending upon the aggregate principal amount of Notes purchased in any
transaction, and, the Issuer expects generally to distinguish, with respect to
such offered rates, between purchases which are for less than, and purchases
which are equal to or greater than, $200,000.
REDEMPTION
If set forth in the applicable Pricing Supplement, the Notes will be subject
to redemption by the Issuer on and after the initial redemption date fixed at
the time of sale (the "Initial Redemption Date"). If no Initial
S-3
<PAGE>
Redemption Date is indicated with respect to a Note, such Note will not be
redeemable prior to the stated maturity date. On and after the Initial
Redemption Date with respect to any Note, such Note will be redeemable in whole
or in part in increments of $1,000 at the option of the Issuer at a redemption
price (the "Redemption Price") determined in accordance with the following
paragraph, together with interest thereon payable to the date of redemption, on
notice given no more than 60 nor less than 30 days prior to the date of
redemption.
The Redemption Price for each Note subject to redemption will initially be
equal to a certain percentage (the "Initial Redemption Percentage") of the
principal amount of such Note to be redeemed and will decline at each
anniversary of the Initial Redemption Date with respect to such Note by a
percentage (the "Annual Redemption Percentage Reduction") of the principal
amount to be redeemed until the Redemption Price is 100% of such principal
amount. The Initial Redemption Percentage and any Annual Redemption Percentage
Reduction with respect to each Note subject to redemption prior to the stated
maturity date will be fixed at the time of sale and set forth in the applicable
Pricing Supplement and in the applicable Note.
REPAYMENT
If set forth in the applicable Pricing Supplement, the Notes will be subject
to repayment at the option of the registered holders thereof in accordance with
the terms of the Notes on their respective optional repayment dates fixed at
the time of sale (each, an "Optional Repayment Date"). If no Optional Repayment
Date is indicated with respect to a Note, such Note will not be repayable at
the option of the registered holder thereof prior to the stated maturity date.
On any Optional Repayment Date with respect to any Note, such Note will be
repayable in whole or in part in increments of $1,000 at the option of such
registered holder at a price equal to 100% of the principal amount to be
repaid, together with interest thereon payable to the date of repayment, on
notice given not more than 60 nor less than 30 days prior to the Optional
Repayment Date.
FIXED RATE NOTES
Each Fixed Rate Note will bear interest from the date of issue at the rate
per annum stated on the face thereof until the principal amount thereof is paid
or duly made available for payment. Interest on Fixed Rate Notes will be
computed on the basis of a 360-day year consisting of twelve 30-day months.
Unless otherwise specified in the applicable Pricing Supplement, interest on
Fixed Rate Notes will be payable semi-annually on each March 15 and September
15 (each, an "Interest Payment Date") and on the Maturity Date. The "Regular
Record Date" for Fixed Rate Notes will be the March 1 or September 1
immediately preceding an Interest Payment Date. If any Interest Payment Date or
the Maturity Date on a Fixed Rate Note falls on a day that is not a Business
Day (as hereinafter defined), the payment shall be made on the next Business
Day as if it were made on the date such payment was due and no interest will
accrue on the amount so payable for the period from and after such Interest
Payment Date or the Maturity Date, as the case may be.
FLOATING RATE NOTES
Interest on Floating Rates Notes will be determined by reference to a "Base
Rate," which may be one or more of the following: (a) the "Certificate of
Deposit Rate" ("Certificate of Deposit Rate Notes"), (b) the "Commercial Paper
Rate" ("Commercial Paper Rate Notes"), (c) the "CMT Rate" ("CMT Rate Notes"),
(d) the "Federal Funds Rate" ("Federal Funds Rate Notes"), (e) "LIBOR" ("LIBOR
Notes"), (f) the "Prime Rate" ("Prime Rate Notes"), (g) the "Treasury Rate"
("Treasury Rate Notes"), (h) the "Eleventh District Cost of Funds Rate"
("Eleventh District Cost of Funds Rate Notes"), or (i) such other interest rate
basis or formula as may be set forth in an applicable Pricing Supplement. The
Base Rate will be based upon the Index Maturity and adjusted by a Spread and/or
Spread Multiplier, if any, as specified in the applicable Pricing Supplement.
The interest rate on each Floating Rate Note will be calculated by reference to
the specified Base Rate, plus or minus the Spread and/or multiplied by the
Spread Multiplier, if any. The "Index Maturity" is the period to maturity of
the instrument or obligation with respect to which the Base Rate is calculated.
The "Spread" is the number of basis points above or below the Base Rate
applicable to such
S-4
<PAGE>
Floating Rate Note, and the "Spread Multiplier" is the percentage of the Base
Rate applicable to the interest rate for such Floating Rate Note. The Spread,
Spread Multiplier, Index Maturity and other variable terms of the Floating Rate
Notes are subject to change by the Issuer from time to time, but no such change
will affect any Floating Rate Note theretofore issued or as to which an offer
has been accepted by the Issuer.
The applicable Pricing Supplement will specify for each Floating Rate Note
the following terms: the Base Rate, Initial Interest Rate, Initial Interest
Rate Reset Date, Interest Rate Reset Dates, Interest Rate Reset Periods,
Interest Payment Dates, Index Maturity, Stated Maturity Date, Maximum Interest
Rate and Minimum Interest Rate, if any, Spread and/or Spread Multiplier, if
any, Initial Redemption Date, if any, Initial Redemption Percentage, if any,
Annual Redemption Percentage Reduction, if any, and Optional Repayment Date, if
any.
The rate of interest on each Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semi-annually or annually (each, an "Interest Rate Reset
Period") as specified in the applicable Pricing Supplement. The "Interest Rate
Reset Date" will be, in the case of Floating Rate Notes which reset (a) daily,
each Business Day; (b) weekly, the Wednesday of each week (with the exception
of weekly reset Treasury Rate Notes, which reset Tuesday of each week except as
provided below); (c) monthly, the third Wednesday of each month; (d) quarterly,
the third Wednesday of March, June, September and December of each year; (e)
semi-annually, the third Wednesday of the two months specified in the
applicable Pricing Supplement; and (f) annually, the third Wednesday of the
month specified in the applicable Pricing Supplement. If any Interest Rate
Reset Date for any Floating Rate Note would otherwise be a day that is not a
Business Day, such Interest Rate Reset Date will be postponed to the next
succeeding day that is a Business Day, except that in the case of a LIBOR Note,
if such Business Day is in the next succeeding calendar month, such Interest
Rate Reset Date shall be the next preceding Business Day. Unless otherwise
specified in the applicable Pricing Supplement, "Business Day" means any day
other than a Saturday, Sunday, legal holiday or other day on which banks in The
City of New York are required or authorized by law or executive order to close
and with respect to LIBOR Notes, is also a London Banking Day. "London Banking
Day" means any day on which dealings in deposits in U.S. dollars are transacted
in the London interbank market.
A Floating Rate Note may also have either or both of the following: (i) a
maximum limit, or ceiling (the "Maximum Interest Rate"), on the rate of
interest that may accrue during any Interest Period; and (ii) a minimum limit,
or floor (the "Minimum Interest Rate"), on the rate of interest which may
accrue during any Interest Period. Notwithstanding any Maximum Interest Rate
which may be applicable to any Floating Rate Note pursuant to the above
provisions, the interest rate on Floating Rate Notes will in no event be higher
than the maximum rate permitted by New York law as the same may be modified by
United States law of general application. Under present New York law, the
maximum rate of interest is 25% per annum on a simple interest basis. The limit
may apply to Floating Rate Notes in which $2,500,000 or more has been invested.
The interest rate in effect with respect to a Floating Rate Note during any
interest period commencing as of an Interest Rate Reset Date will be the rate
determined as of the "Interest Determination Date." The Interest Determination
Date pertaining to an Interest Rate Reset Date for Certificate of Deposit Rate
Notes, Commercial Paper Rate Notes, CMT Rate Notes, Federal Funds Rate Notes
and Prime Rate Notes will be the second Business Day preceding such Interest
Rate Reset Date. The Interest Determination Date with respect to an Interest
Rate Reset Date for LIBOR Notes will be the second London Banking Day preceding
such Interest Rate Reset Date. The Interest Determination Date with respect to
the Eleventh District Cost of Funds Rate will be the last working day of the
month of the Federal Home Loan Bank of San Francisco (the "FHLB of San
Francisco") preceding the Interest Rate Reset Date on which the FHLB of San
Francisco publishes the Index (as hereinafter defined). With respect to
Treasury Rate Notes, the Interest Determination Date with respect to an
Interest Rate Reset Date will be the day of the week in which the Interest Rate
Reset Date falls on which Treasury bills (as hereinafter defined) are auctioned
(Treasury bills are normally sold at auction on Monday of each week, unless
that day is a legal holiday, in which case the auction is normally held on the
following Tuesday, except that such auction may be held on the preceding
Friday); provided,
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however, that if as a result of a legal holiday an auction is held on the
Friday of the week preceding an Interest Rate Reset Date, the related Interest
Determination Date will be such preceding Friday; and provided further, that if
an auction shall fall on any Interest Rate Reset Date, then the Interest Rate
Reset Date will instead be the first Business Day following such auction.
The interest rate in effect with respect to a Floating Rate Note on each day
that is not an Interest Rate Reset Date will be the interest rate determined as
of the Interest Determination Date pertaining to the immediately preceding
Interest Rate Reset Date, and the interest rate in effect on any day that is an
Interest Rate Reset Date will be the interest rate determined as of the
Interest Determination Date pertaining to such Interest Rate Reset Date,
subject in either case to any maximum or minimum interest rate limitation
referred to above, provided, however, that the interest rate in effect with
respect to a Floating Rate Note for the period from the date of issue to the
Initial Interest Reset Date will be the "Initial Interest Rate".
Each Floating Rate Note will bear interest from the date of issue at the
rates determined as described below until the principal thereof is paid or
otherwise made available for payment. Except as provided below or in the
applicable Pricing Supplement, interest will be payable, in the case of
Floating Rate Notes which reset (a) daily, weekly or monthly, on the third
Wednesday of each month or on the third Wednesday of March, June, September and
December of each year, as specified in the applicable Pricing Supplement; (b)
quarterly, on the third Wednesday of March, June, September and December of
each year; (c) semi-annually, on the third Wednesday of the two months of each
year specified in the applicable Pricing Supplement; and (d) annually, on the
third Wednesday of the month specified in the applicable Pricing Supplement
(each, an "Interest Payment Date") and, in each case, on the Maturity Date.
If any Interest Payment Date for any Floating Rate Note would otherwise fall
on a day that is not a Business Day with respect to such Note, such Interest
Payment Date shall be postponed to the next day that is a Business Day, except
that in the case of a LIBOR Note, if such Business Day falls in the next
succeeding calendar month, such Interest Payment Date will be advanced to the
immediately preceding Business Day. If the Maturity Date of any Floating Rate
Note would fall on a day that is not a Business Day, the payment of principal,
premium, if any, and interest may be made on the next succeeding Business Day,
and no interest on such payment shall accrue for the period from and after the
Maturity Date.
The "Regular Record Date" for Floating Rate Notes with respect to any
Interest Payment Date will be the fifteenth calendar day, whether or not such
date is a Business Day, prior to such Interest Payment Date.
With respect to a Floating Rate Note, accrued interest will be calculated by
multiplying the face amount of such Floating Rate Note by an accrued interest
factor. Such accrued interest factor will be computed by adding the interest
factor calculated for each day from and including the date of issue, or from
but excluding the last date to which interest has been paid to and including
the date for which accrued interest is being calculated. The interest factor
for each such day will be computed by dividing the interest rate applicable to
such day by 360 (or, in the case of CMT Rate Notes or Treasury Rate Notes, by
the actual number of days in the year).
Unless otherwise provided for in the applicable Pricing Supplement,
CoreStates Bank, N.A. will be the "Calculation Agent" for the Floating Rate
Notes. Upon the request of the registered holder of a Floating Rate Note, the
applicable Calculation Agent will provide the interest rate then in effect and,
if determined, the interest rate that will become effective as a result of a
determination made for the next Interest Rate Reset Date with respect to such
Floating Rate Note. The "Calculation Date," where applicable, pertaining to any
Interest Determination Date will be the earlier of (i) the tenth calendar day
after such Interest Determination Date or, if any such day is not a Business
Day, the next succeeding Business Day or (ii) the Business Day preceding the
applicable Interest Payment Date or Maturity Date, as the case may be.
All percentages resulting from any calculation on Floating Rate Notes will be
rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point
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rounded upward (e.g., 9.876545% (or .09876545) will be rounded upward to
9.87655% (or .0987655)), and all dollar amounts used in or resulting from such
calculation of Floating Rate Notes will be rounded to the nearest cent (with
one-half cent being rounded upward).
As mentioned above, the Initial Interest Rate will be specified in the
applicable Pricing Supplement. The interest rate that will become effective on
each subsequent Interest Rate Reset Date will be determined by the applicable
Calculation Agent (calculated with reference to the Base Rate and the Spread
and/or Spread Multiplier, if any, specified in the applicable Pricing
Supplement) as follows:
CERTIFICATE OF DEPOSIT RATE: Unless otherwise indicated in the applicable
Pricing Supplement, "Certificate of Deposit Rate" means, with respect to any
Interest Determination Date relating to a Certificate of Deposit Rate Note (a
"Certificate of Deposit Rate Interest Determination Date"), the rate on that
day for negotiable certificates of deposit having the Index Maturity specified
in the applicable Pricing Supplement as published by the Board of Governors of
the Federal Reserve System in "Statistical Release H.15 (519). Selected
Interest Rates," or any successor publication ("H.15 (519)"), under the heading
"CDs (Secondary Market)," or, if not so published by 3:00 P.M., New York City
time, on the Calculation Date, the Certificate of Deposit Rate will be the rate
on such Certificate of Deposit Rate Interest Determination Date for negotiable
certificates of deposit of the Index Maturity specified in the applicable
Pricing Supplement as published by the Federal Reserve Bank of New York in its
daily statistical release "Composite 3:30 P.M. quotations for U.S. Government
Securities" ("Composite Quotations") under the heading "Certificates of
Deposit." If such rate is not published by 3:00 P.M., New York City time, on
such Calculation Date, then the Certificate of Deposit Rate on such Certificate
of Deposit Rate Interest Determination Date will be calculated by the
applicable Calculation Agent and will be the arithmetic mean of the secondary
market offered rates as of 10:00 A.M., New York City time, on such Certificate
of Deposit Rate Interest Determination Date, of three leading nonbank dealers
in negotiable U.S. dollar certificates of deposit in The City of New York
(which may include the Agents) selected by the applicable Calculation Agent for
negotiable certificates of deposit of major United States money market banks
(in the market for negotiable certificates of deposit) with a remaining
maturity closest to the Index Maturity specified in the applicable Pricing
Supplement in denominations of $5,000,000; provided, however, that if the
dealers selected as aforesaid by the applicable Calculation Agent are not
quoting as mentioned in this sentence, the Certificate of Deposit Rate will be
the Certificate of Deposit Rate in effect on such Certificate of Deposit Rate
Interest Determination Date.
COMMERCIAL PAPER RATE: Unless otherwise indicated in the applicable Pricing
Supplement, "Commercial Paper Rate" means, with respect to any Interest
Determination Date relating to a Commercial Paper Rate Note (a "Commercial
Paper Rate Interest Determination Date"), the Money Market Yield (as
hereinafter defined) on such date of the rate for commercial paper having the
Index Maturity specified in the applicable Pricing Supplement as published by
the Board of Governors of the Federal Reserve System in H.15(519) under the
heading "Commercial Paper." In the event that such rate is not published by
3:00 P.M., New York City time, on the Calculation Date pertaining to such
Commercial Paper Rate Interest Determination Date, then the Commercial Paper
Rate shall be the Money Market Yield on such Commercial Paper Rate Interest
Determination Date of the rate for commercial paper of the specified Index
Maturity as published in Composite Quotations under the heading "Commercial
Paper." If the rate for a Commercial Paper Rate Interest Determination Date is
not published in either H.15(519) or Composite Quotations by 3:00 P.M., New
York City time, on the Calculation Date, the Commercial Paper Rate for that
Commercial Paper Rate Interest Determination Date shall be calculated by the
applicable Calculation Agent and shall be the Money Market Yield of the
arithmetic mean of the offered rates, as of 11:00 A.M., New York City time, on
such Commercial Paper Rate Interest Determination Date, of three leading
dealers in commercial paper in The City of New York (which may include any
Calculation Agent) selected by the applicable Calculation Agent on such
Commercial Paper Rate Interest Determination Date for commercial paper of the
specified Index Maturity placed for an industrial issuer whose bond rating is
"AA," or the equivalent, from a nationally recognized statistical rating
agency; provided, however, that if the dealers selected as aforesaid by the
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applicable Calculation Agent are not quoting as mentioned in this sentence, the
Commercial Paper Rate will be the Commercial Paper Rate in effect on such
Commercial Paper Rate Interest Determination Date.
"Money Market Yield" shall be the yield (expressed as a percentage)
calculated in accordance with the following formula:
D X 360
Money Market Yield = ------------ X 100
360 -(D X M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal, and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
CMT RATE NOTES: Unless otherwise specified in the applicable Pricing
Supplement, "CMT Rate" means, with respect to any Interest Determination Date
relating to a CMT Rate Note or any Floating Rate Note for which the interest
rate is determined with reference to the CMT Rate (a "CMT Rate Interest
Determination Date"), the rate displayed on the Designated CMT Telerate Page
under the caption " . . . Treasury Constant Maturities . . . Federal Reserve
Board Release H.15 . . . Mondays Approximately 3:45 P.M.," under the column for
the Designated CMT Maturity Index for (i) if the Designated CMT Telerate Page
is 7055, the rate on such CMT Rate Interest Determination Date and (ii) if the
Designated CMT Telerate Page is 7052, the week, or the month, as applicable,
ended immediately preceding the week in which the related CMT Rate Interest
Determination Date occurs. If such rate is no longer displayed on the relevant
page, or if not displayed by 3:00 P.M., New York City time, on the related
Calculation Date, then the CMT Rate for such CMT Rate Interest Determination
Date will be such treasury constant maturity rate for the Designated CMT
Maturity Index as published in the relevant H.15(519). If such rate is no
longer published, or if not published by 3:00 P.M., New York City time, on the
related Calculation Date, then the CMT Rate for such CMT Rate Interest
Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Rate Interest Determination Date
with respect to such Interest Reset Date as may then be published by either the
Board of Governors of the Federal Reserve System or the United States
Department of the Treasury that the Calculation Agent determines to be
comparable to the rate formerly displayed on the Designated CMT Telerate Page
and published in the relevant H.15(519). If such information is not provided by
3:00 P.M., New York City time, on the related Calculation Date, then the CMT
Rate for the CMT Rate Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity, based on the arithmetic mean
of the secondary market closing offer side prices as of approximately 3:30 P.M.
(New York City time) on the CMT Rate Interest Determination Date reported,
according to their written records, by three leading primary United States
government securities dealers (each, a "Reference Dealer") in The City of New
York selected by the Calculation Agent (from five such Reference Dealers
selected by the Calculation Agent and eliminating the highest quotation (or, in
the event of equality, one of the highest) and the lowest quotation (or, in the
event of equality, one of the lowest)), for the most recently issued direct
noncallable fixed rate obligations of the United States ("Treasury Notes") with
an original maturity of approximately the Designated CMT Maturity Index and a
remaining term to maturity of not less than such Designated CMT Maturity Index
minus one year. If the Calculation Agent cannot obtain three such Treasury Note
quotations, the CMT Rate for such CMT Rate Interest Determination Date will be
calculated by the Calculation Agent and will be a yield to maturity based on
the arithmetic mean of the secondary market offer side prices as of
approximately 3:30 P.M. (New York City time) on the CMT Rate Interest
Determination Date of three Reference Dealers in The City of New York (from
five such Reference Dealers selected by the Calculation Agent and eliminating
the highest quotation (or, in the event of equality, one of the highest) and
the lowest quotation (or, in the event of equality, one of the lowest)), for
Treasury Notes with an original maturity of the number of years that is the
next highest to the Designated CMT Maturity Index and a remaining term to
maturity closest to the Designated CMT Maturity Index and in an amount of at
least $100 million. If three or four (and not five) of such Reference Dealers
are quoting as described above, then the CMT Rate will be based on the
arithmetic mean of the offer
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prices obtained and neither the highest nor the lowest of such quotes will be
eliminated; provided however, that if fewer than three Reference Dealers
selected by the Calculation Agent are quoting as described herein, the CMT Rate
will be the CMT Rate in effect on such CMT Rate Interest Determination Date. If
two Treasury Notes with an original maturity as described in the third
preceding sentence, have remaining terms to maturity equally close to the
Designated CMT Maturity Index, the quotes for the CMT Rate Note with the
shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service on the page designated in the applicable Pricing Supplement (or any
other page as may replace such page on that service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519)), for the
purpose of displaying Treasury Constant Maturities as reported in H.15(519). If
no such page is specified in the applicable Pricing Supplement, the Designated
CMT Telerate Page shall be 7052, for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of the
U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20, or 30 years) specified
in the applicable Pricing Supplement with respect to which the CMT Rate will be
calculated. If no such maturity is specified in the applicable Pricing
Supplement, the Designated CMT Maturity Index shall be 2 years.
FEDERAL FUNDS RATE: Unless otherwise indicated in the applicable Pricing
Supplement, "Federal Funds Rate" means, with respect to any Interest
Determination Date relating to a Federal Funds Rate Note (a "Federal Funds Rate
Interest Determination Date"), the rate on that day for Federal Funds as
published in H.15(519) under the heading "Federal Funds (Effective)" or, if not
so published by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Federal Funds Rate Interest Determination Date, the Federal
Funds Rate will be the rate on such Federal Funds Rate Interest Determination
Date as published in Composite Quotations under the heading "Federal
Funds/Effective Rate." If such rate is not published by 3:00 P.M., New York
City time, on such Calculation Date, the Federal Funds Rate will be calculated
by the applicable Calculation Agent and will be the arithmetic mean of the
rates for the last transaction in overnight Federal Funds arranged by three
leading brokers of Federal Funds transactions in The City of New York selected
by the applicable Calculation Agent as of 9:00 A.M., New York City time, on
such Federal Funds Rate Interest Determination Date; provided, however, that if
the brokers selected as aforesaid by the applicable Calculation Agent are not
quoting as described above, the Federal Funds Rate in effect for the applicable
period will be the Federal Funds Rate in effect on such Federal Funds Rate
Interest Determination Date.
LIBOR: Unless otherwise indicated in the applicable Pricing Supplement, LIBOR
will be determined by the applicable Calculation Agent in accordance with the
following provisions:
(i) With respect to an Interest Determination Date relating to a LIBOR
Note (a "LIBOR Interest Determination Date"), LIBOR will be, as specified
in the applicable Pricing Supplement, either (a) the arithmetic mean of the
offered rates for deposits in U.S. dollars having the Index Maturity
designated in the applicable Pricing Supplement, commencing on the second
London Banking Day immediately following such LIBOR Interest Determination
Date, that appear on the Reuters Screen LIBO Page as of 11:00 A.M., London
time, on such LIBOR Interest Determination Date, if at least two such
offered rates appear on the Reuters Screen LIBO Page ("LIBOR Reuters"), or
(b) the rate for deposits in U.S. dollars having the Index Maturity
designated in the applicable Pricing Supplement, commencing on the second
London Banking Day immediately following such LIBOR Interest Determination
Date, that appears on Telerate Page 3750 as of 11:00 A.M., London time, on
such LIBOR Interest Determination Date ("LIBOR Telerate"). "Reuters Screen
LIBO Page" means the display designated as page "LIBO" on the Reuters
Monitor Money Rates Service (or such other page as may replace page LIBO on
that service for the purpose of displaying London interbank offered rates
of major banks). "Telerate Page 3750" means the display designated as page
"3750" on the Telerate Service (or such other page as may replace the 3750
page on that service or such other service or services as may be nominated
by the British Bankers' Association for the purpose of displaying London
interbank offered rates for U.S. dollar deposits). If neither LIBOR Reuters
nor LIBOR Telerate is specified in the applicable Pricing
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Supplement, LIBOR will be determined as if LIBOR Telerate had been
specified. If fewer than two offered rates appear on the Reuters Screen
LIBO Page, or if no rate appears on Telerate Page 3750, as applicable,
LIBOR in respect of such LIBOR Interest Determination Date will be
determined as if the parties had specified the rate described in (ii)
below.
(ii) With respect to a LIBOR Interest Determination Date on which fewer
than two offered rates appear on the Reuters Screen LIBO Page, as specified
in (i)(a) above, or on which no rate appears on Telerate Page 3750, as
specified in (i)(b) above, as applicable, LIBOR will be determined on the
basis of the rates at which deposits in U.S. dollars having the Index
Maturity designated in the applicable Pricing Supplement are offered at
approximately 11:00 A.M., London time, on such LIBOR Interest Determination
Date by four major banks in the London interbank market selected by the
applicable Calculation Agent (the "Reference Banks") to prime banks in the
London interbank market, commencing on the second London Banking Day
immediately following such LIBOR Interest Determination Date and in a
principal amount equal to an amount of not less than U.S. $1 million that
is representative for a single transaction in such market at such time. The
applicable Calculation Agent will request the principal London office of
each of the Reference Banks to provide a quotation of its rates. If at
least two such quotations are provided, LIBOR for such LIBOR Interest
Determination Date will be the arithmetic mean of such quotations. If fewer
than two quotations are provided, LIBOR for such LIBOR Interest
Determination Date will be the arithmetic mean of the rates quoted by 11:00
A.M., New York City time, on such LIBOR Interest Determination Date by
three major banks in The City of New York selected by the applicable
Calculation Agent for loans in U.S. dollars to leading European banks,
having the Index Maturity specified in the applicable Pricing Supplement,
commencing on the second London Banking Day immediately following such
LIBOR Interest Determination Date and in a principal amount equal to an
amount of not less than U.S. $1 million that is representative for a single
transaction in such market at such time; provided, however, that if the
banks selected as aforesaid by the applicable Calculation Agent are not
quoting as mentioned in this sentence, LIBOR will be LIBOR in effect on
such LIBOR Interest Determination Date.
PRIME RATE: Unless otherwise indicated in the applicable Pricing Supplement,
"Prime Rate" means, with respect to any Interest Determination Date relating to
a Prime Rate Note (a "Prime Rate Interest Determination Date"), the rate set
forth in H.15(519) for such date opposite the caption "Bank Prime Loan." If
such rate is not yet published by 9:00 A.M., New York City time, on the
Calculation Date, the Prime Rate for such Prime Rate Interest Determination
Date will be the arithmetic mean of the rates of interest publicly announced by
each bank named on the Reuters Screen NYMF Page as such bank's prime rate or
base lending rate as in effect for such Prime Rate Interest Determination Date
as quoted on the Reuters Screen NYMF Page on such Prime Rate Interest
Determination Date, or, if fewer than four such rates appear on the Reuters
Screen NYMF Page for such Prime Rate Interest Determination Date, the rate
shall be the arithmetic mean of the prime rates quoted on the basis of the
actual number of days in the year divided by 360 as of the close of business on
such Prime Rate Interest Determination Date by at least two of the three major
money center banks in The City of New York selected by the applicable
Calculation Agent from which quotations are requested. If fewer than two
quotations are provided, the Prime Rate shall be calculated by the applicable
Calculation Agent and shall be determined as the arithmetic mean of the prime
rates quoted in The City of New York on such date by the approximate number of
banks or trust companies organized and doing business under the laws of the
United States, or any State thereof, each having total equity capital of at
least $500 million and being subject to supervision or examination by a Federal
or State authority, selected by the applicable Calculation Agent to quote such
rate or rates; provided, however, that if the Prime Rate is not published in
H.15(519) and the banks or trust companies selected as aforesaid are not
quoting as mentioned in this sentence, the Prime Rate with respect to such
Prime Rate Interest Determination Date will be the interest rate otherwise in
effect on such Prime Rate Interest Determination Date. "Reuters Screen NYMF
Page" means the display designated as page "NYMF" on the Reuters Monitor Money
Rates Service (or such other page as may replace page NYMF on that service for
the purpose of displaying prime rates or base lending rates of major United
States banks).
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TREASURY RATE: Unless otherwise indicated in the applicable Pricing
Supplement, the "Treasury Rate" means, with respect to any Interest
Determination Date relating to a Treasury Rate Note (a "Treasury Rate Interest
Determination Date"), the rate applicable to the most recent auction of direct
obligations of the United States ("Treasury bills") having the Index Maturity
specified in the applicable Pricing Supplement as such rate is published in
H.15 (519) under the heading "Treasury bills--auction average (investment)" or,
if not so published by 3:00 P.M., New York City time, on or prior to the
Calculation Date pertaining to such Treasury Rate Interest Determination Date,
the auction average rate (expressed as a bond equivalent on the basis of a year
of 365 or 366 days, as applicable, and applied on a daily basis) as otherwise
announced by the United States Department of the Treasury. Treasury bills are
usually sold at auction on Monday of each week unless that day is a legal
holiday, in which case the auction is usually held on the following Tuesday,
except that such auction may be held on the preceding Friday. In the event that
the results of the auction of Treasury bills having the specified Index
Maturity are not reported as provided by 3:00 P.M., New York City time, on such
Calculation Date, or if no such auction is held in a particular week, then the
Treasury Rate shall be a yield to maturity (expressed as a bond equivalent on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) of the arithmetic mean of the secondary market bid rates, as of
approximately 3:30 P.M., New York City time, on such Treasury Rate Interest
Determination Date, of three leading primary United States government
securities dealers, selected by the applicable Calculation Agent, for the issue
of Treasury bills with a remaining maturity closest to the applicable Index
Maturity; provided, however, that if the dealers selected as aforesaid by the
applicable Calculation Agent are not quoting as mentioned in this sentence, the
rate of interest in effect for the applicable period will be the rate of
interest in effect on such Treasury Rate Interest Determination Date.
ELEVENTH DISTRICT COST OF FUNDS RATE: Unless otherwise indicated in the
applicable Pricing Supplement, the "Eleventh District Cost of Funds Rate"
means, with respect to any Interest Determination Date relating to an Eleventh
District Cost of Funds Rate Note (an "Eleventh District Cost of Funds Interest
Determination Date"), the rate equal to the monthly weighted average cost of
funds for the calendar month preceding such Eleventh District Cost of Funds
Rate Interest Determination Date as set forth under the caption "11th District"
on Telerate Page 7058 as of 11:00 A.M., San Francisco time, on such Eleventh
District Cost of Funds Rate Interest Determination Date. If such rate does not
appear on Telerate Page 7058 on any related Eleventh District Cost of Funds
Rate Interest Determination Date, the Eleventh District Cost of Funds Rate for
such Eleventh District Cost of Funds Rate Interest Determination Date shall be
the monthly weighted average cost of funds paid by member institutions of the
Eleventh Federal Home Loan Bank District that was most recently announced (the
"Index") by the FHLB of San Francisco as such cost of funds for the calendar
month preceding the date of such announcement. If the FHLB of San Francisco
fails to announce such rate for the calendar month next preceding such Eleventh
District Cost of Funds Rate Interest Determination Date, then the Eleventh
District Cost of Funds Rate for such Eleventh District Cost of Funds Rate
Interest Determination Date will be the Eleventh District Cost of Funds Rate in
effect on such Eleventh District Cost of Funds Rate Interest Determination
Date.
BOOK-ENTRY NOTES
The Notes may be issued in whole or in part in the form of one or more fully-
registered Notes (each, a "Book-Entry Note") which will be deposited with, or
on behalf of, the Depositary and registered in the name of the Depositary's
nominee. Except as set forth below, a Book-Entry Note may not be transferred
except as a whole 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 by the Depositary or any nominee to a successor of the Depositary
or a nominee of such successor.
The Depositary has advised the Issuer and the Agents as follows: it 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 Securities Exchange Act of
1934. The Depositary holds securities that its participants
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("Participants") deposit with the Depositary. The Depositary 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. "Direct Participants" include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations. The Depositary 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 Depositary's system is also available to others such as securities
brokers and dealers, banks and trust companies that clear through or maintain a
custodial relationship with a Direct Participant, either directly or indirectly
("Indirect Participants"). The Rules applicable to the Depositary and its
participants are on file with the Securities and Exchange Commission.
Purchase of interests in the Book-Entry Notes under the Depositary's system
must be made by or through Direct Participants, which will receive a credit for
such interests on the Depositary's records. The ownership interest of each
actual purchaser of interests in the Book-Entry Notes ("Beneficial Owner") is
in turn to be recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from the Depositary of
their purchase, 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 or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Book-Entry Notes 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
Book-Entry Notes, except as described below.
To facilitate subsequent transfers, all Book-Entry Notes deposited by
Participants with the Depositary are registered in the name of the Depositary's
partnership nominee, Cede & Co. The deposit of Book-Entry Notes with the
Depositary and their registration in the name of Cede & Co. affect no change in
beneficial ownership. The Depositary has no knowledge of the actual Beneficial
Owners of the interests in the Book-Entry Notes; the Depositary's records
reflect only the identity of the Direct Participants to whose accounts
interests in the Book-Entry Notes are credited, which may or may not be the
Beneficial Owners. The Participants will remain responsible for keeping account
of their holdings on behalf of their customers.
Conveyance of notices and other communications by the Depositary to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangement among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all the interests
in the Book-Entry Notes are being redeemed, the Depositary's practice is to
determine by lot the amount of the interest of each Direct Participant in such
Book-Entry Note to be redeemed.
Neither the Depositary nor Cede & Co. will consent or vote with respect to
the Book-Entry Notes. Under its usual procedures, the Depositary mails an
Omnibus Proxy to the issuer 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 interests in the Book-Entry Notes are credited
on the record date (identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Book-Entry Notes will be made to the
Depositary. The Depositary's practice is to credit Direct Participants'
accounts on the payment date in accordance with their respective holdings shown
on the Depositary's records unless the Depositary has reason to believe that it
will not receive payment on the payment date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts of customers in
bearer form or registered in "street name," and will be the responsibility of
such Participant and not of the Depositary, the related Trustee, the Issuer or
any paying agent or the Securities Registrar,
S-12
<PAGE>
subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of principal and interest to the Depositary is the
responsibility of the Issuer or its paying agent, disbursement of such payments
to Direct and Indirect Participants shall be the responsibility of the
Depositary, and disbursement of such payments to the Beneficial Owners shall be
the responsibility of Direct and Indirect Participants.
The Depositary may discontinue providing its services as depository with
respect to the Notes at any time by giving reasonable notice to the Issuer or
its paying agent. The Issuer may decide to discontinue use of the system of
book-entry transfers through the Depositary (or a successor depository).
Book-Entry Notes are exchangeable for certificated Notes in definitive form
of like tenor as such Book-Entry Notes if (i) the Depositary for such Book-
Entry Notes notifies the Issuer that it is unwilling or unable to continue as
Depositary for such Book-Entry Notes or if at any time such Depositary ceases
to be a clearing agency registered under the Securities Exchange Act of 1934,
as amended, and, in either case, a successor depositary is not appointed by the
Issuer within 90 days, (ii) the Issuer in its discretion at any time determines
not to have all of the Notes of such series represented by one or more Book-
Entry Notes and notifies the applicable Trustee thereof, or (iii) an Event of
Default has occurred and is continuing with respect to the Notes of such
series. Any Book-Entry Note that is exchangeable pursuant to the preceding
sentence is exchangeable for certificated Notes issuable in authorized
denominations and registered in such names as the Depositary holding such Book-
Entry Notes shall direct. Subject to the foregoing, a Book-Entry Note is not
exchangeable, except for a Book-Entry Note or Book-Entry Notes of the same
aggregate denominations to be registered in the name of such Depositary or its
nominee or in the name of a successor of such Depositary or a nominee of such
successor.
The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that the Issuer
believes to be reliable, but the Issuer takes no responsibility for the
accuracy thereof.
GUARANTEES
The Senior Notes will be unconditionally guaranteed (the "Senior Guarantees")
by CoreStates Financial Corp (previously defined as the Guarantor) as to
payment of principal, premium if any, and interest when and as the same shall
become due and payable, whether at maturity or upon redemption, repayment or
otherwise. The Senior Guarantees will rank pari passu with all other unsecured
and unsubordinated obligations of the Guarantor. At March 31, 1994, $1.7
billion of Senior Guarantees were outstanding. All outstanding Senior
Guarantees ranked pari passu with all other unsecured and unsubordinated
obligations of the Guarantor.
The Subordinated Notes will be unconditionally guaranteed (the "Subordinated
Guarantees" and, together with the Senior Guarantees, the "Guarantees") by the
Guarantor, on a subordinated basis, as to payment of principal, premium, if
any, and interest when and as the same shall become due and payable, whether at
maturity or upon redemption, repayment or otherwise. The Subordinated
Guarantees will be unsecured and will be subordinated as set forth under
"Guarantees" in the accompanying Prospectus. Prior to the execution of the
First Supplemental Indenture, the Guarantor issued guarantees subordinated to a
more narrowly defined category of Senior Guarantees. At March 31, 1994, $250
million of such obligations were outstanding.
The obligations of the Guarantor under the Guarantees will be unconditional
regardless of the enforceability of the applicable Notes or the related
Indenture and will not be discharged until all obligations contained in such
Notes and the related Indenture are satisfied. Holders of the Notes may proceed
directly against the Guarantor in the event of a default under the applicable
Notes without first proceeding against the Issuer.
MULTI-CURRENCY NOTES AND INDEXED NOTES
If any Note is not to be denominated in U.S. dollars, certain provisions with
respect thereto will be set forth in the applicable Pricing Supplement which
will specify the currency or currencies, including composite
S-13
<PAGE>
currencies such as the European Currency Unit, in which the principal, premium,
if any, and interest with respect to such Note are to be paid (the "Specified
Currency"), along with any other terms relating to the non-U.S. dollar
denomination.
The Notes also may be issued with the principal amount payable at maturity to
be determined with reference to the exchange rate of a Specified Currency
relative to an indexed currency (the "Indexed Currency") or other index, each
as set forth in the applicable Pricing Supplement. Holders of such Notes may
receive a principal amount on the Maturity Date that is greater than or less
than the face amount of the Note depending upon the relative value at maturity
of the Specified Currency compared to the Indexed Currency or as otherwise set
forth in the applicable Pricing Supplement. Information as to the method for
determining the principal amount payable on the Maturity Date and certain
additional risks and tax considerations associated with investment in such
Notes will be set forth in the applicable Pricing Supplement.
OTHER PROVISIONS; ADDENDA
Any provisions with respect to the determination of a Base Rate, the
specification of Base Rates, calculation of the interest rate applicable to a
Floating Rate Note, its Interest Payment Dates or any other matter relating
thereto may be modified by the terms as specified under "Other Provisions" on
the face thereof or in an Addendum relating thereto, if so specified on the
face thereof and in the applicable Pricing Supplement.
BEARER NOTES
The Issuer also may offer from time to time Notes in bearer form ("Bearer
Notes") outside the United States at varying prices and terms. Such offerings
of Bearer Notes may be separate from, or simultaneous with, offerings of Notes
in the United States. The Bearer Notes are not offered by this Prospectus
Supplement and the accompanying Prospectus and may not be purchased by U.S.
persons other than foreign branches of certain U.S. financial institutions.
PLAN OF DISTRIBUTION
The Notes are being offered on a continuous basis for sale by the Issuer
through the Agents, each of which has agreed to use its reasonable best efforts
to solicit purchasers of the Notes. The Issuer will pay the applicable Agent a
commission which, depending on the maturity of the Notes, will range from .125%
to .750% (or, in the case of Notes with a stated maturity in excess of 30
years, such commission as shall be agreed upon between the Issuer and the
applicable Agent at the time of sale), of the principal amount of any Note sold
through such Agent. The Issuer may also sell Notes to an Agent, as principal,
at a discount from the principal amount thereof, and such Agent may later
resell such Notes to investors and other purchasers at varying prices related
to prevailing market prices at the time of resale as determined by such Agent
or, if so agreed, on a fixed public offering price basis. The Issuer may also
sell Notes directly to investors on its own behalf in those jurisdictions where
it is authorized to do so.
In addition, the Agents may offer the Notes they have purchased as principal
to other dealers. The Agents may sell Notes to any dealer at a discount and,
unless otherwise specified in the applicable Pricing Supplement, such discount
allowed to any dealer will not be in excess of the discount to be received by
such Agent from the Issuer. Unless otherwise indicated in the applicable
Pricing Supplement, any Note sold to an Agent as principal will be purchased by
such Agent at a price equal to 100% of the principal amount thereof less a
percentage equal to the commission applicable to any agency sale of a Note of
identical maturity, and may be resold by the Agent to investors and other
purchasers as described above. After the initial public offering of Notes to be
resold to investors and other purchasers, the public offering price (in the
case of fixed price public offering), concession and discount may be changed.
The Issuer reserves the right to withdraw, cancel or modify the offer made
hereby without notice and may reject orders in whole or in part whether placed
directly with the Issuer or through an Agent. Each
S-14
<PAGE>
Agent will have the right, in its discretion reasonably exercised, to reject
any offer to purchase Notes received by it, in whole or in part.
Unless otherwise provided in a Pricing Supplement, payment of the purchase
price of the Notes will be required to be made in immediately available funds
in The City of New York on the date of settlement.
The Issuer and the Guarantor have agreed, jointly and severally, to indemnify
the Agents against and to make contributions relating to certain liabilities,
including liabilities under the Securities Act of 1933, as amended. The Agents
may be deemed to be "underwriters" within the meaning of such Act. The Issuer
and the Guarantor have also agreed to reimburse the Agents for certain
expenses. The Agents and certain of their affiliates have engaged and may in
the future engage in investment banking and/or commercial banking with the
Issuer or the Guarantor in the ordinary course of business.
The Agents may from time to time purchase and sell Notes in the secondary
market, but they are not obligated to do so, and there can be no assurance that
there will be a secondary market for the Notes or liquidity in the secondary
market if one develops. From time to time, the Agents may make a market in the
Notes.
S-15
<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
PRELIMINARY PROSPECTUS DATED JUNE 9, 1994
PROSPECTUS [LOGO OF CORESTATES APPEARS HERE]
CORESTATES FINANCIAL CORP
COMMON STOCK, PREFERRED STOCK AND PREFERRED STOCK WARRANTS
CORESTATES CAPITAL CORP
(WHOLLY-OWNED SUBSIDIARY OF CORESTATES FINANCIAL CORP)
DEBT SECURITIES, UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL,
PREMIUM, IF ANY, AND INTEREST, IF ANY, BY CORESTATES FINANCIAL CORP AND
DEBT WARRANTS
-----------
CoreStates Financial Corp ("CoreStates") may offer from time to time shares
of its common stock (the "Common Stock"), par value $1.00 per share or shares
of its preferred stock (the "Preferred Stock") including, at its option,
depositary shares ("Depositary Shares") evidenced by depositary receipts
("Depositary Receipts") each representing a fractional interest in such
Preferred Stock and CoreStates Capital Corp ("CoreStates Capital") may offer
from time to time its debt securities (the "Debt Securities") which will be
unconditionally guaranteed as to payment of principal, premium, if any, and
interest, if any, by CoreStates, having an aggregate public offering price of
$1,000,000,000 on terms and conditions to be determined at the time of sale.
CoreStates Capital may issue warrants to purchase Debt Securities (all such
warrants being collectively referred to herein as the "Securities Warrants").
The Debt Securities, Common Stock, Preferred Stock and Securities Warrants
(collectively, the "Offered Securities") may be offered separately or together,
in separate series, in amounts and at prices and terms to be set forth in an
accompanying Prospectus Supplement ("Prospectus Supplement"). The issuer, the
specific title and, where applicable, the specific designation, priority,
aggregate principal amount, liquidation preference, authorized denominations,
maturity, interest or dividend rate or rates, interest or dividend payment
dates, any sinking fund provisions, any conversion provisions and any other
provisions or terms in connection with the offering and sale of such Offered
Securities will be set forth in any accompanying Prospectus Supplement. As used
herein, the term "Issuer" refers to CoreStates as issuer of the Common Stock,
the Preferred Stock and the guarantees referred to below and CoreStates Capital
as issuer of the Debt Securities and Securities Warrants.
The Debt Securities may be senior debt securities (the "Senior Debt
Securities") or subordinated debt securities (the "Subordinated Debt
Securities") and, in the case of Subordinated Debt Securities, may be
convertible into or exchangeable for Capital Securities of CoreStates (as
defined herein). The Senior Debt Securities will rank equally with all other
unsubordinated and unsecured indebtedness of CoreStates Capital. The
Subordinated Debt Securities will be subordinated to all existing and future
Senior CoreStates Capital Indebtedness, as defined. UNLESS OTHERWISE SPECIFIED
IN THE APPLICABLE PROSPECTUS SUPPLEMENT, THE SUBORDINATED DEBT SECURITIES WILL
BE SUBJECT TO ACCELERATION OF MATURITY ONLY IN THE CASE OF CERTAIN EVENTS OF
BANKRUPTCY, INSOLVENCY OR REORGANIZATION. The Debt Securities will be
unconditionally guaranteed as to payment of principal, premium, if any, and
interest, if any, by CoreStates. The holders of Subordinated Debt Securities of
any series may be obligated at any time or at maturity to exchange such
Subordinated Debt Securities for Capital Securities. See "Description of Debt
Securities".
Debt Securities of a series may be issuable in individual registered form
without coupons, in the form of one or more global securities, or in bearer
form with or without coupons. Such bearer securities will be offered only to
non-United States persons and to offices located outside of the United States
of certain United States financial institutions.
-----------
The Offered Securities may be sold by CoreStates or CoreStates Capital, as
the case may be, in an offering within the United States ("United States
Offering") or outside the United States ("International Offering"). The Offered
Securities may be offered and sold through one or more underwriters, directly
by CoreStates or CoreStates Capital, as the case may be, or through dealers or
agents. The Prospectus Supplement will also set forth with respect to the sale
of the Offered Securities in respect of which this Prospectus is being
delivered the names of the underwriters, dealers or agents, if any, together
with the terms of offering. Any underwriters, dealers or agents participating
in the offering of Offered Securities may be deemed "underwriters" within the
meaning of the Securities Act of 1933, as amended (the "Securities Act").
CoreStates or CoreStates Capital, as the case may be, may also issue contracts
under which the counterparty may be required to purchase Debt Securities,
Common Stock, Preferred Stock, Depositary Shares or Securities Warrants. Such
contracts would be issued with the Debt Securities, Common Stock, Preferred
Stock, Depositary Shares and/or Securities Warrants in amounts, at prices and
on terms to be set forth in a Prospectus Supplement.
-----------
THE OFFERED SECURITIES WILL BE UNSECURED OBLIGATIONS OF CORESTATES OR
CORESTATES CAPITAL, AS THE CASE MAY BE, AND WILL NOT BE SAVINGS ACCOUNTS,
DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK OR NON-BANK SUBSIDIARY OF CORESTATES
OR CORESTATES CAPITAL, AS THE CASE MAY BE, AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE FUND OR ANY OTHER GOVERNMENT
AGENCY.
-----------
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 REPRESEN-TATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
-----------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF THE OFFERED SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
-----------
The date of this Prospectus is June , 1994.
<PAGE>
AVAILABLE INFORMATION
CoreStates is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Proxy statements, reports and other information
concerning CoreStates can be inspected and copied at the Commission's office at
450 5th Street, N.W., Washington, D.C. 20549 and the Commission's Regional
Offices in New York (Seven World Trade Center, 13th Floor, New York, New York
10048) and Chicago (500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511) and copies of such material can be obtained from the Public
Reference Section of the Commission at 450 5th Street, N.W., Washington, D.C.
20549, at prescribed rates. In addition, CoreStates Common Stock is listed for
trading on the New York Stock Exchange ("NYSE"), and such reports, proxy
statements & other information concerning CoreStates also should be available
for inspection at the offices of the NYSE at 20 Broad Street, New York, New
York 10005. This Prospectus does not contain all the information set forth in
the Registration Statement and Exhibits thereto which CoreStates has filed with
the Commission under the Securities Act of 1933, as amended (the "Act"), and to
which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are incorporated herein by reference the following documents of
CoreStates.
1. Annual Report on Form 10-K for the year ended December 31, 1993 (including
portions of its 1993 Annual Report to Shareholders incorporated by reference
therein), filed with the Commission pursuant to Section 13(a) of the Exchange
Act.
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 1994, filed
with the Commission pursuant to Section 13(a) of the Exchange Act.
3. Current Reports on Form 8-K dated January 19, March 7, March 16, 1994, as
amended, April 19, 1994, April 29, 1994, May 5, 1994 (which includes the
consolidated financial statements of CoreStates for the year ended December 31,
1993 restated to incorporate Constellation Bancorp which was acquired on March
16, 1994), May 19 1994 and June 8, 1994, filed with the Commission pursuant to
Section 13(a) of the Exchange Act.
4. The description of CoreStates Common Shares contained in CoreStates
Registration Statement on Form 8-A/A dated December 22, 1993.
All other documents filed with the Commission by CoreStates pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the termination of the offering of the Offered
Securities shall be deemed to be incorporated by reference into this
Prospectus. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
Any person receiving a copy of this Prospectus may obtain, without charge,
upon written or oral request, a copy of any of the documents incorporated by
reference herein, except for the exhibits to such documents unless such
exhibits are specifically incorporated by reference therein. Written requests
should be mailed to the Corporate Secretary, CoreStates Financial Corp, P.O.
Box 7618, F.C. 01-03-16-29, Philadelphia, Pennsylvania 19101-7618. Telephone
requests may be directed to (215) 973-3827.
CORESTATES FINANCIAL CORP
CoreStates is a registered bank holding company incorporated under the laws
of Pennsylvania with its executive offices at Centre Square West, 1500 Market
Street, Philadelphia, Pennsylvania 19102 (telephone
2
<PAGE>
number (215) 973-3827). At March 31, 1994, CoreStates had total consolidated
assets of approximately $25.7 billion and shareholders' equity of
approximately $2.0 billion and, based on the latest available rankings of bank
holding companies, was believed to be the 26th largest bank holding company in
the United States at such date.
The principal banking subsidiaries of CoreStates are: CoreStates Bank, N.A.
("CoreStates Bank"), a national banking association with executive offices
located in Philadelphia, Pennsylvania; New Jersey National Bank ("NJNB"), a
national banking association with its executive offices located in Pennington,
New Jersey; and CoreStates Bank of Delaware N.A. ("CBD"), a national banking
association with its sole office located in New Castle County, Delaware
("Banking Subsidiaries"). Through CoreStates Bank, NJNB and CBD, CoreStates is
engaged in the business of providing wholesale banking services, consumer
financial services, including retail banking, trust and investment management
services and electronic payment services. At December 31, 1993, CoreStates
Bank had total assets of $17.8 billion and total deposits of $13.4 billion;
NJNB had total assets of $4.5 billion and total deposits of $4 billion. Based
on commercial bank deposits at December 31, 1993, CoreStates Bank and NJNB
ranked 26th and 115th, respectively in the United States. Other subsidiaries
of CoreStates currently engage in factoring and commercial financing,
investment advisory, discount brokerage and leasing services.
CoreStates acquired all of the outstanding common stock of Constellation
Bancorp on March 16, 1994 and on April 30, 1994 Constellation Bank, N.A. was
merged into NJNB. On November 19, 1993 CoreStates and Independence Bancorp,
Inc. ("Independence") entered into an Agreement and Plan of Merger pursuant to
which Independence will merge with and into CoreStates. Consummation of the
Independence transaction is subject to certain conditions including approval
by Independence shareholders and various regulatory agencies. On March 7, 1994
CoreStates and Germantown Savings Bank ("Germantown") entered into an
Agreement and Plan of Merger pursuant to which CoreStates will acquire
Germantown. Consummation of the Germantown transaction is subject to certain
conditions including approval by Germantown shareholders and various
regulatory agencies.
CORESTATES CAPITAL CORP
CoreStates Capital, a wholly-owned subsidiary of CoreStates, functions
primarily as a financing entity for CoreStates and its subsidiaries and
affiliates through the issuance of commercial paper and other debt guaranteed
by CoreStates. Financial data for CoreStates Capital and CoreStates are
combined for purposes of calculating the ratio of earnings to fixed charges
due to this limited function of CoreStates Capital and the unconditional
guarantees of all of CoreStates Capital's obligations by CoreStates. The
principal office of CoreStates Capital is located at 1500 Market Street,
Philadelphia, Pennsylvania 19102 (telephone (215) 973-4185).
CERTAIN LEGAL AND REGULATORY CONSIDERATIONS
CoreStates Capital and CoreStates are legal entities separate and distinct
from CoreStates Bank, NJNB and CBD. There are various legal limitations on the
extent to which CoreStates' bank subsidiaries can finance or otherwise supply
funds to CoreStates Capital, CoreStates and certain of its other affiliates.
Provisions of federal banking law restrict the amount of dividends that can
be paid to CoreStates by its bank subsidiaries. Under applicable federal law,
no dividends may be paid in an amount greater than "undivided profits then on
hand", after deduction therefrom of certain loan losses. In addition, for each
of CoreStates' banking subsidiaries, prior approval of the Comptroller is
required if dividends declared by a subsidiary bank in any calendar year will
exceed its net profits (as defined) for that year, combined with its retained
net profits for the preceding two calendar years, less any required transfers
to surplus or a fund for the retirement of preferred stock. Based on these
regulations, CoreStates' banking subsidiaries, without regulatory approval,
could declare dividends at March 31, 1994 of $176 million.
3
<PAGE>
The Comptroller has authority to prohibit payment of a dividend if such
payment constitutes, what, in the Comptroller's opinion, is an unsafe or
unsound practice. In addition, the ability of CoreStates and its bank
subsidiaries to pay dividends may be affected by the various minimum capital
requirements and the capital and non-capital standards established under the
Federal Deposit Insurance Corporation Improvement Act of 1991, enacted in
December 1991 ("FDICIA"), as described below. The rights of CoreStates, its
shareholders and its creditors to participate in any distribution of the assets
or earnings of its subsidiaries is further subject to the prior claims of
creditors of the respective subsidiaries.
According to Federal Reserve Board policy, CoreStates is expected to act as a
source of financial strength to each subsidiary bank and to commit resources to
support each subsidiary bank in circumstances in which it might not do so
absent such policy. In addition, any capital loans by CoreStates to any
subsidiary bank would be subordinated in right of payment to deposits and
certain other indebtedness of each subsidiary bank.
In addition, CoreStates' bank subsidiaries are subject to certain
restrictions imposed by Federal law on any extension of credit to, and certain
other transactions with CoreStates, CoreStates Capital and certain other non-
bank subsidiaries, on investments in stock or other securities thereof and on
the taking of such securities as collateral for loans. Among other things, the
aggregate of such loans made by each CoreStates bank subsidiary to CoreStates
or to any single non-bank subsidiary generally may not exceed 10% of the sum of
such bank's capital and surplus, as defined, and all loans by each bank
subsidiary to CoreStates and its non-bank subsidiaries are limited to 20% of
such bank's capital and surplus. Such loans must be secured by collateral with
a value between 100% and 130% of the loan amount, depending on the type of
collateral. The bank subsidiaries may extend credit to CoreStates and its non-
bank subsidiaries without regard to these restrictions to the extent such
extensions of credit are secured by specific kinds of collateral such as
obligations of or guaranteed by the U.S. Government or its agencies and certain
bank deposits.
The Federal Reserve Board has adopted minimum risk-based and leverage capital
guidelines for bank holding companies. Effective December 31, 1992, the minimum
required ratio of qualifying total capital to risk-weighted assets (including
certain off-balance sheet items, such as standby letters of credit) is 8%, of
which at least 4% must consist of common equity, retained earnings and
qualifying perpetual preferred stock, less certain intangibles ("Tier 1
Capital"). The remainder may consist of subordinated debt, qualifying preferred
stock and a limited amount of loan loss reserves. As of March 31, 1994,
CoreStates' total risk-based capital ratio was 13.1%, including 8.9% of Tier 1
capital (as defined in the guidelines as fully phased-in on December 31, 1992).
The minimum required leverage capital ratio (Tier 1 capital to average total
assets) is 3% for banking organizations that meet certain specified criteria,
including that they have the highest regulatory rating. All other banking
organizations are required to maintain a leverage ratio of 3% plus an
additional cushion of at least 100 to 200 basis points. The requirements also
provide that bank holding companies experiencing internal growth or making
acquisitions will be expected to maintain strong capital positions
substantially above the minimum supervisory levels without significant reliance
on intangible assets. As of March 31, 1994, CoreStates' leverage capital ratio
was 7.8%.
Each of CoreStates' subsidiary banks is subject to similar capital
requirements adopted by the Comptroller. As of March 31, 1994, the capital
ratios of CoreStates' subsidiary banks were as follows:
<TABLE>
<CAPTION>
REGULATORY CAPITAL
RATIOS
----------------------
TIER 1 TOTAL LEVERAGE
------ ----- --------
<S> <C> <C> <C>
CoreStates Bank, N.A..................................... 8.4% 10.9% 7.4%
New Jersey National Bank (1)............................. 9.5 11.6 6.6
CoreStates Bank of Delaware, N.A......................... 12.2 13.5 11.9
</TABLE>
- --------
(1) Constellation Bank was merged into New Jersey National Bank on April 29,
1994. Pro forma combined regulatory capital ratios at March 31, 1994 were
8.9%, 10.8% and 6.2% for Tier 1 capital, total capital and leverage ratios,
respectively.
4
<PAGE>
The federal banking agencies continue to indicate their desire to raise
capital requirements applicable to banking organizations, and recently proposed
amendments to their risk-based capital regulations to provide for the
consideration of interest rate risk in the determination of a bank's minimum
capital requirements. The proposed amendments are intended to require that
banks effectively measure and monitor their interest rate risk and that they
maintain capital adequate for that risk. Under the proposed amendments, banks
with interest rate risk in excess of a defined supervisory threshold would be
required to maintain additional capital beyond that generally required. In
addition, the federal banking agencies recently proposed amendments to their
risk-based capital standards to provide for the consideration of credit risk
and certain risks arising from nontraditional activities, as well as a bank's
ability to manage these risks, as important factors in assessing a bank's
overall capital adequacy.
FDICIA modifies certain provisions of the Federal Deposit Insurance Act and
makes revisions to several other banking statutes. In general, FDICIA subjects
banks to significantly increased regulation and supervision, and requires the
federal banking agencies to take "prompt corrective action" with respect to
banks which do not meet minimum capital requirements. Among other things,
FDICIA requires a bank which is "undercapitalized" (as defined in the
applicable regulations) to submit a capital restoration plan for improving its
capital. A holding company of a bank must guarantee that the bank will meet its
capital plan, subject to certain limitations. If such a guarantee were deemed
to be a commitment to maintain capital under the U.S. federal Bankruptcy Code,
a claim under such guarantee in a bankruptcy proceeding involving the holding
company would be entitled to a priority over third party creditors of the
holding company. In addition, FDICIA prohibits a bank from making a capital
distribution (including payment of a dividend) to its holding company or
otherwise if it would thereafter be undercapitalization. Furthermore, under
certain circumstances, a holding company of a bank which fails to meet certain
of its capital requirements may be prohibited from making any capital
distributions to its shareholders or otherwise. Critically undercapitalized
banks (which are defined to include banks which still have a positive net
worth) are generally subject to the mandatory appointment of a receiver or
conservator. All of CoreStates' subsidiaries meet current regulatory capital
requirements.
The Financial Institution Reform, Recovery, and Enforcement Act ("FIRREA")
enacted in August 1989 provides among other things for cross-guarantees of the
liabilities of insured depository institutions pursuant to which any bank or
savings association subsidiary of a holding company may be required to
reimburse the FDIC for any loss or anticipated loss to the FDIC that arises
from a default of any of such holding company's other subsidiary banks or
savings associations or assistance provided to such an institution in danger of
default. The banking subsidiaries of CoreStates are subject to such cross-
guarantee.
The deposits of each of the subsidiary banks are insured up to applicable
limits by the FDIC. Accordingly, the subsidiary banks are subject to deposit
insurance assessments to maintain the Bank Insurance Fund (the "BIF") of the
FDIC. The FDIC recently established a risk related premium assessment system,
with assessment rates ranging from .23% of domestic deposits (the same rate as
under the previous flat-rate assessment system) for those banks deemed to pose
the least risk to the insurance fund, to .31% for those banks deemed to pose
the greatest risk (with intermediate rates of .26%, .29% and .30%). All
CoreStates' subsidiary banks have been notified by the FDIC that, for the
semiannual assessment period beginning January 1, 1994, each is subject to an
assessment rate of .23%.
Effective August 10, 1993, the Federal Deposit Insurance Act was amended to
provide that, in the liquidation or other resolution by any receiver of a bank
insured by the FDIC, the claims of depositors have preference over the general
claims of other creditors. Accordingly, in the event of the liquidation or
other resolution of a banking subsidiary of CoreStates, the claims of
CoreStates as a creditor of such banking subsidiary would be subordinate to the
claims of depositors of such banking subsidiary, even if the claims of
CoreStates were not by their terms so subordinated.
5
<PAGE>
USE OF PROCEEDS
Unless otherwise provided in the Prospectus Supplement, the net proceeds from
the sale of the Offered Securities will be used for general corporate purposes,
including extensions of credit to subsidiaries and affiliates of CoreStates,
including its bank subsidiaries, which will use the proceeds for general
corporate purposes, possibly including acquisitions, and repayment at maturity
of commercial paper. The precise amounts and timing of the application of
proceeds will depend upon funding requirements of CoreStates and its
subsidiaries and affiliates and the amount of Offered Securities offered from
time to time pursuant to this Prospectus. If CoreStates elects at the time of
issuance of Offered Securities to make different or more specific use of
proceeds other than as set forth herein, such use will be described in the
Prospectus Supplement.
In view of its anticipated requirements, CoreStates and CoreStates Capital
expect to engage, on a recurring basis, in additional private or public
financings of a character and amount to be determined as the need arises.
CoreStates is continually evaluating acquisition opportunities and frequently
conducts due diligence activities in connection with possible acquisitions both
on an assisted and unassisted basis. Acquisitions that may be under
consideration at any time include, without limitation, acquisitions of banking
organizations and thrift or savings-type associations or their assets or
liabilities or acquisitions of other financial service companies or their
assets or liabilities.
6
<PAGE>
CORESTATES FINANCIAL CORP
CONSOLIDATED SELECTED HISTORICAL FINANCIAL INFORMATION
(UNAUDITED)
The following unaudited consolidated selected historical financial
information for each of the five years in the period ended December 31, 1993
and the three-month periods ended March 31, 1994 and 1993 is derived from
financial statements previously filed with the Securities and Exchange
Commission and incorporated by reference in this Prospectus. The unaudited
consolidated selected historical financial information is qualified in its
entirety by and should be read in conjunction with those consolidated financial
statements and related footnotes thereto. The unaudited consolidated selected
historical financial information reflects the restatement for the March 16,
1994 acquisition of Constellation Bancorp ("Constellation") under the pooling
of interests method of accounting. The consolidated selected historical
financial information for the three months ended March 31, 1994 and 1993
reflects, in the opinion of management, all adjustments (comprising only of
normal recurring accruals) necessary to present fairly the information for such
interim periods. Results for the interim periods are not necessarily indicative
of results for the full year or any other period.
7
<PAGE>
SELECTED HISTORICAL FINANCIAL INFORMATION OF CORESTATES FINANCIAL CORP
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
-------------------- ----------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
--------- --------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED SUMMARY OF
INCOME:
Interest income........ $ 407,219 $ 413,478 $1,664,769 $1,762,751 $2,254,473 $2,549,267 $2,608,651
Interest expense....... 105,695 118,317 446,115 619,401 1,086,605 1,382,363 1,477,368
Net interest income.... 301,524 295,161 1,218,654 1,143,350 1,167,868 1,166,904 1,131,283
Provision for losses on
loans(1).............. 25,000 27,500 230,000 129,300 272,596 424,644 322,166
Securities gains (loss-
es)................... 6,911 3,022 15,748 15,085 (14,175) 2,208 161
Income before
cumulative effect of a
change in accounting
principle............. 91,912 75,050 211,750 261,022 162,626 88,631 142,892
Cumulative effect of a
change in accounting
principle(2)(8)....... -- (13,010) (13,010) (84,946) -- -- --
Net income............. 91,912 62,040 198,740 176,076 162,626 88,631 142,892
Dividends on preferred
stock(3).............. -- -- -- -- -- 1,662 20,973
Net income attributable
to common shares...... 91,912 62,040 198,740 176,076 162,626 86,969 121,919
PER COMMON SHARE(4):
Income before
cumulative effect of a
change in accounting
principle(2)(8)....... 0.72 0.58 1.65 2.19 1.39 0.74 1.03
Net income............. 0.72 0.48 1.55 1.48 1.39 0.74 1.03
Cash dividends de-
clared(5)............. 0.30 0.27 1.14 1.02 0.97 0.96 0.87
Book value............. 15.88 15.00 15.79 14.76 14.65 13.99 14.41
<CAPTION>
($ IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE
SHEET
(AVERAGE BALANCES):
Total assets........... $ 25,222 $ 25,017 $ 25,171 $ 24,931 $ 26,036 $ 26,686 $ 26,660
Loans.................. 17,757 16,751 17,315 17,152 18,869 20,088 19,063
Allowance for possible
loan losses........... 542 418 422 433 486 335 382
Deposits............... 18,436 18,794 18,550 19,073 19,414 18,908 18,857
Long-term debt......... 1,476 1,267 1,333 1,227 1,094 754 741
Common shareholders'
equity(7)............. 2,104 1,905 1,987 1,742 1,668 1,770 1,764
Total shareholders' eq-
uity(3)............... 2,104 1,905 1,987 1,742 1,668 1,787 1,864
AVERAGE COMMON SHARES
OUTSTANDING (4)(7)
(in thousands)......... 128,089 128,300 128,570 119,350 117,016 117,293 118,128
PERIOD-END COMMON SHARES
OUTSTANDING(4)(7) (in
thousands)............. 127,038 128,509 128,784 128,055 117,577 116,695 117,814
SELECTED RATIOS:
Return on average total
assets(6)............. 1.48% 1.22% 0.84% 1.05% 0.62% 0.33% 0.46%
Return on average
common shareholders'
equity(6)............. 17.72 15.98 10.66 14.98 9.75 4.91 6.91
Return on average total
shareholders'
equity(6)............. 17.72 15.98 10.66 14.98 9.75 4.96 7.67
Average shareholders'
equity to average
assets................ 8.34 7.61 7.89 6.99 6.41 6.70 6.99
Allowance for possible
loan losses to loans
(period-end).......... 2.87 2.42 2.98 2.37 2.52 2.46 2.69
Non-performing assets
to total loans plus
other real estate
owned (period-end).... 2.49 3.11 2.06 3.55 4.24 3.21 2.04
Ratio of earnings from
continuing operations
before income taxes to
fixed charges of
continuing operations:
Combined CoreStates
(parent company) and
CoreStates Capital(9). 2.71 6.50 3.14 2.74 2.68 1.71 1.54
Consolidated(10):
Excluding interest on
deposits.............. 4.77 4.16 3.12 3.62 1.95 1.23 1.31
Including interest on
deposits.............. 2.28 1.91 1.66 1.61 1.23 1.07 1.09
</TABLE>
See footnotes to selected financial information on pages 9 and 10.
8
<PAGE>
FOOTNOTES TO SELECTED FINANCIAL INFORMATION
(UNAUDITED)
(1) Included in the provision for losses on loans in 1989 was an addition to
the allowance for possible losses on loans to less developed countries
("LDC") of $195 million. The provision for losses on loans in 1990 included
a $220 million provision in the fourth quarter of that year made in
response to declining real estate values and deteriorating economic
conditions. The provision for loan losses in 1993 included $120 million
recorded in connection with a change in strategic direction concerning the
workout of Constellation's problem assets and to conform Constellation's
loan, accrual and reserves policies to those of CoreStates.
(2) Effective January 1, 1992, CoreStates adopted Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions" ("FAS 106"). FAS 106 requires that employers
accrue the costs associated with providing postretirement benefits during
the active service periods of employees, rather than the previously
accepted accounting practice of recognizing these costs on a pay-as-you-go
basis. As permitted under FAS 106, CoreStates elected to recognize
immediately a one-time, non-cash charge equal to the January 1, 1992
transitional liability of $128.7 million, $84.9 million after-tax or $0.71
per share, as the cumulative effect of a change in accounting principle.
(3) During the third quarter of 1989, First Pennsylvania Corporation ("FPC"),
acquired by CoreStates on March 5, 1990, paid to Marine Midland Banks, Inc.
("Marine Midland"), the sole holder of FPC's Series D Preferred Stock, a
$12.7 million special dividend. This special dividend was paid in
connection with the termination of a previous merger agreement between FPC
and Marine Midland. On March 5, 1990, all outstanding Series D Preferred
Shares were redeemed at their $100 per share stated value plus accrued
regular dividends.
(4) Restated to reflect the impact of CoreStates' 100% stock dividend declared
on August 17, 1993 and paid on October 15, 1993 to shareholders of record
on September 15, 1993 (the "Stock Dividend"). CoreStates earnings per
common share for three months ended March 31, 1994 and 1993 and the five
years ended December 31, 1993, were based on weighted average common shares
outstanding as dilution from potentially dilutive common stock equivalents
was less than 3% for each period.
(5) Cash dividends declared per share for the respective periods prior to
CoreStates' acquisition of FPC, First Peoples Corporation (on September 3,
1992) and Constellation (on March 16, 1994) assume that CoreStates would
have declared cash dividends per share equal to the cash dividends per
share actually declared by CoreStates.
(6) Return on average total assets and return on average common shareholders'
equity are calculated on income from continuing operations, net of income
taxes, after total preferred dividends. Return on average total
shareholders' equity is calculated on income from continuing operations,
net of income taxes.
(7) On December 18, 1992, Constellation completed the sale of 13.3 million
Constellation common shares (5.5 million shares of CoreStates Common Stock)
in a rights offering to existing shareholders and the sale of 5.5 million
additional Constellation common shares (2.3 million shares of CoreStates
Common Stock) to various standby purchasers for an aggregate net increase
in shareholders' equity of $67.5 million.
(8) Effective January 1, 1993, CoreStates adopted Statement of Financial
Accounting Standards No. 112, "Employers' Accounting for Postemployment
Benefits" ("FAS 112"). FAS 112 established the accounting requirements for
benefits provided to former or inactive employees after employment but
before retirement. FAS 112 requires that employers accrue the costs
associated with providing benefits, such as salary and benefit continuation
under disability plans, when payment of the benefits is probable and the
amount of the obligation can be reasonably estimated. CoreStates recognized
the January 1, 1993 FAS 112 transitional liability of $20.0 million, $13.0
million after-tax or $0.10 per share, as the cumulative effect of a change
in accounting principle.
9
<PAGE>
(9) For purposes of computing this ratio for CoreStates (parent only), earnings
represent income from continuing operations before extraordinary items,
income taxes and undistributed income of subsidiaries, plus fixed charges
excluding preferred stock dividends. Fixed charges represent interest
expense, one-third (the proportion deemed representative of the interest
factor) of rental expense, net of income from subleases, amortization of
debt issuance costs and preferred stock dividends. Because the ratio
excludes from earnings the undistributed net income of subsidiaries, the
ratio varies with the payments of dividends by such subsidiaries.
(10) For purposes of computing these ratios, earnings represent consolidated
income from continuing operations before extraordinary items and income
taxes, plus consolidated fixed charges excluding preferred dividends.
Fixed charges represent interest (excluding interest on deposits in the
first ratio and including interest and deposits in the second ratio), one-
third (the proportion deemed representative of the interest factor) of
rental expense, net of income from subleases, amortization of debt
issuance costs and preferred stock dividends.
10
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following description encompasses all the material terms and provisions
of the Debt Securities.
The Debt Securities will constitute either Senior Debt Securities or
Subordinated Debt Securities of CoreStates Capital which will be
unconditionally guaranteed as to payment of principal, premium, if any, and
interest, if any, by CoreStates. The Senior Debt Securities will be issued
under an indenture dated as of December 1, 1990 (the "Senior Indenture"),
between CoreStates, CoreStates Capital and NationsBank of Georgia, National
Association, as senior trustee and successor to Wachovia Bank of Georgia, N.A.
(formerly the First National Bank of Atlanta, N.A.) (the "Senior Trustee"). The
Subordinated Debt Securities will be issued under an indenture between
CoreStates, CoreStates Capital and Bank One, Columbus, N.A., dated as of
December 1, 1990, as amended by a First Supplemental Indenture dated as of
March 1, 1993 and as further amended by a Second Supplemental Indenture dated
as of June 1, 1994 (together the "Subordinated Indenture"), between CoreStates,
CoreStates Capital, Bank One, Columbus, N.A. and Citibank, N.A., as
subordinated Trustee (the "Subordinated Trustee"). The Senior Indenture and
Subordinated Indenture are collectively referred to herein as the "Indentures".
A copy of each of the Indentures has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. The following
description of Debt Securities relates to Debt Securities to be issued in
connection with either a United States Offering or an International Offering,
unless otherwise specified in the Prospectus Supplement relating thereto.
The Trustee for a particular series of Debt Securities will be identified in
the Prospectus Supplement for such series, and all references to "Trustee"
shall be deemed to mean the Trustee so identified in such Prospectus
Supplement. No Trustee shall be responsible for the acts, obligations,
liabilities or responsibilities of any other Trustee. The following summaries
of certain provisions of the Indentures do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, all the
provisions of the Indentures, including the definitions therein of certain
terms. Wherever particular Sections or defined terms of the Indentures are
referred to, it is intended that such Sections or definitions shall be
incorporated herein by reference. The following summaries set forth certain
general terms and provisions of the Debt Securities to which any Prospectus
Supplement may relate. The particular terms of the Debt Securities offered by
any Prospectus Supplement, and the extent, if any, to which such general
provisions may apply to the Debt Securities so offered, will be described in
the Prospectus Supplement relating to such Offered Securities. Unless otherwise
indicated, Section references contained herein refer to both the Senior
Indenture and the Subordinated Indenture.
Because CoreStates is a holding company, its rights and the rights of its
creditors, including the Holders of the Debt Securities offered hereby, to
participate in the assets of any subsidiary upon the latter's liquidation or
recapitalization will be subject to the prior claims of the subsidiary's
creditors except to the extent that CoreStates may itself be a creditor with
recognized claims against the subsidiary.
GENERAL
The Debt Securities to be offered by this Prospectus are limited to the
amounts described on the cover of this Prospectus. The Indentures, however, do
not limit the aggregate principal amount of Debt Securities which may issued
thereunder and provide that Debt Securities may be issued from time to time in
one or more series. The Debt Securities will be unsecured obligations of the
Issuer. Neither the Indentures nor the Debt Securities will limit or otherwise
restrict the amount of other indebtedness which may be incurred or other
securities which may be issued by the Issuer or any of its subsidiaries. The
Senior Debt Securities and the related Guarantees will rank on a parity with
all other unsecured unsubordinated indebtedness of the Issuer while the
indebtedness represented by the Subordinated Debt Securities and the related
Guarantees will be subordinated as described below under "Certain Terms
Relating to Subordinated Debt Securities".
Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities offered thereby for the following terms, where
applicable, of the Debt Securities in respect of which this Prospectus is being
delivered: (1) the title of the Debt Securities; (2) the limit, if any, on the
aggregate
11
<PAGE>
principal amount or initial public offering price of the Debt Securities; (3)
the priority of payment of such Debt Securities; (4) the price or prices (which
may be expressed as a percentage of the aggregate principal amount thereof) at
which the Debt Securities will be issued; (5) the date or dates on which the
Debt Securities will mature; (6) the rate or rates (which may be fixed or
variable) per annum at which the Debt Securities will bear interest, if any,
and the method of determining the same; (7) the date from which such interest,
if any, on the Debt Securities will accrue, the date or dates on which such
interest, if any, will be payable, the dates on which payment of such interest,
if any, will commence and the Regular Record Dates for such Interest Payment
Dates, if any; (8) the extent to which any of the Debt Securities will be
issuable in temporary or permanent global form and, if so, the identity of the
depositary for such global Offered Security, or the manner in which any
interest payable on a temporary or permanent global Debt Security will be paid;
(9) the dates, if any, on which, and the price or prices at which, the Debt
Securities will, pursuant to any mandatory sinking fund provisions, or may,
pursuant to any optional sinking fund or to any purchase fund provisions, be
redeemed by the Issuer, and the other detailed terms and provisions of such
sinking and/or purchase funds; (10) the date, if any, after which, and the
price or prices at which, the Debt Securities may, pursuant to any optional
redemption provisions, be redeemed at the option of the Issuer or the Holder
thereof and the other detailed terms and provisions of such optional
redemption; (11) the denomination or denominations in which such Debt
Securities are authorized to be issued; (12) whether any of the Debt Securities
will be issued in bearer form and, if so, any limitations on issuance of such
bearer Debt Securities (including exchange for registered Debt Securities of
the same series); (13) information with respect to book-entry procedures;
(14) whether any of the Debt Securities will be issued as Original Issue
Discount Securities; (15) each office or agency where, subject to the terms of
the applicable Indenture, such Debt Securities may be presented for
registration of transfer or exchange; (16) any other terms of the series (which
will not be inconsistent with the provisions of the applicable Indenture); (17)
the currencies or currency units in which such Debt Securities are issued and
in which the principal of, interest on and additional amounts, if any, in
respect of such Debt Securities will be payable; (18) whether the amount of
payments of principal of or interest on such Debt Securities may be determined
with reference to an index, formula or other method (which index, formula or
method may, but need not be, based on a currency, currencies, currency unit or
units or composite currency or currencies) and the manner in which such amounts
shall be determined; (19) whether the Issuer or a Holder may elect payment of
the principal of or interest on such Debt Securities in a currency, currencies,
currency unit or units or composite currency or currencies other than that in
which such Debt Securities are denominated or stated to be payable, the period
or periods within which, and the terms and conditions upon which, such election
may be made, and the time and manner of determining the exchange rate between
the coin or currency, currencies, currency unit or units or composite currency
or currencies in which such Debt Securities are denominated or stated to be
payable and the coin or currency, currencies, currency unit or units or
composite currency or currencies in which such Debt Securities are to be so
payable; (20) if other than the Trustee, the identity of the Security Registrar
and/or Paying Agent and the designation of the initial Exchange Rate Agent;
(21) if applicable, the defeasance of certain obligations by the Issuer
pertaining to Debt Securities of the series; (22) the Person to whom any
interest on any Registered Security of the series shall be payable, if other
than the Person in whose name that Debt Security (or one or more predecessor
Debt Securities) is registered at the close of business on the Regular Record
Date for such interest, the manner in which, or the Person to whom, any
interest on any Bearer Security of the series shall be payable, if otherwise
than upon presentation and surrender of the coupons appertaining thereto as
they severally mature, and the extent to which, or the manner in which, any
interest payable on a temporary global Debt Security on an Interest Payment
Date will be paid if other than in the manner provided in the related
Indenture; (23) if such Debt Securities are to be issued upon the exercise of
warrants, the time, manner and place for the Debt Securities to be
authenticated and delivered; (24) whether and under what circumstances the
Issuer will pay additional amounts as contemplated by Section 1104 of the
related Indenture (the term "interest", as used in this Prospectus, shall
include such additional amounts) on such Debt Securities to any Holder who is
not a United States person (including any modification to the definition of
such term as contained in the Indenture as originally executed) in respect of
any tax, assessment or governmental charge and, if so, whether the Issuer will
have the option to redeem such Debt Securities rather than pay such additional
amounts (and the terms of any such option); (25) any terms upon which any
Subordinated Debt Securities will be
12
<PAGE>
convertible into or exchangeable for Capital Securities (as defined below) of
CoreStates; (26) any other terms of such Debt Securities.
Neither Indenture limits the aggregate principal amount of Debt Securities
that may be issued thereunder or of any particular series of such Debt
Securities and both Indentures provide that, in addition to the Debt
Securities, additional Debt Securities may be issued thereunder from time to
time in one or more series (Section 301). All Debt Securities issued under each
Indenture will rank equally and ratably with any additional Debt Securities
issued under such Indenture.
Debt Securities may be issued as Original Issue Discount Securities (bearing
no interest or interest at a rate which at the time of issuance is below market
rates) to be sold at a substantial discount below their face amount. In the
event of an acceleration of the maturity of any Original Issue Discount
Security, the amount payable to the Holder of such Original Issue Discount
Security upon such acceleration will be determined in accordance with the
applicable Prospectus Supplement, the terms of such security and the applicable
Indenture, but will be an amount less than the amount payable at the maturity
of the principal of such Original Issue Discount Security. Special federal
income tax and other considerations relating thereto will be described in the
applicable Prospectus Supplement.
The provisions of the Indentures described below under "Restrictive
Covenants" are the only provisions which would provide protection to Holders in
the event of a highly leveraged transaction involving the Issuer. There are no
other covenants in any of the Issuer's other senior or subordinated
indebtedness which would afford holders thereof protection in the event of a
change in control of the Issuer.
ACCELERATION OF MATURITY
If any Event of Default with respect to Debt Securities of the Issuer of any
series at the time Outstanding shall occur and be continuing, then and in every
such case the Trustee or the Holders of not less than 25% in principal amount
of the Outstanding Debt Securities of that series may declare to be due and
payable immediately by a notice in writing to CoreStates and CoreStates Capital
(and to the Trustee if given by Holders) the principal amount 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. However, at any time after such a declaration
of acceleration with respect to Debt Securities of any series has been made,
but before a judgment or decree based on such acceleration has been obtained,
the Holders of a majority in principal amount of Outstanding Debt Securities of
that series may, under certain circumstances, rescind and annul such
acceleration if all Events of Default, except, in the case of Senior Debt
Securities, the non-payment of acceleration of principal, of that series have
been cured or waived as provided in the Indentures (Section 602). Reference is
made to the Prospectus Supplement relating to each series of Debt Securities
which are Original Issue Discount Securities for the particular provisions
relating to acceleration of the Maturity of a portion of the principal amount
of such Original Issue Discount Securities upon the occurrence of an Event of
Default and the continuation thereof.
REGISTRATION, TRANSFER, PAYMENT AND PAYING AGENT
Unless otherwise indicated in the applicable Prospectus Supplement, each
series of Debt Securities will be issued in registered form only, without
coupons. The Indentures, however, provide that the Issuer may also issue Debt
Securities in bearer form only, or in both registered and bearer form. Debt
Securities issued in bearer form shall have interest coupons attached, unless
issued as zero coupon securities. Debt Securities in bearer form shall not be
offered, sold, resold or delivered in connection with their original issuance
in the United States or to any United States person (as defined below) other
than offices located outside the United States of certain United States
financial institutions. As used herein, "United States person" means any
citizen or resident of the United States, any corporation, partnership or other
entity created or organized in or under the laws of the United States, or any
estate or trust, the income of which is subject to United States federal income
taxation regardless of its source, and "United States" means the United States
of America (including
13
<PAGE>
the States and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction. Purchasers of Debt Securities in
bearer form will be subject to certification procedures and may be affected by
certain limitations under United States tax laws. Such procedures and
limitations will be described in the Prospectus Supplement relating to the
offering of the Debt Securities in bearer form.
Unless otherwise indicated in the applicable Prospectus Supplement, Debt
Securities will be issued in denominations of $1,000 or any integral multiple
thereof. No service charge will be made for any transfer or exchange of the
Debt Securities but the Issuer may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Unless otherwise described in the Prospectus Supplement relating thereto, the
principal, premium, if any, and interest, if any, of or on the Debt Securities
will be payable, and transfer of the Debt Securities will be registrable, at
the corporate trust office of CoreStates Bank, N.A., as Paying Agent and
Security Registrar under the Indenture, in Philadelphia, Pennsylvania, provided
that payments of interest may be made at the option of the Issuer by check
mailed to the address appearing in the Security Register of the person in whose
name such Registered Security is registered at the close of business on the
Regular Record Date (Sections 305 and 307).
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of, premium, if any, and interest, if any, on Debt Securities in
bearer form will be made payable, subject to any applicable laws and
regulations, at such office outside the United States as specified in the
Prospectus Supplement and as the Issuer may designate from time to time, at the
option of the Holder, by check or by transfer to an account maintained by the
payee with a bank located outside the United States. Unless otherwise indicated
in the applicable Prospectus Supplement, payment of interest and certain
additional amounts on Debt Securities in bearer form will be made only against
surrender of the coupon relating to such Interest Payment Date. No payment with
respect to any Debt Security in bearer form will be made at any office or
agency of the Issuer in the United States or by check mailed to any address in
the United States or by transfer to an account maintained with a bank located
in the United States.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the form
of one or more global securities ("Global Securities") that will be deposited
with, or on behalf of, a depository (the "Depositary") identified in the
Prospectus Supplement relating to such series. Global Securities may be issued
in either registered or bearer form and in either temporary or permanent form.
Unless and until it is exchanged in whole or in part for individual
certificates evidencing Debt Securities in definitive form represented thereby,
a Global Security may not be transferred except as a whole by the Depositary
for such Global Security to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor of such Depositary or a
nominee of such successor.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities and certain limitations and restrictions relating to a series
of Bearer Securities, will be described in the Prospectus Supplement relating
to such series.
RESTRICTIVE COVENANTS
The Senior Indenture contains a covenant by CoreStates limiting its ability
to dispose of the Voting Stock of CoreStates Capital or any Major Constituent
Bank. A "Major Constituent Bank" is defined to mean any Banking Subsidiary of
CoreStates whose Consolidated Banking Assets constitute 20% or more of
CoreStates' Consolidated Banking Assets. Currently, CoreStates Bank and NJNB
each qualify as a Major Constituent Bank. Such covenant provides that, subject
to certain exceptions, so long as any of the Senior Debt Securities are
outstanding, CoreStates: (a) will not, nor will it permit any Subsidiary to,
sell, assign,
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transfer or otherwise dispose of any shares of, or securities convertible into,
or options, warrants or rights to subscribe for or purchase shares of, Voting
Stock of the Major Constituent Banks or CoreStates Capital, nor will CoreStates
permit the Major Constituent Banks or CoreStates Capital to issue any shares
of, or securities convertible into, or options, warrants or rights to subscribe
for or purchase shares of, Voting Stock of the Major Constituent Banks or
CoreStates Capital, unless CoreStates will own, directly or indirectly, at
least 80% of the issued and outstanding Voting Stock of such Major Constituent
Bank or CoreStates Capital, as the case may be, after giving effect to such
transaction; or (b) will not permit CoreStates Capital or a Major Constituent
Bank to either (i) merge or consolidate with or into any corporation (other
than CoreStates), unless at least 80% of the surviving corporation's Voting
Stock is, or upon consummation of the merger or consolidation will be, owned,
directly or indirectly, by CoreStates and the Consolidated Banking Assets of
CoreStates are at least equal to what they were prior to such transaction or
(ii) lease, sell or transfer all or substantially all of its properties or
assets to any corporation or other person (other than CoreStates), unless 80%
of the Voting Stock of such corporation or other person is owned, or will be
owned upon such lease, sale or transfer, directly or indirectly, by CoreStates
(Section 1107).
MODIFICATION AND WAIVER
Each Indenture provides that modifications and amendments may be made by the
Issuer and the applicable Trustee with the consent of the Holders of a majority
in principal amount of the Outstanding Debt Securities of each series affected
thereby; provided, however, that no such modification or amendment may, without
the consent of the Holder of each Outstanding Debt Security affected thereby,
(a) change the stated maturity date of the principal of, or any installment of
principal of or interest on, any Debt Security, (b) reduce the principal amount
of, or the premium (if any) or interest (if any) on, or additional amounts, if
any, in respect of, any Debt Security, (c) change the place or currency of
payment of principal of, or premium (if any) or interest (if any) on, any Debt
Security, (d) impair the right to institute suit for the enforcement of any
payment on or with respect to any Debt Security, (e) reduce the above-stated
percentage of Outstanding Debt Securities of any series the consent of the
Holders of which is required to modify or amend the related Indenture, (f)
reduce the percentage in principal amount of Outstanding Debt Securities of any
series the consent of the Holders of which is required for waiver of compliance
with certain provisions of the related Indenture or for waiver of certain
defaults, (g) modify (with certain exceptions) any provision of the Indentures
relating to modification and amendment of such Indenture or waiver of
compliance with conditions and defaults thereunder, (h) modify or affect in any
manner adverse to a Holder the terms and conditions of the Guarantees, (i) with
respect to the Subordinated Indenture, alter in any respect the provisions
regarding subordination of the Debt Securities issued thereunder, or (j) reduce
the principal amount of Original Issue Discount Securities which could be
declared due and payable upon acceleration of maturity thereof (Section 1002).
The Holders of a majority in principal amount of the Outstanding Debt
Securities of any series may on behalf of the Holders of all Debt Securities of
that series waive, insofar as that series is concerned, compliance by
CoreStates Capital or CoreStates, as the case may be, with certain restrictive
provisions of the Indentures (Section 1110). The Holders of a majority in
principal amount of the Outstanding Debt Securities of any series may on behalf
of the Holders of all Debt Securities of that series waive any past default
under the applicable Indenture with respect to that series, except a default in
the payment of the principal of (or premium, if any) or interest, if any, on
any Debt Security of that series or in respect of a provision which under the
applicable Indenture cannot be modified or amended without the consent of the
Holder of each Outstanding Debt Security of that series affected (Section 613).
Modification and amendment of either of the Indentures may be made by the
Issuer and the Trustee without the consent of any Holder for any of the
following purposes: (i) to evidence the succession of another corporation to
the Issuer; (ii) to add to the covenants of the Issuer for the benefit of the
Holders of all or any series of Debt Securities; (iii) to add Events of
Default; (iv) to add or change any provisions of either of the Indentures to
facilitate the issuance of Bearer Securities; (v) to add to, delete from or
revise the conditions,
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limitations and restrictions on the authorized amount, terms or purposes of
issue, authentication and delivery of Securities; (vi) to establish the form or
terms of Debt Securities of any series and any related coupons; (vii) to
provide for the acceptance of appointment by a successor Trustee; (viii) to
cure any ambiguity, defect or inconsistency in the Indenture, provided such
action does not adversely affect the interests of Holders of Debt Securities of
any series or any related coupons in any material respect; (ix) to modify,
eliminate or add to the provisions of either of the Indentures to such extent
as is necessary to effect qualification under the Trust Indenture Act of 1939,
as amended, or (x) to effect the assumption by CoreStates of the obligations
under either of such Indentures (Section 1001).
OUTSTANDING DEBT SECURITIES
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 under each Indenture, (i) the portion of
the principal amount of an Original Issue Discount Security that shall be
deemed to be Outstanding for such purposes shall be that portion of the
principal amount thereof that could be declared to be due and payable pursuant
to the terms of such Original Issue Discount Security as of the date of such
determination, and (ii) the principal amount of a Debt Security denominated in
a foreign currency or currencies shall be the U.S. dollar equivalent,
determined on the settlement date therefor, of the principal amount of such
Debt Security (Section 101).
ADDITIONAL PROVISIONS
The Indentures provide that the Senior Trustee or the Subordinated Trustee,
as the case may be, will be under no obligation, subject to the duty of such
Trustee during a default thereunder to act with the required standard of care,
to exercise any of its rights or powers under the related Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered such Trustee reasonable indemnity (Section 701). Subject to such
provisions for indemnification of the related Trustee, the Holders of a
majority in principal amount of the Outstanding Debt Securities of any series
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the related Trustee, or exercising any
trust or power conferred on such Trustee, with respect to the Debt Securities
of that series (Section 612).
No holder of any Debt Security of any series will have the right to institute
any proceeding with respect to the Indenture under which such Holder's Debt
Securities were issued for any remedy thereunder, unless: (a) such Holder shall
have previously given to the related Trustee written notice of a continuing
Event of Default with respect to the Debt Securities of that series; (b) the
Holders of no less than 25% in principal amount of the Outstanding Senior Debt
Securities or Subordinated Debt Securities, as the case may be, of that series
shall have made written request, and offered reasonable indemnity, to the
related Trustee to institute such proceeding as Trustee; (c) the related
Trustee shall not have received from the Holders of a majority in principal
amount of the Outstanding Senior Debt Securities or Subordinated Debt
Securities, as the case may be, of that series a direction inconsistent with
such request and (d) the related Trustee shall have failed to institute such
proceeding within 60 days after its receipt of such notice, request and offer
of indemnity (Section 607). However, the Holder of any Debt Security will have
an absolute and unconditional right to receive payment of the principal of (and
premium, if any) and interest, if any, on such Debt Security on or after the
due dates expressed in such Debt Security and to institute suit for the
enforcement of any such payment (Section 608).
The Issuer is required to furnish to the applicable Trustee annually a
statement as to performance or fulfillment of certain of its obligations under
the applicable Indenture and as to any default in such performance or
fulfillment (Sections 1105 and 1106).
The Issuer may consolidate with, merge into, or transfer substantially all of
its properties to, any other corporation provided that the successor
corporation assumes all obligations of the Issuer under the Debt Securities and
the Guarantees, as the case may be, and provided that certain other conditions
are met
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(Sections 901, 902, 903 and 904). In addition, CoreStates may, by supplemental
indenture, assume all of the obligations of CoreStates Capital under either
Indenture to pay principal of (and premium, if any) and interest on and
additional amounts in respect of Debt Securities issued thereunder and to
perform every covenant of such Indenture on the part of CoreStates Capital to
be performed (Section 905).
REGARDING THE TRUSTEES
CoreStates Bank maintains deposit accounts and conducts other banking
transactions with both the Senior and Subordinated Trustees. In addition, the
Subordinated Trustee has made available to CoreStates a line of credit for
borrowings up to $40,000,000 and the Senior Trustee has made available to
CoreStates a line of credit for borrowings up to $25,000,000.
CERTAIN TERMS RELATING TO SENIOR DEBT SECURITIES
The Senior Debt Securities will be direct, unsecured obligations of
CoreStates Capital and will rank pari passu with all outstanding and future
senior indebtedness of CoreStates Capital.
EVENTS OF DEFAULT
The following will be Events of Default under the Senior Indenture with
respect to Debt Securities of any series issued thereunder: (a) failure to pay
principal of or premium, if any, on any Senior Debt Security of that series
when due; (b) failure to pay any interest, if any, or any additional amounts,
if any, on any Senior Debt Security of that series when due, and continuance of
such default for 30 days; (c) failure to deposit any sinking fund payment, when
due, in respect of any Senior Debt Security of that series; (d) failure to
perform any other covenant of CoreStates Capital or CoreStates in such
Indenture and the related Guarantees, (other than a covenant included in the
Indenture solely for the benefit of a series of Senior Debt Securities other
than that series), continued for 60 days after written notice as provided in
the Indenture; (e) acceleration of indebtedness in principal amount in excess
of $5,000,000 for money borrowed by CoreStates Capital, CoreStates or any Major
Constituent Bank under the terms of the instrument under which such
indebtedness is issued or secured, if such acceleration is not annulled, or
such indebtedness is not discharged, within 30 days after written notice as
provide in the Indenture; (f) certain events in bankruptcy, insolvency or
reorganization of CoreStates Capital, CoreStates, CoreStates Bank or any Major
Constituent Bank; and (g) any other Event of Default provided with respect to
Senior Debt Securities of that series (Senior Indenture, Section 601).
CERTAIN TERMS RELATING TO SUBORDINATED DEBT SECURITIES
The Subordinated Debt Securities will be direct, unsecured obligations of
CoreStates Capital and will rank in priority of payment with outstanding and
future indebtedness of CoreStates Capital as set forth below.
SUBORDINATION
During the continuance beyond any applicable grace period of any default with
respect to Senior CoreStates Capital Indebtedness, no payment of principal of
and interest on the Subordinated Debt Securities shall be made by CoreStates
Capital until payment in full of all principal of and premium and interest on
such Senior CoreStates Capital Indebtedness. In addition, upon any distribution
of assets of CoreStates Capital, upon any dissolution, winding up, liquidation
or reorganization, the payment of the principal of and interest on the
Subordinated Debt Securities is to be subordinated to the extent provided in
the Subordinated Indenture in right of payment to the prior payment in full of
principal, premium and interest on all Senior CoreStates Capital Indebtedness.
By reason of such subordination, in the event of the dissolution of CoreStates
Capital, holders of Senior CoreStates Capital Indebtedness may receive more,
ratably, and holders of the Subordinated Debt Securities may receive less,
ratably, then the other creditors of CoreStates Capital.
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Such subordination will not prevent the occurrence of any Event of Default
under the Subordinated Indenture (Subordinated Indenture, Article Sixteen).
For purposes of the preceding paragraph, the term "Senior CoreStates Capital
Indebtedness" means any indebtedness or other obligation of CoreStates Capital,
whether outstanding at the date of execution of the First Supplemental
Indenture or thereafter incurred, except indebtedness or obligations expressly
subordinated in right of payment to the Subordinated Debt Securities or ranking
on a parity with the Subordinated Debt Securities (Subordinated Indenture,
Section 101). As of March 31, 1994, CoreStates Capital had approximately $1.7
billion of principal amount of Senior CoreStates Capital Indebtedness
outstanding, excluding trade payables, guarantees and other contingent
obligations of CoreStates Capital. Prior to the execution of the First
Supplemental Indenture, CoreStates Capital issued indebtedness subordinated to
a more narrowly defined category of senior indebtedness. As of March 31, 1994,
$250 million of such indebtedness was outstanding, subordinated to
approximately $1.7 billion of senior indebtedness.
EVENT OF DEFAULT
An Event of Default will be defined under the Subordinated Indenture with
respect to Subordinated Debt Securities of any series issued thereunder as
certain events in bankruptcy, insolvency or reorganization of CoreStates
Capital, CoreStates or any Major Constituent Bank.
The Subordinated Indenture does not provide for any right of acceleration of
the payment of the principal of a series of Subordinated Debt Securities upon a
default in the payment of principal or interest or a default in the performance
of any covenant or agreement in the Subordinated Debt Securities of a
particular series or in the Subordinated Indenture. In the event of a default
in the payment of interest or principal, the Holder of a Subordinated Debt
Security (or the Subordinated Trustee on behalf of the Holders of all of the
series of Subordinated Debt Securities so affected) may, subject to certain
limitations and conditions, seek to enforce payment of such interest or
principal.
CONVERSION
The holders of Subordinated Debt Securities of a specified series that are
convertible into Capital Securities of CoreStates ("Subordinated Convertible
Debt Securities") will be entitled at certain times specified in the Prospectus
Supplement relating to such Subordinated Convertible Debt Securities, subject
to prior redemption, exchange, repayment or repurchase, to convert any
Subordinated Convertible Debt Securities of such series into Capital
Securities, at the conversion price set forth in such Prospectus Supplement,
subject to adjustment and to such other terms as are set forth in such
Prospectus Supplement.
EXCHANGEABILITY
The holders of Subordinated Debt Securities of any series may be obligated at
any time or at maturity to exchange them for Capital Securities of CoreStates.
The terms of any such exchange and any such Capital Securities will be
described in the Prospectus Supplement relating to such series of Subordinated
Debt Securities. The Preferred Stock, Common Stock, and Capital Securities of
CoreStates are described below under "Description of Preferred Stock,"
"Description of Common Stock," and "Description of Capital Securities,"
respectively.
GUARANTEES
The Senior Debt Securities will be unconditionally guaranteed (the "Senior
Guarantees") by CoreStates as to payment of principal, premium, if any, and
interest when and as the same shall become due and payable, whether at maturity
or upon redemption, repayment or otherwise. The Senior Guarantees will rank
pari passu with all other unsecured and unsubordinated obligations of
CoreStates.
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The Subordinated Debt Securities will be unconditionally guaranteed (the
"Subordinated Guarantees" and, together with the Senior Guarantees, the
"Guarantees") by CoreStates, on a subordinated basis, as to payment of
principal, premium, if any, and interest when and as the same shall become due
and payable, whether at maturity or upon redemption, repayment or otherwise.
The Subordinated Guarantees will be unsecured and will be subordinated to all
outstanding and future Senior CoreStates Indebtedness to the same extent that
Subordinated Debt Securities issued by CoreStates Capital are subordinated to
all outstanding and future Senior CoreStates Capital Indebtedness.
For purposes of the preceding paragraph, the term "Senior CoreStates
Indebtedness" will be defined to mean any indebtedness or other obligation of
CoreStates, whether outstanding at the date of execution of the First
Supplemental Indenture or thereafter incurred, except indebtedness or
obligations expressly subordinated in right of payment to the Subordinated
Guarantees or ranking on a parity with the Subordinated Guarantees
(Subordinated Indenture, Section 101). As of March 31, 1994, CoreStates had
approximately $11 million principal amount of Senior CoreStates Indebtedness
outstanding, excluding trade payables, guarantees and other contingent
obligations of CoreStates.
The obligations of CoreStates under the Guarantees will be unconditional
regardless of the enforceability of the applicable Debt Securities or the
related Indenture and will not be discharged until all obligations contained in
such Debt Securities and the related Indenture are satisfied. Holders of the
Debt Securities may proceed directly against CoreStates in the event of a
default under the applicable Debt Securities without first proceeding against
CoreStates Capital.
DESCRIPTION OF PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. Certain other terms of any series of the
Preferred Stock offered by any Prospectus Supplement will be described in the
Prospectus Supplement relating to such series of the Preferred Stock. If so
indicated in the Prospectus Supplement, the terms of any such series may differ
from the terms set forth below. The description of certain provisions of the
Preferred Stock set forth below and in any Prospectus Supplement does not
purport to be complete and is subject to and qualified in its entirety by
reference to the Certificate of Designation relating to each series of the
Preferred Stock.
GENERAL
Under CoreStates' Articles of Incorporation, as amended (the "Articles"), the
Board of Directors of CoreStates is authorized without further stockholder
action to provide for the issuance of up to 10,000,000 shares of Preferred
Stock in one or more series, with such voting rights, designations,
preferences, qualifications, privileges, limitations, options, conversion
rights and other special rights, as shall be set forth in resolutions providing
for the issue thereof adopted by the Board of Directors. CoreStates does not
currently have outstanding any shares of preferred Stock.
As described under "Description of Depositary Shares," CoreStates may, at its
option, elect to offer depositary shares ("Depositary Shares") evidenced by
depositary receipts ("Depositary Receipts") each representing a fractional
interest (to be specified in the Prospectus Supplement relating to the
particular series of the Preferred Stock) in a share of the particular series
of the Preferred Stock issued and deposited with a Securities Depositary (as
defined below).
The Preferred Stock will, when issued, be fully paid and non-assessable.
Unless otherwise specified in the Prospectus Supplement relating to a
particular series of the Preferred Stock, each series of the Preferred Stock
will rank on a parity in all respects with each other series of the Preferred
Stock.
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The transfer agent, registrar, dividend disbursing agent and redemption agent
for shares of the Preferred Stock will be First Chicago Trust Company of New
York, New York, New York.
The following statements are brief summaries of certain provisions that will
be contained in the Certificate of Designation authorizing the issuance of a
series of Preferred Stock. These statements do not purport to be complete and
are qualified in their entirety by reference to such Certificate of
Designation, the form of which will be filed with the Commission at or prior to
the time of sale of such series of Preferred Stock, and to the Articles. The
resolutions set forth in the Certificate of Designation will be adopted by the
Board of Directors or a duly authorized committee thereof prior to the issuance
of a series of Preferred Stock and such Certificate of Designation will be
filed with the Secretary of State of the Commonwealth of Pennsylvania as soon
thereafter as reasonably practicable.
DIVIDENDS
Holders of the Preferred Stock of each series will be entitled to receive,
when and as declared by the Board of Directors of CoreStates, out of assets of
CoreStates legally available for payment, cash dividends at such rates and on
such dates as set forth in the Prospectus Supplement relating to such series of
the Preferred Stock. Dividends may or may not be cumulative as set forth in the
Prospectus Supplement. Each dividend will be payable to holders of record as
they appear on the stock register of CoreStates on the record dates fixed by
the Board of Directors of CoreStates.
If there shall be outstanding shares of any other series of preferred stock
ranking junior to or on a parity with any series of the Preferred Stock as to
dividends, no dividends shall be declared or paid or set apart for payment on
any such other series for any period unless full cumulative (if applicable)
dividends have been paid or declared and a sum sufficient for the payment
thereof set apart for such payment on such series of the Preferred Stock for
all dividend payment periods terminating on or prior to the date of payment of
such dividends. If dividends on any series of the Preferred Stock and on any
other series of preferred stock ranking on a parity as to dividends with such
series of the Preferred Stock are not paid in full, in making any dividend
payment on account of such arrears, CoreStates shall make payments ratably upon
all outstanding shares of such series of the Preferred Stock and shares of such
other series of preferred stock in proportion to the respective amounts of
dividends, including accumulations, in arrears on such series of the Preferred
Stock and on such other series of preferred stock to the date of such dividend
payment. Holders of shares of any series of the Preferred Stock shall not be
entitled to any dividend, whether payable in cash, property or stock, in excess
of full cumulative (if applicable) dividends on such series. No interest, or
sum of money in lieu of interest, shall be payable in respect of any dividend
payment or payments which may be in arrears.
Unless full cumulative (if applicable) dividends on all outstanding shares of
any series of the Preferred Stock to the last preceding quarterly dividend
period shall have been paid or declared and set aside for payment, no dividend
(other than a dividend in Common Stock or in any other stock ranking junior to
such series of the Preferred Stock as to dividends and upon liquidation) shall
be declared upon the Common Stock or upon any other stock ranking junior to
such series of Preferred Stock as to dividends and upon liquidation, nor shall
any Common Stock or any other stock of CoreStates ranking junior to or on a
parity with such series of the Preferred Stock as to dividends or upon
liquidation be redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund for the
redemption of any shares of any such stock) by CoreStates (except by conversion
into or exchange for the stock of CoreStates ranking junior to such series of
the Preferred Stock as to dividends and upon liquidation).
CONVERSION
The Prospectus Supplement for any series of the Preferred Stock will state
the terms, if any, on which shares of that series are convertible into shares
of another series of Preferred Stock, Common Stock or Capital Securities (as
more fully described below under "Description of Capital Securities") of
CoreStates.
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For any series of Preferred Stock which is convertible, CoreStates shall at
all times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Preferred Stock, Common Stock or
applicable Capital Securities or shares held in its treasury or both, for the
purpose of effecting the conversion of the shares of such series of Preferred
Stock, the full number of shares of Preferred Stock, Common Stock or Capital
Securities then deliverable upon the conversion of all outstanding shares of
such series.
No fractional shares of scrip representing fractional shares of Preferred
Stock, Common Stock or Capital Securities will be issued upon the conversion of
shares of any series of convertible Preferred Stock. Each holder to whom
fractional shares would otherwise be issued will instead be entitled to
receive, at CoreStates' election, either (a) a cash payment equal to the
current market price of such holder's fractional interest or (b) a cash payment
equal to such holder's proportionate interest in the net proceeds (following
the deduction of applicable transaction costs) from the sale promptly by an
agent, on behalf of such holders, of shares of Preferred Stock, Common Stock or
Capital Securities representing the aggregate of such fractional shares.
The holders of any series of shares of Preferred Stock at the close of
business on a dividend payment record date will be entitled to receive the
dividend payable on such shares (except that holders of shares called for
redemption on a redemption date occurring between such record date and the
dividend payment date shall not be entitled to receive such dividend on such
dividend payment date but instead will receive accrued and unpaid dividends to
such redemption date) on the corresponding dividend payment date
notwithstanding the conversion thereof or CoreStates' default in payment of the
dividend due. Except as provided above, CoreStates will make no payment or
allowance for unpaid dividends, whether or not in arrears, on converted shares
or for dividends on the shares of Preferred Stock, Common Stock or Capital
Securities issued upon conversion.
LIQUIDATION RIGHTS
In the event of any voluntary or involuntary dissolution, liquidation or
winding-up of CoreStates, the holders of each series of the Preferred Stock
will be entitled to receive out of the assets of CoreStates available for
distribution to its stockholders, before any distribution of assets is made to
holders of Common Stock or any other class of stock ranking junior to such
series of the Preferred Stock upon liquidation, a liquidating distribution in
an amount per share as set forth in the Prospectus Supplement relating to such
series of the Preferred Stock plus accrued and unpaid dividends. After payment
of the full amount of the liquidating distributions to which they are entitled,
the holders of such series of the Preferred Stock will have no right or claim
to any of the remaining assets of CoreStates. If, upon any voluntary or
involuntary dissolution, liquidation or winding-up of CoreStates, the amounts
payable with respect to the Preferred Stock of any series and any other shares
of stock of CoreStates ranking as to any such distribution on a parity with the
Preferred Stock of such series are not paid in full, the holders of the
Preferred Stock of such series and of such other shares will share ratably in
any such distribution of assets in proportion to the respective amounts which
would be payable in respect to the shares held by them upon such distribution
if all amounts payable on or with respect to such shares were paid in full.
Neither the sale of all or substantially all of the property or business of
CoreStates, nor the merger or consolidation of CoreStates into or with any
other corporation, shall be deemed to be a dissolution, liquidation or winding
up, voluntary or involuntary, of CoreStates.
REDEMPTION
Any series of the Preferred Stock may be redeemable, in whole or in part, at
the option of CoreStates, and may be subject to mandatory redemption pursuant
to a sinking fund, in each case upon the terms, at the times and at the
redemption prices set forth in the Prospectus Supplement relating to such
series.
In the event that full cumulative (if applicable) dividends on any series of
the Preferred Stock have not been paid or declared and set apart for payment,
such series of the Preferred Stock may not be redeemed in whole or in part and
CoreStates may not purchase or acquire any shares of such series otherwise than
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pursuant to a purchase or exchange offer made on the same terms to all holders
of such series of the Preferred Stock.
VOTING RIGHTS
The Preferred Stock of a series shall have no voting rights except as shall
be provided in the Prospectus Supplement relating thereto. As more fully
described under "Description of Depositary Shares", if CoreStates elects to
provide for the issuance of Depositary Shares representing fractional interests
in a share of such series of the Preferred Stock, the holders of each such
Depositary Share will, in effect, be entitled through the Securities Depositary
to such fraction of a vote rather than a full vote.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares and Depositary Receipts does not purport to be complete and is subject
to and qualified in its entirety by reference to the Deposit Agreement and
Depositary Receipts relating to each series of the Preferred Stock which will
be filed with the Commission at or prior to the time of the sale of such series
of the Preferred Stock.
GENERAL
CoreStates may, at its option, elect to offer fractional interests in shares
of Preferred Stock, rather than full shares of Preferred Stock. In the event
such option is exercised, CoreStates will provide for the issuance by a
Securities Depositary to the public of Depositary Receipts evidencing
Depositary Shares, each of which will represent a fractional interest (to be
set forth in the Prospectus Supplement relating to a particular series of the
Preferred Stock) in a share of a particular series of the Preferred Stock as
described below.
The shares of any series of the Preferred Stock underlying the Depositary
Shares will be deposited under a separate Deposit Agreement (the "Deposit
Agreement") between CoreStates and a bank or trust company selected by
CoreStates having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000 (the "Securities
Depositary"). The Prospectus Supplement relating to a series of Depositary
Shares will set forth the name and address of the Securities Depositary.
Subject to the terms of the Deposit Agreement, each owner of a Depositary Share
will be entitled, in proportion to the applicable fractional interest in a
share of Preferred Stock underlying such Depositary Share, to all the rights
and preferences of the Preferred Stock underlying such Depositary Share
(including dividend, voting, redemption, conversion and liquidation rights).
Pending the preparation of definitive engraved Depositary Receipts, the
Securities Depositary may, upon the written order of CoreStates, issue
temporary Depositary Receipts substantially identical to (and entitling the
holders thereof to all the rights pertaining to) the definitive Depositary
Receipts but not in definitive form. Definitive Depositary Receipts will be
prepared thereafter without unreasonable delay, and temporary Depositary
Receipts will be exchangeable for definitive Depositary Receipts at CoreStates'
expense.
Upon surrender of the Depositary Receipts at the principal office of the
Securities Depositary (unless the related Depositary Shares have previously
been called for redemption), the owner of the Depositary Shares evidenced
thereby will be entitled to delivery at such office, to or upon his order, of
the number of whole shares of Preferred Stock and any money or other property
represented by such Depositary Shares. Partial shares of Preferred Stock will
not be issued. If the Depositary Receipts delivered by the holder evidence a
number of Depositary Shares in excess of the number of Depositary Shares
representing the number of whole shares of Preferred Stock to be withdrawn, the
Securities Depositary will deliver to such holder at the same time a new
Depositary Receipt evidencing such excess number of Depositary Shares. Holders
of shares of Preferred Stock thus withdrawn will not thereafter be entitled to
deposit such shares under the Deposit Agreement or to receive Depositary Shares
therefor.
22
<PAGE>
DIVIDENDS AND OTHER DISTRIBUTIONS
The Securities Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
numbers of such Depositary Shares owned by such holders on the relevant record
date. The Securities Depositary shall distribute only such amount, however, as
can be distributed without attributing to any holder of Depositary Shares a
fraction of one cent, and any balance not so distributed shall be added to and
treated as part of the next sum received by the Securities Depositary for
distribution to record holders of Depositary Shares.
In the event of a distribution other than in cash, the Securities Depositary
will distribute property received by it to the record holders of Depositary
Shares entitled thereto, unless the Securities Depositary determines that it is
not feasible to make such distribution, in which case the Securities Depositary
may, with the approval of CoreStates, sell such property and distribute the net
proceeds from such sale to such holders.
The Deposit Agreement will also contain provisions relating to the manner in
which any subscription or similar rights offered by CoreStates to holders of
the Preferred Stock shall be made available to holders of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Securities Depositary resulting from the redemption, in whole
or in part, of such series of the Preferred Stock held by the Securities
Depositary. The Securities Depositary shall mail notice of redemption not less
than 30 and not more than 60 days prior to the date fixed for redemption to the
record holders of the Depositary Shares to be so redeemed at their respective
addresses appearing in the Securities Depositary's books. The redemption price
per Depositary Share will be equal to the applicable fraction of the redemption
price per share payable with respect to such series of the Preferred Stock.
Whenever CoreStates redeems shares of Preferred Stock held by the Securities
Depositary, the Securities Depositary will redeem as of the same redemption
date the number of Depositary Shares relating to shares of Preferred Stock so
redeemed. If less than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or pro rata as may be
determined by the Securities Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or the property to which the
holders of such Depositary Shares were entitled upon such redemption upon
surrender to the Securities Depositary of the Depositary Receipts evidencing
such Depositary Shares.
CONVERSION
With respect to a series of the Preferred Stock underlying the Depositary
Shares that is convertible into other Preferred Stock, Common Stock or Capital
Securities (as the case may be, in accordance with the terms of such series of
Preferred Stock), a holder of Depositary Receipts may participate in the
conversion in the manner specified in the pertinent Certificate of Designation
for holders of the underlying Preferred Stock. If the Depositary Shares
represented by a Depositary Receipt are to be converted in part only, a new
Depositary Receipt or Depositary Receipts will be issued by the Securities
Depositary for the Depositary Shares not to be converted. No fractional shares
of other Preferred Stock, Common Stock or Capital Securities will be issued
upon such conversion, and if such conversion would result in a fractional share
being issued, an amount will be paid in cash by CoreStates equal to the value
of the fractional interest as set forth in the Prospectus Supplement.
23
<PAGE>
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Securities Depositary will mail the information
contained in such notice of meeting to the record holders of the Depositary
Shares relating to such Preferred Stock. Each record holder of such Depositary
Shares on the record date (which will be the same date as the record date for
the Preferred Stock) will be entitled to instruct the Securities Depositary as
to the exercise of the voting rights pertaining to the number of shares of
Preferred Stock underlying such holder's Depositary Shares. The Securities
Depositary will endeavor, insofar as practicable, to vote the number of shares
of Preferred Stock underlying such Depositary Shares in accordance with such
instructions, and CoreStates will agree to take all action which may be deemed
necessary by the Depositary in order to enable the Securities Depositary to do
so. The Securities Depositary will abstain from voting shares of Preferred
Stock to the extent it does not receive specified instructions from the holders
of Depositary Shares relating to such Preferred Stock.
TAXATION
Owners of Depositary Shares will be treated for federal income tax purposes
as if they were owners of the Preferred Stock represented by such Depositary
Shares and, accordingly, will be entitled to take into account for federal
income tax purposes income and deductions to which they would be entitled if
they were holders of such Preferred Stock. In addition, (i) no gain or loss
will be recognized for federal income tax purposes upon the withdrawal of
Preferred Stock in exchange for Depositary Shares as provided in the Deposit
Agreement, (ii) the tax basis of each share of Preferred Stock to an exchanging
owner of Depositary Shares will, upon such exchange, be the same as the
aggregate tax basis of the Depositary Shares exchanged therefor and (iii) the
holding period of shares of the Preferred Stock in the hands of an exchanging
owner of Depositary Shares who held such Depositary Shares as a capital asset
at the time of the exchange thereof for Preferred Stock will include the period
during which such person owned such Depositary Shares.
AMENDMENT AND TERMINATION OF THE DEPOSITARY AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between CoreStates and the Securities Depositary. However, any amendment which
materially and adversely alters the rights of the existing holders of
Depositary Shares will not be effective unless such amendment has been approved
by the record holders of at least a majority of the Depositary Shares then
outstanding. A Deposit Agreement may be terminated by CoreStates or the
Securities Depositary only if (i) all outstanding Depositary Shares relating
thereto have been redeemed or, if applicable, converted into other Preferred
Stock, Common Stock or Capital Securities or (ii) there has been a final
distribution in respect of the Preferred Stock of the relevant series in
connection with any liquidation, dissolution or winding-up of CoreStates and
such distribution has been distributed to the holders of the related Depositary
Shares.
CHANGES OF SECURITIES DEPOSITARY
CoreStates will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary agreements. CoreStates will
pay charges of the Securities Depositary in connection with the initial deposit
of the Preferred Stock and any redemption of the Preferred Stock. Holders of
Depositary Shares will pay other transfer and other taxes and governmental
charges and such other charges as are expressly provided in the Deposit
Agreement to be for their accounts.
MISCELLANEOUS
The Securities Depositary will forward to the holders of Depositary Shares
all reports and communications from CoreStates which are delivered to the
Securities Depositary and which CoreStates is required to furnish to the
holders of the Preferred Stock.
24
<PAGE>
Neither the Securities Depositary nor CoreStates will be liable if it is
prevented or delayed by law or any circumstance beyond its control in
performing its obligations under the Deposit Agreement. The obligations of
CoreStates and the Securities Depositary under the Deposit Agreement will be
limited to performance in good faith of their duties thereunder and they will
not be obligated to prosecute or defend any legal proceeding in respect of any
Depositary Shares or Preferred Stock unless satisfactory indemnity is
furnished. They may rely upon written advice of counsel or accountants, holders
of Depositary Shares or other persons believed to be competent and on documents
believed to be genuine.
RESIGNATION AND REMOVAL OF SECURITIES DEPOSITARY
The Securities Depositary may resign at any time by delivering to CoreStates
notice of its election to do so, and CoreStates may at any time remove the
Securities Depositary, any such resignation or removal to take effect upon the
appointment of a successor Securities Depositary and its acceptance of such
appointment. Such successor Securities Depositary must be appointed within 60
days after delivery of the notice of resignation or removal and must be a bank
or trust company having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000.
DESCRIPTION OF COMMON STOCK
The following description of the Common Stock sets forth certain general
terms and provisions of CoreStates Common Stock. These and certain other terms
of the Common Stock will be described more fully be a Prospectus Supplement at
the time such Common Stock is issued.
GENERAL
Under CoreStates' Articles of Incorporation, as amended (the "Articles"), the
Board of Directors of CoreStates is authorized to issue up to 200,000,000
shares of Common Stock, par value $1.00 per share. As of March 31, 1994,
127,037,854 shares of Common Stock were outstanding.
The transfer agent, registrar, and dividend disbursing agent for shares of
Common Stock is First Chicago Trust Company of New York, New York.
Dividend Rights. The holders of CoreStates Common Stock are entitled to share
ratably in dividends out of funds legally available therefor, when and as
declared by CoreStates' Board of Directors, after full cumulative dividends on
all shares of Preferred Stock, and any other class or series of preferred stock
ranking superior as to dividends to CoreStates Common Stock, have been paid or
declared and funds sufficient for the payment thereof set apart. (See
"Description of Preferred Stock--Dividends").
Voting Rights. Each holder of CoreStates Common Stock has one vote on matters
presented for consideration by the shareholders for each share held. There are
no cumulative voting rights in the election of directors. All issued and
outstanding shares of CoreStates Common Stock are fully paid and non-
assessable. In certain circumstances, issued and outstanding Preferred Stock or
any other class or series of preferred stock issued by CoreStates may affect
voting rights of CoreStates Common Stock. At the date hereof, there are no
shares of Preferred Stock or any other class or series of preferred stock
issued by CoreStates outstanding.
Size and Classification of Board of Directors. CoreStates' Articles of
Incorporation provide for a classified Board of Directors, consisting of three
substantially equal classes of directors, each serving for a three-year term,
with the term of each class of directors ending in successive years. The Board
of Directors currently consists of 18 members. Classification of the Board of
Directors may have the effect of decreasing the number of directors that could
otherwise be elected at a given annual meeting by anyone who obtains a
controlling interest in CoreStates Common Stock and thereby could impede a
change in control of CoreStates.
Preemptive Rights. The holders of CoreStates Common Stock have no preemptive
rights to acquire any new or additional unissued shares or treasury shares of
CoreStates capital stock.
25
<PAGE>
Liquidation Rights. In the event of a liquidation, dissolution or winding up
of CoreStates, whether voluntary or involuntary, the holders of CoreStates
Common Stock will be entitled to share ratably in any of CoreStates' assets or
funds that are available for distribution to its shareholders after the
satisfaction of its liabilities (or after adequate provision is made therefor)
and after preferences on any outstanding preferred stock.
Assessment and Redemption. CoreStates Common Stock will be, when issued,
fully paid and nonassessable. CoreStates Common Stock does not have any
redemption provisions.
DESCRIPTION OF CAPITAL SECURITIES
A Prospectus Supplement may provide that Capital Securities will be issuable
in exchange for or upon conversion of Subordinated Debt Securities or Preferred
Stock of any series, "Capital Securities" may consist of common stock,
perpetual preferred stock or, if permitted by CoreStates' primary federal
banking regulator (currently the Board of Governors of the Federal Reserve
System), other securities of CoreStates. The Prospectus Supplement relating to
Subordinated Debt Securities or Preferred Stock which is exchangeable for or
convertible into Capital Securities will contain a description of the Capital
Securities.
DESCRIPTION OF SECURITIES WARRANTS
CoreStates Capital may issue Securities Warrants for the purchase of Debt
Securities. Securities Warrants may be issued independently or together with
Debt Securities offered by any Prospectus Supplement and may be attached to or
separate from such Debt Securities.
The Securities Warrants are to be issued under Warrant Agreements to be
entered into between CoreStates Capital and a bank or trust company, as Warrant
Agent, all as set forth in the Prospectus Supplement relating to the particular
issue of Warrants. The Warrant Agent will act solely as an agent of CoreStates
Capital in connection with the Warrant Certificates and will not assume any
obligation or relationship of agency or trust for or with any holders of
Warrant Certificates or beneficial owners of Warrants. Copies of the forms of
Warrant Agreements, including the forms of Warrant Certificates representing
the Securities Warrants, will be filed as exhibits to the Registration
Statement to which this Prospectus pertains. The following summaries of certain
provisions of the forms of Warrant Agreement and Warrant Certificates do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all the provisions of the Warrant Agreements and the Warrant
Certificates.
GENERAL
If Securities Warrants are offered, the applicable Prospectus Supplement will
describe the terms of the Securities Warrants, including the following: (1) the
offering price; (2) the designation, aggregate principal amount, priority of
payment and terms of the Debt Securities purchasable upon exercise of the
Securities Warrants; (3) if applicable, the designation and terms of the Debt
Securities with which the Securities Warrants are issued and the number of
Securities Warrants issued with each such Debt Security; (4) if applicable, the
date on and after which the Securities Warrants and the related Debt Securities
will be separately transferable; (5) the principal amount of Debt Securities
purchasable upon exercise of one Securities Warrant and the price at which such
principal amount of Debt Securities may be purchased upon such exercise; (6)
the date on which the right to exercise the Securities Warrants shall commence
and the date on which such right shall expire (the "Expiration Date"); (7) a
discussion of certain federal income tax consequences of holding or exercising
Securities Warrants; (8) whether the Securities Warrants represented by the
Warrant Certificates will be issued in registered or bearer form and, if
registered, where they may be registered and transferred; and (9) any other
terms of the Securities Warrants (which shall not be inconsistent with the
provisions of the applicable Warrant Agreement).
26
<PAGE>
Warrant Certificates may be exchanged for new Warrant Certificates of
different denominations, may (if in registered form) be presented for
registration of transfer, and may be exercised at the corporate trust office of
the Warrant Agent or any other office indicated in the applicable Prospectus
Supplement. Prior to the exercise of their Securities Warrants, holders of
Securities Warrants will not have any of the rights of holders of the Debt
Securities purchasable upon such exercise, including the right to receive
payments of principal of, premium, if any, or interest, if any, on the Debt
Securities purchasable upon such exercise.
EXERCISE OF SECURITIES WARRANTS
Each Securities Warrant will entitle the holder to purchase such principal
amount of Debt Securities at such exercise price as shall in each case be set
forth in, or calculated from, the Prospectus Supplement relating to the
Securities Warrants. Securities Warrants may be exercised at any time up to
5:00 P.M. Philadelphia time on the Expiration Date set forth in the Prospectus
Supplement relating to such Securities Warrants. After the close of business on
the Expiration Date (or such later date to which such Expiration Date may be
extended by the Issuer), unexercised Securities Warrants will become void.
Securities Warrants may be exercised by delivery of payment to the Warrant
Agent as provided in the applicable Prospectus Supplement of the amount
required to purchase the Debt Securities purchasable upon such exercise
together with certain information set forth on the reverse side of the Warrant
Certificate. Securities Warrants will be deemed to have been exercised upon
receipt of the exercise price, subject to the receipt, within five business
days, of the Warrant Certificate evidencing such Warrants. Upon receipt of such
payment and the Warrant Certificate properly completed and duly executed at the
corporate trust office of the Warrant Agent or any other office indicated in
the applicable Prospectus Supplement, CoreStates Capital will, as soon as
practicable, issue and deliver the Debt Securities purchasable upon such
exercise. If fewer than all of the Warrants represented by such Warrant
Certificates are exercised, a new Warrant Certificate will be issued for the
remaining amount of Warrants.
PLAN OF DISTRIBUTION
The Issuer may sell Offered Securities to or through underwriters, dealers
and also may sell Offered Securities directly to other purchasers or through
agents or dealers which may be affiliates.
The distribution of Offered Securities may be effected from time to time in
one or more transactions at a fixed price or prices (which may be changed from
time to time), at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. Each
Prospectus Supplement will describe the method of distribution of the Offered
Securities. Certain restrictions relating to distribution of Offered Securities
in connection with an International Offering will be set forth in the
applicable Prospectus Supplement.
In connection with the sale of Offered Securities, underwriters or agents
acting on the Issuer's behalf may receive compensation from the Issuer or from
purchasers of Offered Securities for whom they may act as agents, in the form
of discounts, concessions or commissions. The underwriters, dealers and agents
that participate in the distribution of Offered Securities may be deemed to be
underwriters under the Act and any discounts or commissions received by them
and any profit on the resale of Offered Securities by them may be deemed to be
underwriting discounts and commissions under the Act. Any such underwriter will
be identified and any such compensation will be described in the applicable
Prospectus Supplement.
Under agreements which may be entered into by the Issuer, underwriters,
dealers and agents who participate in the distribution of Offered Securities
may be entitled to indemnification by the Issuer against certain liabilities,
including liabilities under the Act.
If so indicated in the applicable Prospectus Supplement, the Issuer will
authorize underwriters or other persons acting as the Issuer's agents to
solicit offers by certain institutions to purchase Debt Securities,
27
<PAGE>
Preferred Stock, Depository Shares or Securities Warrants from the Issuer
pursuant to delayed delivery contracts providing for payment and delivery on a
future date or dates stated in the applicable Prospectus Supplement. Each such
contract will be for an amount not less than, and the aggregate amount of such
securities sold pursuant to such contracts shall not be less nor more than, the
respective amounts stated in the applicable Prospectus Supplement. Institutions
with which such contracts may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but in all cases such institutions must be
approved by the Issuer. The obligations of any purchaser under any such
contract will not be subject to any condition except that (1) the purchase of
the Debt Securities, Preferred Stock, Depository Shares or Securities Warrants
shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject, and (2) if the Debt
Securities, Preferred Stock, Depository Shares or Securities Warrants are also
being sold to underwriters acting as principals for their own account, the
underwriters shall have purchased such Debt Securities, Preferred Stock,
Depository Shares or Securities Warrants not sold for delayed delivery. The
underwriters and such other persons will not have any responsibility in respect
of the validity or performance of such contracts.
Certain of the underwriters, dealers or agents may be customers of, including
borrowers from, engage in transactions with, and perform services for, the
Issuer or one or more of its affiliates in the ordinary course of business.
LEGAL OPINIONS
The validity of the Offered Securities will be passed upon for CoreStates by
David J. Martin, Esq., Executive Vice President and Chief Counsel of
CoreStates. At March 31, 1994 Mr. Martin was the beneficial owner of 11,275
shares of Common Stock and of options covering an additional 52,736 shares of
such Common Stock. Unless otherwise indicated in the Prospectus Supplement
relating thereto, certain legal matters with respect to the Offered Securities
will be passed upon for the underwriters, dealers or agents by Brown & Wood,
who will rely upon the opinion of Mr. Martin as to matters of Pennsylvania law.
EXPERTS
CORESTATES
The consolidated financial statements of CoreStates for the year ended
December 31, 1993 (restated to include Constellation Bancorp which was acquired
on March 16, 1994), included in CoreStates' Form 8-K dated May 5, 1994, have
been audited by Ernst & Young, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference, whose
opinion is based in part on the report of KPMG Peat Marwick, independent
auditors. Such consolidated financial statements are incorporated herein by
reference in reliance upon such reports given upon the authority of such firms
as experts in accounting and auditing. The report of KPMG Peat Marwick refers
to a change in accounting for postretirement benefits, other than pensions,
income taxes and certain investments in debt and equity securities in 1993.
INDEPENDENCE
The consolidated financial statements of Independence contained in
CoreStates' Form 8-K dated June 8, 1994, and incorporated herein by reference,
as of December 31, 1993 and for the year ended December 31, 1993 have been
audited by Coopers & Lybrand, independent auditors, as set forth in their
report thereon, which includes an explanatory paragraph noting that
Independence changed its method of accounting for investments in 1993. 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.
28
<PAGE>
GERMANTOWN
The consolidated financial statements of Germantown for the year ended
December 31, 1993 incorporated in this Prospectus by reference from the
CoreStates' Current Report on Form 8-K dated April 29, 1994, have been audited
by Deloitte & Touche, independent auditors, as stated in their report, which is
incorporated herein by reference, and has so been incorporated in reliance upon
the report of such firm, given upon their authority as experts in accounting
and auditing.
29
<PAGE>
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NO DEALER, SALESMAN, OR ANY OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IN CON-
NECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS SUPPLEMENT (INCLUDING THE
PRICING SUPPLEMENT) AND THE ACCOMPANYING PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHO-
RIZED BY THE ISSUER OR THE AGENTS. THIS PROSPECTUS SUPPLEMENT (INCLUDING THE
PRICING SUPPLEMENT) AND THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER
TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY OF THE SECURITIES OFFERED
HEREBY IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS SUP-
PLEMENT (INCLUDING THE PRICING SUPPLEMENT) AND THE ACCOMPANYING PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT (INCLUDING THE PRICING SUPPLEMENT) OR
THE ACCOMPANYING PROSPECTUS OR IN THE AFFAIRS OF THE ISSUER OR THE GUARANTOR
SINCE THE DATE HEREOF.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
PROSPECTUS SUPPLEMENT
<S> <C>
Description of Notes...................................................... S-2
Plan of Distribution...................................................... S-14
PROSPECTUS
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
CoreStates Financial Corp................................................. 2
CoreStates Capital Corp................................................... 3
Certain Legal and Regulatory Considerations............................... 3
Use of Proceeds........................................................... 5
CoreStates Financial Corp Consolidated Selected Historical Financial
Information.............................................................. 6
Description of Debt Securities............................................ 10
Certain Terms Relating to Senior Debt Securities.......................... 16
Certain Terms Relating to Subordinated Debt Securities.................... 16
Guarantees................................................................ 17
Description of Preferred Stock............................................ 18
Description of Depositary Shares.......................................... 21
Description of Common Stock............................................... 24
Description of Capital Securities......................................... 25
Description of Securities Warrants........................................ 25
Plan of Distribution...................................................... 26
Legal Opinions............................................................ 27
Experts................................................................... 27
</TABLE>
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$1,000,000,000
[LOGO OF CORESTATES APPEARS HERE]
CORESTATES CAPITAL CORP
SENIOR/SUBORDINATED
MEDIUM-TERM NOTES
DUE NINE MONTHS OR MORE
FROM DATE OF ISSUE
UNCONDITIONALLY GUARANTEED
AS TO PAYMENT OF PRINCIPAL,
PREMIUM, IF ANY, AND INTEREST BY
CORESTATES FINANCIAL CORP
----------------------
PROSPECTUS SUPPLEMENT
----------------------
MERRILL LYNCH & CO.
CS FIRST BOSTON
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
J.P. MORGAN SECURITIES INC.
SMITH BARNEY INC.
------------
JUNE , 1994
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is an estimate of the expenses which will be incurred in
connection with the issuance and distribution of the securities, being
registered:
<TABLE>
<S> <C>
Registration Fee................................................. $335,359
Printing and Engraving........................................... 25,000
Rating Agency Fees............................................... 100,000
Accounting Fees.................................................. 50,000
Blue Sky and Legal Investment Fees and Expenses.................. 20,000
Miscellaneous.................................................... 75,000
--------
Total........................................................ 605,359
</TABLE>
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ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 1741 et seq. of the Pennsylvania Business Corporation Law provide
that a business corporation may indemnify directors and officers against
liabilities they may incur in such capacities provided certain standards are
met, including good faith and the reasonable belief that the particular action
is in, or not opposed to, the best interest of the corporation. In general,
this power to indemnify does not exist in the case of actions against a
director or officer by or in the right of the corporation if the person
entitled to indemnification shall have been adjudged to be liable for
negligence or misconduct in the performance of the person's duties. However,
Section 1746 provides that the other sections of the law are not exclusive and
that further indemnification may be provided by by-law, agreement or otherwise
except where the act or failure to act giving rise to a claim for
indemnification is determined by a court to have constituted willful misconduct
or recklessness. The corporation is required to indemnify directors and
officers against expenses they may incur in defending action against them in
such capacities if they are successful on the merits or otherwise in the
defense of such action.
The by-laws of CoreStates Financial Corp provide for the mandatory
indemnification of directors and officers to the full extent permitted by law.
CoreStates has purchased director's and officers' liability insurance covering
certain liabilities which may be incurred by its officers and directors in
connection with the performance of their duties.
See Item 17 herein for the undertaking with respect to indemnification.
ITEM 16. LIST OF EXHIBITS
The following exhibits are filed herewith as part of this Registration
Statement:
<TABLE>
<C> <S>
1(a) Form of Underwriting Agreement.
1(b) Form of Distribution Agreement.
2(a) (1) The Agreement and Plan of Reorganization between First Pennsylvania
Corporation and CoreStates Financial Corp dated as of September 18,
1989, as amended and restated as of October 24, 1989.
2(b) Agreement and Plan of Reorganization between First Peoples Financial
Corporation and CoreStates Financial Corp dated as of February 13,
1992.
2(c) (2) Amended & Restated Agreement & Plan of Merger dated as of the 2nd
Day of August, 1993 by and between CoreStates Financial Corp and
Constellation Bancorp.
</TABLE>
II-1
<PAGE>
<TABLE>
<S> <C>
2(d) (3) Agreement and Plan of Merger dated as of November 19, 1993 by and between CoreStates
Financial Corp and Independence Bancorp, Inc.
2(e) Agreement and Plan of Merger by and between CoreStates Financial Corp and Germantown
Savings Bank dated March 7, 1994
3(a) (4) Articles of Incorporation of CoreStates Financial Corp as amended through May 3, 1993
3(b) (4) By-laws of CoreStates Financial Corp as amended through April 20, 1993
4(a) (5) Trust Indenture dated as of December 1, 1990 among CoreStates, CoreStates Capital and
NationBank of Georgia, National Association, as successor to Wachovia Bank of
Georgia, N.A. (formerly the First National Bank of Atlanta, N.A.)
4(b) (5) Trust Indenture dated as of December 1, 1990 among CoreStates, CoreStates Capital and
Bank One, Columbus, N.A.
4(c) (6) First Supplemental Indenture dated as of March 1, 1993, among CoreStates, CoreStates
Capital, and Bank One, Columbus, N.A.
4(d) Form of Medium-Term Note (Senior Fixed Rate)
4(e) Form of Medium-Term Note (Senior Floating Rate)
4(f) Form of Medium-Term Note (Subordinated Fixed Rate)
4(g) Form of Medium-Term Note (Subordinated Floating Rate)
4(h) Form of Warrant.*
4(i) Form of Warrant Agreement.*
4(j) Form of Certificate of Designation of $ Preferred Stock.*
4(k) Form of $ Preferred Stock.*
4(l) Form of Common Stock.*
4(m) Deposit Agreement.*
4(n) Form of Depositary Receipt.*
4(o) Form of Second Supplemental Indenture dated as of June 1, 1994 between CoreStates,
CoreStates Capital, Bank One, Columbus, N.A. and Citibank, N.A.*
5(a) Opinion and consent of David J. Martin, Esq. as to the validity of the Common Stock,
Preferred Stock, Capital Securities, Debt Securities, the related Guarantees and the
Warrants being registered.*
12(a) (7) Computation of Ratio of Earnings to Fixed Charges (Combined CoreStates and CoreStates
Capital).
12(b) (7) Computation of Ratio of Earnings from Continuing Operations to Fixed Charges of
Continuing Operations (Consolidated).
23(a) Consent of Ernst & Young.
23(b) Consent of KPMG Peat Marwick.
23(c) Consent of Coopers & Lybrand
23(d) Consent of Deloitte & Touche
23(e) Consent of David J. Martin, Esq. (included in Exhibit 5(a)).*
25(a) Powers of Attorney (See signature pages).
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C>
26(a) Form T-1 Statement of Eligibility & Qualification under the Trust Indenture Act
of 1939 of NationsBank of Georgia, National Association.
26(b) Form T-1 Statement of Eligibility & Qualification under the Trust Indenture Act
of 1939 of Citibank, N.A.
</TABLE>
- --------
(1) Incorporated by reference from Appendix I to the Proxy Statement included
in Part I of Registration Statement on Form S-4 (File No. 33-31896) as
filed with the Securities and Exchange Commission under the Securities Act
of 1933 on November 1, 1989.
(2) Incorporated by reference from Appendix I to the Proxy Statement included
in Part I of Registration Statement on Form S-4 (File No. 33-51429) as
filed with the Securities and Exchange Commission under the Securities Act
of 1933 on December 13, 1993.
(3) Incorporated by reference from Exhibit 2-2 to CoreStates Financial Corp's
Annual Report on Form 10-K for the year ended December 31, 1993.
(4) Exhibits 3(a) & 3(b) incorporated by reference from Exhibits 3(a) & 3(b),
respectively to CoreStates Financial Corp Current Report on Form 8-K dated
October 21, 1993.
(5) Exhibits 4(a) and 4(b) are incorporated by reference from Exhibits 4.1 and
4.2, respectively, to CoreStates Financial Corp Current Report on Form 8-K
dated January 29, 1991.
(6) Incorporated by reference from Exhibit 4 to CoreStates Financial Corp
Current Report on Form 8-K dated April 20, 1993, as amended.
(7) Exhibits 12(a) & 12(b) are incorporated by reference from Exhibits 12.2
and 12.1, respectively, to CoreStates Financial Corp Current Report on
Form 10-Q dated May 13, 1994.
* To be filed by amendment.
ITEM 17. UNDERTAKINGS.
The Registrant hereby undertakes:
(1) To file, during any period in which offers or 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-3
<PAGE>
Provided, however, that paragraphs (i) and (ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Issuer pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) 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.
(3) 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.
(4) That for purposes of determining any liability under the Securities
Act of 1933, each filing of CoreStates' Annual Report pursuant to Section
13(a) or 15(d) of the Securities 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.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Issuer pursuant to the foregoing provisions or
otherwise, the Issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Issuer of expenses incurred or paid by a director,
officer or controlling person of the Issuer in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Issuer will, unless in the opinion of their counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by them is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(6)(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new Registration Statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
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 ON FORM S-3 AND HAS DULY CAUSED THESE REGISTRATION
STATEMENTS TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED IN THE CITY OF PHILADELPHIA, AND COMMONWEALTH OF PENNSYLVANIA, ON
THIS 8TH DAY OF JUNE, 1994.
CoreStates Capital Corp
By: /s/ Terrence A. Larsen
---------------------------------
TERRENCE A. LARSEN
CHAIRMAN OF THE BOARD AND CHIEF
EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THESE
REGISTRATION STATEMENTS HAVE BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED. EACH PERSON IN SO SIGNING ALSO MAKES,
CONSTITUTES AND APPOINTS TERRENCE A. LARSEN, CHAIRMAN OF THE BOARD AND CHIEF
EXECUTIVE OFFICER, AND DAVID C. CARNEY, PRESIDENT AND CHIEF FINANCIAL OFFICER,
AND EACH OF THEM, HIS OR HER TRUE AND LAWFUL ATTORNEY-IN-FACT, IN HIS OR HER
NAME, PLACE AND STEAD TO EXECUTE AND CAUSE TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION ANY AND ALL FURTHER AMENDMENTS (INCLUDING POST-EFFECTIVE
AMENDMENTS) TO THESE REGISTRATION STATEMENTS.
SIGNATURES CAPACITY DATE
---------- -------- ----
/s/ Terrence A. Larsen Director, Chairman June 8, 1994
- ------------------------------------ of the Board, and
TERRENCE A. LARSEN Chief Executive
Officer (principal
executive officer)
/s/ David C. Carney Director, President
- ------------------------------------ and Chief
DAVID C. CARNEY Financial Officer June 8, 1994
(principal
financial officer)
/s/ George J. Karklins Director, Vice June 8, 1994
- ------------------------------------ President and
GEORGE J. KARKLINS Treasurer
(principal
accounting
officer)
/s/ Carol A. Leisenring Director and Vice June 8, 1994
- ------------------------------------ President
CAROL A. LEISENRING
II-5
<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 ON FORM S-3 AND HAS DULY CAUSED THESE REGISTRATION
STATEMENTS TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED IN THE CITY OF PHILADELPHIA, AND COMMONWEALTH OF PENNSYLVANIA, ON
THIS 8TH DAY OF JUNE, 1994.
CoreStates Financial Corp
By /s/ Terrence A. Larsen
----------------------------------
TERRENCE A. LARSEN
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THESE
REGISTRATION STATEMENTS HAVE BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED. EACH PERSON IN SO SIGNING ALSO MAKES,
CONSTITUTES AND APPOINTS TERRENCE A. LARSEN, CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER, AND DAVID C. CARNEY, CHIEF FINANCIAL OFFICER, AND
EACH OF THEM, HIS OR HER TRUE AND LAWFUL ATTORNEY-IN-FACT, IN HIS OR HER NAME,
PLACE AND STEAD TO EXECUTE AND CAUSE TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION ANY AND ALL FURTHER AMENDMENTS (INCLUDING POST-EFFECTIVE
AMENDMENTS) TO THESE REGISTRATION STATEMENTS.
SIGNATURES CAPACITY DATE
---------- -------- ----
/s/ Terrence A. Larsen Director, Chairman June 8, 1994
- ------------------------------------- of the Board,
TERRENCE A. LARSEN President and Chief
Executive Officer
(principal
executive officer)
/s/ David C. Carney Chief Financial June 8, 1994
- ------------------------------------- Officer (principal
DAVID C. CARNEY financial officer)
/s/ Albert W. Mandia Executive Vice June 8, 1994
- ------------------------------------- President
ALBERT W. MANDIA (principal
accounting officer)
/s/ George A. Butler Director June 8, 1994
- -------------------------------------
GEORGE A. BUTLER
/s/ Robert H. Campbell Director June 8, 1994
- -------------------------------------
ROBERT H. CAMPBELL
II-6
<PAGE>
SIGNATURES CAPACITY DATE
-------- ----
/s/ Nelson G. Harris Director June 8, 1994
- ------------------------------------
NELSON G. HARRIS
/s/ Carlton E. Hughes Director June 8, 1994
- ------------------------------------
CARLTON E. HUGHES
Director
- ------------------------------------
SHIRLEY A. JACKSON
/s/ Ernest E. Jones Director June 8, 1994
- ------------------------------------
ERNEST E. JONES
/s/ Herbert Lotman Director June 8, 1994
- ------------------------------------
HERBERT LOTMAN
/s/ Patricia A. McFate Director June 8, 1994
- ------------------------------------
PATRICIA A. MCFATE
/s/ John A. Miller Director June 8, 1994
- ------------------------------------
JOHN A. MILLER
/s/ Marlin Miller, Jr. Director June 8, 1994
- ------------------------------------
MARLIN MILLER, JR.
/s/ Stephanie W. Naidoff Director June 8, 1994
- ------------------------------------
STEPHANIE W. NAIDOFF
/s/ Seymour S. Preston, III Director June 8, 1994
- ------------------------------------
SEYMOUR S. PRESTON, III
/s/ James M. Seabrook Director June 8, 1994
- ------------------------------------
JAMES M. SEABROOK
/s/ J. Lawrence Shane Director June 8, 1994
- ------------------------------------
J. LAWRENCE SHANE
Director
- ------------------------------------
RAYMOND W. SMITH
/s/ Harold A. Sorgenti Director June 8, 1994
- ------------------------------------
HAROLD A. SORGENTI
/s/ Peter S. Strawbridge Director June 8, 1994
- ------------------------------------
PETER S. STRAWBRIDGE
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
------- ----
<C> <S> <C>
1(a) Form of Underwriting Agreement
1(b) Form of Distribution Agreement
2(b) Agreement and Plan of Reorganization between First Peoples
Financial Corporation and CoreStates Financial Corp dated as of
February 13, 1992
2(e) Agreement and Plan of Merger by and between CoreStates
Financial Corp and Germantown Savings Bank dated March 7, 1994
4(d) Form of Medium-Term Note (Senior Fixed Rate)
4(e) Form of Medium-Term Note (Senior Floating Rate)
4(f) Form of Medium-Term Note (Subordinated Fixed Rate)
4(g) Form of Medium-Term Note (Subordinated Floating Rate)
23(a) Consent of Ernst & Young
23(b) Consent of KPMG Peat Marwick
23(c) Consent of Coopers & Lybrand
23(d) Consent of Deloitte & Touche
26(a) Form T-1 Statement of Eligibility & Qualification under the
Trust Indenture Act of 1939 of NationsBank of Georgia, National
Association
26(b) Form T-1 Statement of Eligibility & Qualification under the
Trust Indenture Act of 1939 of Citibank, N.A.
</TABLE>
<PAGE>
Exhibit 1.A
DRAFT 5/19/94
CORESTATES CAPITAL CORP
(a Pennsylvania corporation)
[Title of Security]
Unconditionally guaranteed by
CORESTATES FINANCIAL CORP
(a Pennsylvania corporation)
TERMS AGREEMENT
---------------
Dated: , 1994
To: CoreStates Capital Corp
Broad and Chestnut Streets
Philadelphia, Pennsylvania 19101
CoreStates Financial Corp
Broad and Chestnut Streets
Philadelphia, Pennsylvania 19101
Title of Debt Securities:
Senior or Subordinated:
Lead Managing Underwriter, including address:
Additional Co-Managing Underwriters, if any:
Principal amount: $___________________
Current ratings:
Interest rate: _____%. Payable: __________ 1 and 1, commencing
______1, ______.
<PAGE>
Date of maturity: ______________, __, ____.
Public offering price: _____%, [plus accrued interest from
____________, __,_____].
Purchase price: ____% [plus accrued interest from
___________ __, 1994]
(payable in next day funds).
Closing date and location: _______________ __, 1993 at the offices of Brown &
Wood, One World Trade Center,
New York, N.Y. 10048.
Guaranty: Unconditionally guaranteed by CoreStates Financial Corp as to
principal, premium, if any, and interest, if any.
Redemption provisions: As set forth in the attached Prospectus Supplement
dated ________ __, 1994, the Notes are not redeemable
prior to _______ __, ____; on and after ________ __,
____ the Notes are redeemable in whole or in part at
the option of CoreStates Capital Corp at 100% of their
principal amount together with interest to the date of
redemption.
Sinking fund requirements: ___________.
Delayed Delivery Contracts: __________.
Each Underwriter named below (the "Underwriters") severally agrees, subject to
the terms and provisions set forth herein or incorporated by reference herein,
to purchase the principal amount of Securities set forth opposite its name.
Principal
Underwriter Amount
----------- ---------
$
---------
Total................... $
=========
2
<PAGE>
All the terms and provisions contained in the document attached as Annex A
hereto entitled "Underwriting Agreement Basic Provisions" are hereby
incorporated by reference in their entirety herein and shall be deemed to be a
part of this Terms Agreement to the same extent as if such terms and provisions
had been set forth in full herein. Terms defined in such document are used
herein as therein defined.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company and the Guarantor a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among you, the Company and the Guarantor in accordance with its terms.
[Managing Underwriter]
By_________________________________
Acting on behalf of themselves and
the other named Underwriters
Accepted:
CORESTATES CAPITAL CORP
By__________________________
CORESTATES FINANCIAL CORP
By__________________________
3
<PAGE>
ANNEX A
CORESTATES CAPITAL CORP
(a Pennsylvania corporation)
Debt Securities and
Warrants to Purchase Debt Securities
Unconditionally guaranteed as to payment of
principal, premium, if any, and interest, if any, by
CORESTATES FINANCIAL CORP
(a Pennsylvania corporation)
UNDERWRITING AGREEMENT BASIC PROVISIONS
---------------------------------------
CoreStates Capital Corp (the "Company") proposes to issue and sell up to
$1,000,000,000 aggregate principal amount, or its equivalent based on the
applicable exchange rate at the time of the offering in such foreign currencies
or units of two or more thereof, of its senior debt securities (the "Senior Debt
Securities"), its subordinated debt securities ("Subordinated Debt Securities",
and, together with the Senior Debt Securities, the "Debt Securities") and/or
warrants to purchase Debt Securities ("Warrants") in one or more offerings on
terms determined at the time of sale. The Senior Debt Securities will be
unconditionally guaranteed as to payment of principal, premium, if any, and
interest, if any (said guarantees being hereinafter referred to as the "Senior
Guarantees"), by CoreStates Financial Corp (the "Guarantor"). The Subordinated
Debt Securities will be unconditionally guaranteed as to principal, premium, if
any, and interest, if any (said guarantees being hereinafter referred to as the
"Subordinated Guarantees" and, together with the Senior Guarantees, the
"Guarantees") by the Guarantor. The Senior Debt Securities and the Senior
Guarantees will be issued under an indenture dated as of December 1, 1990 (the
"Senior Indenture"), among the Company, the Guarantor and NationsBank of
Georgia, National Association, as trustee and successor to Wachovia Bank of
Georgia, N.A. (the "Senior Debt Trustee"). The Subordinated Debt Securities and
Subordinated Guarantees will be issued under an indenture dated as of December
1, 1990, as amended by a first supplemental indenture dated as of March 1, 1993
and a second supplemental indenture dated as of ______ __, 1994 (the
"Subordinated Indenture", and, together with the Senior Indenture, the
"Indentures"), among the Company, the Guarantor and Citibank, N.A., as trustee
(the "Subordinated Debt Trustee", and, together
A-1
<PAGE>
with the Senior Debt Trustee, the "Trustees"). The Warrants will be issued
under one or more warrant agreements (the warrant agreement relating to any
issue of Warrants to be sold pursuant to this Agreement will be identified in
the applicable Terms Agreement (as hereinafter defined) and is referred to
herein as the "Warrant Agreement") among the Company, the Guarantor and the
Warrant Agent identified in such Warrant Agreement (the "Warrant Agent"). Each
issue of Debt Securities and Warrants may vary as to aggregate principal amount,
maturity date, currency, interest rate or rates and timing of payments thereof,
redemption provisions and sinking fund requirements, if any, and any other
variable terms which the applicable Indenture or any Warrant Agreement, as the
case may be, contemplates may be set forth in the Debt Securities and Warrants
as issued from time to time. The Debt Securities and Warrants may be offered
either together or separately. As used herein, "Securities" shall mean the
securities (whether Debt Securities, Warrants or both) covered by the applicable
Terms Agreement; "Warrant Securities" shall mean the Debt Securities issuable
upon exercise of Warrants; and "you" or "your", unless the context otherwise
requires, shall mean such of the Managing Underwriter or Underwriters identified
in the Terms Agreement in respect of the Securities purchased pursuant thereto.
Each offering of Debt Securities, other than Warrant Securities, will be
made, and any offering of Warrants may be made, through you or through an
underwriting syndicate managed by you as set forth in the applicable terms
agreement entered into between you and the Company of which this Underwriting
Agreement Basic Provisions is Annex A thereto (the "Terms Agreement", which,
together with the provisions hereof incorporated therein by reference is herein
referred to as the "Agreement"). The Terms Agreement relating to each offering
of Securities shall specify the name of the lead Managing Underwriter and the
names of such other Co-Managing Underwriters, if any, in connection with such
offering, and the names of the other underwriters (the "Underwriters"), which
shall include you while acting alone in the sale of Securities or as a member of
an underwriting syndicate, and any Underwriter substituted pursuant to Section
10 hereof), if any, participating in such offering, the principal amount of
Securities to be issued and their terms not otherwise specified in the
Indenture, the principal amount of Securities which each Underwriter severally
agrees to purchase, the price at which the Securities are to be purchased by the
Underwriters from the Company, the initial public offering price, any delayed
delivery arrangements and the time and place of delivery and payment. The Terms
Agreement may take the form of an exchange of any standard form of written
telecommunication between you, the Company and the Guarantor.
A-2
<PAGE>
The Company and the Guarantor have filed with the Securities and Exchange
Commission (the "Commission") registration statements on Form S-3 (Nos.
33-______ and 33-57034) such registration statements together relating to
securities including the Debt Securities, the related Guarantees and Warrants
and the offering thereof from time to time in accordance with Rule 415 under the
Securities Act of 1933, as amended (the "1933 Act"), and have filed such
amendments thereto as may have been required to the date hereof. Such
registration statements as amended have been declared effective by the
Commission, and the Indentures have been qualified under the Trust Indenture Act
of 1939, as amended (the "1939 Act"). Such registration statements as amended
and the prospectuses relating to the sale of Debt Securities and Warrants by the
Company and the issuance of the Guarantees by the Guarantor constituting a part
thereof, including all documents incorporated therein by reference, as from time
to time amended or supplemented pursuant to the Securities Exchange Act of 1934,
as amended (the "1934 Act"), the 1933 Act or otherwise, are referred to herein
as the "Registration Statement" and the "Prospectus", respectively; provided,
however, that a supplement to the Prospectus contemplated by Section 3(a) (a
"Prospectus Supplement") shall be deemed to have supplemented the Prospectus
only with respect to the offering of Securities and the related Guarantees to
which it relates.
Section 1. Representations and Warranties. The Company and the Guarantor
------------------------------
jointly and severally represent and warrant to you and to each Underwriter named
in a Terms Agreement as of the date thereof (in each case the "Representation
Date"), as follows:
(a) The Registration Statement and the Prospectus, at the times the
Registration Statement became effective and as of the applicable
Representation Date complied in all material respects with the requirements
of the 1933 Act, the rules and regulations thereunder (the "Regulations")
and the 1939 Act. The Registration Statement, at the times the
Registration Statement became effective and as of the applicable
Representation Date, did not, and will not, contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus, at the times the Registration Statement became effective and as
of the applicable Representation Date, did not, and will not, contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection shall
not apply to statements in or
A-3
<PAGE>
omissions from the Registration Statement or Prospectus made in reliance
upon and in conformity with information furnished to the Company and the
Guarantor in writing by any Underwriter through you expressly for use in
the Registration Statement or Prospectus or to that part of the
Registration Statement which shall constitute the Statement of Eligibility
and Qualification under the 1939 Act (Form T-1), of any Trustee under the
applicable Indenture.
(b) The consolidated financial statements included in the
Registration Statement and Prospectus present fairly the consolidated
financial position of the Company and the Guarantor and their respective
consolidated subsidiaries as at the dates indicated and the results of
their operations for the periods specified; said financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis during the periods involved, except as
indicated therein; and the supporting schedules included in the
Registration Statement present fairly the information required to be stated
therein.
(c) The documents incorporated by reference in the Prospectus, at the
time they were or hereafter are filed with the Commission, complied and
will comply in all material respects with the requirements of the 1934 Act
and the rules and regulations thereunder, and, when read together and with
the other information in the 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 the light
of the circumstances under which they are made, not misleading.
(d) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein or contemplated thereby, (A) there has been no material adverse
change in the condition, financial or otherwise, of the Company or the
Guarantor and its subsidiaries considered as one enterprise, or in the
earnings, business affairs or business prospects of the Company or the
Guarantor and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary court of business, (B) there have been no material
transactions entered into by the Company or the Guarantor or any of its
subsidiaries other than those in the ordinary course of business, and (C)
except for regular dividends on the Guarantor's Common Stock, $1.00 par
value, there has been no dividend or distribution of any kind declared,
paid or made by the Company or the Guarantor on any class of their capital
stock.
A-4
<PAGE>
(e) Each of the Company and the Guarantor has been duly incorporated
and is validly existing as a corporation in good standing under the laws
of the Commonwealth of Pennsylvania with corporate power and authority to
own, lease and operate its properties and conduct its business as
described in the Registration Statement; the Guarantor is duly registered
as a bank holding company under the Bank Holding Company Act of 1956, as
amended (the "Bank Holding Company Act"); and each of the Company and the
Guarantor is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which it owns or leases
substantial properties or in which the conduct of its business requires
such qualification.
(f) Each subsidiary of the Company or the Guarantor which is a
"significant subsidiary" as defined in Rule 405 of Regulation C of the
Regulations (a "Significant Subsidiary") has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and conduct its business as described
in the Registration Statement and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which it owns or leases substantial properties or in which
the conduct of its business requires such qualification; all of the issued
and outstanding capital stock of each such Significant Subsidiary has been
duly authorized and validly issued and is fully paid and non-assessable
(subject to the provisions of Section 55 of Title 12 of the United States
Code in the case of Significate Subsidiaries which are national banking
associations); and the capital stock of each such Significant Subsidiary
owned by the Guarantor or the Company, directly or through subsidiaries, is
owned free and clear of any mortgage, pledge, lien, encumbrance, claim or
equity.
(g) Neither the Company, the Guarantor nor any of the Significant
Subsidiaries is in violation of its charter or in default in the
performance or observance of any material obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which any of them is a party
or by which they or their properties may be bound; and the execution and
delivery of this Agreement, the applicable Indenture and each Warrant
Agreement, if any, and the consummation of the transactions contemplated
herein and therein have been duly authorized by all necessary corporate
action and will not conflict with or constitute a breach of,
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or default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company, the
Guarantor or any of the Significant Subsidiaries pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Company, the Guarantor or any of the Significant Subsidiaries is
a party or by which any of them may be bound or to which any of the
property or assets of the Company, the Guarantor or any of the Significant
Subsidiaries is subject, nor will such action result in any violation of
the provisions of the charter or by-laws of the Company, the Guarantor or,
to the best of their knowledge, any law, administrative regulation or
administrative or court decree; and no consent, approval, authorization or
order of any court or governmental authority or agency is required for the
consummation by the Company or the Guarantor of the transactions
contemplated by this Agreement, except such as may be required under the
1933 Act, the 1939 Act or the Regulations or state securities or Blue Sky
laws.
(h) The Company, the Guarantor and the Significant Subsidiaries
possess adequate certificates, authorities or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them, and neither the
Company nor the Guarantor nor any of the Significant Subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would materially adversely affect the conduct of the business,
operations, financial condition or income of the Company or the Guarantor
and its subsidiaries considered as one enterprise.
(i) Except as set forth in the Prospectus, there is no action, suit
or proceeding before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company or
the Guarantor, threatened against or affecting, the Company, the Guarantor
or any of their subsidiaries, which might result in any material adverse
change in the condition, financial or otherwise, of the Company or the
Guarantor and its subsidiaries considered as one enterprise, or in the
earnings, business affairs or business prospects of the Company or the
Guarantor and its subsidiaries considered as one enterprise, or might
materially and adversely affect the properties or assets thereof or might
materially and adversely affect the consummation of this Agreement; and
there are no contract or documents of the Company, the
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Guarantor or any of their subsidiaries which are required to be filed as
exhibits to the Registration Statement by the 1933 Act or by the
Regulations which have not been so filed.
(j) The Securities have been duly authorized for issuance and sale
pursuant to this Agreement (or will have been so authorized prior to each
issuance of Securities) and, when issued, authenticated and delivered
pursuant to the provisions of this Agreement and of the applicable
Indenture or Warrant Agreement, as the case may be, against payment of the
consideration therefor in accordance with this Agreement, the Securities
will be valid and legally binding obligations of the Company enforceable in
accordance with their terms, except as enforcement thereof may be limited
by bankruptcy, insolvency or other laws relating to or affecting
enforcement of creditors' rights or by general equity principles, and will
be entitled to the benefits of the applicable Indenture or Warrant
Agreement, as the case may be; the Guarantees have been duly authorized (or
will have been so authorized prior to each issuance of the related
Securities), and upon due issuance, authentication and delivery of the
related Securities and due endorsement of the Guarantees, the Guarantees
will have been duly executed, issued and delivered and will be valid and
legally binding obligations of the Guarantor enforceable in accordance with
their terms, except as enforcement thereof may be limited by bankruptcy,
insolvency or other laws relating to or affecting enforcement of creditors'
rights or by general equity principles, and will be entitled to the
benefits of the Indenture; and the Securities, the Guarantees, the Warrant
Agreement, if any, and the applicable Indenture conform in all material
respects to all statements relating thereto contained in the Prospectus.
(k) The Warrant Securities, if any, have been duly authorized for
issuance and sale upon the exercise of the Warrants, and, when issued,
authenticated and delivered pursuant to the terms and provisions of the
applicable Indenture against payment of the exercise price in accordance
with the terms of the Warrant Agreement, the Warrant Securities will be
valid and legally binding obligations of the Company and the related
Guarantees will be valid and legally binding obligations of the Guarantor,
in each case enforceable in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or other laws
of general applicability relating to or affecting enforcement of creditors'
rights or by general equity principles, and will be entitled to the
benefits of the applicable Indenture; and the Warrant Securities, if any,
will conform at the time of their
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issuance in all material respects to all statements relating thereto in the
Prospectus.
(l) The Company, the Guarantor and the Significant Subsidiaries own
or possess, or can acquire on reasonable terms, adequate trademarks,
service marks and trade names necessary to conduct the businesses now
operated by them, and neither the Company, the Guarantor nor any of their
subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any trademarks, service marks or
trade names which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially adversely affect
the conduct of the business, operations, financial condition or income of
the Company or the Guarantor and its subsidiaries considered as one
enterprise.
(m) No labor disturbance by the employees of the Company, the
Guarantor or their subsidiaries exists or, to the knowledge of the Company
or the Guarantor, is imminent which might be expected to have a material
adverse effect upon the conduct of the business, or the earnings,
operations or condition, financial or otherwise, of the Company or the
Guarantor and its subsidiaries, considered as one enterprise.
(n) The Company and the Guarantor are in compliance with all of the
provisions of Section 517.075 of the Florida statutes, and all rules and
regulations promulgated thereunder relating to issuers doing business in
Cuba.
Any certificate signed by any officer of the Company or the Guarantor and
delivered to you or counsel for the Underwriters in connection with an offering
of Securities and related Guarantees shall be deemed a representation and
warranty by the Company and the Guarantor, as to the matters covered thereby, to
each Underwriter participating in such offering.
Section 2. Purchase and Sale. The several commitments of the Underwriters
-----------------
to purchase Securities pursuant to the Terms Agreement shall be deemed to have
been made on the basis of the representations and warranties herein contained
and shall be subject to the terms and conditions herein set forth.
Payment of the purchase price for, and delivery of, any Securities to be
purchased by the Underwriters shall be made at the office of Brown & Wood, One
World Trade Center, New York, New York 10048, or at such other place as shall be
agreed upon by you and the Company, at 10:00 A.M., New York City time, on the
fifth business day (unless postponed in accordance with the provisions
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of Section 10) following the date of the Terms Agreement or such other time as
shall be agreed upon by you and the Company (each such time and date being
referred to as a "Closing Time"). Payment shall be made to the Company by
certified or official bank check or checks in New York Clearing House or similar
next day funds payable to the order of the Company against delivery to you for
the respective accounts of the Underwriters of the Securities to be purchased by
them, together with the related Guarantees. Such Securities shall be in such
denominations and registered in such names as you may request in writing at
least two business days prior to the applicable Closing Time. Such Securities
and the related Guarantees, each of which may be in temporary form, will be made
available for examination and packaging by you on or before the first business
day prior to Closing Time.
If authorized by the Terms Agreement, the Underwriters named therein may
solicit offers to purchase Debt Securities or Warrants from the Company pursuant
to delayed delivery contracts ("Delayed Delivery Contracts") substantially in
the form of Exhibit A hereto with such changes therein as the Company and the
Guarantor may approve. As compensation for arranging Delayed Delivery
Contracts, the Company will pay to you at Closing Time, for the accounts of the
Underwriters, a fee equal to that percentage of the principal amount of Debt
Securities or number of Warrants, as the case may be, for which Delayed
Delivery Contracts are made at Closing Time as is specified in the applicable
Terms Agreement. Any Delayed Delivery Contracts are to be with institutional
investors of the types set forth in the Prospectus. At Closing Time, the
Company will enter into Delayed Delivery Contracts (for not less than the
minimum principal amount of Debt Securities or number of Warrants per Delayed
Delivery Contract specified in the Terms Agreement) with all purchasers proposed
by the Underwriters and previously approved by the Company and the Guarantor as
provided below, but not for an aggregate principal amount of Debt Securities or
number of Warrants in excess of that specified in the Terms Agreement. The
Underwriters will not have any responsibility for the validity or performance of
Delayed Delivery Contracts.
You are to submit to the Company and the Guarantor, at least three business
days prior to Closing Time, the names of any institutional investors with which
it is proposed that the Company and the Guarantor will enter into Delayed
Delivery Contracts and the principal amount of Debt Securities or number of
Warrants to be purchased by each of them, and the Company and the Guarantor will
advise you, at least two business days prior to Closing Time, of the names of
the institutions with which the making of Delayed Delivery Contracts is approved
by the Company and the Guarantor and the principal amount of Debt Securities or
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number of Warrants to be covered by each such Delayed Delivery Contract.
The principal amount of Debt Securities or number of Warrants agreed to be
purchased by the respective Underwriters pursuant to the Terms Agreement shall
be reduced by the principal amount of Debt Securities or number of Warrants
covered by Delayed Delivery Contracts, as to each Underwriter as set forth in a
written notice delivered by you to the Company and the Guarantor; provided,
however, that the total principal amount of Debt Securities or number of
Warrants to be purchased by all Underwriters shall be the total amount of Debt
Securities or number of Warrants covered by the Terms Agreement, less the
principal amount of Debt Securities or number of Warrants covered by Delayed
Delivery Contracts.
Section 3. Covenants of the Company. The Company and the Guarantor
------------------------
jointly and severally covenant with each of you, and with each Underwriter
participating in the offering of Securities, as follows:
(a) Immediately following the execution of the Terms Agreement, the
Company and the Guarantor will prepare a Prospectus Supplement setting
forth the principal amount of Debt Securities and/or number of Warrants
covered thereby and the terms of such Debt Securities and Warrants and the
related Guarantees not otherwise specified in the applicable Indenture or
Warrant Agreement, as the case may be, the names of the Underwriters
participating in the offering and the principal amount of Debt Securities
and/or number of Warrants which each severally has agreed to purchase, the
name of the Underwriter acting as Lead Managing Underwriter and the names
of such Underwriters, if any, acting as Co-Managing Underwriters in
connection with the offering, the price at which the Securities are to be
purchased by the Underwriters from the Company, the initial public offering
price, the selling concession and reallowance, if any, any delayed delivery
arrangements, and such other information as you, the Company and the
Guarantor deem appropriate in connection with the offering of the
Securities and the related Guarantees. The Company and the Guarantor will
promptly transmit copies of the Prospectus Supplement to the Commission for
filing pursuant to Rule 424 of the Regulations and will furnish to the
Underwriters named therein as many copies of the Prospectus and such
Prospectus Supplement as you shall reasonably request.
(b) If at any time when the Prospectus is required by the 1933 Act to
be delivered in connection with sales of the Securities any event shall
occur or condition exist as a
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result of which it is necessary, in the opinion of your counsel or counsel
for the Company or the Guarantor, to further amend or supplement the
Prospectus in order that the Prospectus will not include an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein not misleading in the light of circumstances
existing at the time it is delivered to a purchaser or if it shall be
necessary, in the opinion of either such counsel, at any such time to amend
or supplement the Registration Statement or the Prospectus in order to
comply with the requirements of the 1933 Act or the Regulations, the
Company and the Guarantor will promptly prepare and file with the
Commission such amendment or supplement, whether by filing documents
pursuant to the 1934 Act or otherwise, as may be necessary to correct such
untrue statement or omission to make the Registration Statement comply with
such requirements.
(c) With respect to each sale of Securities and issuance of related
Guarantees, the Guarantor will make generally available to the security
holders of the Guarantor and the Company as soon as practicable, but not
later than 90 days after the close of the period covered thereby, earnings
statements of the Guarantor (in form complying with the provisions of Rule
158 under the 1933 Act) covering twelve-month periods beginning, in each
case, not later than the first day of the Guarantor's fiscal quarter next
following each "effective date" (as defined in Rule 158) of the
Registration Statement relating to such Securities and Guarantees.
(d) The Company and the Guarantor will give you notice of their
intention to file any amendment to the Registration Statement or any
amendment or supplement to the Prospectus, whether pursuant to the 1934
Act, the 1933 Act or otherwise, and will furnish you with copies of any
such amendment or supplement or other documents proposed to be filed a
reasonable time in advance of filing, and will not file any such amendment
or supplement or other documents in a form to which you or your counsel
shall reasonably object.
(e) The Company and the Guarantor will notify each of you
immediately, and confirm the notice in writing, (i) of the effectiveness of
any amendment to the Registration Statement, (ii) of the mailing or the
delivery to the Commission for filing of any supplement to the Prospectus
or any document to be filed pursuant to the 1934 Act, (iii) of the receipt
of any comments from the Commission with respect to the Registration
Statement, the Prospectus or any Prospectus Supplement, (iv) of any request
by the Commission
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for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, and (v) of 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. The Company and the Guarantor will make every reasonable effort
to prevent the issuance of any stop order and, if any stop order is issued,
to obtain the lifting thereof at the earliest possible moment.
(f) The Company and the Guarantor will deliver to each of you as many
signed and conformed copies of the registration statement (as originally
filed) and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated by reference
in the Prospectus) as you may reasonably request and will also deliver to
you a conformed copy of the Registration Statement and each amendment
thereto for each of the Underwriters.
(g) The Company and the Guarantor will endeavor, in cooperation with
you, to qualify the Securities and the related Guarantees for offering and
sale under the applicable securities laws of such states and other
jurisdictions of the United States as you may designate, and will maintain
such qualifications in effect for as long as may be required for the
distribution of the Securities. The Company and the Guarantor will file
such statements and reports as may be required by the laws of each
jurisdiction in which the Securities and the related Guarantees have been
qualified as above provided.
(h) The Company and the Guarantor, during the period when the
Prospectus is required to be delivered under the 1933 Act, will file
promptly all documents required to be filed with the Commission pursuant to
Section 13 or 14 of the 1934 Act.
(i) Between the date of the Terms Agreement and termination of any
trading restrictions or Closing Time, whichever is later, with respect to
the Securities covered thereby, the Company and the Guarantor will not,
without the prior consent of such of you as may be named in such Terms
Agreement, offer or sell, or enter into any agreement to sell, any debt
securities of the Company or the Guarantor with a maturity of more than one
year, including additional Debt Securities or any Warrants to purchase Debt
Securities with a maturity of more than one year.
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<PAGE>
Section 4. Conditions of Underwriters' Obligations. The several
---------------------------------------
obligations of the Underwriters to purchase Securities pursuant to the Terms
Agreement are subject to the accuracy of the representations and warranties on
the part of the Company and the Guarantor herein contained, to the accuracy of
the statements of the Company's and Guarantor's officers made in any certificate
furnished pursuant to the provisions hereof, to the performance by the Company
and the Guarantor of all of their covenants and other obligations hereunder and
to the following further conditions:
(a) At the applicable Closing Time (i) no stop order suspending the
effectiveness of the Registration Statement shall have been issued under
the 1933 Act or proceedings therefor initiated or threatened by the
Commission, (ii) the rating assigned by an internationally recognized
securities rating agency to any debt securities or preferred stock of the
Company or the Guarantor as of the date of the applicable Terms Agreement
shall not have been lowered since the execution of such Terms Agreement or
if any such rating agency shall have publicly announced that it has placed
any debt securities or preferred stock of the Company or the Guarantor, as
the case may be, on what is commonly termed a "watch list" for possible
downgrading and (iii) there shall not have come to your attention any facts
that would cause such of you to believe that the Prospectus, together with
the applicable Prospectus Supplement, at the time it was required to be
delivered to a purchaser of the Securities, contained an untrue statement
of a material fact or omitted to state a material fact necessary in order
to make the statements therein, in light of the circumstances existing at
such time, not misleading.
(b) At the applicable Closing Time you shall have received:
(1) The favorable opinion, dated as of the applicable Closing
Time, of David J. Martin, Esq., counsel for the Guarantor and counsel
for the Company, in form and substance satisfactory to your counsel,
to the effect that:
(i) The Company and the Guarantor have been duly
incorporated and are validly existing as corporations in good
standing under the laws of the Commonwealth of Pennsylvania.
(ii) The Company has corporate power and authority to own,
lease and operate its properties
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and conduct its business as described in the Registration
Statement.
(iii) The Guarantor is duly registered as a bank holding
company under the Bank Holding Company Act and has the corporate
power and authority under the laws of the United States of
America and the Commonwealth of Pennsylvania to own, lease and
operate its properties and conduct its business as described in
the Registration Statement.
(iv) To the best of his knowledge and information, the
Company and the Guarantor are each duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required.
(v) Each Significant Subsidiary has been duly organized and
is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement,
and, to the best of his knowledge and information, is duly
qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which it owns or leases
substantial properties or in which the conduct of its business
requires such qualification; all of the issued and outstanding
capital stock of each such Significant Subsidiary has been duly
authorized and validly issued and is fully paid and non-
assessable (subject to the provisions of Section 55 of Title 12
of the United States Code in the case of Significant Subsidiaries
which are national banking associations) and all of such capital
stock, to the best of his knowledge and information, is owned,
directly or indirectly, by the Guarantor free and clear of any
pledge, lien, encumbrance, claim or equity.
(vi) This Agreement and the Delayed Delivery Contracts, if
any, have been duly authorized, executed and delivered by the
Company and the Guarantor.
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(vii) The applicable Indenture and any Warrant Agreement
have been duly and validly authorized, executed and delivered by
the Company and the Guarantor and constitute the valid and
binding agreements of the Company and the Guarantor, enforceable
in accordance with their terms, except as enforcement thereof may
be limited by bankruptcy, insolvency or other laws relating to or
affecting enforcement of creditors' rights or by general equity
principles.
(viii) The Securities and the Guarantees covered by the Terms
Agreement are in the form contemplated in the case of Debt
Securities, by the applicable Indenture and, in the case of
Warrants by the applicable Warrant Agreement, have been duly and
validly authorized by all necessary corporate action and, when
executed and authenticated as specified in the applicable
Indenture or any Warrant Agreement, as the case may be, and
delivered against payment pursuant to this Agreement, or any
Delayed Delivery Contracts, will be valid and binding obligations
of the Company and the Guarantor, respectively, enforceable in
accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency or other laws relating to or
affecting enforcement or creditors' rights or by general equity
principles, and except further as enforcement thereof may be
limited by requirements that a claim (or a foreign currency
judgment in respect of such claim) be converted into United
States dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law, and will be entitled to
the benefits of the applicable Indenture or the Warrant
Agreement, as the case may be.
(ix) The applicable Indenture, any Warrant Agreement, the
Securities and Guarantees covered by the Terms Agreement conform
in all material respects to the descriptions thereof in the
Prospectus and the applicable Prospectus Supplement.
(x) The Warrant Securities, if any, have been duly
authorized for issuance and sale upon the exercise of the
Warrants, and, when issued, authenticated and delivered pursuant
to the terms and provisions of the applicable Indenture against
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payment of the exercise price in accordance with the terms of the
Warrant Agreement, the Warrant Securities will be valid and
legally binding obligations of the Company and the related
Guarantees will be valid and legally binding obligations of the
Guarantor, in each case enforceable in accordance with their
terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other laws of general applicability
relating to or affecting enforcement of creditors' rights or by
general equity principles, and except further as enforcement
thereof may be limited by requirements that a claim (or foreign
currency judgment in respect of such claim) be converted into
United States dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law, and will be entitled to
the benefits of the applicable Indenture; and the form of Warrant
Securities, if any, conforms in all material respects to the
description thereof in the Prospectus.
(xi) The applicable Indenture is qualified under the 1939
Act.
(xii) The Registration Statement is effective under the 1933
Act and, to the best of his knowledge and information, no stop
order suspending the effectiveness of the Registration Statement
has been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission.
(xiii) The Registration Statement, at the time it became
effective (other than the financial statements included therein,
as to which no opinion need be rendered), complied as to form in
all material respects with the requirements of the 1933 Act, the
1939 Act, and the Regulations, and nothing has come to his
attention that would lead him to believe that the Registration
Statement, at the times it became effective, or if an amendment
to the Registration Statement or an Annual Report on Form 10-K
has been filed by the Guarantor with the Commission subsequent to
the effectiveness of the Registration Statement, then at the time
of the most recent such filing, and as of the date of the Terms
Agreement, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to
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make the statements therein not misleading or that the
Prospectus, as amended or supplemented at the date of the Terms
Agreement and at Closing Time, contains an untrue statement of a
material fact or omits to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(xiv) Each document filed pursuant to the 1934 Act (other
than the financial statements included therein, as to which no
opinion need be rendered) and incorporated by reference in the
Prospectus complied when so filed as to form in all material
respects with the 1934 Act and the rules and regulations
thereunder.
(xv) No consent, approval, authorization or order of any
court or governmental authority or agency is required in
connection with the sale of the Securities or the issuance of the
related Guarantees to the Underwriters or the compliance by the
Company and the Guarantor with all of the provisions of the
Securities, the Guarantees, the applicable Indenture, any Warrant
Agreement, any Delayed Delivery Contracts and the Terms
Agreement, except such as may be required under the 1933 Act and
state securities or Blue Sky laws; and to the best of his
knowledge and information, the execution and the delivery of the
Terms Agreement, any Delayed Delivery Contracts and the
applicable Indenture and the consummation of the transactions
contemplated herein and therein will not conflict with or
constitute a breach of, or a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company, the Guarantor or any of
their Significant Subsidiaries pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company, the Guarantor or any of their
Significant Subsidiaries is a party or by which any of them may
be bound or to which any of the property or assets of the
Company, the Guarantor or any of their Significant Subsidiaries
is subject, nor will such action result in any violation of the
provisions of the charter or by-laws of the Company, the
Guarantor or any of their Significant Subsidiaries, or any law,
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administrative regulation or administrative or court decree.
(2) The favorable opinion or opinions, dated as of the
applicable Closing Time, of Brown & Wood, counsel for the
Underwriters, with respect to the matters set forth in (i) and (vi) to
(xiii), inclusive, of subsection (b)(1) of this Section.
(c) At the applicable Closing Time there shall not have been, since
the date of the Terms Agreement or since the respective dates as of which
information is given in the Registration Statement, any material adverse
change in the condition, financial or otherwise, of the Company or the
Guarantor and its subsidiaries considered as one enterprise, or in the
earnings, business affairs or business prospects of the Company or the
Guarantor and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and you shall have received a
certificate of the President or a Vice President of each of the Company and
the Guarantor, dated as of such Closing Time, to the effect that there has
been no such material adverse change and to the effect that the
representations and warranties of the Company and the Guarantor contained
in Section 1 are true and correct with the same force and effect as though
such Closing Time were a Representation Date.
(d) You shall have received letters from Ernst & Young dated as of
the date of the Terms Agreement and delivered at such time, in form
heretofore agreed to.
(e) You shall have received from Ernst & Young or other independent
certified public accountants acceptable to you, a letter dated as of the
applicable Closing Time, reconfirming or updating the letter of Ernst &
Young required by subsection (d) of this Section to the extent that may be
reasonably requested.
(f) At the applicable Closing Time counsel for the Underwriters shall
have been furnished with such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the issuance and sale
of the Securities and the related Guarantees as herein contemplated and
related proceedings or in order to evidence the accuracy and completeness
of any of the representations and warranties, or the fulfillment of any of
the conditions, herein contained; and all proceedings taken by the Company
and the Guarantor in connection with the issuance and sale of the
Securities and the related Guarantees as herein
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contemplated shall be satisfactory in form and substance to you and counsel
for the Underwriters.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by such
of you by notice to the Company and the Guarantor at any time at or prior to the
applicable Closing Time, and such termination shall be without liability of any
party to any other party except as provided in Section 5.
Section 5. Payment of Expenses. The Company and the Guarantor will pay
-------------------
all expenses incident to the performance of their obligations under this
Agreement, including (i) the printing and filing of the Registration Statement
and all amendments thereto and the printing of this Agreement and each Terms
Agreement, (ii) the preparation, issuance and delivery of the Securities and
related Guarantees to the Underwriters and the preparation, issuance and
delivery of any Warrant Securities upon exercise of Warrants, (iii) the fees and
disbursement of the Company's and the Guarantor's counsel and accountants, (iv)
the qualification of the Securities, the related Guarantees and any Warrant
Securities under the securities laws in accordance with the provisions of
Section 3(g), including filing fees and the fees and disbursements of counsel
for the Underwriters in connection therewith and in connection with the
preparation of any Blue Sky Survey and Legal Investment Survey, (v) the printing
and delivery to the Underwriters in quantities as hereinabove stated of copies
of the registration statement and all amendments thereto, of the Registration
Statement and any amendments thereto, and of the Prospectus and any amendments
or supplements thereto, (vi) the printing and delivery to the Underwriters of
copies of the applicable Indenture and any Blue Sky Survey and Legal Investment
Survey, (vii) the fees of rating agencies, (viii) the fees and expenses, if any,
incurred in connection with the listing of Securities and any warrant Securities
on any exchange and (ix) the fees and expenses, if any, incurred with respect to
any filing with the National Association of Securities Dealers, Inc.
If the Terms Agreement is terminated by you in accordance with the
provisions of Section 4 or Section 9(i), the Company and the Guarantor shall
reimburse the Underwriters named in such Terms Agreement for all of their out-
of-pocket expenses, including the reasonable fees and disbursements of counsel
for the Underwriters.
Section 6. Indemnification. (a) The Company and the Guarantor jointly
---------------
and severally agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls
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<PAGE>
any Underwriter within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, unless such untrue statement or omission or such alleged
untrue statement or omission was made in reliance upon and in
conformity with written information furnished to the Company or the
Guarantor by any Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto);
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company and the Guarantor;
and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by you),
reasonably incurred in investigating, preparing or defending against
any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, the extent that any such expense is not paid
under (i) or (ii) above.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company and the Guarantor, their
A-20
<PAGE>
directors, each of their officers who signed the Registration Statement,
and each person, if any, who controls the Company or the Guarantor within
the meaning of Section 15 of the 1933 Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in
the Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity
with written information furnished to the Company or the Guarantor by such
Underwriter through you expressly for use in the Registration Statement (or
any amendment thereto) or the Prospectus (or any amendment or supplement
thereto).
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder but failure to so notify an indemnifying
party shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. An indemnifying party may
participate at its own expense in the defense of such action. In no event
shall the indemnifying parties be liable for the fees and expenses of more
than one counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
SECTION 7. Contribution. In order to provide for just and equitable
------------
contribution in circumstances in which the indemnity agreement provided for
in Section 6 is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company, the
Guarantor and the Underwriters of each offering of Securities shall
contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by said indemnity agreement incurred by
the Company, the Guarantor and one or more of such Underwriters in respect
of such offering in such proportions as will reflect the relative benefits
from the offering of such Securities received by the Company and the
Guarantor on the one hand and by such Underwriters on the other hand,
provided that if the Securities are offered by Underwriters at an initial
public offering price set forth in a Prospectus Supplement, the relative
benefits shall be deemed to be such that the Underwriters shall be
responsible for that portion of the aggregate losses, liabilities, claims,
damages and expenses represented by the percentage that the
A-21
<PAGE>
underwriting discount appearing in such Prospectus Supplement bears to the
initial public offering price appearing therein and the Company and the
Guarantor shall be responsible for the balance; provided, however, that no
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the 1933 Act shall have the same rights
to contribution as such Underwriter, and each director of the Company or
the Guarantor, each officer of the Company or the Guarantor who signed the
Registration Statement, and each person, if any, who controls the Company
or the Guarantor within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as the Company or the Guarantor, as
the case may be.
SECTION 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
--------
Agreement, or contained in certificates of officers of the Company or the
Guarantor submitted pursuant hereto, shall remain operative and in full
force and effect, regardless of any termination of this Agreement, or any
investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Company or the Guarantor, and shall
survive delivery of any Securities to the Underwriters.
SECTION 9. Termination. You may terminate this Agreement by written
-----------
notice to the Company and the Guarantor at any time at or prior to the
Closing Time (i) if there has been, since the date of the Terms Agreement
or since the respective dates as of which information is given in the
Registration Statement, any material adverse change in the condition,
financial or otherwise, of the Company or the Guarantor and its
subsidiaries considered as one enterprise, or in the earnings, business
affairs or business prospects of the Company or the Guarantor and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material
adverse change in the debt markets in the United States or any outbreak or
escalation of hostilities or other calamity or crisis the effect of which
on the financial markets of the United States is such as to make it, in
your reasonable judgment, impracticable to market the Securities or enforce
contracts for the sale of the Securities, or (iii) if trading in the
capital stock of the Guarantor has been suspended by the Commission or a
national securities exchange, or if trading generally on either the
A-22
<PAGE>
American Stock Exchange or the New York Stock Exchange has been suspended,
or minimum or maximum prices for trading have been fixed, or maximum ranges
for prices for securities have been required, by either of said exchanges
or by order of the Commission or any other governmental authority, or if a
banking moratorium has been declared by either Federal or New York or
Pennsylvania authorities or (iv) if the rating assigned by any nationally
recognized securities rating agency to any debt securities or preferred
stock of the Company or the Guarantor as of the time of the Terms Agreement
shall have been lowered since that time or if any such rating agency shall
have publicly announced that it has placed any debt securities or preferred
stock of the Company or the Guarantor on what is commonly termed a "watch
list" for possible downgrading. In the event of any such termination, (x)
the covenants set forth in Section 3 with respect to any offering of
Securities and related Guarantees shall remain in effect so long as any
Underwriter owns any such Securities and related Guarantees purchased from
the Company pursuant to the Terms Agreement and (y) the covenant set forth
in Section 3(c), the provisions of Section 5, the indemnity agreement set
forth in Section 6, the contribution provisions set forth in Section 7 and
the provisions of Sections 8 and 13 shall remain in effect.
SECTION 10. Default. If one or more of the Underwriters participating in
-------
an offering of Securities shall fail at the applicable Closing Time to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), then you shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amount as may be agreed upon and upon the
terms herein set forth. If, however, during such 24 hours you shall not have
completed such arrangements for the purchase of all of the Defaulted Securities,
then:
(a) if the aggregate principal amount of Defaulted Securities does
not exceed 10% of the aggregate principal amount of the Securities to be
purchased pursuant to the Terms Agreement, the non-defaulting Underwriters
named in the Terms Agreement shall be obligated to purchase the full amount
thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all such non-defaulting
Underwriters, or
(b) if the aggregate principal amount of Defaulted Securities exceeds
10% of the aggregate principal amount of the Securities to be purchased
pursuant to the Terms
A-23
<PAGE>
Agreement, the Terms Agreement shall terminate, without any liability on
the part of any non-defaulting Underwriter, the Company or the Guarantor.
As used in this Section only, the "aggregate amount" of Securities shall
mean the aggregate principal amount of any Debt Securities plus the offering
price of any Warrants included in the relevant Securities. No action taken
pursuant to this Section shall relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
In the event of a default by any Underwriter or Underwriters as set forth
in this Section, either you, the Company or the Guarantor shall have the right
to postpone the applicable Closing Time for a period of not exceeding seven days
in order that any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements may be effected.
SECTION 11. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to you at the address of the Lead Managing
Underwriter indicated in the Terms Agreement; notices to the Guarantor shall be
directed to it at Broad and Chestnut Streets, Philadelphia, Pennsylvania 19107,
attention of the Secretary with a copy to the Treasurer; and notices to the
Company shall be directed to it at Broad and Chestnut Streets, Philadelphia,
Pennsylvania 19107, attention of the Secretary.
SECTION 12. Parties. This Agreement shall inure to the benefit of and be
-------
binding upon you, the Company and the Guarantor, any Underwriter who becomes a
party hereto, and their respective successors. Nothing expressed or mentioned
in this Agreement is intended to or shall be construed to give any person, firm
or corporation, other than the parties hereto and their respective successors
and the controlling persons and officers and directors referred to in Sections
6 and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the parties and their respective
successors and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities or the related Guarantees from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
A-24
<PAGE>
SECTION 13. Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the laws of the State of New York applicable to
agreements made and to be performed in such State.
A-25
<PAGE>
EXHIBIT A
CORESTATES CAPITAL CORP
(a Pennsylvania corporation)
[Title of Security]
Unconditionally guaranteed by
CORESTATES FINANCIAL CORP
(a Pennsylvania corporation)
DELAYED DELIVERY CONTRACT
, 19
CoreStates Capital Corp and
CoreStates Financial Corp
c/o [Name and Address of Managing Underwriter(s)]
Attention: , Vice President
Syndicate Department
Dear Sirs:
The undersigned hereby agrees to purchase from CoreStates Capital Corp (the
"Company"), and the Company agrees to sell to the undersigned on , 19
(the "Delivery Date"), principal amount of the Company's
% [Senior] [Subordinated] [Debt Securities] [Notes] [Debentures] due ,
19 (the "Securities"). The Securities are unconditionally guaranteed as to
payment of principal, premium, if any, and interest, if any (said guarantees
being hereinafter referred to as the "Guarantees"), by CoreStates Financial Corp
(the "Guarantor"). The Securities are offered by the Company pursuant to the
Company's and the Guarantor's Prospectus dated
, 199 , as supplemented by their Prospectus Supplement dated
, 19 , receipt of which is hereby acknowledged, at a purchase price of % of
the principal amount thereof, plus accrued interest from , 19 , to
the Delivery Date, and on the further terms and conditions set forth in this
contract.
Exhibit A-1
<PAGE>
Payment for the Securities which the undersigned has agreed to purchase on
the Delivery Date shall be made to the Company or its order by certified or
official bank check in New York Clearing House funds, at the office of [Name and
Address of Managing Underwriter] on the Delivery Date, upon delivery to the
undersigned in definitive form and in such denominations and registered in such
names as the undersigned may designate by written or telegraphic communication
addressed to the Company not less than five full business days prior to the
Delivery Date.
The obligation of the undersigned to take delivery of and make payment for
Securities on the Delivery Date and the issuance of the related Guarantees by
the Guarantor shall be subject only to the conditions that (1) the purchase of
Securities to be made by the undersigned shall not on the Delivery Date be
prohibited under the laws of the jurisdiction to which the undersigned is
subject and (2) the Company, on or before , 19 , shall have sold to
the Underwriters of the Securities (the "Underwriters") such principal amount of
the Securities as is to be sold to them pursuant to the Terms Agreement dated
, 19 between the Company, the Guarantor and the Underwriters. The
obligation of the undersigned to take delivery of and make payment for
Securities shall not be affected by the failure of any purchaser to take
delivery of and make payment for Securities pursuant to other contracts
similar to this contract. The undersigned represents and warrants to you that
its investment in the Securities and the Guarantees is not, as of the date
hereof, prohibited under the laws of any jurisdiction to which the undersigned
is subject and which govern such investment.
Promptly after completion of the sale to the Underwriters, the Company will
mail or deliver to the undersigned at its address set forth below notice to such
effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith.
By the execution hereof, the undersigned represents and warrants to the
Company and the Guarantor that all necessary corporate action for the due
execution and delivery of this contract and the payment for and purchase of the
Securities has been taken by it and no further authorization or approval of any
government or other regulatory authority is required for such execution,
delivery, payment or purchase, and that, upon acceptance hereof by the Company
and the Guarantor and mailing or delivery of a copy as provided below, this
contract will constitute a valid and binding agreement of the undersigned in
accordance with its terms.
This contract will inure to the benefit of and be binding upon the parties
hereto and their respective successors, but will
Exhibit A-2
<PAGE>
not be assignable by either party hereto without the written consent of the
other.
It is understood that the Company and the Guarantor will not accept Delayed
Delivery Contracts for an aggregate principal amount of Securities in excess of
$ and that the acceptance of any Delayed Delivery Contract is in the sole
discretion of the Company and the Guarantor and, without limiting the foregoing,
need not be on a first-come, first-served basis. If this con-tract is
acceptable to the Company and the Guarantor, it is requested that the Company
and the Guarantor sign the form of acceptance on a copy hereof and mail or
deliver a signed copy hereof to the undersigned at its address set forth below.
This will become a binding contract among the Company, the Guarantor and the
undersigned when such copy is so mailed or delivered.
This Agreement shall be governed by the laws of the State of New York.
Yours very truly,
____________________________
(Name of Purchaser)
By__________________________
(Title)
____________________________
____________________________
(Address)
Accepted as of the date
first above written.
CORESTATES CAPITAL CORP
By__________________________
CORESTATES FINANCIAL CORP
By___________________________
Exhibit A-3
<PAGE>
PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the Purchaser with
whom details of delivery on the Delivery Date may be discussed is as follows:
(Please print)
Telephone No.
Name (including Area Code)
---- ---------------------
Exhibit A-4
<PAGE>
Exhibit 1.B
DRAFT 5/19/94
CORESTATES CAPITAL CORP
Medium-Term Notes Due From
9 Months or more from Date of Issue
Unconditionally Guaranteed as to Payment
of Principal, Premium, if any and Interest by
CORESTATES FINANCIAL CORP
DISTRIBUTION AGREEMENT
April 27, 1993
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower, 23rd Floor
New York, New York 10281-1323
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Lehman Brothers Inc.
American Express Tower
World Financial Center
New York, New York 10285
J.P. Morgan Securities Inc.
Capital Markets Services
60 Wall Street
New York, New York 10260
CS First Boston
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
Smith Barney Shearson Inc.
1345 Avenue of the Americas
New York, New York 10105
Dear Sirs:
CoreStates Capital Corp, a Pennsylvania corporation (the "Company"),
confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Goldman, Sachs
<PAGE>
& Co., Lehman Brothers Inc., J.P. Morgan Securities Inc., CS First Boston and
Smith Barney, Shearson Inc. (each referred to as an "Agent" and collectively
referred to as the "Agents") with respect to the issue and sale by the Company
of its Senior and/or Subordinated Medium-Term Notes described herein (the
"Notes"). The Senior Notes will be unconditionally guaranteed as to payment of
principal, premium, if any, and interest (the "Senior Guarantees") by CoreStates
Financial Corp (the "Guarantor"). The Subordinated Notes will be
unconditionally guaranteed, on a subordinated basis, as to payment of principal,
premium, if any, and interest (the "Subordinated Guarantees", and, together with
the Senior Guarantees, the "Guarantees") by the Guarantor. The Senior Notes and
Senior Guarantees are to be issued pursuant to an Indenture, dated as of
December 1, 1990 (the "Senior Indenture"), among the Company, the Guarantor and
NationsBank of Georgia, National Association, as trustee and successor to
Wachovia Bank of Georgia, N.A. (the "Senior Trustee"). The Subordinated Notes
and Subordinated Guarantees are to be issued pursuant to an Indenture, dated as
of December 1, 1990, as amended by the First Supplemental Indenture, dated as of
March 1, 1993, and the Second Supplemental Indenture, dated as of ______ __,
1994 (together, the "Subordinated Indenture", and, together with the Senior
Indenture, the "Indentures"), among the Company, the Guarantor and Citibank,
N.A., as trustee (the "Subordinated Trustee", and, together with the Senior
Trustee, the "Trustees").
As of the date hereof, the Company has authorized the issuance and sale of
up to U.S. $1,000,000,000 aggregate principal amount (or its equivalent, based
upon the applicable exchange rate at the time of issuance, in such foreign
currencies or units of two or more currencies as the Company shall designate at
the time of issuance) of Notes through the Agents pursuant to the terms of this
Agreement. It is understood, however, that the Company may from time to time
authorize the issuance of additional Notes and that such additional Notes may be
sold through or to the Agents pursuant to the terms of this Agreement, all as
though the issuance of such Notes were authorized as of the date hereof.
This Agreement provides both for the sale of Notes by the Company through
the Agents, in which case the Agents will act as agents of the Company in
soliciting Note purchasers, and (as may from time to time be agreed to by the
Company and the applicable Agent) to an Agent as principal for resale to
purchasers.
The Company and the Guarantor have filed with the Securities and Exchange
Commission (the "SEC") registration statements on Form S-3 (No. 33-____ and No.
33-57034) for the registration of debt securities, including the Notes, the
Guarantees and warrants to purchase debt securities under the Securities Act of
1933, as amended (the "1933 Act"), and the offering thereof from time to
2
<PAGE>
time in accordance with Rule 415 of the rules and regulations of the SEC under
the 1933 Act (the "1933 Act Regulations"). Such registration statements have
been declared effective by the SEC and the Indentures have been qualified under
the Trust Indenture Act of 1939, as amended (the "1939 Act"). Such registration
statements (and any further registration statements which may be filed by the
Company and the Guarantor for the purpose of registering additional Notes and
related Guarantees and in connection with which this Agreement is included as an
exhibit) and the prospectuses constituting a part thereof, and any prospectus
supplements relating to the Notes, including all documents incorporated therein
by reference, as from time to time amended or supplemented by the filing of
documents pursuant to the Securities Exchange Act of 1934, as amended (the "1934
Act") or the 1933 Act or otherwise, are referred to herein collectively as the
"Registration Statement" and the "Prospectus", respectively, except that if any
revised prospectus shall be provided to the Agents by the Company for use in
connection with the offering of the Notes and related Guarantees which is not
required to be filed by the Company pursuant to Rule 424(b) of the 1933 Act
Regulations, the term "Prospectus" shall refer to such revised prospectus from
and after the time it is first provided to each Agent for such use.
SECTION 1. Appointment as Agents.
---------------------
(a) Appointment of Agents. Subject to the terms and conditions stated
---------------------
herein and subject to the reservation by the Company of the right to sell Notes
directly on its own behalf, the Company hereby appoints the Agents as its agents
for the purpose of soliciting purchases of the Notes from the Company by others
and agrees that whenever the Company determines to sell Notes directly to an
Agent as principal for resale to others, it will enter into a Terms Agreement
(hereafter defined) relating to such sale in accordance with the provisions of
Section 3(b) hereof. The Agents are not authorized to appoint sub-agents or to
engage the services of any other broker or dealer in connection with the offer
or sale of the Notes. The appointment of the Agents hereunder is not exclusive
and the Company may from time to time offer Notes for sale otherwise than to or
through an Agent; provided, however, that so long as this Agreement is in effect
-------- -------
the Company will not appoint any other agent for the purpose of soliciting
purchases of the Notes on a continuous basis. It is understood, however, that
if from time to time the Company is approached by a prospective agent offering
to solicit a specific purchase of Notes, the Company may engage such agent with
respect to such specific purchase, provided that (i) such agent is engaged on
terms substantially similar (including the same commission schedule as set forth
hereto as Schedule A) to the applicable terms of this Agreement and (ii) the
Agents are given notice of such purchase promptly, including the terms thereof
and a copy of the agreement setting forth the terms
3
<PAGE>
of engagement of such agent by the Company, in each case after the purchase is
agreed to. Each such Agent is acting in connection with the Notes individually
and not collectively or jointly.
(b) Reasonable Best Efforts Solicitations; Right to Reject Offers. Upon
-------------------------------------------------------------
receipt of instructions from the Company, each Agent will use its reasonable
best efforts to solicit purchases of such principal amount of the Notes as the
Company and such Agent shall agree upon from time to time during the term of
this Agreement, it being understood that the Company shall not approve the
solicitation of purchases of Notes in excess of the amount which shall be
authorized by the Company from time to time or in excess of the initial offering
price of Notes registered pursuant to the Registration Statement. The Agents
will have no responsibility for maintaining records with respect to the
aggregate initial offering price of Notes sold, or of otherwise monitoring the
availability of Notes for sale under the Registration Statement. Each Agent
will communicate to the Company, orally or in writing, each reasonable offer to
purchase Notes. Each Agent shall have the right, in its discretion reasonably
exercised, to reject any proposed purchase of Notes, as a whole or in part, and
any such rejection shall not be deemed a breach of such Agent's agreement
contained herein. The Company may accept or reject any proposed purchase of the
Notes, in whole or in part.
(c) Solicitations as Agent; Purchases as Principal. In soliciting
----------------------------------------------
purchases of the Notes on behalf of the Company, unless otherwise specified
pursuant to the terms hereof, the Agents shall act solely as agents for the
Company and not as principal. Each Agent shall make reasonable efforts to
assist the Company in obtaining performance by each purchaser whose offer to
purchase Notes has been solicited by such Agent and accepted by the Company.
The Agents shall not have any liability to the Company in the event any such
purchase is not consummated for any reason. The Agents shall not have any
obligation to purchase Notes from the Company as principal, but each Agent may
agree from time to time to purchase Notes as principal. Any such purchase of
Notes by an Agent as principal shall be made pursuant to a Terms Agreement in
accordance with Section 3(b) hereof.
(d) Reliance. The Company and each Agent agree that any Notes the
--------
placement of which such Agent arranges shall be placed by such Agent, and any
Notes purchased by such Agent shall be purchased, in reliance on the
representations, warranties, covenants and agreements of the Company and the
Guarantor contained herein and on the terms and conditions and in the manner
provided herein.
SECTION 2. Representations and Warranties of the Company and the Guarantor.
---------------------------------------------------------------
4
<PAGE>
(a) The Company and the Guarantor jointly and severally represent and
warrant to each Agent as of the date hereof, as of the date of each acceptance
by the Company of an offer for the purchase of Notes (whether through an Agent
as agent or to an Agent as principal), as of the date of each delivery of Notes
(whether through an Agent as agent or to an Agent as principal) (the date of
each such delivery to an Agent as principal being hereafter referred to as a
"Settlement Date"), and as of the times referred to in Section 7(b) hereof (each
of the times referenced above being referred to herein as a "Representation
Date") as follows:
(i) Due Incorporation and Qualification. Each of the Guarantor and
-----------------------------------
the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the Commonwealth of
Pennsylvania with corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus;
the Guarantor is duly registered as a bank holding company under the Bank
Holding Company Act of 1956, as amended (the "Bank Holding Company Act");
and each of the Guarantor and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, except where the
failure to so qualify would not have a material adverse effect on the
condition, financial or otherwise, of the Guarantor or the Company, as the
case may be.
(ii) Subsidiaries. Each subsidiary of the Guarantor or the Company
------------
which is a significant subsidiary (each, a "Significant Subsidiary") as
defined in Rule 405 of Regulation C of the 1933 Act Regulations has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and conduct
its business as described in the Prospectus and is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, except where the
failure to so qualify would not have a material adverse effect on the
condition, financial or otherwise, of each such Significant Subsidiary; and
all of the issued and outstanding capital stock of each such Significant
Subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable (subject to the provisions of Section 55 of Title 12 of the
United States Code in the case of Significant Subsidiaries which are
national banking associations) and is owned by the Company or the
Guarantor, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
5
<PAGE>
(iii) Registration Statement and Prospectus. At the time the
-------------------------------------
Registration Statement became effective, the Registration Statement
complied, and as of the applicable Representation Date will comply, in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations and the 1939 Act and the rules and regulations of the SEC
promulgated thereunder. The Registration Statement, at the time it became
effective, did not, and at each time thereafter at which any amendment to
the Registration Statement becomes effective and any Annual Report on Form
10-K is filed by the Company or the Guarantor with the SEC and as of each
representation date referred to in Section 2(a) hereof, will not, contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading. The Prospectus, as of the date hereof does not, and as of
each representation date referred to in Section 2(a) hereof will not,
contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
--------
however, that the representations and warranties in this subsection shall
-------
not apply to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by the Agents expressly for use in the
Registration Statement or Prospectus or to that part of the Registration
Statement which constitutes the Statements of Eligibility and Qualification
under the 1939 Act (Form T-1) of the Trustees.
(iv) Incorporated Documents. The documents incorporated by reference
----------------------
in the Prospectus, at the time they were or hereafter are filed with the
SEC, complied or when so filed will comply, as the case may be, in all
material respects with the requirements of the 1934 Act and the rules and
regulations promulgated thereunder (the "1934 Act Regulations"), and, when
read together and with the other information in the Prospectus, did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they
were or are made, not misleading.
(v) Accountants. The accountants who certified the financial
-----------
statements included or incorporated by reference in the Prospectus are
independent public accountants within the meaning of the 1933 Act and the
1933 Act Regulations.
6
<PAGE>
(vi) Financial Statements. The consolidated financial statements and
--------------------
any supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the consolidated
financial position of the Company and the Guarantor and their respective
consolidated subsidiaries as of the dates indicated and the consolidated
results of their operations for the periods specified; except as stated
therein, said financial statements have been prepared in conformity with
generally accepted accounting principles in the United States applied on a
consistent basis during the periods involved; and the supporting schedules
included in the Registration Statement present fairly the information
required to be stated therein.
(vii) Authorization and Validity of this Agreement, the Indentures, the
-----------------------------------------------------------------
Guarantees and the Notes. This Agreement has been duly authorized and,
------------------------
upon execution and delivery by the Agents, will be a valid and binding
agreement of the Company and the Guarantor; each Indenture has been duly
authorized and, upon execution and delivery by the applicable Trustee, will
be a valid and binding obligation of the Company and the Guarantor; the
Notes have been duly and validly authorized for issuance, offer and sale
pursuant to this Agreement and, when issued, authenticated and delivered
pursuant to the provisions of this Agreement and the applicable Indenture
against payment of the consideration therefor specified in the Prospectus
or pursuant to any Terms Agreement, the Notes will constitute valid and
legally binding obligations of the Company enforceable in accordance with
their terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
affecting enforcement of creditors' rights generally or by general equity
principles, and except further as enforcement thereof may be limited by (i)
requirements that a claim with respect to any Notes denominated other than
in U.S. dollars (or a foreign currency or currency unit judgment in respect
of such claim) be converted into U.S. dollars at a rate or exchange
prevailing on a date determined pursuant to applicable law or (ii)
governmental authority to limit, delay or prohibit the making of payments
outside the United States; the Guarantees have been duly authorized and,
upon due issuance, authentication and delivery of the related Notes and due
endorsement of the Guarantees, the Guarantees will have been duly executed,
issued and delivered and will be valid and legally binding obligations of
the Guarantor enforceable in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
enforcement of creditors' rights generally or by general equity principles,
and except further as enforcement thereof may be
7
<PAGE>
limited by (i) requirements that a claim with respect to any Notes
denominated other than in U.S. dollars (or a foreign currency or currency
unit judgment in respect of such claim) be converted into U.S. dollars at a
rate or exchange prevailing on a date determined pursuant to applicable law
or (ii) governmental authority to limit, delay or prohibit the making of
payments outside the United States; the Notes, the Guarantees and the
Indentures will be substantially in the form heretofore delivered to the
Agents and conform in all material respects to all statements relating
thereto contained in the Prospectus; and the Notes and the Guarantees will
be entitled to the benefits provided by the applicable Indenture.
(viii) Material Changes or Material Transactions. Since the respective
-----------------------------------------
dates as of which information is given in the Registration Statement and
Prospectus, except as may otherwise be stated therein or contemplated
thereby, (a) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company or the Guarantor and its subsidiaries considered
as one enterprise, whether or not arising in the ordinary course of
business, (b) there have been no material transactions entered into by the
Company, the Guarantor or any of its subsidiaries other than those in the
ordinary course of business and (c) except for regular dividends on the
Guarantor's Common Stock, $1.00 par value, there has been no dividend or
distribution of any kind declared, paid or made by the Company or the
Guarantor on any class of its capital stock.
(ix) No Defaults; Regulatory Approvals. Neither the Company, the
---------------------------------
Guarantor nor any of the Significant Subsidiaries is in violation of its
charter or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which it is a party or by which it or any of them or their properties may
be bound; the execution and delivery of this Agreement and each Indenture
and the consummation of the transactions contemplated herein, therein and
pursuant to any applicable Terms Agreement have been duly authorized by all
necessary corporate action and will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company, the
Guarantor or any of the Significant Subsidiaries pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Company, the Guarantor or any of its subsidiaries is a party or
by which it or any of them may be bound or to which any of the property or
assets of the
8
<PAGE>
Company, the Guarantor or any such subsidiary is subject, nor will such
action result in any violation of the provisions of the charter or by-laws
of the Company, the Guarantor or any such subsidiary or any law,
administrative regulation or administrative or court order or decree; and
no consent, approval, authorization, order or decree of any court or
governmental agency or body is required for the consummation by the
Guarantor or the Company of the transactions contemplated by this
Agreement, except such as may be required under the 1933 Act, the 1939 Act,
the 1933 Act Regulations or state securities or Blue Sky laws.
(x) Legal Proceedings; Contracts. Except as may be set forth in the
----------------------------
Registration Statement, there is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Guarantor or the Company, threatened against or
affecting, the Company, the Guarantor or any of its subsidiaries, which
might result in any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company or the Guarantor and its subsidiaries considered as one
enterprise, or might materially and adversely affect the properties or
assets thereof or might materially and adversely affect the consummation of
this Agreement; and there are no contracts or documents of the Company or
the Guarantor or any of its subsidiaries which are required to be filed as
exhibits to the Registration Statement by the 1933 Act or by the 1933 Act
Regulations which have not been so filed.
(xi) Regulatory Certificates, Authorities and Permits. The Company,
------------------------------------------------
the Guarantor and the Significant Subsidiaries possess adequate
certificates, authorities or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct the
business now operated by them, and neither the Company, the Guarantor nor
any of the Significant Subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially adversely affect
the conduct of the business, operations, financial condition or income of
the Company or the Guarantor and its subsidiaries considered as one
enterprise.
(xii) Trademarks, Service Marks and Trade Names. The Company, the
-----------------------------------------
Guarantor and the Significant Subsidiaries own or possess or can acquire on
reasonable terms adequate trademarks, service marks and trade names
necessary to conduct the business now operated by them, and neither the
Company,
9
<PAGE>
the Guarantor nor any of the Significant Subsidiaries has received any
notice of infringement of or conflict with asserted rights of others with
respect to any trademarks, service marks or trade names which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, would materially adversely affect the conduct of the business,
operations, financial condition or income of the Company or the Guarantor
and its subsidiaries considered as one enterprise.
(xiii) No Labor Dispute. No labor dispute with the employees of the
----------------
Company, the Guarantor or any of its subsidiaries exists or, to the
knowledge of the Guarantor or the Company, is imminent, which might be
expected to result in any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company or the Guarantor and its subsidiaries considered
as one enterprise.
(xiv) No Authorization, Approval or Consent Required. No
----------------------------------------------
authorization, approval or consent of any court or governmental authority
or agency is necessary in connection with the sale of the Notes and
issuance of the related Guarantees hereunder, except such as may be
required under the 1933 Act or the 1933 Act Regulations or state securities
or Blue Sky laws.
(xv) Compliance with Florida Statutes. The Company is in compliance
--------------------------------
with all of the provisions of Section 517.075 of the Florida statues, and
all rules and regulations promulgated thereunder relating to issuers doing
business in Cuba.
(b) Additional Certifications. Any certificate signed by any officer of
-------------------------
the Guarantor or the Company and delivered to the Agents or to counsel for the
Agents in connection with an offering of Notes and related Guarantees or the
sale of Notes to an Agent as principal shall be deemed a representation and
warranty by the Company or the Guarantor, as the case may be, to the Agents as
to the matters covered thereby on the date of such certificate and at each
representation date referred to in Section 2(a) hereof subsequent thereto.
SECTION 3. Solicitations as Agent; Purchases as Principal.
----------------------------------------------
(a) Solicitations as Agent. On the basis of the representations and
----------------------
warranties herein contained, but subject to the terms and conditions herein set
forth, each Agent agrees, as an agent of the Company, to use its reasonable best
efforts to solicit offers to purchase the Notes upon the terms and conditions
set forth herein and in the Prospectus.
10
<PAGE>
The Company reserves the right, in its sole discretion, to suspend
solicitation of purchases of the Notes through an Agent, as agent, commencing at
any time for any period of time or permanently. Upon receipt of instructions
from the Company, the Agents will forthwith suspend solicitation of purchases
from the Company until such time as the Company has advised the Agents that such
solicitation may be resumed.
The Company agrees to pay each Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Senior Note sold by the Company as a result of a solicitation made by such Agent
as set forth in Schedule A hereto. Schedule A shall also apply to commissions
paid by the Company to each Agent for sales of Subordinated Notes unless
otherwise agreed to by all of the Agents and the Company.
The purchase price, interest rate, maturity date and other terms of the
Notes shall be agreed upon by the Company and the Agents and set forth in a
pricing supplement to the Prospectus to be prepared following each acceptance by
the Company of an offer for the purchase of Notes. Except as may be otherwise
provided in such supplement to the Prospectus, the Notes will be issued in
denominations of U.S. $1,000 and integral multiples thereof. All Notes sold
through an Agent as agent will be sold at 100% of their principal amount unless
otherwise agreed to by the Company and such Agent.
(b) Purchases as Principal. Each sale of Notes to an Agent as principal
----------------------
shall be made in accordance with the terms contained herein and pursuant to a
separate agreement which will provide for the sale of such Notes to, and the
purchase and reoffering thereof by, such Agent. Each such separate agreement
(which may be an oral agreement and confirmed in writing as described below
between such Agent and the Company) is herein referred to as a "Terms
Agreement". Unless the context otherwise requires, each reference contained
herein to "this Agreement" shall be deemed to include any applicable Terms
Agreement between the Company and the applicable Agent. Each such Terms
Agreement, whether oral (and confirmed in writing, which may be by facsimile
transmission) or in writing, shall be with respect to such information (as
applicable) as is specified in Exhibit A hereto. An Agent's commitment to
purchase Notes as principal pursuant to any Terms Agreement shall be deemed to
have been made on the basis of the representations and warranties of the Company
and the Guarantor herein contained and shall be subject to the terms and
conditions herein set forth. Each Terms Agreement shall specify the principal
amount of Notes to be purchased by such Agent pursuant thereto, the price to be
paid to the Company for such Notes, the time and place of delivery of and
payment for such Notes and such other provisions (including further terms of the
Notes) as may be mutually agreed upon. The
11
<PAGE>
Agents may utilize a selling or dealer group in connection with the resale of
the Notes purchased. Such Terms Agreement shall also specify the requirements
for the officer's certificates, opinion of counsel, comfort letter and stand-off
agreement pursuant to Section 7(b), Section 7(c), Section 7(d) and Section 4(j),
respectively, hereof.
(c) Administrative Procedures. Administrative procedures with respect to
-------------------------
the sale of Notes shall be agreed upon from time to time by the Agents, the
Company, the Guarantor and the Trustees (the "Procedures"). The Agents, on the
one hand, and the Company and the Guarantor, jointly and severally on the other
hand, agree to perform the respective duties and obligations specifically
provided to be performed by them in the Procedures.
(d) Delivery of Closing Documents. The documents required to be delivered
-----------------------------
by Section 5 hereof shall be delivered at the office of Brown & Wood, One World
Trade Center, New York, New York 10048 on the date hereof, or at such other time
or place as the Agents and the Company may agree.
SECTION 4. Covenants of the Company and the Guarantor.
------------------------------------------
The Company and the Guarantor jointly and severally covenant with each
Agent as follows:
(a) Notice of Certain Events. The Company and the Guarantor will notify
------------------------
the Agents immediately (i) of the effectiveness of any amendment to the
Registration Statement, (ii) of the transmittal to the SEC for filing of any
supplement to the Prospectus or any document to be filed pursuant to the 1934
Act which will be incorporated by reference in the Prospectus, (iii) of the
receipt of any comments from the SEC with respect to the Registration Statement
or the Prospectus, (iv) of any request by the SEC for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, and (v) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose. The Company and the Guarantor will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) Notice of Certain Proposed Filings. The Company and the Guarantor
----------------------------------
will give the Agents notice of its intention to file or prepare any additional
registration statement with respect to the registration of additional Notes and
related Guarantees, any amendment to the Registration Statement or any amendment
or supplement to the Prospectus (other than an amendment or supplement providing
solely for a change in the interest rates of Notes),
12
<PAGE>
whether by the filing of documents pursuant to the 1934 Act, the 1933 Act or
otherwise, and will furnish the Agents with copies of any such amendment or
supplement or other documents proposed to be filed or prepared a reasonable time
in advance of such proposed filing or preparation, as the case may be, and will
not file any such amendment or supplement or other documents in a form to which
the Agents or counsel for the Agents shall reasonably object.
(c) Copies of the Registration Statement and the Prospectus. The Company
-------------------------------------------------------
and the Guarantor will deliver to the Agents as many signed and conformed copies
of the Registration Statement (as originally filed) and of each amendment
thereto (including exhibits filed therewith or incorporated by reference therein
and documents incorporated by reference in the Prospectus) as the Agents may
reasonably request. The Company and the Guarantor will furnish the Agents with
as many copies of the Prospectus (as amended or supplemented) as the Agents
shall reasonably request so long as the Agents are required to deliver a
Prospectus in connection with sales or solicitations of offers to purchase the
Notes.
(d) Revisions of Prospectus -- Material Changes. Except as otherwise
-------------------------------------------
provided in subsection (k) of this Section, if at any time during the term of
this Agreement any event shall occur or condition exist as a result of which it
is necessary, in the reasonable opinion of counsel for the Agents or counsel for
the Company, to further amend or supplement the Prospectus in order that the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time the Prospectus
is delivered to a purchaser, or if it shall be necessary, in the reasonable
opinion of either such counsel, to amend or supplement the Registration
Statement or the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, immediate notice shall be given, and confirmed
in writing, to each Agent to cease the solicitation of offers to purchase the
Notes in such Agent's capacity as agent and to cease sales of any Notes such
Agent may then own as principal pursuant to a Terms Agreement, and the Company
and the Guarantor will promptly prepare and file with the SEC such amendment or
supplement, whether by filing documents pursuant to the 1934 Act, the 1933 Act
or otherwise, as may be necessary to correct such untrue statement or omission
or to make the Registration Statement and Prospectus comply with such
requirements.
(e) Prospectus Revisions -- Periodic Financial Information. Except as
------------------------------------------------------
otherwise provided in subsection (k) of this Section, on or prior to the date on
which there shall be released to the general public interim financial statement
information related to the Company or the Guarantor and its subsidiaries with
respect to
13
<PAGE>
each of the first three quarters of any fiscal year or preliminary financial
statement information with respect to any fiscal year, the Company and the
Guarantor shall furnish such information to the Agents, confirmed in writing,
and shall cause the Registration Statement and the Prospectus to be amended or
supplemented to include or incorporate by reference capsule financial
information with respect to the results of operations of the Company or the
Guarantor and its subsidiaries for the period between the end of the preceding
fiscal year and the end of such quarter or for such fiscal year, as the case may
be, and corresponding information for the comparable period of the preceding
fiscal year, as well as such other information and explanations as shall be
necessary for an understanding thereof or as shall be required by the 1933 Act
or the 1933 Act Regulations.
(f) Prospectus Revisions -- Audited Financial Information. Except as
-----------------------------------------------------
otherwise provided in subsection (k) of this Section, on or prior to the date on
which there shall be released to the general public financial information
included in or derived from the audited financial statements of the Company or
the Guarantor and its subsidiaries for the preceding fiscal year, the Company
and the Guarantor shall cause the Registration Statement and the Prospectus to
be amended, whether by the filing of documents pursuant to the 1934 Act, the
1933 Act or otherwise, to include or incorporate by reference such audited
financial statements and the report or reports, and consent or consents to such
inclusion or incorporation by reference, of the independent accountants with
respect thereto, as well as such other information and explanations as shall be
necessary for an understanding of such financial statements or as shall be
required by the 1933 Act or the 1933 Act Regulations.
(g) Earning Statements. The Guarantor will make generally available to
------------------
the security holders of the Guarantor and the Company as soon as practicable,
but not later than 90 days after the close of the period covered thereby, an
earning statement (in form complying with the provisions of Rule 158 under the
1933 Act) covering each twelve month period beginning, in each case, not later
than the first day of the Guarantor's fiscal quarter next following the
"effective date" (as defined in such Rule 158) of the Registration Statement
with respect to each sale of Notes and issuance of the related Guarantees.
(h) Blue Sky Qualifications. The Company and the Guarantor will endeavor,
-----------------------
in cooperation with the Agents, to qualify the Notes and related Guarantees for
offering and sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Agents may designate, and will
maintain such qualifications in effect for as long as may be required for the
distribution of the Notes and related Guarantees. The Company and
14
<PAGE>
the Guarantor will file such statements and reports as may be required by the
laws of each jurisdiction in which the Notes and related Guarantees have been
qualified as above provided. The Company and the Guarantor will promptly advise
the Agents of their receipt of any notification with respect to the suspension
of the qualification of the Notes and related Guarantees for sale in any such
state or jurisdiction or the initiating or threatening of any proceeding for
such purpose.
(i) 1934 Act Filings. The Guarantor and the Company, during the period
----------------
when the time that Prospectus is required to be delivered under the 1933 Act,
will file promptly all documents required to be filed with the SEC pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act.
(j) Stand-Off Agreement. If required pursuant to the terms of a Terms
-------------------
Agreement, between the time that any Terms Agreement is entered into and the
Settlement Date with respect to such Terms Agreement, the Company and the
Guarantor will not, without the applicable Agent's prior consent, offer or sell,
or enter into any agreement to sell, any debt securities of the Company or the
Guarantor with a maturity of more than one year, including additional Notes.
(k) Suspension of Certain Obligations. The Company and the Guarantor
---------------------------------
shall not be required to comply with the provisions of subsections (d), (e) or
(f) of this Section during any period from the time (i) the Agents shall have
suspended solicitation of purchases of the Notes in their capacity as agents
pursuant to a request from the Company and (ii) the Agents shall not then hold
any Notes as principal purchased pursuant to a Terms Agreement, to the time the
Company shall determine that solicitation of purchases of the Notes should be
resumed or shall subsequently enter into a new Terms Agreement with one or more
of the Agents.
(l) Public Reports. The Company and the Guarantor will furnish to the
--------------
Agents, at the earliest time the Company and the Guarantor make the same
available to others, copies of their annual reports and other financial reports
furnished or made available to the public generally.
(m) Preparation of Pricing Supplements. The Company will prepare, with
----------------------------------
respect to any Notes to be sold through or to the Agents pursuant to this
Agreement, a Pricing Supplement with respect to such Notes in a form previously
approved by the Agents and will file such Pricing Supplement pursuant to Rule
424(b)(3) under the 1933 Act not later than the close of business of the
Commission on the fifth business day after the date on which such Pricing
Supplement is first used.
15
<PAGE>
SECTION 5. Conditions of Obligations.
-------------------------
The obligations of each Agent to solicit offers to purchase the Notes as
agent of the Company, the obligations of any purchasers of the Notes sold
through each Agent as agent, and any obligation of an Agent to purchase Notes
pursuant to a Terms Agreement will be subject to the accuracy of the
representations and warranties on the part of the Company and the Guarantor
contained herein and to the accuracy of the statements of the officers of the
Company and the Guarantor made in any certificate furnished pursuant to the
provisions hereof, to the performance and observance by the Company and the
Guarantor of all their respective covenants and agreements herein contained and
to the following additional conditions precedent:
(a) Legal Opinions. On the date hereof, the Agents shall have received
--------------
the following legal opinions, dated as of the date hereof and in form and
substance satisfactory to the Agents:
(1) Opinion of Counsel to the Company and the Guarantor. The opinion
of David T. Walker, Esq., Deputy Chief Counsel for the Guarantor and
Counsel to the Company, to the effect that:
(i) Each of the Guarantor and the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the Commonwealth of Pennsylvania.
(ii) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in
the Registration Statement.
(iii) The Guarantor is duly registered as a bank holding company
under the Bank Holding Company Act and has corporate power and
authority under the laws of the United States of America and the
Commonwealth of Pennsylvania to own, lease and operate its properties
and conduct its business as described in the Registration Statement.
(iv) To the best of such counsel's knowledge, each of the
Guarantor and the Company is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business.
(v) Each Significant Subsidiary has been duly incorporated and
is validly existing as a corporation in good standing under the laws
of the jurisdiction of its
16
<PAGE>
incorporation, has corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Registration Statement, and, to the best of such counsel's knowledge,
is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business; and all of the issued and outstanding capital
stock of each Significant Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable (subject to the
provisions of Section 55 of Title 12 of the United States Code in the
case of Significant Subsidiaries which are national banking
associations) and is owned by the Company or the Guarantor, directly
or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(vi) The authorized, issued and outstanding capital stock of the
Guarantor and the Company is as set forth in the Prospectus and the
shares of issued and outstanding Common Stock set forth therein have
been duly authorized and validly issued and are fully paid and non-
assessable.
(vii) This Agreement has been duly authorized, executed and
delivered by the Company and the Guarantor and constitutes the legal,
valid, and binding obligation of the Company and the Guarantor
enforceable in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting enforcement of
creditors' rights generally or by general equity principles.
(viii) Each Indenture has been duly and validly authorized,
executed and delivered by the Company and the Guarantor and (assuming
such Indenture has been duly authorized, executed and delivered by the
applicable Trustee) constitutes a valid and binding agreement of the
Company and the Guarantor enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
affecting enforcement of creditors' rights or by general equity
principles, and except further as enforcement thereof may be limited
by (A) requirements that a claim with respect to any Notes denominated
other than in U.S. dollars (or a foreign currency or foreign currency
unit judgment in respect of such claim) be converted into United
States dollars at a rate of exchange prevailing on a date determined
pursuant
17
<PAGE>
to applicable law or (B) governmental authority to limit, delay or
prohibit the making of payments in foreign currency or currency units
or payments outside the United States.
(ix) The Notes are in due and proper form, have been duly
authorized for issuance, offer and sale pursuant to this Agreement
and, when issued, authenticated and delivered pursuant to the
provisions of this Agreement and the applicable Indenture against
payment of the consideration therefor, the Notes will constitute valid
and legally binding obligations of the Company enforceable in
accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting enforcement of creditors' rights
generally or by general equity principles, and except further as
enforcement thereof may be limited by (A) requirements that a claim
with respect to any Notes denominated other than in U.S. dollars (or a
foreign currency or foreign currency unit judgment in respect of such
claim) be converted into United States dollars at a rate of exchange
prevailing on a date determined pursuant to applicable law or (B)
governmental authority to limit, delay or prohibit the making of
payments in foreign currency or currency units or payments outside the
United States, and each holder of Notes will be entitled to the
benefits of the applicable Indenture.
(x) The Guarantees are in due and proper form, have been duly
authorized and, upon due issuance, authentication and delivery of the
related Notes and due endorsement of the Guarantees, the Guarantees
will have been duly executed, issued and delivered and will be valid
and legally binding obligations of the Guarantor enforceable in
accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting enforcement of creditors' rights
generally or by general equity principles, and except further as
enforcement thereof may be limited by (A) requirements that a claim
with respect to any Notes denominated other than in U.S. dollars (or a
foreign currency or foreign currency unit judgment in respect of such
claim) be converted into United States dollars at a rate of exchange
prevailing on a date determined pursuant to applicable law or (B)
governmental authority to limit, delay or prohibit the making of
payments in foreign currency or currency units or payments outside the
United
18
<PAGE>
States, and the Guarantees will be entitled to the benefits provided
by the applicable Indenture.
(xi) Each Indenture is qualified under the 1939 Act.
(xii) The Registration Statement is effective under the 1933 Act
and, to the best of such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued under
the 1933 Act or proceedings therefor initiated or threatened by the
SEC.
(xiii) At the time the Registration Statement became effective, the
Registration Statement (other than the financial statements, schedules
and other financial data included therein, as to which no opinion need
be rendered by such counsel) complied as to form in all material
respects with the requirements of the 1933 Act, the 1939 Act and the
regulations under each of those Acts.
(xiv) The statements in the Prospectus under the captions
"Description of Debt Securities", "Certain Terms Relating to Senior
Debt Securities", "Certain Terms Relating to Subordinated Debt
Securities", "Description of Securities Warrants" and "Guarantees" and
in the Prospectus Supplement under the caption "Description of Notes"
insofar as they purport to summarize certain provisions of documents
specifically referred to therein, are accurate summaries of such
provisions.
(xv) To the best of such counsel's knowledge, there are no legal
or governmental proceedings pending or threatened which are required
to be disclosed in the Prospectus, other than those disclosed therein,
and all pending legal or governmental proceedings to which the
Company, the Guarantor or any of its subsidiaries is a party or of
which any of their property is the subject which are not described in
the Registration Statement, including ordinary routine litigation
incidental to the business of the Company, the Guarantor or any such
subsidiary, are, considered in the aggregate, not material.
(xvi) To the best of such counsel's knowledge, neither the
Company, the Guarantor nor any of the Significant Subsidiaries is in
violation of its charter or in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note or lease to which it is a party or by
19
<PAGE>
which it or any of them or their properties may be bound. The
execution and delivery of this Agreement or of the Indentures, or the
consummation of the transactions contemplated by this Agreement and
the Notes and the incurrence of the obligations and consummation of
the transactions therein contemplated will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company, the Guarantor or any of its subsidiaries
pursuant to, any contract, indenture, mortgage, loan agreement, note,
lease or other instrument known to, such counsel and to which the
Company, the Guarantor or any of their subsidiaries is a party or by
which it or any of them may be bound or to which any of the property
or assets of the Company, the Guarantor or any of their subsidiaries
is subject, or any law, administrative regulation or administrative or
court decree known to such counsel to be applicable to the Company or
the Guarantor of any court or governmental agency, authority or body
or any arbitrator having jurisdiction over the Company or the
Guarantor, as the case may be; nor will such action result in any
violation of the provisions of the charter or by-laws of the Company,
the Guarantor or any of their subsidiaries.
(xvii) To the best of such counsel's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments or documents required to be described or referred to
in the Registration Statement or to be filed as exhibits thereto other
than those described or referred to therein or filed or incorporated
by reference as exhibits thereto, the descriptions thereof or
references thereto are correct, and no default exists in the due
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument so described, referred
to, filed or incorporated by reference.
(xviii) No consent, approval, authorization, order or decree of any
court or governmental agency or body (including the SEC) is required
in connection with the sale of the Notes or issuance of the related
Guarantees or compliance by the Company and the Guarantor with all of
the provisions of the Notes, the Guarantees, the Indentures and this
Agreement, except such as may be required under the 1933 Act, the 1939
Act, the 1933 Act Regulations or state securities laws.
20
<PAGE>
(xix) Each document, if any, filed pursuant to the 1934 Act
(other than the financial statements, schedules and other financial
data included therein, as to which no opinion need be rendered by
such opinion) and incorporated by reference in the Prospectus
complied when filed as to form in all material respects with the
1934 Act and the 1934 Act Regulations thereunder.
(xx) The Company, the Guarantor and its subsidiaries own or
possess or have obtained adequate trademarks, service marks and trade
names necessary to conduct the business now operated by them; neither
the Company, the Guarantor nor any of its subsidiaries has received
any notice of infringement of or conflict with asserted rights of
others with respect to any trademarks, service marks or trade names
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially adversely affect the
conduct of the business, operations, financial condition or income of
the Company, the Guarantor and its subsidiaries considered as one
enterprise.
(xxi) The information incorporated by reference in the Prospectus
under the captions "Supervision and Regulation", "Properties" and
"Legal Proceedings" in the Company's Annual Report on Form 10-K for
the Fiscal Year ended December 31, 1992, to the extent that it
constitutes matters of law or legal conclusions, has been reviewed by
such counsel and is correct.
(2) Opinion of Counsel to the Agents. The opinion of Brown & Wood,
--------------------------------
counsel to the Agents, covering the matters referred to in subparagraph (1)
under the subheadings (i) and (vii) to (xiii), inclusive, above.
(3) In giving their opinions required by subsection (a)(1) and (a)(2)
of this Section, David J. Martin, Esq., and Brown & Wood shall each
additionally state that nothing has come to their attention that would lead
them to believe that (other than the financial statements, schedules and
other financial data included therein, as to which no opinion need be
rendered by such counsel) the Registration Statement, at the time it became
effective, and if an amendment to the Registration Statement or an Annual
Report on Form 10-K has been filed by the Guarantor or the Company with the
SEC subsequent to the effectiveness of the Registration Statement, then at
the time such amendment became effective or at the time of the most recent
such filing, and at the date hereof, or (if such opinion is being delivered
in connection with a Terms Agreement pursuant to Section 7(c) hereof) at
the date
21
<PAGE>
of any Terms Agreement and at the Settlement Date with respect thereto, as
the case may be, contains or contained an untrue statement of a material
fact or omits or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading or that the
Prospectus, as amended or supplemented at the date hereof, or (if such
opinion is being delivered in connection with a Terms Agreement pursuant to
Section 7(c) hereof) at the date of any Terms Agreement and at the
Settlement Date with respect thereto, as the case may be, contains an
untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) Officer's Certificates. At the date hereof, the Agents shall have
----------------------
received a certificate of the President or Vice President of each of the Company
and the Guarantor, dated as of the date hereof, to the effect that (i) since the
respective dates as of which information is given in the Registration Statement
and the Prospectus or since the time that any applicable Terms Agreement was
entered into, there has not been any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company or the Guarantor and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, (ii) the
other representations and warranties of the Company and the Guarantor contained
in Section 2 hereof are true and correct with the same force and effect as
though expressly made at and as of the date of such certificate, (iii) the
Company and the Guarantor have performed or complied with all agreements and
satisfied all conditions on their respective parts to be performed or satisfied
at or prior to the date of such certificate, and (iv) that no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been initiated or threatened by the SEC.
(c) Comfort Letter. On the date hereof, the Agents shall have received a
--------------
letter from Ernst & Young, dated as of the date hereof and in form and substance
satisfactory to the Agents, to the effect that:
(i) They are independent public accountants with respect to the
Company and its subsidiaries within the meaning of the 1933 Act and the
1933 Act Regulations.
(ii) In their opinion, the consolidated financial statements and
supporting schedule(s) examined by them and included or incorporated by
reference in the Registration
22
<PAGE>
Statement comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1933 Act Regulations with
respect to registration statements on Form S-3 and the 1934 Act and the
1934 Act Regulations.
(iii) They have performed specified procedures, not constituting an
audit, including a reading of the latest available interim financial
statements of the Company, the Guarantor and its indicated subsidiaries, a
reading of the minute books of the Company, and the Guarantor and such
subsidiaries since the end of the most recent fiscal year with respect to
which an audit report has been issued, inquiries of and discussions with
certain officials of the Company and the Guarantor and such subsidiaries
responsible for financial and accounting matters with respect to the
unaudited consolidated financial statements included in the Registration
Statement and Prospectus and the latest available interim unaudited
financial statements of the Company, the Guarantor and its subsidiaries,
and such other inquiries and procedures as may be specified in such letter,
and on the basis of such inquiries and procedures nothing came to their
attention that caused them to believe that: (A) the unaudited consolidated
financial statements of the Company, the Guarantor and its subsidiaries
included in the Registration Statement and Prospectus do not comply as to
form in all material respects with the applicable accounting requirements
of the 1934 Act and the 1934 Act Regulations or were not fairly presented
in conformity with generally accepted accounting principles in the United
States applied on a basis substantially consistent with that of the audited
financial statements included therein, or (B) at a specified date not more
than five days prior to the date of such letter, there was any change in
the consolidated capital stock or any increase in consolidated long-term
debt of the Company, the Guarantor and its subsidiaries or any decrease in
the consolidated net assets of the Company, the Guarantor and its
subsidiaries, in each case as compared with the amounts shown on the most
recent consolidated balance sheet included in the Registration Statement
and Prospectus or, during the period from the date of such balance sheet to
a specified date not more than five days prior to the date of such letter,
there were any decreases, as compared with the corresponding period in the
preceding year, in consolidated revenues or net income, except in each such
case as set forth in or contemplated by the Registration Statement and
Prospectus or except for such exceptions enumerated in such letter as shall
have been agreed to by the Agents, the Company and the Guarantor.
(iv) In addition to the examination referred to in their report
included or incorporated by reference in the
23
<PAGE>
Registration Statement and the Prospectus, and the limited procedures
referred to in clause (iii) above, they have carried out certain other
specified procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information which are included or
incorporated by reference in the Registration Statement and Prospectus and
which are specified by the Agents, and have found such amounts, percentages
and financial information to be in agreement with the relevant accounting,
financial and other records of the Company, the Guarantor and its
subsidiaries identified in such letter.
(d) Other Documents. On the date hereof and on each Settlement Date with
---------------
respect to any applicable Terms Agreement, counsel to the Agents shall have been
furnished with such documents and opinions as such counsel may reasonably
require for the purpose of enabling such counsel to pass upon the issuance and
sale of Notes and issuance of the related Guarantees as herein contemplated and
related proceedings, or in order to evidence the accuracy and completeness of
any of the representations and warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company or the
Guarantor in connection with the issuance and sale of Notes or issuance of the
related Guarantees, as the case may be, as herein contemplated shall be
satisfactory in form and substance to the Agents and to counsel to the Agents.
If any condition specified in this Section 5 shall not have been fulfilled
when and as required to be fulfilled, this Agreement (or, at the option of the
applicable Agents, any applicable Terms Agreement) may be terminated by the
Agents by notice to the Company at any time and any such termination shall be
without liability of any party to any other party, except that the covenant
regarding provision of an earning statement set forth in Section 4(g) hereof,
the provisions concerning payment of expenses under Section 10 hereof, the
indemnity and contribution agreement set forth in Sections 8 and 9 hereof, the
provisions concerning the representations, warranties and agreements to survive
delivery of Section 11 hereof and the provisions set forth under "Parties" of
Section 15 hereof shall remain in effect.
SECTION 6. Delivery of and Payment for Notes Sold through the Agents.
---------------------------------------------------------
Delivery of Notes sold through the Agents as agents shall be made by the
Company to the Agents for the account of any purchaser only against payment
therefor in immediately available funds. In the event that a purchaser shall
fail either to accept delivery of or to make payment for a Note on the date
fixed for settlement, the applicable Agent shall promptly notify the Company and
deliver the
24
<PAGE>
Note to the Company, and, if such Agent has theretofore paid the Company for
such Note, the Company will promptly return such funds to such Agent. If such
failure occurred for any reason other than default by such Agent in the
performance of its obligations hereunder, the Company will reimburse such Agent
on an equitable basis for its loss of the use of the funds for the period such
funds were credited to the Company's account.
SECTION 7. Additional Covenants of the Company and the Guarantor.
-----------------------------------------------------
The Company and the Guarantor jointly and severally covenant with each
Agent as follows:
(a) Reaffirmation of Representations and Warranties. Each acceptance by
-----------------------------------------------
it of an offer for the purchase of Notes, and each delivery of Notes to the
applicable Agent pursuant to a Terms Agreement, shall be deemed to be an
affirmation that the representations and warranties of the Company and the
Guarantor contained in this Agreement and in any certificate theretofore
delivered to the Agents pursuant hereto are true and correct at the time of such
acceptance or sale, as the case may be, and an undertaking that such
representations and warranties will be true and correct at the time of delivery
to the purchaser or his agent, or to the Agents, of the Note or Notes relating
to such acceptance or sale, as the case may be, as though made at and as of each
such time (and it is understood that such representations and warranties shall
relate to the Registration Statement and Prospectus as amended and supplemented
to each such time).
(b) Subsequent Delivery of Certificates. Each time that the Registration
-----------------------------------
Statement or the Prospectus shall be amended or supplemented (other than by an
amendment or supplement providing solely for a change in the interest rates of
Notes or similar changes, and, unless the Agents shall otherwise specify, other
than by an amendment or supplement which relates exclusively to an offering of
debt securities other than the Notes) or there is filed with the SEC any
document incorporated by reference into the Prospectus (other than any Current
Report on Form 8-K relating exclusively to the issuance of debt securities under
the Registration Statement, unless the Agents shall otherwise specify) or (if
required pursuant to the terms of a Terms Agreement) the Company sells Notes to
an Agent pursuant to a Terms Agreement, the Company shall furnish or cause to be
furnished to the Agents forthwith a certificate dated the date of filing with
the SEC of such supplement or document, the date of effectiveness of such
amendment, or the date of such sale, as the case may be, in form satisfactory to
the Agents to the effect that the statements contained in the certificate
referred to in Section 5(b) hereof which were last furnished to the Agents are
true and correct at the
25
<PAGE>
time of such amendment, supplement, filing or sale, as the case may be, as
though made at and as of such time (except that such statements shall be deemed
to relate to the Registration Statement and the Prospectus as amended and
supplemented to such time) or, in lieu of such certificate, a certificate of the
same tenor as the certificate referred to in said Section 5(b), modified as
necessary to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such certificate.
(c) Subsequent Delivery of Legal Opinions. Each time that the
-------------------------------------
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for a change in the interest
rates of the Notes or similar changes or solely for the inclusion of additional
financial information, and, unless the Agents shall otherwise specify, other
than by an amendment or supplement which relates exclusively to an offering of
debt securities other than the Notes) or there is filed with the SEC any
document incorporated by reference into the Prospectus (other than any Current
Report on Form 8-K or Quarterly Report on Form 10-Q, unless the Agents shall
otherwise specify), or (if required pursuant to the terms of a Terms Agreement)
the Company sells Notes to an Agent pursuant to a Terms Agreement, the Company
shall furnish or cause to be furnished forthwith to the Agents and to counsel to
the Agents a written opinion of David J. Martin, Esq., Counsel for the Guarantor
and Counsel to the Company, or other counsel satisfactory to the Agents, dated
the date of filing with the SEC of such supplement or document, the date of
effectiveness of such amendment, or the date of such sale, as the case may be,
in form and substance satisfactory to the Agents, of the same tenor as the
opinion referred to in Section 5(a)(1) hereof, but modified, as necessary, to
relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such opinion; or, in lieu of such
opinion, counsel last furnishing such opinion to the Agents shall furnish the
Agents with a letter to the effect that the Agents may rely on such last opinion
to the same extent as though it was dated the date of such letter authorizing
reliance (except that statements in such last opinion shall be deemed to relate
to the Registration Statement and the Prospectus as amended and supplemented to
the time of delivery of such letter authorizing reliance).
(d) Subsequent Delivery of Comfort Letters. Each time that the
--------------------------------------
Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial information or there is filed with the SEC any
document incorporated by reference into the Prospectus which contains additional
financial information or (if required pursuant to the terms of a Terms
Agreement) the Company sells Notes to an Agent pursuant to a Terms Agreement,
the Company shall cause Ernst & Young forthwith to furnish the Agents
26
<PAGE>
with a letter, dated the date of effectiveness of such amendment, supplement or
document with the SEC , or the date of such sale, as the case may be, in form
satisfactory to the Agents, of the same tenor as the portions of the letter
referred to in clauses (i) and (ii) of Section 5(c) hereof but modified to
relate to the Registration Statement and Prospectus, as amended and supplemented
to the date of such letter, and of the same general tenor as the portions of the
letter referred to in clauses (iii) and (iv) of said Section 5(c) with such
changes as may be necessary to reflect changes in the financial statements and
other information derived from the accounting records of the Company and the
Guarantor; provided, however, that if the Registration Statement or the
-------- -------
Prospectus is amended or supplemented solely to include financial information as
of and for a fiscal quarter, Ernst & Young may limit the scope of such letter to
the unaudited financial statements included in such amendment or supplement
unless any other information included therein of an accounting, financial or
statistical nature is of such a nature that, in the reasonable judgment of the
Agents, such letter should cover such other information.
SECTION 8. Indemnification.
---------------
(a) Indemnification of the Agents. The Company and the Guarantor jointly
-----------------------------
and severally agree to indemnify and hold harmless each Agent and each person,
if any, who controls each Agent within the meaning of Section 15 of the 1933
Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus (or
any amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is
27
<PAGE>
effected with the written consent of the Company and the Guarantor; and
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 8(c) hereof, the fees and disbursements of counsel
chosen by the Agents), reasonably incurred in investigating, preparing or
defending against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company and the
Guarantor by the Agents expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto) or
made in reliance upon either of the Trustees' Statement of Eligibility and
Qualification under the 1939 Act filed as an exhibit to the Registration
Statement.
(b) Indemnification of the Company and the Guarantor. Each Agent agrees
------------------------------------------------
to indemnify and hold harmless the Company and the Guarantor, their respective
directors, each of their officers who signed the Registration Statement, and
each person, if any, who controls the Company or the Guarantor within the
meaning of Section 15 of the 1933 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company or the Guarantor by such Agent expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto).
(c) General. Each indemnified party shall give prompt notice to each
-------
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it may
have otherwise than on account of this indemnity agreement. An indemnifying
party may participate at its own expense in the defense of such action. In no
event shall the indemnifying parties be liable for the fees and expenses of more
than one counsel (in addition to any local
28
<PAGE>
counsel) for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. The indemnified party shall
cause its counsel to communicate generally with the indemnifying party in
connection with any litigation for which indemnity may be sought; provided,
however, that such counsel shall be under no obligation to discuss any matter
relating directly to any claim or action or to such party's defense of such
claim or action, or to otherwise reveal any information which such counsel
considers to be privileged or confidential.
SECTION 9. Contribution.
------------
In order to provide for just and equitable contribution in circumstances in
which the indemnity agreement provided for in Section 8 hereof is for any reason
held to be unenforceable by the indemnified parties although applicable in
accordance with its terms, the Company, the Guarantor and the Agents shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by said indemnity agreement incurred by the Company, the
Guarantor and the Agents, as incurred, in such proportions that each Agent is
responsible for that portion represented by the percentage that the total
commissions and underwriting discounts received by such Agent to the date of
such liability bears to the total sales price received by the Company from the
sale of Notes to the date of such liability, and the Company is responsible for
the balance; provided, however, that no person guilty of fraudulent
-------- -------
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any, who
controls each Agent within the meaning of Section 15 of the 1933 Act shall have
the same rights to contribution as such Agent, and each director of the Company
or the Guarantor, each officer of the Company or the Guarantor who signed the
Registration Statement, and each person, if any, who controls the Company or the
Guarantor within the meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as the Company or the Guarantor, as the case may be.
SECTION 10. Payment of Expenses.
-------------------
The Company and the Guarantor will pay all expenses incident to the
performance of their respective obligations under this Agreement, including:
(i) The preparation and filing of the Registration Statement and all
amendments thereto and the Prospectus and any amendments or supplements
thereto;
29
<PAGE>
(ii) The preparation, filing and reproduction of this Agreement;
(iii) The preparation, printing, issuance and delivery of the Notes and
the related Guarantees, including any fees and expenses relating to the use
of book-entry notes;
(iv) The fees and disbursements of the Company's accountants and
counsel, of the Trustees and their counsel, and of any calculation agent or
exchange rate agent;
(v) The reasonable fees and disbursements of counsel to the Agents
incurred from time to time in connection with the transactions contemplated
hereby;
(vi) The qualification of the Notes and the related Guarantees under
state securities laws in accordance with the provisions of Section 4(h)
hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Agents in connection therewith and in connection with the
preparation of any Blue Sky Survey and any Legal Investment Survey;
(vii) The printing and delivery to the Agents in quantities as
hereinabove stated of copies of the Registration Statement and any
amendments thereto, and of the Prospectus and any amendments or supplements
thereto, and the delivery by the Agents of the Prospectus and any
amendments or supplements thereto in connection with solicitations or
confirmations of sales of the Notes;
(viii) The preparation, printing and delivery to the Agents of copies of
each Indenture and all supplements and amendments thereto;
(ix) Any fees charged by rating agencies for the rating of the Notes;
(x) The fees and expenses incurred in connection with the listing of
the Notes on any securities exchange, if applicable;
(xi) The fees and expenses, if any, incurred with respect to any
filing with the National Association of Securities Dealers, Inc.;
(xii) Any advertising and other out-of-pocket expenses of the Agents
incurred with the approval of the Company and the Guarantor;
30
<PAGE>
(xiii) The fees and expenses of any Depository (as defined in the
Indentures) and any nominees thereof in connection with the Notes; and
(xiv) The cost of preparing and providing any CUSIP or other
identification numbers for the Notes.
SECTION 11. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement
or in certificates of officers of the Company or the Guarantor submitted
pursuant hereto or thereto shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Agents or any
controlling person of any Agent, or by or on behalf of the Company or the
Guarantor, and shall survive each delivery of and payment for any of the Notes.
SECTION 12. Termination.
-----------
(a) Termination of this Agreement. This Agreement (excluding any Terms
-----------------------------
Agreement) may be terminated for any reason, at any time by either the Company
or an Agent upon the giving of 30 days' written notice of such termination to
the other party hereto; provided, however, that the termination of this
Agreement by one Agent shall terminate this Agreement only as among such Agent
and the Company and the Company's notice of termination as to any one Agent
shall terminate this Agreement only between itself and such Agent.
(b) Termination of a Terms Agreement. The applicable Agent may terminate
--------------------------------
any Terms Agreement, immediately upon notice to the Company and the Guarantor,
at any time prior to the Settlement Date relating thereto (i) if there has been,
since the time that such Terms Agreement was entered into or since the
respective dates as of which information is given in the Registration Statement,
any material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company or the Guarantor
and its subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there shall have occurred any material
adverse change in the financial markets in the United States or any outbreak or
escalation of hostilities or other national or international calamity or crisis
the effect of which is such as to make it, in the reasonable judgment of such
Agent, impracticable to market the Notes or enforce contracts for the sale of
the Notes, or (iii) if trading in any securities of the Company or the Guarantor
has been suspended by the SEC or a national securities exchange, or if trading
generally on either the American Stock Exchange or the
31
<PAGE>
New York Stock Exchange shall have been suspended, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices for securities have
been required, by either of said exchanges or by order of the SEC or any other
governmental authority, or if a banking moratorium shall have been declared by
either federal, New York or Pennsylvania authorities or if a banking moratorium
shall have been declared by the relevant authorities in the country or countries
of origin of any foreign currency or currencies in which the Notes are
denominated or payable, or (iv) if the rating assigned by any nationally
recognized securities rating agency to any debt securities of the Company or the
Guarantor as of the time that any applicable Terms Agreement was entered into
shall have been lowered since that time or if any such rating agency shall have
publicly announced that it has placed any debt securities of the Company or the
Guarantor on what is commonly termed a "watch list" for possible downgrading, or
(v) if there shall have come to the applicable Agent's attention any facts that
would cause such Agent to believe that the Prospectus, at the time it was
required to be delivered to a purchaser of Notes, contained an untrue statement
of a material fact or omitted to state a material fact necessary in order to
make the statements therein, in light of the circumstances existing at the time
of such delivery, not misleading.
(c) General. In the event of any such termination, neither party will
-------
have any liability to the other party hereto, except that (i) each Agent shall
be entitled to any commission earned in accordance with the third paragraph of
Section 3(a) hereof, (ii) if at the time of termination (a) each Agent shall own
any Notes purchased pursuant to a Terms Agreement with the intention of
reselling them or (b) an offer to purchase any of the Notes has been accepted by
the Company but the time of delivery to the purchaser or his agent of the Note
or Notes relating thereto has not occurred, the covenants set forth in Sections
4 and 7 hereof shall remain in effect until such Notes are so resold or
delivered, as the case may be, and (iii) the covenant set forth in Section 4(g)
hereof, the provisions of Section 5 hereof, the indemnity and contribution
agreements set forth in Sections 8 and 9 hereof, and the provisions of Sections
11 and 15 hereof shall remain in effect.
SECTION 13. Notices.
-------
Unless otherwise provided herein, all notices required under the terms and
provisions hereof shall be in writing, either delivered by hand, by mail or by
telex, telecopier or telegram, and any such notice shall be effective when
received at the address specified below.
32
<PAGE>
If to the Company:
CoreStates Financial Corp/CoreStates Capital Corp
Philadelphia National Bank Building
Broad and Chestnut Streets
F.C. 01-08-10-58
Philadelphia, Pennsylvania 19101
Attention: George J. Karklins, Vice President & Treasurer
If to Merrill Lynch:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower - 23rd Floor
World Financial Center
New York, New York 10281-1323
Attention: MTN Product Management,
J. Patrick Hannon
If to Goldman, Sachs & Co.:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Registration Department
If to Lehman Brothers Inc.:
Lehman Brothers
World Financial Center
American Express Tower
9th Floor
New York, New York 10285
Attention: Medium Term Note Department
33
<PAGE>
If to J.P. Morgan Securities Inc.:
J.P. Morgan Securities Inc.
Capital Markets Services
60 Wall Street
New York, New York 10260
Attention: Medium Term Note Desk
Steve Janicek
If to CS First Boston:
______________________
______________________
______________________
If to Smith Barney Shearson Inc.:
______________________
______________________
______________________
or at such other address as such party may designate from time to time by notice
duly given in accordance with the terms of this Section 13.
SECTION 14. Governing Law.
-------------
This Agreement and all the rights and obligations of the parties shall be
governed by and construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed in such State. Any suit,
action or proceeding brought by the Company or the Guarantor against the Agents
in connection with or arising under this Agreement shall be brought solely in
the state or federal court of appropriate jurisdiction located in the Borough of
Manhattan, The City of New York.
SECTION 15. Parties.
-------
This Agreement shall inure to the benefit of and be binding upon the Agent,
the Company, the Guarantor and their respective successors. Nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and their respective
successors and the controlling persons and officers and directors referred to in
Sections 8 and 9 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and respective successors and said controlling
34
<PAGE>
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Notes shall be deemed to be a successor by reason merely of such purchase.
35
<PAGE>
If the foregoing is in accordance with the Agents understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument along with all counterparts will become a binding agreement
between the Agents and the Company in accordance with its terms.
Very truly yours,
CORESTATES CAPITAL CORP
By:___________________________
Name:
Title:
CORESTATES FINANCIAL CORP
By:___________________________
Name:
Title:
Accepted:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:__________________________________
Name:
Title:
_____________________________________
(Goldman, Sachs & Co.)
LEHMAN BROTHERS INC.
By:__________________________________
Name:
Title:
J.P. MORGAN SECURITIES INC.
By:__________________________________
Name:
Title:
36
<PAGE>
CS FIRST BOSTON
By:___________________________________
Name:
Title:
SMITH BARNEY SHEARSON INC.
By:___________________________________
Name:
Title:
37
<PAGE>
EXHIBIT A
The following terms, if applicable, shall be agreed to by the applicable
Agent and the Company pursuant to each Terms Agreement:
Principal Amount: $_______
(or principal amount of foreign currency or currency unit)
Interest Rate:
If Fixed Rate Note, Interest Rate:
If Floating Rate Note:
Interest Rate Basis:
Initial Interest Rate:
Initial Interest Reset Date:
Spread or Spread Multiplier, if any:
Index Maturity:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Interest Rate Reset Dates:
Interest Payment Dates:
Calculation Agent:
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction:
Optional Repayment Date(s), if any:
Date of Maturity:
Purchase Price: ___%
Settlement Date and Time:
Currency of Denomination:
Denominations (if currency is other than U.S. dollar):
Currency of Payment:
Additional Terms:
Also, agreement as to whether the following will be required:
Officer's Certificate pursuant to Section 7(b)
of the Distribution Agreement.
Legal Opinion pursuant to Section 7(c) of the
Distribution Agreement.
Comfort Letter pursuant to Section 7(d) of the
Distribution Agreement.
Stand-off Agreement pursuant to Section 4(j) of the
Distribution Agreement.
A-1
<PAGE>
SCHEDULE A
As compensation for the services of the Agents hereunder, the Company shall
pay the applicable Agent, on a discount basis, a commission for the sale of each
Senior Note equal to the principal amount of such Senior Note multiplied by the
appropriate percentage set forth below:
PERCENT OF
PRINCIPAL
MATURITY RANGES AMOUNT
- --------------- ----------
From 9 months but less than 1 year......... %
From 1 year but less than 18 months........
From 18 months but less than 2 years.......
From 2 years but less than 3 years.........
From 3 years but less than 4 years.........
From 4 years but less than 5 years.........
From 5 years but less than 6 years.........
From 6 years but less than 7 years.........
From 7 years but less than 8 years.........
From 8 years but less than 9 years.........
From 9 years but less than 10 years........
From 10 years but less than 15 years.......
From 15 years but less than 20 years.......
From 20 years to 30 years..................
The above Schedule shall also apply to commissions paid in connection
with sales of Subordinated Notes unless otherwise agreed to by all of the
Agents and the Company.
<PAGE>
================================================================================
EXHIBIT 2(b)
AGREEMENT AND PLAN OF REORGANIZATION
Between
FIRST PEOPLES FINANCIAL CORPORATION
and
CORESTATES FINANCIAL CORP
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I-THE MERGER .................................................. 1
SECTION 1.1 Plan of Merger ........................................ 1
(a) Company Common Shares ..................................... 1
(b) No Fractional Shares ...................................... 2
(c) Company Common Share Options .............................. 2
(d) CoreStates Common Shares .................................. 2
(e) Anti-Dilution ............................................. 2
SECTION 1.2 The Closing ........................................... 3
SECTION 1.3 Effective Time of Merger .............................. 3
SECTION 1.4 Stock Option Agreement ................................ 3
ARTICLE II-REPRESENTATIONS AND WARRANTIES ............................. 3
SECTION 2.1 Corporate Standing .................................... 3
SECTION 2.2 Authorization ......................................... 3-4
SECTION 2.3 Capital Stock ......................................... 4-5
SECTION 2.4 Financial Statements .................................. 5
SECTION 2.5 Absence of Material Adverse Change .................... 5
SECTION 2.6 Conduct of Business ................................... 5-6
SECTION 2.7 CoreStates Common Shares .............................. 6
SECTION 2.8 Absence of Undisclosed Liabilities .................... 6
SECTION 2.9 Absence of Defaults under Contracts ................... 6
SECTION 2.10 SEC Filings ........................................... 6-7
SECTION 2.11 Registration Statement, Etc. .......................... 7
SECTION 2.12 Broker's and Finder's Fee ............................. 7
SECTION 2.13 Absence of Litigation ................................. 7-8
SECTION 2.14 Accounting Matters .................................... 8
ARTICLE III-ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE COMPANY... 8
SECTION 3.1 Subsidiaries .......................................... 8
SECTION 3.2 Employee Benefit Plans ................................ 8-11
SECTION 3.3 Reserve for Loan Losses ............................... 11
SECTION 3.4 Tax Returns ........................................... 11
SECTION 3.5 Insurance ............................................. 11
SECTION 3.6 Labor Matters ......................................... 11-12
ARTICLE IV-CERTAIN COVENANTS OF THE COMPANY ........................... 12
SECTION 4.1 Conduct of Business ................................... 12
ARTICLE V-ADDITIONAL AGREEMENTS ....................................... 12
SECTION 5.1 CoreStates Registration Statement ..................... 12-13
SECTION 5.2 Investigations ........................................ 13
SECTION 5.3 Press Releases ........................................ 13
SECTION 5.4 Miscellaneous Agreements and Consents ................. 13-14
SECTION 5.5 Other Proposals ....................................... 14
SECTION 5.6 Update Information .................................... 14
SECTION 5.7 Change of Control ..................................... 14
i
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Page
----
ARTICLE VI-CONDITIONS PRECEDENT TO CORESTATES' OBLIGATIONS ........... 14
SECTION 6.1 Representations, Warranties, and Covenants of the
Company ............................................ 15
SECTION 6.2 Shareholder Approval ................................. 15
SECTION 6.3 Pending Litigation ................................... 15
SECTION 6.4 Opinion of Counsel ................................... 15-17
SECTION 6.5 Required Approvals ................................... 17
SECTION 6.6 Affiliates' Letters .................................. 17
SECTION 6.7 Registration Statement ............................... 17
SECTION 6.8 Auditor's Letter ..................................... 17
SECTION 6.9 Pooling .............................................. 17
ARTICLE VII-CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATIONS ........ 18
SECTION 7.1 Representations, Warranties, and Covenants of
CoreStates ......................................... 18
SECTION 7.2 Shareholder Approval ................................. 18
SECTION 7.3 Pending Litigation ................................... 18
SECTION 7.4 Opinion of Counsel ................................... 18-20
SECTION 7.5 Required Approvals ................................... 20
SECTION 7.6 Registration Statement ............................... 20
SECTION 7.7 Auditor's Letter ..................................... 20
SECTION 7.8 Tax Opinion .......................................... 20-21
SECTION 7.9 Pooling .............................................. 21
ARTICLE VIII-TERMINATION ............................................. 21
SECTION 8.1 Termination Provisions ............................... 21
(a) Mutual Consent ....................................... 21
(b) Material Breach ...................................... 21
(c) Approval Date ........................................ 21
(d) Court Orders ......................................... 21
(e) Required Approvals ................................... 22
SECTION 8.2 Approval by Board of Directors ....................... 22
ARTICLE IX-AMENDMENT AND WAIVER ...................................... 22
SECTION 9.1 Amendment ............................................ 22
SECTION 9.2 Waiver ............................................... 22
ARTICLE X-MISCELLANEOUS .............................................. 23
SECTION 10.1 Expenses and Fees ................................... 23
SECTION 10.2 Termination of Representations and Warranties ....... 23
SECTION 10.3 Notices ............................................. 23-24
SECTION 10.4 Governing Law ....................................... 24
SECTION 10.5 Entire Agreement .................................... 24
SECTION 10.6 Method of Consent or Waiver ......................... 24
SECTION 10.7 Liability of CoreStates and Company ................. 24
SECTION 10.8 Counterparts ........................................ 25
SECTION 10.9 Headings, Etc ....................................... 25
SECTION 10.10 Indemnification ..................................... 25-26
SECTION 10.11 Employee Benefits ................................... 26
SECTION 10.12 Employee Contracts and Vested Employee Benefits ..... 26
ii
<PAGE>
Page
----
SECTION 10.13 Dividends ........................................... 26
EXHIBIT A-Plan of Merger
EXHIBIT B-Stock Option Agreement
iii
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, dated as of February 13, 1992,
by and between FIRST PEOPLES FINANCIAL CORPORATION, a New Jersey corporation
(the "Company"), and CORESTATES FINANCIAL CORP, a Pennsylvania corporation
("CoreStates").
W I T N E S S E T H;
WHEREAS, CoreStates and the Company desire that the Company be merged
with and into CoreStates in accordance with the applicable statutes of the
Commonwealth of Pennsylvania and the State of New Jersey, and in accordance
with a Plan of Merger (the "Plan of Merger") substantially in the form
attached hereto as Exhibit A (the merger provided for therein being herein
called the "Merger");
WHEREAS, this Agreement has been approved by the Board of Directors of
each party hereto; and
WHEREAS, pursuant to a Stock Option Agreement referred to in Section 1.4
hereof, the Company shall have granted CoreStates the option to purchase
certain authorized but unissued shares of the Common Stock, par value $6.00
per share, of the Company ("Company Common Shares");
NOW, THEREFORE, in consideration of the premises and the mutual and
dependent promises hereinafter contained, and intending to be legally bound
hereby, the parties do represent, warrant, covenant and agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 Plan of Merger. Upon the satisfaction or waiver of the
conditions precedent set forth in Articles VI and VII hereof, at the Closing
(hereinafter defined) the Company and CoreStates shall execute and consummate
a Plan of Merger substantially in the form attached hereto as Exhibit A,
providing for the merger of the Company with and into CoreStates and the
conversion of the capital stock of the Company and CoreStates, or rights with
respect thereto, in the following manner:
(a) Company Common Shares. Each Company Common Share issued and
outstanding at the Effective Time of Merger (hereinafter defined) shall
be converted into 0.935 shares of Common Stock, par value $1.00 per
share, of CoreStates ("CoreStates Common Shares"). Each Company Common
Share held in the treasury of the Company or held by CoreStates or any
CoreStates subsidiary shall be cancelled.
<PAGE>
(b) No Fractional Shares. No fractional shares will be issued in
the Merger. Each shareholder of the Company receiving CoreStates Common
Shares will receive cash in lieu of any fraction of a CoreStates Common
Share in an amount equal to the fraction times 0.935 times the closing
sale price of CoreStates Common Shares on the day prior to the Effective
Time of Merger.
(c) Company Common Shares Options. Each option to purchase Company
Common Shares issued under the Company's stock option plans shall be
converted into an option to purchase the number of CoreStates Common
Shares which is equal to the number of Company Common Shares subject to
such option multiplied by 0.935, (provided that in the case of options
granted under such plans that are designated as incentive stock options,
the conversion ratio shall, to the extent necessary, be adjusted to allow
such options to retain qualified treatment under the Internal Revenue
Code), upon the same terms and conditions as such option to purchase
Company Common Shares, except that the per share exercise price shall be
multiplied by a fraction of which the numerator is the number of Company
Common Shares subject to such option and the denominator is equal to the
number of CoreStates Common Shares into which such option may be
converted hereunder. CoreStates shall adopt each of such stock option
plans, to the extent necessary, to allow participants in such plans to
exercise options issued prior to the Effective Time of the Merger.
(d) CoreStates Common Shares. Each CoreStates Common Share issued
and outstanding at the Effective Time of Merger shall remain outstanding.
(e) Anti-Dilution. If CoreStates shall, at any time before the
Effective Time of Merger, (i) issue a dividend in shares of CoreStates
Common Shares, (ii) combine the outstanding CoreStates Common Shares into
a smaller number of shares, (iii) subdivide the outstanding CoreStates
Common Shares, (iv) reclassify the CoreStates Common Shares, or (v)
change the number of its shares as a result of recapitalization or
otherwise, then, in such event, the number of CoreStates Common Shares to
be delivered to Company shareholders who are entitled to receive
CoreStates Common Shares in exchange for Company Common Shares shall be
adjusted so that each shareholder shall be entitled to receive such
number of CoreStates Common Shares as such shareholder would have been
entitled to receive if the Effective Time of Merger had occurred prior to
the happening of such event and appropriate and proportionate adjustment
shall be made to the calculations and number of CoreStates Common Shares
to be issued as set forth in Section 1.1(a) hereof and as set forth in
Section 1.1(c) hereof.
2
<PAGE>
SECTION 1.2 The Closing. The Merger shall be consummated, subject to the
terms and conditions of this Agreement and the Plan of Merger, as promptly as
possible after a closing (the "Closing") to be held at the offices of
CoreStates, Broad and Chestnut Streets, Philadelphia, Pennsylvania, at 10:00
a.m., local time, as promptly as practicable following the date on which all
conditions precedent to such Closing contained in Articles VI and VII hereof
have been satisfied or duly waived or at such other date, time and place as
parties shall agree (the "Closing Date").
SECTION 1.3 Effective Time of Merger. The Merger shall be consummated
upon the filing by the Company and CoreStates of Articles of Merger in the
form and manner required by the Pennsylvania Business Corporation Law (the
"Pennsylvania Act") and the New Jersey Business Corporation Act (the "New
Jersey Act"), which shall be done on the Closing Date. The close of business
on the date on which such Articles of Merger shall be filed is herein referred
to as the "Effective Time of Merger".
SECTION 1.4 Stock Option Agreement. Contemporaneously with the
execution and delivery of this Agreement, the Company and CoreStates have
executed a Stock Option Agreement in the form attached hereto as Exhibit B.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
CoreStates represents and warrants to the Company, and the Company
represents and warrants to CoreStates, as follows:
SECTION 2.1 Corporate Standing. It is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its incorporation, has all requisite corporate power and authority to own its
properties and carry on its business as now conducted, and is qualified as
foreign corporation in every jurisdiction in which the failure to so qualify
would have a material adverse effect on the financial condition or results of
operations of it and its subsidiaries, taken as a whole.
SECTION 2.2 Authorization. The execution, delivery and performance of
this Agreement and the Plan of Merger by it have been duly authorized and
approved by all necessary corporate action, and this Agreement and the Plan of
Merger are legally binding on and enforceable against it in accordance with
their terms, subject to the acceptance for filing of the Plan of Merger in
accordance with the provisions of the Pennsylvania Act and the New Jersey Act,
and subject, in the case of the Company, to the approval of the Company's
stockholders to the extent required by applicable law. The execution and
delivery of this Agreement and
3
<PAGE>
the Plan of Merger do not, and the consummation of the Merger will not,
violate the provisions of its Articles, as amended, or By-Laws, as amended,
nor will the consummation of the Merger result in any breach or violation of,
or default under, or any event which with due notice or lapse of time or both
would constitute a default under, result in the termination of, or accelerate
the performance required by, any judgment, decree, mortgage, agreement,
indenture or other instrument which is material to the business or financial
condition of it and its subsidiaries, taken as a whole, or which would enable
any party, as a result of such breach or default, to enjoin the Merger.
Other than in connection or in compliance with the provisions of the
Pennsylvania Act, the New Jersey Act, the Securities Act of 1933, as amended,
and the rules and regulations thereunder (the "Securities Act"), the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (the "Exchange Act"), the securities or blue sky laws of the
various states, and consents, authorizations, approvals or exemptions required
under the Bank Holding Company Act of 1956, as amended, and federal,
Pennsylvania and New Jersey banking laws or any other required federal
regulatory approval or notice, no notice to, filing with, authorization of,
exemption by, or consent or approval of, any public body or authority is
necessary for the consummation of the transactions contemplated by this
Agreement and the Plan of Merger, other than regulatory consents or approvals
the failure to obtain which would not have a material adverse effect on the
financial condition or results of operations of it and its subsidiaries, taken
as a whole.
SECTION 2.3 Capital Stock. As of December 31, 1991 (i) in the case of
CoreStates, its authorized capital stock consisted of 10,000,000 shares of
Series Preferred Stock, without par value, of which none were issued and
outstanding, and 80,000,000 shares of Common Stock, par value $1.00 per share,
of which not more than 54,744,486 shares were issued and outstanding, and (ii)
in the case of the Company, its authorized capital stock consisted of
20,000,000 shares of Common Stock, par value $6.00 per share, of which not more
than 2,510,171 shares were issued and outstanding; 400,000 shares of
Non-Convertible Preferred Stock, par value $25.00 per share, of which none
were issued and outstanding; and 498,481 shares of Convertible Preferred
Stock, par value $20.00 per share, of which none were issued and authorized
and validly issued, and is fully paid and nonassessable, with no personal
liability attaching to the ownership thereof. There have been no changes in
its authorized and issued and outstanding capital stock since December 31,
1991 except for issuances described below in this Section 2.3. Except for
options issued under the Company's stock option plans, there are no
outstanding subscriptions, options, warrants, convertible securities or
agreements to which the Company is a party or by
4
<PAGE>
which it is bound requiring it to issue or sell shares of its capital
stock. Except for Common Stock reserved for issuance pursuant to outstanding
CoreStates' stock option and stock appreciation rights, there are no
outstanding subscriptions, options, warrants, convertible securities or
agreements to which Corestates is a party or by which it is bound
requiring it to issue or sell shares of capital stock.
SECTION 2.4 Finincial Statements. It has delivered or will delivered
to the other party hereto true and complete copies of the
following financial statements:
(a) Its and its subsidiaries' consolidated statement of financial
condition at December 31, 1991, and consolidated statements of income,
changes in shareholders' equity and changes in financial position or cash
flows for the three years ended December 31, 1991, certified by Ernest &
Young , independent certified public accountants, in the case of
Corestates, and by KPMG Peat Marwick, independent certified public
accountants, in the case of the Company.
(b) Each of its quarterly and annual financial statements contained in
its reports filed with the Securities and Exchange Commission (the "SEC")
after December 31, 1991 and prior to the Effective Time of Merger
(together with the finincial statements in clause (a), the "SEC
Reports"), as well as each finincial report or statement submitted to
bank regulatory authorities during that period.
Such financial statements, other than those submitted to bank regulatory
authorities, have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis, except as noted therein,
and present fairly its consolidated financial position at the dates shown and
the consolidated results of its operations and changes in financial position
or cash flows for the periods covered.
SECTION 2.5 Absence of Material Adverse Change. Except for matters
disclosed to the other in writing on or prior to the date hereof or in the SEC
Reports filed on or prior to the date hereof, since September 30, 1991, there
has been no material adverse change in the financial condition or results of
operations of it and its subsidiaries, taken as a whole. For purposes of this
Agreement a material adverse change shall not include a decline in results of
operations or net worth resulting from any law, rule or regulation or GAAP or
from any change in the Company's stock price .
SECTION 2.6 Conduct of Business. It and its subsidiaries have conducted
their business and used their property substantially in compliance with all
federal, state and local
5
<PAGE>
laws, ordinances and regulations, including without limitation, applicable
banking laws and regulations, and it is not subject to any memorandum of
understanding, written agreement or similar arrangement with any bank
regulatory agency, except in the case of the Company the resolution of its
Board of Directors dated September 25, 1991.
SECTION 2.7 CoreStates Common Shares. In the case of CoreStates only,
the CoreStates Common Shares which will be issued in accordance with the Plan
of Merger or as provided in Section 1.1(c) have been duly authorized and, when
issued as contemplated thereby, will be duly and validly issued and
outstanding, fully-paid and nonassessable, with no personal liability attaching
to the ownership thereof.
SECTION 2.8 Absence of Undisclosed liabilities. Except as and to the
extent reflected or reserved against in its consolidated balance sheet as of
December 31, 1991, and the notes thereto, or except for matters disclosed in
writing to the other party on or prior to the date hereof, it had, as of
December 31, 1991, no material liabilities or obligations, secured or
unsecured (whether accrued, absolute, contingent or otherwise), of a nature
required to be reflected in a balance sheet, or the notes thereto, in
accordance with generally accepted accounting principles.
SECTION 2.9 Absence of Defaults under Contracts. There is not, under
any material contract or agreement to which it or any of its subsidiaries is a
party, any existing default by it or any of its subsidiaries which could have
a material adverse effect on the financial condition or results of operations
of it and its subsidiaries, taken as a whole. No default or breach of
contract will occur by virtue of the Merger under any material contract or
agreement to which it or any of its subsidiaries is a party and no material
contract rights of it or any of its subsidiaries under any existing material
contracts or agreements to which it or any of its subsidiaries is a party will
be extinguished by virtue of the Merger.
SECTION 2.10 SEC Filings. Since December 31, 1991, it and each of its
subsidiaries has filed in a timely manner all required filings with the SEC,
including all Form 10-K and 10-Q Reports, and with all other regulatory bodies
where such filings are required; and no such filings contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements made, in light of the circumstances under which
they were made, not misleading, as of the dates of the filings. It has
furnished to the other a true and complete copy of (i) each final prospectus
and definitive proxy statement filed by it with the SEC since December 31,
1991, (ii) each report filed by it with the SEC since December 31, 1991, and
<PAGE>
(iii) each communication by it to its shareholders generally dispatched since
December 31, 1991.
SECTION 2.11 Registration Statement, Etc. None of the information
supplied or to be supplied by it for inclusion in (i) the Registration
Statement to be filed by CoreStates with the SEC (the "Registration
Statement") in connection with the CoreStates Common Shares which may be
issued in the Merger, (ii) the Prospectus-Proxy Statement (the "Proxy
Statement") to be mailed to the Company's shareholders in connection with the
meeting (the "Shareholders' Meeting") to be called to consider the Merger, or
(iii) any other documents to be filed with the SEC or any regulatory agency in
connection with the transaction contemplated hereby or by the Plan of Merger,
will, at the respective times such documents are filed, and, in the case of
the Registration Statement, when it becomes effective and at all times
necessary for the issuance of CoreStates Common Shares in the Merger to comply
with the Securities Act, and, with respect to the Proxy Statement, when mailed
and at all times through the date of the Shareholders' Meeting, be false or
misleading with respect to any material fact, or omit to state any material
fact necessary in order to make the statements therein not misleading. All
documents which it is responsible for filing with the SEC and any regulatory
agency in connection with the Merger will comply as to form in all material
respects with the provisions of applicable law. CoreStates will advise the
Company promptly after it receives notice thereof of the time when the
Registration Statement has become effective or any supplement or amendment has
been filed, of the issuance of any stop order, of the suspension of the
qualification of the CoreStates Common Shares issuable in connection with the
Merger for offering or sale in any jurisdiction, of the initiation or threat
of any proceeding for any such purpose, or of any request by the SEC for the
amendment or supplement of the Registration Statement or for any additional
information. It will provide the other party with copies of all
correspondence with the SEC regarding the Registration Statement and the Proxy
Statement.
SECTION 2.12 Broker's and Finder's Fee. No agent, broker, investment
banker, person or firm acting on behalf of it or under its authority is or
will be entitled to any broker's or finder's fee or any other commission or
similar fee directly or indirectly in connection with any of the transactions
contemplated herein, except Alex. Brown & Sons, Inc. in the case of the
Company.
SECTION 2.13 Absence of Litigation. Except as disclosed in the SEC
Reports filed prior to the date of this Agreement or otherwise in writing to
the other party prior to the date of this Agreement, there is no action, suit
or proceeding or, to its knowledge, investigation by any governmental agency
pending or, to its knowledge, threatened against it or any of its Subsidiaries
or any directors or officers thereof which may
7
<PAGE>
reasonably be expected to have a material adverse effect on the financial
condition or results of operations of it and its Subsidiaries, taken as a
whole.
SECTION 2.14 Accounting Matters. To the best of its knowledge, neither
it nor its affiliates, have through the date hereof, taken or agreed to take
any action that would prevent CoreStates from accounting for the business
combination to be effected by the Merger as a "pooling of interests".
ARTICLE III
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company further represents and warrants to CoreStates as follows:
SECTION 3.1 Subsidiaries. Exhibit 22 to its Annual Report on Form 10-K
for the year ended December 31, 1991 (the "1991 Form 10-K") accurately lists
all of the significant subsidiaries of the Company (the "Subsidiaries") and
the jurisdiction of their organization. Each of its Subsidiaries is validly
existing and in good standing under the laws of the jurisdiction of its
organization, has full corporate power and authority to conduct its business
as now conducted and to own and operate its assets, properties and business,
and is qualified to do business and is in good standing in each jurisdiction
in which the failure to so qualify would have a material adverse effect on
the financial condition or results of operations of it and its subsidiaries,
taken as a whole. All issued and outstanding and shares of capital stock of
each Subsidiary have been duly authorized and are fully-paid and nonassessable
and are owned of record and beneficially by the Company either directly or
indirectly. There are no outstanding subscriptions, options, warrants,
convertible securities, calls, commitments or agreements calling for or
requiring the issuance, transfer, sale or other disposition of any shares of
the capital stock of any Subsidiary, or calling for or requiring the issuance
of any securities or rights convertible into or exchangeable for shares of
capital stock of any Subsidiary. There are no direct or indirect subsidiaries
of the Company which on the date hereof would be required to be consolidated
or accounted for on the equity method in the Company's consolidated financial
statements prepared in accordance with generally accepted accounting
principles.
SECTION 3.2 Employee Benefit Plans. (a) The Company has delivered to
CoreStates copies of all employee benefit plans, contracts or arrangements
sponsored, maintained or contributed to by the Company or its ERISA Affiliates
including, without being limited to, all pension, retirement, deferred
compensation, incentive, bonus, profit sharing, stock purchase, stock option,
performance share, stock appreciation right, phantom stock, life
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insurance, death or survivor's benefit, health insurance, sickness,
disability, medical, surgical, hospital, severance, layoff or vacation plans,
contracts or arrangements. For purposes of this Section 3.2, the term "ERISA
Affiliate" shall mean any corporation which, together with it, is a member of
a controlled group of corporations (as defined in Section 414(b) or the
Internal Revenue Code of 1986, as amended, the "Code") or any trade or
business (whether or not incorporated) which is under common control (as
defined in Section 414(c) of the Code) with it; provided, however, that for
purposes of the representation made in Section 3.2(b)(iii), the term "ERISA
Affiliate" shall also include any organization (whether or not incorporated)
which is a member of an affiliated service group (as defined in Section 414(m)
of the Code) which includes it and any other entity required to be aggregated
with it pursuant to the regulations issued under Section 414(o) of the Code.
(b) The Company and its ERISA Affiliates contribute to or maintain only
one defined benefit pension plan (the "Defined Benefit Plan") which is subject
to the provisions of Title IV of Employee Retirement Income Security Act of
1974, as amended ("ERISA"). Neither the Company nor any of its ERISA
Affiliates maintains or has maintained any other defined benefit pension plans
which are or were subject to Title IV or ERISA, except any such plans which
have been merged with and into the Defined Benefit Plan or as to which all
material liabilities otherwise have been discharged or settled. With respect
to the Defined Benefit Plan, the following are true:
(i) The present value of the benefit liabilities under the Defined
Benefit Plan did not (computed on the basis of the actuarial assumptions
which would be used in the termination of the Defined Benefit Plan), as
of the last annual valuation date for the Defined Benefit Plan, exceed
the value of the assets of the Defined Benefit Plan allocable to such
benefits by an amount which, if the Defined Benefit Plan then terminated,
would have a material adverse effect on the financial condition or
results of operations of the Company and its ERISA Affiliates, taken as a
whole, and since the date of such last annual valuation, there has been
no material adverse change in the funding status of the Defined Benefit
Plan as reflected in the actuarial report for such valuation.
(ii) The Defined Benefit Plan has not been terminated nor has there
been any "reportable event," as that term is defined in Section 4043 of
ERISA (other than any event as to which the 30-day notice has been
waived) with respect to the Defined Benefit Plan, which in either event
could reasonably result in liability from the termination of the Defined
Benefit Plan which would have a material adverse effect on
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the financial condition or results of operations of the Company and its
ERISA Affiliates, taken as a whole.
(iii) The Defined Benefit Plan has not incurred any "accumulated
funding deficiency," as such term is defined in Section 302 of ERISA and
Section 412 of the Code (whether or not waived).
(iv) Other than premiums payable in the ordinary course, no
material liability to the Pension Benefit Guaranty Corporation ("PBGC")
has been or is reasonably expected by the Company to be incurred with
respect to the Defined Benefit Plan by the Company or its ERISA
Affiliates, which liability would have a material adverse effect on the
financial condition or results of operations of the Company and its ERISA
Affiliates, taken as a whole.
(v) No proceeding or other action has been initiated by the PBGC to
terminate the Defined Benefit Plan or written notice by the PBGC given to
the Company or its ERISA Affiliates or an intention to commence or seek
the commencement of any such proceeding or action with respect to the
Defined Benefit Plan, which proceeding or action could reasonably result
in liability from the termination of the Defined Benefit Plan that would
have a material adverse effect on the financial condition or results of
operations of the Company and its ERISA Affiliates, taken as a whole.
(c) Neither the Company nor any ERISA Affiliate has been obligated to
contribute to any employee pension benefit plan which is a "multiemployer
plan" as that term is defined in Section 3 of ERISA, at any time on or after
September 26, 1980. Neither the Company nor any of its ERISA Affiliates has
incurred or reasonably expects to incur any "withdrawal liability" within the
meaning of Title IV of ERISA, in an amount which would have a material adverse
effect on the financial condition or results of operations of the Company and
its ERISA Affiliates, taken as a whole.
(d) Each employee benefit plan (as such term is defined in Section 3(3)
of ERISA) contributed to or maintained by the Company or its ERISA Affiliates
is in compliance with the requirements of all applicable laws, including the
Code and ERISA, as they relate to each such employee benefit plan, except
where the failure to so comply would not have a material adverse effect on the
financial condition or results of operations of the Company and its ERISA
Affiliates, taken as a whole. To the best of the Company's knowledge, no
fiduciary or party in interest with respect to any such employee benefit plan,
nor any trust created thereunder, has engaged in a "prohibited transaction" as
such term is defined in Section 4975 of the Code, which could reasonably
subject the Company or its ERISA Affiliates to any tax
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or penalty imposed by Section 4975 of the Code in an amount which would have a
material adverse effect on the financial condition or results of operations of
the Company and its ERISA Affiliates, taken as a whole. Each employee benefit
plan which is intended to be qualified under Section 401(a) of the Code and
its corresponding trust exempt from tax under Section 501(a) of the Code has
been determined by the Internal Revenue Service to be so qualified. Such
determination remains in effect and has not been revoked and, to the best of
the Company's knowledge, nothing has occurred since the date of such
determination which would adversely affect such qualification or exemption,
except where the loss of such qualification would not have a material adverse
effect on the financial condition or results of operations of the Company and
its ERISA Affiliates, taken as a whole.
SECTION 3.3 Reserve for Loan Losses. The reserve for loan losses in the
Company's financial statements furnished to CoreStates as contemplated by
Section 2.4 hereof is adequate under the requirements of generally accepted
accounting principles and standard banking practice to provide for possible
losses on outstanding loans, net of recoveries, except as previously disclosed
in writing to CoreStates or except where the failure to be adequate would not
have a material adverse effect on the financial condition or results of
operations of the Company taken as a whole.
SECTION 3.4 Tax Returns. The Company and the Subsidiaries have duly
filed all tax returns (federal, state and local) which they have by law been
required to file, including those with respect to income, withholding, social
security, unemployment, franchise, real property, personal property and
intangible taxes. The accruals made for taxes, if any, on the consolidated
balance sheet of the Company and the Subsidiaries as of December 31, 1991, are
sufficient for the payment of all federal, state, county and local taxes of
the Company and the Subsidiaries accrued but unpaid as of the date indicated,
whether or not disputed, with respect to all periods through December 31,
1991.
SECTION 3.5 Insurance. The Company and its Subsidiaries have insurance
contracts in full force and effect which provide for coverage which are usual
and customary in the business of the Company and its Subsidiaries as to amount
and scope and neither the Company nor any of its Subsidiaries has to the best
of its knowledge failed to give any notice or present any claim under any
insurance contract in due and timely fashion.
SECTION 3.6 Labor Matters. Neither the Company nor any Subsidiary is a
party to or bound by any collective bargaining contracts with respect to any
employees of the Company or any Subsidiary. Since January 1, 1988 there has
not been, nor to the knowledge of the Company was there or is there
threatened, any strike, slowdown, picketing or work stoppage by any union or
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other group of employees against the Company or any Subsidiary or any of their
premises, or any other labor trouble or other occurrence, event or condition of
a similar character, which in any such case may reasonably be expected to
have a material adverse effect on the financial condition or results of
operations of the Company and its Subsidiaries taken as a whole.
ARTICLE IV
CERTAIN COVENANTS OF THE COMPANY
SECTION 4.1 Conduct of Business. (a) The Company covenants with
CoreStates as follows: without the prior written consent of CoreStates, between
the date hereof and the Closing Date, the Company and each of the Subdsidiaries
(i) will conduct its affairs in the ordinary course of business consistent with
past and then current practice and will not change its investment and lending
policies and practices, (ii) will not adopt, amend or modify any employment or
personnel contract or plan, or increase the level of compensation payable to any
officer or employee other than increases not greater than 5% over the current
level of compensation and in accordance with past practice, (iii) will not issue
any capital stock or security convertible into capital stock, except pursuant to
outstanding stock options, or grant any option or rights to acquire capital
stock, or otherwise alter its capital structure, (iv) will not repurchase any of
its securities or pay any dividend or make any distribution with respect to its
securities other than cash dividends by Subsidiaries to the Company, and other
than regular quarterly dividends paid consistent with past practice, (v) will
not enter into any contract or arrangement other than in the ordinary course of
business, (vi) will not amend its charter documents or By-laws, and (vii) will
not take any action which at the time taken is likely to cause any significant
decrease in the book value of its capital stock or materially adversely affect
the financial condition of the Company and the Subsidiaries.
(b) Affiliates. The Company will furnish to CoreStates a true and complete
list of all persons who, in the opinion of counsel for the Company, are
affiliates of the Company ("Affiliates"). For purposes of this Agreement, the
term "Affiliates" shall have the same meaning as that term is used in Rule 144
promulgated under the Securities Act.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1 CoreStates Registration Statement. CoreStates and the Company
will take such actions and furnish such information as shall be necessary to
prepare and file as soon as is reasonably practical with the SEC, the
Registration Statement
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and the related Proxy Statement included as a part thereof covering the
issuance by CoreStates of the CoreStates Common Shares as contemplated by the
Plan of Merger.
SECTION 5.2 Investigations. The Company and CoreStates will each permit
the other to have, subject to fiduciary, privacy and other legal obligations,
full access during normal business hours to make or cause to be made such
investigation of it and its Subsidiaries and their respective financial and
legal condition as the other deems necessary or advisable. Each of the
Company and CoreStates agrees to treat as strictly confidential during and
after the investigation contemplated by this Section 5.2 and agrees not to
divulge to any other person, natural or corporate (other than employees of,
and attorneys, financial advisors and accountants for, it who agree to be
bound by the provisions of this Section 5.2) any financial statements,
schedules, contracts, agreements, instruments, papers, documents and other
information relating to the other and its Subsidiaries which it may come to
know or which may come into its possession during the course of such
investigation and, if the transactions contemplated hereby are not consummated
for any reason, agrees promptly to return to the other all written materials
furnished by the other and its Subsidiaries hereunder in connection with such
investigation and to destroy all internally prepared documents containing
information derived from such materials. Notwithstanding any investigation by
the Company or CoreStates, it shall be entitled to rely on the representations,
warranties, and covenants set forth herein.
SECTION 5.3 Press Releases. The Company and CoreStates shall consult
with each other with respect to the form and substance of any press release or
other public disclosure of matters related to this Agreement or any of the
transactions contemplated hereby.
SECTION 5.4 Miscellaneous Agreements and Consents. Subject to the terms
and conditions herein provided, each of the parties hereto agrees to use
all reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement and the Plan of Merger. CoreStates and the
Company will use their best efforts to obtain consents of all third parties
and governmental bodies necessary or desirable for the consummation of the
transactions contemplated by this Agreement and the Plan of Merger as
expeditiously as practicable. As promptly as practicable after the date
hereof, the Company will call and hold the Shareholders' Meeting and the Board
of Directors of the Company shall, except as may otherwise be required in
accordance with their fiduciary duty under applicable law, recommend to the
requisite approval of
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the Plan of Merger and shall use its best efforts to obtain such approval.
SECTION 5.5 Other Proposals. Neither the Company nor any of its
subsidiaries nor any of their respective officers, employees, or directors
("Restricted Parties") will, directly or indirectly, solicit or encourage any
inquiries or proposals with respect to a business combination, tender offer,
exchange offer, merger, consolidation, recapitalization or similar transaction
regarding any purchase of all or a substantial portion of the assets of, or
any equity interest in, the Company or any of its subsidiaries (an
"Acquisition Proposal"). Restricted Parties will not authorize, permit or
instruct the Company's investment bankers or other third parties to (i)
solicit or encourage an Acquisition Proposal or (ii) subject to the fiduciary
obligations of the Company's Board of Directors, cooperate with, or furnish
non-public information concerning the Company or any of its Subsidiaries to
any person in connection with an Acquisition Proposal. The Company will notify
CoreStates immediately if any inquiries or proposals are received by, any
information is requested from, or any negotiations or discussions are sought
to be initiated or continued with the Company relating to an Acquisition
Proposal. The Company will provide to CoreStates a copy of any written
information provided to any person relating to or in connection with a
proposed or potential Acquisition Proposal. As of the date hereof, the Company
is not engaged in any negotiations or discussions relating to an Acquisition
Proposal.
SECTION 5.6 Update Information. From the date of this Agreement to the
Closing Date, the Company will promptly disclose to CoreStates in writing any
information which arises after the date hereof and which would have been
materially inconsistent with its representations and warranties hereunder if
such information had obtained on the date hereof.
SECTION 5.7 Change of Control. Each of the Company and CoreStates agrees
that, for purposes of any incentive compensation, deferred compensation, stock
option, retirement, severance or other benefit arrangement between the Company
and any employee or director of the Company and its subsidiaries, the Merger
shall constitute a "Change of Control" of the Company.
ARTICLE VI
CONDITIONS PRECEDENT TO CORESTATES' OBLIGATIONS
The obligations of CoreStates under this Agreement to effect the Merger
are subject to the fulfillment (or waiver in writing by a duly authorized
officer of CoreStates), prior to or at the Closing, of each of the following
conditions:
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SECTION 6.1 Representations, Warranties, and Covenants of the Company.
The representations and warranties of the Company herein contained and the
information contained in the other documents delivered by the Company in
connection with this Agreement shall be true and correct at the Closing Date
in all material respects with the same effect as though made at such time
except to the extent waived hereunder or affected by the transactions
contemplated herein; the Company shall have performed in all material respects
all obligations and compiled in all material respects with all agreements,
undertakings, covenants and conditions required by this Agreement to be
performed or compiled with by it at or prior to the Closing Date; and the
Company shall have delivered to CoreStates a certificate in form and substance
satisfactory to CoreStates dated the Closing Date and signed by the chief
executive officer and the chief financial officer of the Company to such
effect.
SECTION 6.2 Shareholder Approval. The Plan of Merger and the
transactions contemplated hereby and thereby shall have been approved by the
requisite vote of holders of the Company's capital stock entitled to vote
thereon in accordance with the provisions of the New Jersey Act and the
Company's Articles, or as required by the rules of the NASDAQ National Market
System or the New York Stock Exchange.
SECTION 6.3 Pending Litigation. There shall not be pending an
injunction or order or decree of a court of competent jurisdiction restraining
or prohibiting consummation of the Merger, which in the sole judgment of
CoreStates, made in good faith, would make the Merger imprudent in light of
applicable law or the defense of which would involve expense or lapse of time
that would be materially adverse to the interests of CoreStates.
SECTION 6.4 Opinion of Counsel. The Company shall have delivered to
CoreStates an opinion, dated the Closing Date, satisfactory to counsel for
CoreStates, of Stroock & Stroock & Lavan, to the effect that:
(a) Each of the Company and the Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, is duly qualified to do business in
each jurisdiction in which qualification is necessary except where the
failure to be so qualified would not have a material adverse effect on
the financial condition or results of operations of it and its
subsidiaries, taken as a whole, has the requisite corporate power to
carry on its business as now being conducted, and, in the case of the
Company, has the requisite corporate power to enter into and perform its
obligations under this Agreement and the Plan of Merger.
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(b) The execution, delivery and performance of this Agreement and
the Plan of Merger and the consummation of the Merger as provided in the
Plan of Merger by the Company have been duly authorized and approved by
all requisite action of the Company's Board of Directors and its
shareholders; this Agreement and the Plan of Merger have been duly
executed and delivered by the Company and constitute valid and binding
obligations of the Company, enforceable in accordance with their terms,
subject to any bankruptcy, insolvency, moratorium or other laws affecting
the enforcement of creditors' rights and by general principles of equity;
and the consummation by the Company of the transactions contemplated by
this Agreement and the Plan of Merger will not result in any breach or
violation of, or default under, any judgement, decree, mortgage,
agreement, indenture or other instrument material to the business or
financial condition of the Company and the Subsidiaries, taken as a
whole, and known to such counsel.
(c) All such approvals, consents, authorizations or modifications as
may, to the knowledge of such counsel, be required (other than as may be
required under the securities or blue sky laws of the several States) to
permit the performance of the Company of its obligations under this
Agreement and the Plan of Merger and consummation of the transactions
herein contemplated have been obtained (whether from governmental
authorities or other persons).
(d) Such counsel without special investigation does not know of any
litigation, proceeding or governmental investigation pending or
threatened against or relating to the Company or the Subsidiaries or its
or their respective properties or businesses, or the transactions
contemplated by this Agreement, which will result in any liability
material to the Company and the Subsidiaries, taken as a whole, except
for matters previously disclosed in writing to CoreStates.
(e) Although such counsel has not independently verified the
accuracy, completeness or fairness of the statements contained in the
Registration Statement, on the basis of its examination and participation
in the preparation of the Registration Statement, it does not believe
that the Registration Statement, it does not believe that the
Registration Statement contains any untrue statements of a material fact
or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading except
that such counsel expresses no opinion as to the financial statements and
other financial data included therein.
Such opinion shall also cover such other matters incident to the
transaction herein contemplated as CoreStates and its counsel
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may reasonably request. In rendering its opinion, such counsel may rely on
certificates of officers of the Company or the Subsidiaries or government
officials, opinions of other counsel and such other evidence as such counsel
for the Company may deem necessary or desirable.
SECTION 6.5 Required Approvals. (a) CoreStates shall have received all
such approvals, consents, authorizations and licenses of all regulatory and
other governmental authorities having jurisdiction as may be required to
permit the performance by the Company and CoreStates of their obligations
under this Agreement and the Plan of Merger and consummation of the
transactions herein contemplated, without in any case the imposition of any
conditions or requirements that would reduce materially the benefits to
CoreStates of the transactions contemplated hereby, (b) all waiting periods of
all regulatory and other governmental authorities shall have expired or been
terminated and (c) CoreStates shall have received evidence of the requisite
approval of the shareholders of the Company of the Plan of Merger and the
consummation of the transactions herein contemplated.
SECTION 6.6 Affiliates' Letters. At least 30 days prior to the Closing,
each person who may be deemed an Affiliate of the Company on the Closing Date
shall have delivered to CoreStates a letter satisfactory to counsel for
CoreStates, acknowledging and agreeing to abide by the limitations imposed by
law or required to assure that the Merger qualifies for pooling of interest
accounting in respect of the sale or other disposition of CoreStates Common
Shares received by such person pursuant to the Merger.
SECTION 6.7 Registration Statement. The Registration Statement shall
have been declared effective by the SEC and shall not be subject to a stop
order or any threatened stop order.
SECTION 6.8 Auditor's Letter. There shall have been delivered an agreed
upon procedures letter with respect to the financial information concerning
the Company contained in the Registration Statement from KPMG Peat Marwick,
dated not earlier than five days preceding the Closing Date and addressed to
CoreStates, which letter shall be reasonably satisfactory to CoreStates in
form and substance.
SECTION 6.9 Pooling. CoreStates shall have received a letter from KPMG
Peat Marwick to the effect that the Merger qualifies for "pooling of interest"
accounting treatment if consummated in accordance with this Agreement.
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ARTICLE VII
CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATIONS
The obligations of the Company under this Agreement to effect the Merger
are subject to the fulfillment (or waiver in writing by a duly authorized
officer of the Company), prior to or at the Closing, of each of the following
conditions:
SECTION 7.1 Representations, Warranties, and Covenants of CoreStates.
The representations and warranties of CoreStates herein contained and the
information contained in the other documents delivered by CoreStates in
connection with this Agreement shall be true and correct at the Closing Date
in all material respects with the same effect as though made at such time
except to the extent waived hereunder or affected by the transactions
contemplated herein; CoreStates shall have performed in all material respects
all obligations and complied in all material respects with all agreements,
undertakings, covenants and conditions required by this Agreement to be
performed or complied with by it at or prior to the Closing Date; and
CoreStates shall have delivered to the Company a certificate in the form and
substance satisfactory to the Company dated the Closing Date and signed by
the chairman and the chief financial officer of the Company to such effect.
SECTION 7.2 Shareholder Approval. The Plan of Merger and the transactions
contemplated hereby shall have been approved by the requisite vote of holders
of the Company's capital stock entitled to vote thereon in accordance with
the provisions of the New Jersey Act and the Company's Articles, or as
required by the rules of the NASDAQ National Market System or the New York
Stock Exchange.
SECTION 7.3 Pending Litigation. There shall not be pending an injunction
or order or decree of a court of competent jurisdiction restraining or
prohibiting consummation of the Merger.
SECTION 7.4 Opinion of Counsel. CoreStates shall have delivered to the
Company an opinion, dated the Closing Date, satisfactory to counsel for the
Company, of David J. Martin, Executive Vice President and Chief Counsel for
CoreStates, to the effect that:
(a) CoreStates is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation
and has the requisite corporate power to carry on its business as now
being conducted and to enter into and perform its obligations under this
Agreement and under the Plan of Merger.
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(b) The execution, delivery and performance of this Agreement by
CoreStates and the issuance of the CoreStates Common Shares pursuant to
the Plan of Merger, have been duly authorized and approved by all
requisite action of the Board of Directors or CoreStates; this Agreement
and the Plan of Merger have been duly executed and delivered by
CoreStates, and this Agreement and the Plan of Merger are enforceable
against CoreStates, each in accordance with its terms, subject to any
bankruptcy, insolvency, moratorium or other laws affecting the
enforcement of creditors' rights and general principles of equity; and
the consummation by CoreStates of the transactions contemplated by this
Agreement and the Plan of Merger will not result in any breach or
violation of, or default under, any judgment, decree, mortgage,
agreement, indenture or other instrument material to the business or
financial condition of CoreStates and its subsidiaries, taken as a whole,
and known to such counsel.
(c) All such approvals, consents, authorizations or modifications
as may, to the knowledge of such counsel, be required to permit the
performance by CoreStates of its respective obligations under this
Agreement and consummation of the transactions herein contemplated have
been obtained (whether from governmental authorities or other persons).
(d) Such counsel without special investigation does not know of any
material litigation, proceeding or governmental investigation pending or
in prospect or threatened against or relating to CoreStates or any of its
subsidiaries, to its or their properties or businesses or to the
transactions contemplated by this Agreement, which will result in any
material liability to CoreStates and its subsidiaries on a consolidated
basis.
(e) The CoreStates Common Shares to be issued by CoreStates as
contemplated by the Plan of Merger have been duly authorized and upon
delivery to the shareholders of the Company, will be duly and validly
issued, fully paid and non-assessable, and will not have been issued in
violation of any preemptive rights of shareholders.
(f) Although such counsel has not independently verified the
accuracy, completeness or fairness of the statements contained in the
Registration Statement, on the basis of its examination and participation
in the preparation of the Registration Statement, it does not believe
that the Registration Statement contains any untrue statements of a
material fact or omits to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading except that such
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counsel expresses no opinion as to the financial statements and other
financial data included therein.
Such opinion shall also cover such other matters incident to the
transactions herein contemplated as the Company and its counsel may reasonably
request. In rendering his opinion, Mr. Martin may rely on certificates of
officers of CoreStates, opinions of other counsel and such other evidence as
he may deem necessary or desirable.
SECTION 7.5 Required Approvals. (a) The Company shall have received all
such approvals, consents, authorizations or modifications as may be required
to permit the performance by the Company of its obligations under this
Agreement and the Plan of Merger and the consummation of the transactions
herein contemplated; and (b) all waiting periods of all regulatory and other
governmental authorities shall have expired or been terminated.
SECTION 7.6 Registration Statement. The Registration Statement shall
have been declared effective by the SEC and shall not be subject to a stop
order or any threatened stop order.
SECTION 7.7 Auditor's Letter. There shall have been delivered an agreed
upon procedures letter with respect to the financial information concerning
CoreStates contained in the Registration Statement from Ernst & Young, dated
not earlier than five days preceding the Closing Date and addressed to the
Company, which letter shall be reasonably satisfactory to the Company in form
and substance.
SECTION 7.8 Tax Opinion. The Company shall have received an opinion,
dated the Closing Date, of counsel satisfactory to the Company, substantially
to the effect that:
(a) The Merger will constitute a reorganization within the meaning
of Section 368(a)(1)(A) of the Code.
(b) No gain or loss will be recognized by the shareholders of the
Company upon receipt of CoreStates Common Shares except for cash received
in lieu of fractional shares.
(c) The basis of the CoreStates Common Shares received by the
Company's shareholders will be the same as the basis of Company Common
Shares exchanged therefor.
(d) The holding period of the shares of CoreStates Common Shares
received by the Company's shareholders will include the holding period of
the Company Common Shares, provided such Company Common Shares were held
as capital asset on the Effective Time of Merger.
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(e) Such other matters as the Company may reasonably request.
SECTION 7.9 Pooling. The Company shall have received a letter from Ernst
& Young to the effect that the Merger qualifies for "pooling of interests"
accounting treatment if consummated in accordance with this Agreement.
ARTICLE VIII
TERMINATION
SECTION 8.1 Termination Provisions. This Agreement may be terminated and
the Plan of Merger and the Merger abandoned at any time prior to the Effective
Time of Merger (notwithstanding that approval by shareholders of the Company
may have been obtained pursuant to this Agreement) as follows:
(a) Mutual Consent. By mutual consent of CoreStates and the Company.
(b) Material Breach. By either CoreStates or the Company in the
event of a material breach by the other of any representation, warranty
or agreement contained herein which has not been cured or is not curable
by the earlier of the Closing Date or the sixtieth day after written
notice of such breach was given to the party causing such breach.
(c) Approval Date. By either CoreStates or the Company on December 31,
1992, if by such time the Closing has not occurred; provided, however,
that (i) if an injunction or order or decree of a court of competent
jurisdiction is effective as of such time restraining or prohibiting
consummation of the Merger, neither party may terminate this Agreement
pursuant to this clause (c) until 45 days after the date of entry of such
injunction, order or decree; and (ii) if the Board of Governors of the
Federal Reserve System or its delegate shall have refused to approve the
Merger or shall have conditioned an approval of the Merger in a manner
not reasonably satisfactory to CoreStates, CoreStates shall have the
right to initiate and pursue expeditiously an appeal from any such
refusal or imposition of an unsatisfactory condition and, in the event of
such appeal, neither party may terminate this Agreement pursuant to this
clause (c) until the termination of such appeal and then only if such
appeal results in a substantial affirmance of such refusal or imposition
of condition.
(d) Court Orders. By either CoreStates or the Company if a final
unappealable injunction or other order or decree shall have been issued
by a court of competent jurisdiction
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permanently restraining or prohibiting consummation of the Merger.
(e) Required Approvals. By CoreStates or the Company if the merger
is not approved by the shareholders of the Company at a meeting called
for that purpose.
SECTION 8.2 Approval by Board of Directors. Any such termination shall be
approved by the Board of Directors of the party seeking termination.
ARTICLE IX
AMENDMENT AND WAIVER
SECTION 9.1 Amendment. This Agreement may be amended by the parties
hereto, by action taken by or on behalf of their respective Boards of
Directors, at any time before or after approval of the Merger by the
shareholders of the Company; provided, however, that after such approval by
the shareholders of the Company no such amendment, without further shareholder
approval, shall reduce the amount or change the form of the consideration to be
delivered to the shareholders of the Company as contemplated by the Plan of
Merger or alter or change any of the terms or conditions of this Agreement and
the Plan of Merger if such alteration or change would adversely affect the
shareholders of the Company. This Agreement and the Plan of Merger may not be
amended except by an instrument in writing signed on behalf of each the
parties hereto.
SECTION 9.2 Waiver. Any of the terms or conditions of this Agreement
may be waived at any time by whichever of the parties is, or the shareholders
of which are, entitled to the benefit thereof, in the case of a party, by
action taken by the Board of Directors of such party. The failure of any
party at any time or times to require performance of any provision hereof
shall in no manner affect such party's right at a later time to enforce the
same. No waiver by any party of any condition, or of the breach of any term,
covenant, representation or warranty contained in this Agreement, whether by
conduct or otherwise, in any one or more instances shall be deemed to be or
construed as a further or continuing waiver of any such condition or breach or
waiver of any other condition or of the breach of any other term, covenant,
representation or warranty.
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ARTICLE X
MISCELLANEOUS
SECTION 10.1 Expenses and Fees. (a) Except as set forth in subsection
(b) of this Section 10.1, each party hereto shall pay its own expenses
incident to preparing for, entering into and carrying out this Agreement and
to the consummation of the Merger, except that CoreStates and the Company
shall divide equally the expense of printing and mailing incurred in
connection with the preparation and distribution of this Agreement, the Plan
of Merger, the Registration Statement and the Proxy Statement.
(b) In the event that this Agreement shall terminate prior to the
Effective Time of Merger by virtue of the ground set forth in Section 8.1(b),
the party causing such breach agrees to reimburse the other party for all
reasonable expenses incurred by such party in connection with the transactions
contemplated by this Agreement.
SECTION 10.2 Termination of Representations and Warranties. All
representations, warranties and agreements of CoreStates and the Company
contained in this Agreement shall expire with, and be terminated and
extinguished by, the consummation of the transactions contemplated hereby on
the Effective Time of Merger.
SECTION 10.3 Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered or mailed, registered or certified mail, postage
prepaid, as follows:
If to CoreStates:
CoreStates Financial Corp
Broad and Chestnut Streets
Philadelphia, PA 19107
Attn: Terrence A. Larsen, Chairman
and Chief Executive Officer
with copies to:
David T. Walker, Deputy Chief Counsel
CoreStates Financial Corp
PNB Building - F.C. 1-1-22-1
Broad and Chestnut Streets
Philadelphia, PA 19107
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If to the Company:
First Peoples Financial Corporation
Cuthbert Boulevard and MacArthur Drive
Haddon Township, NJ 08101
Attn: Jerome S. Goodman, Chairman, President
and Chief Executive Officer
with copies to:
James R. Tanenbaum, Esq.
Stroock & Stroock & Lavan
7 Hanover Square
New York, NY 10004-2594
SECTION 10.4 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the Commonwealth of
Pennsylvania without regard to principles of conflicts of law thereof.
SECTION 10.5 Entire Agreement. This Agreement and the Plan of Merger and
the documents and letters described herein or therein or attached or delivered
pursuant hereto or thereto set forth the entire agreement and understanding of
the parties in respect of the transactions contemplated hereby and supersede
all prior agreements, arrangements and understandings related to the subject
matter hereof. Nothing herein express or implied is intended or shall be
construed to confer upon or to give any person, other than CoreStates and the
Company and their respective successors and assigns, any rights or remedies
under or by reason of this Agreement.
SECTION 10.6 Method of Consent or Waiver. Any consent hereunder or any
waiver of conditions or covenants as may be herein provided for, subject to all
of the other requirements contained in this Agreement, shall be evidenced in
writing, properly executed by the Chairman, the President or one of the Vice
Presidents of the party so electing hereunder.
SECTION 10.7 Liability of CoreStates and the Company. In the event the
Merger is not consummated because one or more of the conditions to the
obligations of any party under this Agreement have not been fulfilled, despite
the best efforts of the other party, or in the event this Agreement is
terminated and the Plan of Merger is abandoned pursuant to Article VIII, then
absent a breach by it of its obligations hereunder, none of CoreStates or the
Company or their respective directors, officers, controlling persons, agents
or employees shall incur any liability whatsoever under or pursuant to this
Agreement or the Plan of Merger except pursuant to the provisions of Section
5.2 relating to confidential information, and Section 10.1 relating to
expenses and fees.
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SECTION 10.8 Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed an original, but both of which
together shall constitute one and the same instrument.
SECTION 10.9 Headings, Etc. The cover page, article headings and
section headings contained in this Agreement are inserted for convenience only
and shall not affect in any way the meaning or interpretation of this
Agreement.
SECTION 10.10 Indemnification. For three years after the Closing Date,
CoreStates shall indemnify, defend and hold harmless each person who is now,
or has been at any time prior to the date hereof or who becomes prior to the
Closing Date, an officer or director of the Company or any of its subsidiaries
(the "Indemnified Parties") against (i) all losses, claims, damages, costs,
expenses, liabilities or judgments or amounts that are paid in settlement
with the approval of CoreStates (which approval shall not be unreasonably
withheld) of or in connection with any claim, action, suit, proceeding or
investigation based in whole or in part on or arising in whole or in part out
of the fact that such person is or was a director, officer or employee of the
Company or its subsidiaries, whether pertaining to any matter existing or
occurring at or prior to the Closing Date and whether asserted or claimed
prior to, or at or after, the Closing Date ("Indemnified Liabilities") and
(ii) all Indemnified Liabilities based in whole or in part on, or arising in
whole or in part out of, or pertaining to this Agreement or the Transactions
contemplated hereby, in each case to the full extent the Company would have
been permitted under New Jersey law and its Certificate of Incorporation and
By-laws to indemnify such person. Without limiting the foregoing in the event
any such claim, action, suit, proceeding or investigation is brought against
any Indemnified Party (whether arising before or after the Closing Date), (i)
any counsel retained by the Indemnified Parties for any period after the
Closing Date shall be reasonably satisfactory to CoreStates; (ii) after the
Closing Date CoreStates shall pay all reasonable fees and expenses of such
counsel for the Indemnified Parties promptly as statements therefor are
received; and (iii) after the Closing Date, CoreStates will use all reasonable
efforts to assist in the vigorous defense of any such matter, provided that
CoreStates shall not be liable for any settlement of any claim effected
without its written consent, which consent, however, shall not be unreasonably
withheld. Any Indemnified Party wishing to claim indemnification under this
Section 10.10, upon learning of any such claim, action, suit, proceeding or
investigation, shall notify CoreStates within 30 days. The Indemnified
Parties as a group may retain only one law firm to represent them with respect
to each matter unless there is, under applicable standards of
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professional conduct, a conflict on any significant issue between the
positions of any two or more Indemnified Parties.
If CoreStates or any of its successors or assigns (i) shall consolidate
with or merge into any other corporation or entity and shall not be the
continuing or surviving corporation or entity of such consolidation or merger
or (ii) shall transfer all or substantially all of its properties and assets
to any individual, corporation or other entity, then and in each such case,
proper provision shall be made so that the successors and assigns of
CoreStates shall assume the obligations set forth in this Section 10.10.
10.11 Employee Benefits. Following the Closing Date, CoreStates shall
provide generally to officers and employees of the Company employee benefits,
including without limitation pension benefits, health and welfare benefits,
life insurance and vacation and severance arrangements, except individuals
listed in Schedule I shall not be eligible for or receive severance, other
than in accordance with their existing employment contracts, on terms and
conditions which when taken as a whole are substantially similar either (i) to
those currently provided by the Company or (ii) to those provided from time to
time by CoreStates to their similarly situated officers and employees.
10.12 Employee Contracts and Vested Employee Benefits. Following the
Closing Date, CoreStates shall honor in accordance with their terms the
employment, severance, consulting and other compensation contracts previously
disclosed to CoreStates between the Company and any current or former
director, officer or employee thereof as set forth in Schedule I, and all
provisions for vested benefits or other vested amounts earned or accrued
through the Closing Date under the COmpany's benefit plans.
10.13 Dividends. It is the intention of the parties hereto that holders
of Company common stock shall not receive two dividends, or fail to receive
one dividend, for any single calendar quarter with respect to their shares of
Company common stock and any shares of CoreStates' common stock any such
holder receives in exchange therefor in the Merger.
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed
this Agreement as of the date first above written.
FIRST PEOPLES FINANCIAL CORPORATION
By /s/ Jerome S. Goodman
----------------------------
Title:
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CORESTATES FINANCIAL CORP
By (Signature Appears Here)
-----------------------------
Title:
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<PAGE>
SCHEDULE I
To
Agreement and Plan of Reorganization
Between
First Peoples Financial Corporation
and
CoreStates Financial Corp
Dated February 13, 1992
Officer Date Length
------- ---- ------
Charles L. Daley 07/01/87 2 years
Carl A. Lingle 07/01/87 2 years
Robert J. Black 06/19/86 2 years
Edward J. McAleer 04/11/86 2 years
Joseph R. Griggs 06/21/84 1 year
Charles J. Nugent 06/21/84 1 year
George Spohn 12/19/85 1 year
Lee A. Steller 06/21/84 1 year
<PAGE>
EXHIBIT A
PLAN OF MERGER
of
FIRST PEOPLES FINANCIAL CORPORATION
(a New Jersey corporation)
with and into
CORESTATES FINANCIAL CORP
(a Pennsylvania corporation)
This Plan of Merger is made and entered into as of February 13, 1992
between CORESTATES FINANCIAL CORP, a Pennsylvania corporation ("CoreStates"),
and FIRST PEOPLES FINANCIAL CORPORATION, a New Jersey corporation (the
"Company"). CoreStates and the COmpany are hereinafter sometimes collectively
referred to as the "Constituent Corporation."
BACKGROUND
CoreStates is a corporation duly organized and validly existing under the
laws of the Commonwealth of Pennsylvania. As of the date hereof, the
authorized capital stock of CoreStates consists of 80,000,000 shares of Common
Stock, par value $1.00 per share ("CoreStates Common Shares"), of which
54,744,486 shares are issued and outstanding and 10,000,000 shares of Series
Preferred Stock, without par value, of which none are issued and outstanding.
The Company is a corporation duly organized and validly existing under
the laws of the State of New Jersey. As of the date hereof, the authorized
capital stock of the Company consists of 20,000,000 shares of Common Stock,
par value $6.00 per share ("Company Common Shares"), of which _______ shares
are issued and outstanding; 400,000 shares of Non-Convertible Preferred Stock,
par value $25.00 per share, of which none are issued and outstanding; and
498,481 shares of Convertible Preferred Stock, par value $20.00 per share, of
which none are issued and outstanding.
The Company and CoreStates have entered into an Agreement and Plan of
Reorganization dated as of February 13, 1992 (the "Reorganization Agreement"),
setting forth certain representations, warranties and agreements in
connection with the transactions therein and herein contemplated and which
contemplates the merger of the Company with and into CoreStates (the "Merger")
in accordance with this Plan of Merger and the Pennsylvania Business
Corporation Law (the "Pennsylvania Act").
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TERMS AND CONDITIONS
1. Merger. The Constituent Corporations shall effect the Merger on the
terms and conditions hereinafter set forth in this Plan of Merger.
(a) Effect. On the Effective Date, as hereinafter defined in
Section 1(b), the Company shall be merged with and into CoreStates, and the
separate existence of the Company shall cease, all with the effect provided in
Section 1929 of the Pennsylvania Act. CoreStates shall be, and is sometimes
hereinafter referred to as, the "Surviving Corporation."
(b) Effectiveness. Subject to the terms and conditions herein
provided, appropriate articles of merger shall be executed by the Constituent
Corporations on a day established in accordance with Section 1.2 of the
Reorganization Agreement (the "Closing Date"). On the Closing Date or as soon
thereafter as practicable, the articles of merger shall be filed with the
Secretary of State of the Commonwealth of Pennsylvania and the Merger shall
become effective at the close of business on such date of filing (which day
and time are hereinafter referred to as the "Effective Date").
2. Conversion of Shares. On the Effective Date, the manner and basis of
converting shares of the Constituent Corporations will be as follows:
(a) Company Common Shares. Each Company Common Share issued and
outstanding on the Effective Date shall be converted into and become 0.935
CoreStates Common Share and each Company Common Share held in the treasury of
the Company or by CoreStates or any CoreStates subsidiary shall be cancelled.
(b) No Fractional Shares. No fractional shares will be issued in
the Merger. Each shareholder of the Company receiving CoreStates Common
Shares will receive cash in lieu of any fraction of a CoreStates Common Share
in an amount equal to the fraction times 0.935 times the closing sale price of
CoreStates Common Shares on the day prior to the Effective Time of Merger.
(c) Company Common Share Options. Each option to purchase Company
Common Shares issued under the Company's stock option plans shall be converted
into an option to purchase the number of CoreStates Common Shares which is
equal to the number of Company Common Shares subject to such option multiplied
by 0.935, upon the same terms and conditions as such option to purchase
Company Common Shares, except that the per share exercise price shall be
multiplied by a fraction of which the numerator is the number of Company
Common Shares subject to such option and the denominator is equal to the
number of CoreStates Common Shares into which such option may be converted
hereunder.
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(d) CoreStates Common Shares. Each CoreStates Common Share issued and
outstanding on the Effective Date shall remain outstanding.
(e) Surrender of Certificates. As promptly as practicable after the
Effective Date, each holder of an outstanding certificate or certificates
which prior thereto represented Company Common Shares, shall surrender such
certificate or certificates with an appropriate letter of transmittal to an
agent or agents designated for the purpose by CoreStates (the "Exchange Agent"),
and such holder shall upon such surrender receive in exchange therefor a
certificate or certificates representing the number of CoreStates Common
Shares into which such shares shall have been converted in accordance with the
provisions of this Section 2. Until so surrendered and exchanged, each
outstanding certificate which, prior to the Effective Date represented Company
Common Shares shall, upon and after the Effective Date, be deemed for all
purposes (other than to the extent provided in the following sentence) to
evidence ownership of the number of CoreStates Common Shares into which such
shares have been converted pursuant to this Section 2. Beginning 12 months
after the Effective Time, dividends, if any, then so payable to holders of
such shares may, at CoreStates' option, be withheld from holders of
certificates formerly representing Company Common Shares, until such
certificates are surrendered for exchange as aforesaid and, if so withheld,
shall then be paid without interest thereon.
3. Articles of Incorporation. From and after the Effective Date, the
Articles of CoreStates as in effect immediately prior to the Effective Date,
shall be the Articles of the Surviving Corporation until duly amended in
accordance with law.
4. Bylaws. The Bylaws of CoreStates, as in effect immediately prior to
the Effective Date, shall be the Bylaws of the Surviving Corporation until duly
amended in accordance with law.
5. Directors and Officers. (a) The directors of the Surviving
Corporation shall be the directors of CoreStates immediately prior to the
Effective Date, to hold such office in accordance with law and the Bylaws of
the Surviving Corporation.
(b) The officers of the Surviving Corporation shall be the officers of
CoreStates immediately prior to the Effective Date, to hold such office in
accordance with law and the Bylaws of the Surviving Corporation.
6. Failure to Surrender Certificates. In the event that any
certificates formerly representing Company Common Shares are not surrendered
for exchange by the fourth anniversary of the
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Effective Date, CoreStates may deposit with its Transfer Agent, for the
account of the holders of such unsurrendered certificates, certificates
representing the CoreStates Common Shares to which the holders of such
unsurrendered certificates would be entitled upon surrender thereof. The
Transfer Agent will be instructed to sell such CoreStates Common Shares at the
prevailing market price and to hold the net sales proceeds therefrom, together
with any previously accrueddividends therefrom, together with any previously
accrued dividends thereon, in an account for the holders of such unsurrendered
certificates; provided that after the expiration of two years from the date of
such deposit CoreStates shall have the right to direct the balance of the cash
remaining in such account to be transferred to it, after which the holders of
such surrendered certificates shall look only to CoreStates for such payment.
Any interest accruing on the funds in such account shall be for the sole
benefit of CoreStates.
7. Termination. This Plan of Merger may be terminated at any time on or
before the Effective Date by agreement of the Boards of Directors of the
Constituent Corporations. This Plan of Merger shall be automatically
terminated if the Company or CoreStates validly terminates the Reorganization
Agreement.
8. Waiver. Subject to applicable law, any of the terms or conditions
of this Plan of Merger may be waived at any time by whichever of the
Constituent Corporations is, or the shareholders of which are, entitled to the
benefit thereof by action taken by the Board of Directors of such Constituent
Corporation, and this Plan of Merger may be amended, modified or supplemented
in any manner by an agreement in writing approved by the Boards of Directors
of the Constituent Corporations at any time before or after approval of this
Plan of Merger by the shareholders of the Company; provided that no such
waiver, amendment, modification or supplement shall be made after such
approval which shall affect the rights of the shareholders of the Company in a
manner which, in the judgment of the Board of Directors of the Company, is
materially adverse to such shareholders, unless the shareholders shall have
further approved such waiver, amendment, modification or supplement.
9. Further Assurances. If at any time the Surviving Corporation shall
consider or be advised that any further assignments or assurances in law or
any other acts are necessary or desirable to (a) vest, perfect or confirm, of
record or otherwise, in the Surviving Corporation its rights, title or
interest in, to or under any of the rights, properties or assets of the
Company acquired or to be acquired by the Surviving Corporation as a result
of, or in connection with, the Merger, or (b) otherwise carry out the
purposes of this Plan of Merger, the Company and its proper officers and
directors shall be deemed to have granted to the Surviving Corporation an
irrevocable power of attorney to execute and deliver all such proper deeds,
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assignments and assurances in law and to do all acts necessary or proper to
vest, perfect or confirm title to and possession of such rights, properties or
assets in the Surviving Corporation and otherwise to carry out the purposes of
this Plan of Merger; and the proper officers and directors of the Surviving
Corporation are fully authorized in the name of the Company or otherwise to
take any and all such action.
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EXHIBIT B
Stock Option Agreement
STOCK OPTION AGREEMENT, dated as of February 13, 1992 (the "Agreement"),
by and between FIRST PEOPLES FINANCIAL CORPORATION, a New Jersey corporation
(the "Company"), and CORESTATES FINANCIAL CORP, a Pennsylvania corporation
("CoreState").
WHEREAS, CoreStates and the Company propose to enter into an Agreement
and Plan of Reorganization dated as of the date hereof (the "Merger
Agreement"), providing for, among other things, the merger of the Company with
and into CoreStates (the "Merger"), pursuant to which the outstanding shares
of Common Stock, par value $6.00 per share ("Company Common Shares"), of the
Company will be converted into shares of Common Stock, par value $1 per share
("CoreStates Common Shares"), of CoreStates;
WHEREAS, as a condition to CoreStates entering into the Merger Agreement,
CoreStates has requested that the Company agree, and the Company has agreed, to
grant CoreStates the option set forth herein to purchase authorized
but unissued, or treasury Company Common Shares;
NOW, THEREFORE, intending to be legally bound and in consideration of the
foregoing and the mutual covenants and agreements set forth herein and in the
Merger Agreement, the parties hereto agree as follows:
1. Grant of Option.
The Company hereby grants to CoreStates an irrevocable option (the
"Option") to purchase up to 499,524 shares of Company Common Shares (the
"Option Shares") at a purchase price of $28.50 per Option Share (the "Purchase
Price").
2. Exercise of Option.
(a) CoreState, if not in breach of the Merger Agreement, may exercise
the Option, in whole, but not in part, at any time if a Purchase Event (as
defined below) shall have occurred; provided, that to the extent a notice to
exercise the Option shall not have been issued pursuant to subsection (c) of
this Section 2, the Option shall terminate (i) at the effective time of the
Merger; or (ii) upon termination of the Merger Agreement prior to the
occurrence of a Purchase Event; provided however that if a Purchase Event has
occurred prior to or concurrently with the termination of the Merger
Agreement, the Option shall remain in effect until the option Expiration Date
(hereinafter defined); and provided further, however, that nay exercise of the
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<PAGE>
Option shall be subject to compliance with applicable law, including the Bank
Holding Company Act of 1956, as amended, and Pennsylvania and New Jersey
banking laws. The rights set forth in Section 7 shall not terminate when the
right to exercise the Option terminates as set forth herein, but shall extend
to such time as is provided in Section 7.
(b) As used herein, a "Purchase Event" shall mean any of the following
events:
(i) any person (other than CoreStates or any subsidiary of
CoreStates) shall have commenced (as such term is defined in Rule 14d-2
under the Securities Exchange Act of 1934, as amended (the "Exchange
ACt")), a tender offer or exchange offer to purchase Company Common
Shares, which offer shall not have been withdrawn prior to the scheduled
date of the Company shareholder meeting, such that, upon consummation of
such offer, such person could own or control 25 percent or more of the
outstanding Company Common Shares;
(ii) the Company or any subsidiary of the Company shall have
authorized, recommended, proposed or announced an intention to authorize,
recommend or propose, or entered into, an agreement with any person
(other than CoreStates or any subsidiary of CoreStates) to (A) merge or
consolidate with the Company or enter into any similar transaction with
such person, (B) sell, lease or otherwise dispose of all or substantially
all of the assets of the Company to such person, or (C) sell or otherwise
dispose of (including by way of merger, consolidation, share exchange or
similar transaction) securities representing 25 percent of more of the
voting power of the Company;
(iii) any person (other than CoreStates or any subsidiary of
CoreStates) shall have acquired beneficial ownership (as such term is
defined in Rule 13d-3) under the Exchange Act) or the right to acquire
beneficial ownership of, or a new group has been formed which
beneficially owns, 25 percent or more of the outstanding Company Common
Shares;
(iv) the shareholders of the Company shall have disapproved the
Merger after any person (other than CoreStates or any subsidiary of
CoreStates) shall have publicly announced a proposal, which was not
withdrawn prior to the scheduled date of the shareholder meeting, to (A)
acquire the Company or any subsidiary of the Company by merger,
consolidation, purchase of all or substantially all of its assets or any
other similar transaction, or (B) make an offer described in clause (i)
above;
(v) the Board of Directors shall have recommended that the
Company's shareholders accept any tender or exchange
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offer with respect to their Company Common Shares (other than an offer
made by or on behalf of CoreStates) or shall have withdrawn or modified
in a manner adverse to CoreStates its recommendation with respect to the
Merger; or
(vi) any person (other than CoreStates or any subsidiary of
CoreStates) shall, with respect to the Company Common Shares, have
solicited proxies, executed any written consent or become a participant in
any solicitation (as such terms are defined in Regulation 14A under the
Exchange Act) and the shareholders of the Company shall have disapproved
the Merger.
As used in this Agreement, "person" shall have the meanings specified in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
(c) In the event CoreStates wishes to exercise the Option, it shall send
to the Company a written notice (the date of which being herein referred to as
the "Notice Date") specifying a place and date not earlier than the fifth
business day immediately following the Notice Date nor later than twenty
business days from the Notice Date for the closing of such purchase (the
"Closing Date"); provided, that if the closing of the purchase and sale
pursuant to the Option (the "Closing"), cannot be consummated by reason of any
applicable judgment, decree, order, law or regulation, the period of time that
otherwise would run pursuant to this sentence shall run instead from the date
on which such restriction on consummation has expired or been terminated.
3. Payment and Delivery of Certificates.
(a) On the Closing Date, CoreStates shall pay to the Company the
Purchase Price for the Option Shares pursuant to the exercise of the Option,
in immediately available funds by wire transfer to a bank designated
by the Company and the Company shall deliver to CoreStates a certificate or
certificates representing the Option Shares, free and clear of all liens,
claims, charges, and encumbrances of any kind whatsoever.
(b) Certificates for the Option Shares delivered at the Closing
hereunder may be endorsed with a restrictive legend which shall read
substantially as follows:
THE TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND
PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF
_____________, 1992.
It is understood and agreed that the above legend shall be removed by delivery
of substitute certificate(s) without such legend if CoreStates shall have
delivered to the Company a copy
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of a letter from the staff of the SEC, or an opinion of counsel, in form and
substance satisfactory to the Company and its counsel, to the effect that such
legend is not required for purposes of the Securities Act of 1933, as amended
(the "Securities Act") and that the above legend with respect to this
Agreement shall be removed by delivery of substitute certificates without such
legend in connection with a proposed transfer if CoreStates shall have
delivered an opinion of counsel, in form and substance satisfactory to the
Company and its counsel to the effect that the proposed transfer will
comply with Section 10(h) hereof.
4. Representations and Warranties of the Company.
The Company hereby represents and warrants to CoreStates as follows:
(a) Due Authorization. The Company has the requisite corporate
power and authority to enter into and perform this Agreement. This
Agreement has been duly authorized by all necessary corporate action on
the part of the Company and has been duly executed by a duly authorized
officer of the Company, and constitutes a legal, valid and binding
agreement of the Company.
(b) Authorized Shares. The Company has taken all necessary
corporate and other action to authorize and reserve and to permit it to issue,
and, at all times from the date hereof until the obligation to deliver Company
Common Shares upon the exercise of the Option terminates, will have reserved
for issuance, Company Common Shares necessary for CoreStates to exercise the
Option and will take all necessary corporate action to authorize and reserve
for issuance all additional Company Common Shares or other securities which
may be issued pursuant to Section 6, upon exercise of the Option. The Company
Common Shares to be issued upon due exercise of the Option, including all
additional shares or other securities which may be issued pursuant to Section
6, upon issuance pursuant hereto, shall be duly and validly issued, fully paid
and nonassessable, and shall be delivered free and clear of all liens, claims,
charges and encumbrances of any kind or nature whatsoever, including any
preemptive rights of any of the shareholders of the Company.
(c) No Conflicts. The execution and delivery by the Company of
this Agreement and the performance by the Company of its obligations hereunder
do not and will not (i) violate, conflict with, or result in a breach of, any
of the provisions of its Articles or Bylaws, (ii) result in a default (or give
rise to any right of termination, cancellation or acceleration) under any of
the terms,
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conditions or provisions of any note, license, agreement or other
instrument or obligation to which the Company or any of its subsidiaries
is a party or by which the Company, any of its subsidiaries or any of
their respective assets may be bound, other than such defaults (or rights
of termination, cancellation or acceleration) which individually or in
the aggregate do not and will not have a material adverse effect on the
financial condition and results of operations of the Company and its
subsidiaries taken as a whole, or (ii) subject to the obtaining of the
governmental and other consents referred to herein, violate any judgment,
decree, order, law or regulation applicable to the Company, any of its
subsidiaries or any of their respective assets, other than such
violations which individually or in the aggregate do not and will not
have a material adverse effect on the financial condition and results of
operations of the Company and its subsidiaries taken as a whole.
5. Representations and Warranties of CoreStates.
CoreStates hereby represents and warrants to the Company as follows:
(a) Due Authorization. CoreStates has the requisite corporate power
and authority to enter into and perform this Agreement. This Agreement
has been duly authorized by all necessary corporate action on the part of
CoreStates and has been dully executed by a duly authorized officer of
CoreState, and constitutes a legal, valid and binding agreement of
CoreStates.
(b) Purchase Not for Distribution. CoreStates will not sell or
otherwise dispose of any Company Common Shares purchased pursuant to the
Option in violation of applicable law to the provisions of this
Agreement. Shares purchased pursuant to this Agreement are for investment
purposes only and shall not be purchased with a view towards distribution
thereof.
6. Adjustment upon Changes in Capitalization.
In the event of any change in Company Common Shares by reason of stock
dividends, split-ups, mergers (other than the Merger), recapitalization,
combinations, exchange of shares or the like, the type and number of shares or
securities subject to the Option, and the Purchase Price, shall be adjusted
appropriately so that CoreStates shall receive upon exercise of the Option the
number and class of shares or other securities or property that CoreStates
would have received in respect of the Company Common Shares purchasable upon
exercise of the Option if the Option had been exercised immediately prior to
such event. In the event that any additional Company Common Shares are issued
B-5
<PAGE>
after the date of this agreement (other than pursuant to an event described in
the first sentence of this Section 6(a)), the number of Company Common Shares
subject to the Option shall be adjusted so that, after such issuance, it
equals at least 20 percent of the number of Company Common Shares then issued
and outstanding, without giving effect to any shares subject to or issued
pursuant to the Option.
7. Repurchase.
At any time commencing upon the occurrence of a Purchase Event and ending
six months immediately thereafter (the "Repurchase Period"), the Company (or
any successor entity thereof) shall have the right to repurchase from
CoreStates and CoreStates shall have the right to require the Company to
repurchase the Option, at the price equal to the difference between the
"Market/Tender Offer Price" for Company Common Shares (defined as the higher
of the highest price or value per share at which a tender or exchange offer
has been made for Company Common Shares or the highest sale price for Company
Common Shares on the principal trading market on which such shares are traded,
as reported by a recognized source, within that portion of the Repurchase
Period preceding the date CoreStates gives notice of the required repurchase
under this Section 7) and the Purchase Price, multiplied by the number of
Company Common Shares purchasable pursuant to the Option, but only if he
Market/Tender Offer Price is greater than such exercise price.
In the event CoreStates exercises its rights under this Section 7, the
Company shall, within three business days after receipt of notice thereof, pay
the required amount to CoreStates in immediately available funds and CoreStates
shall surrender to the Company the Option.
8. Registration Rights.
The Company shall, if requested by CoreStates, as expeditiously as
possible prepare and file up to two registration statements under the
Securities Act and shall use its best efforts to qualify under any applicable
state securities laws (provided the Company shall have no obligation to
qualify to do business in any jurisdiction or to file a general consent to
service of process in any jurisdiction), if necessary in order to permit the
sale or other disposition of any of all Company Common Shares that have been
acquired upon exercise of the Option in accordance with the intended method of
sale or other disposition stated by CoreStates at anytime within four years of
the exercise of the Option. The Company shall use its best efforts to cause
each such registration statement to become effective, to obtain all consents
or waivers of other parties which are required therefor and to keep such
registration effective for a period of not less than 180 days from the day
such registration
B-6
<PAGE>
statement first becomes effective unless, in the written opinion of counsel to
the Company, addressed to CoreStates and which shall be satisfactory in form
and substance to CoreStates and its counsel, registration is not required for
such proposed disposition by CoreStates. The registrations effected under
this Section 8 shall be at the Company's expense except for underwriting
discounts or commissions, brokers fees and the fees and disbursements of
CoreStates' counsel attributable to the registration of such Company Common
Shares. CoreStates shall provide all information reasonably requested by the
Company for inclusion in any registration statement to be filed hereunder.
Each of the Company and CoreStates (the "Indemnifying Party") shall indemnify
and hold harmless the other (the "Indemnified Party"), its affiliates and each
of their respective officers and directors from and against any and all
losses, claims, damages, liabilities and expenses (including, without
limitation, any amounts paid in settlement of any litigation, commenced or
threatened, if such settlement is effected with the consent of the
Indemnifying Party (which shall not be unreasonably withheld), all
out-of-pocket expenses, investigation expenses, expenses incurred with respect
to any judgment and fees and disbursements of counsel and accountants) arising
out of or based upon any statements contained in, or omissions or alleged
omissions from, each registration statement (and related prospectus) required
to be filed pursuant to this Section 8, except insofar as any such statement
or alleged omission arises from information furnished in writing by the
Indemnified Party specifically for inclusion in the registration statement.
In the event the Company effects a registration of Company Common Shares for
its own account or for any other shareholders of the Company (other than on
Form S-4 or Form S-8, or any successor form), it shall allow CoreStates to
participate in such registration and such participation shall not affect the
obligation of the Company to effect two registration statements for
CoreStates; provided, however, that if the managing underwriters of such
offering advise the Company in writing that in their opinion the number of
Company Common Shares requested to be included in such registration exceeds
the number which can be sold in such offering, the Company will include the
securities requested to be included therein (including for its own account)
pro rata. If requested by CoreStates in connection with any such
registration, the Company shall become a party to any underwriting agreement
relating to the sale of such shares, but only to the extent of obligating
itself in respect of representations, warranties, indemnities and other
agreements customarily included in such underwriting agreements.
9. Listing.
If the Company Common Shares are then listed on the New York Stock
Exchange, the Company, upon the request of CoreStates, will promptly file an
application to list the Company Common Shares to
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<PAGE>
be acquired upon exercise of the Option on the New York Stock Exchange and
will use its best efforts to obtain approval of such listing as soon as
practicable.
10. Miscellaneous.
(a) Expenses. Each of the parties hereto shall bear and pay all costs
and expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel.
(b) Waiver and Amendment. Any provisions of this Agreement may be
waived at any time by the party that is entitled to the benefits thereof.
This Agreement may not be modified, amended, altered or supplemented except
upon the execution and delivery of a written agreement executed by the parties
hereto.
(c) Entire Agreement; No Third-Party Beneficiary. This Agreement
contains the entire agreement between the parties with respect to the
transactions contemplated hereby and supersedes all other agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof. This Agreement is intended for the sole and exclusive
benefit of the parties hereto and is not intended to confer upon any other
person any rights or remedies hereunder and no other persons shall have the
right to bring any action in connection with this Agreement. If any term,
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated.
(d) Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania applicable to
agreements made and entirely to be performed within such state, without regard
to its conflict of law rules.
(e) Descriptive Headings. The descriptive headings contained herein are
for convenience of reference only and shall not affect in any way the meaning
or interpretation of this Agreement.
(f) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when delivered personally
or mailed by overnight express mail or by registered or certified mail,
postage prepaid with return receipt requested, addressed as follows (or at
such other addresses for such party as shall be specified by notice,
B-8
<PAGE>
except that notice of a change of address shall be effective only upon
receipt):
If to CoreStates to:
CoreStates Financial Corp
Broad and Chestnut Streets
Philadelphia, Pa 19107
Attn: Terrence A. Larsen, Chairman
and Chief Executive Officer
with copies to:
David T. Walker, Deputy Chief Counsel
CoreStates Financial Corp
PNB Building - F.C. 1-1-22-1
Broad and Chestnut Streets
Philadelphia, PA 19107
If to the Company:
First Peoples Financial Corporation
Cuthbert Boulevard and MacArthur Drive
Haddon Township, NJ 08101
Attn: Jerome S. Goodman, Chairman, President
and Chief Executive Officer
with copies to:
James R. Tanenbaum, Esq.
Stroock & Stroock & Lavan
7 Hanover Square
New York, NY 10004-2594
(g) Counterparts. This Agreement and any amendments hereto may be
executed in any number of counterparts, each of which shall be deemed to
be an original but all of which together shall constitute but one
agreement.
(h) Transfer or Assignment. Neither of the parties hereto may
sell, transfer, assign or otherwise dispose of any of its rights or
obligations under this Agreement or the Option created hereunder or
Option Shares to any other person, without the express written consent of
the other party, except that CoreStates may assign its rights and
obligations hereunder to a subsidiary, and in the event a Purchase Event
shall have occurred, CoreStates may sell, transfer, assign or otherwise
dispose of, in whole, but not in part, its rights and obligations in the
Option or the Option Shares (collectively the "Restricted Securities") as
follows:
B-9
<PAGE>
(i) in one or more transactions exempt from the registration
requirements of Section 5 of the Securities Act; provided, however, that
the aggregate amount of Restricted Securities sold or transferred to any
single purchaser and persons known to CoreStates to be affiliates of or
persons acting in concert with such purchaser in any such transaction
shall be limited to that amount of Restricted Securities which, when
taken together with the Restricted Securities theretofore sold or
transferred to such purchaser and such affiliates and persons, would not
upon consummation of the sale thereof or the exercise in full thereof,
result in or permit the acquisition of more than 2% of the outstanding
Company Common Shares, determined as of the date of such sale or transfer
on a pro forma basis, assuming the exercise in full of the Option; or
(ii) in registered, underwritten public offerings of the Option
Shares in which steps are taken to insure that no purchaser will acquire
shares equal to 2% of the outstanding Company Common Shares determined on
a pro forma basis assuming the exercise of the Option.
(i) Further Assurances. If CoreStates exercises the Option, the Company
and CoreStates will execute and deliver all such further documents and
instruments and take all such further action as may be necessary in order to
consummate the transaction contemplated hereby.
(j) Specific Performance. The parties hereto agree that this Agreement
may be enforced by either party through specific performance, injunctive or
other equitable relief. Both parties further agree to waive any requirement
for the securing or posting of any bond in connection with the obtaining of
any such equitable relief and that this provision is without prejudice to any
other rights that the parties hereto may have for any failure to perform this
Agreement.
(k) Public Statements. The parties hereto will consult and cooperate
with each other in connection with all press releases, announcements and
public statements with respect to the Merger and this Agreement; provided,
that such consultation and cooperation shall not interfere with any obligation
of the parties to disclose any information as required by applicable law or
stock exchange rule or regulation.
(l) Additional Definition. "Option Expiration Date" shall mean the date
that is six months after the occurrence of a Purchase Event, provided that (i)
in the event during the period beginning on the 27th day and ending on the
90th day prior to such date CoreStates shall have requested that Option Shares
be registered pursuant to Section 8 hereof and a registration statement
covering such Option Shares shall not have become
B-10
<PAGE>
effective under the Securities Act by the 30th day after such request, the
Option Expiration Date shall be deferred by the number of days between such
30th day and the date on which a registration statement covering such Option
Shares becomes effective, (ii) in the event a sale of the Option or Option
Shares shall have been prohibited under the terms of any preliminary
injunction or restraining order or comparable order of any court and such
order shall remain in effect beyond the 60th day prior to such day, the Option
Expiration Date shall be deferred by the number of days between such 60th day
and the date on which it is dissolved or withdrawn.
IN WITNESS WHEREOF, each of the parties has executed this Stock Option
Agreement as of the day and year first written above.
FIRST PEOPLES FINANCIAL CORPORATION
/S/ Jerome S. Goodman
By:_____________________________
Title:
CORESTATES FINANCIAL CORP
/s/ SIGNATURE
By:_____________________________
Title:
DTW:I:OPTION3.AGT
B-11
<PAGE>
Exhibit 2(e)
AGREEMENT AND PLAN OF MERGER
by and between
CORESTATES FINANCIAL CORP
("Acquiror")
and
GERMANTOWN SAVINGS BANK
("Acquiree")
March 7, 1994
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1 - THE MERGER.................................................... 1
1.1. Structure of the Merger....................................... 1
1.2. Conversion of Stock........................................... 1
1.3. Exchange Procedures........................................... 3
1.4. Options....................................................... 3
1.5. Articles of Incorporation of the Surviving Institution........ 4
1.6. By-Laws of the Surviving Institution.......................... 4
1.7. Directors and Officers of the Surviving Institution........... 4
1.8. Closing....................................................... 4
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES................................ 5
2.1. Organization and Capitalization of Acquiror................... 5
2.2. Organization and Capitalization of Acquiree................... 5
2.3. Rights, etc................................................... 5
2.4. Capital Stock................................................. 5
2.5. Authority..................................................... 6
2.6. Subsidiaries.................................................. 6
2.7. Authorization and Validity of Agreement....................... 6
2.8. No Violations................................................. 6
2.9. Securities Exchange Act Reports............................... 7
2.10. Absence of Certain Changes or Events.......................... 8
2.11. Taxes......................................................... 8
2.12. Absence of Claims............................................. 8
2.13. Absence of Regulatory Actions................................. 9
2.14. Labor Matters................................................. 9
2.15. Employee Benefit Plans........................................ 9
2.16. Title to Assets............................................... 10
2.17. Knowledge as to Conditions.................................... 10
2.18. Compliance With Laws.......................................... 10
2.19. Acquiror Stock................................................ 11
2.20. Fees.......................................................... 11
2.21. Registration Statement; Proxy Statement....................... 11
2.22. Environmental Matters......................................... 12
2.23. Material Contacts............................................. 14
2.24. Insurance..................................................... 14
2.25. Allowance for Credit Losses................................... 14
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Page
----
ARTICLE 3 - CONDITIONS TO EFFECTIVENESS................................... 15
3.1. Stock Option Agreement........................................ 15
ARTICLE 4 - COVENANTS PRIOR TO CLOSING.................................... 16
4.1. Access to Information; Notice of Changes; Confidentiality..... 16
4.2. Conduct of the Business of Acquiree Pending the Closing Date.. 17
4.3. Conduct of the Business of Acquiror Pending the Closing Date.. 19
4.4. No Solicitation of Other Offers............................... 19
4.5. Certain Filings, Consents and Arrangements.................... 20
4.6. Best Efforts.................................................. 20
4.7. Publicity..................................................... 20
4.8. Proxy; Registration Statement................................. 20
4.9. Shareholders' Meeting......................................... 21
4.10. Acquiror Sub.................................................. 21
4.11. Securities Act................................................ 21
4.12. Additional Agreements......................................... 21
4.13. Listing....................................................... 22
4.14. Bank Merger................................................... 22
ARTICLE 5 - CONDITIONS PRECEDENT TO MERGER................................ 24
5.1. Conditions Precedent to Obligations of All Parties............ 24
5.2. Conditions Precedent to Obligations of Acquiror............... 26
5.3. Conditions Precedent to Obligation of Acquiree................ 27
ARTICLE 6 - COVENANTS..................................................... 28
6.1. Tax-Free Reorganization Treatment............................. 28
6.2. Employee Benefits............................................. 28
6.3. Indemnification; Directors' and Officers' Insurance........... 29
ARTICLE 7 - TERMINATION................................................... 31
7.1. Termination................................................... 31
7.2. Effect of Termination......................................... 32
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<PAGE>
Page
----
ARTICLE 8 - MISCELLANEOUS................................................. 32
8.1. Certain Definitions; Interpretation........................... 32
8.2. Fees and Expenses............................................. 33
8.3. Survival...................................................... 33
8.4. Public Announcements.......................................... 33
8.5. Notices....................................................... 33
8.6. Entire Agreement.............................................. 34
8.7. Binding Effect; Benefit; Assignment........................... 34
8.8. Waiver........................................................ 35
8.9. Further Actions............................................... 35
8.10. Counterparts.................................................. 35
8.11. Applicable Law................................................ 35
8.12. Severability.................................................. 35
SCHEDULES
Schedule 1.2 - Election and Allocation Procedures
Schedule 1.3 - Exchange Procedures
Schedule 2.3A - Rights with Respect to Acquiror Capital Stock
Schedule 2.3B - Rights with Respect to Acquiree Capital Stock
Schedule 2.6 - Significant Subsidiaries of Acquiree
Schedule 2.11 - Tax Matters
Schedule 2.15A - Benefit Plans of Acquiror
Schedule 2.15B - Benefit Plans and Employment Agreements of Acquiree
Schedule 3.1 - Form of Stock Option Agreement
Schedule 5.3(a) - Representations and Warranties Regarding Acquiror Sub
Schedule 6.2 - Contract Employees
-iii-
<PAGE>
INDEX TO DEFINITIONS
--------------------
Term Location of Definition
- ---- ----------------------
Acquiree.................................................... Preamble
Acquiree Common Stock....................................... 1.2(a)
Acquiree Meeting............................................ 4.9
Acquiror.................................................... Preamble
Acquiror Sub................................................ Recitals
Acquiror Stock.............................................. 1.2(b)
Acquisition Proposal........................................ 4.4
Affiliates.................................................. 4.11(a)
Agreement................................................... Preamble
Bank Regulators............................................. 2.13
Benefit Plans............................................... 2.15
Branch Property............................................. 2.22
Cash Merger Consideration................................... 1.2(b)
Cash Out.................................................... 1.4(a)
Certificate................................................. 1.3
Clarke...................................................... 5.2(h)
Closing Date................................................ 1.8
Contract Employees.......................................... 6.2(a)
Control..................................................... 8.1
Conversion Number........................................... 1.2(b)
Correspondent Agreement..................................... 5.2(g)
Costs....................................................... 6.3(a)
Determination Date.......................................... 1.2(b)
Dissenters' Shares.......................................... 1.2(a)
Effective Date.............................................. 1.8
Effective Time.............................................. 1.8
Environmental Law........................................... 2.22
ERISA....................................................... 2.15
Exchange Option............................................. 1.4(a)
FDIC........................................................ 2.9
Federal Reserve Board....................................... 5.1(c)
First USA................................................... 5.2(g)
Governmental Entity......................................... 2.22
Hazardous Substance......................................... 2.22
Indemnified Parties......................................... 6.3(a)
IRS......................................................... 2.15
Market Value................................................ 1.2(b)
Material.................................................... 8.1
Material Adverse Effect..................................... 8.1
Maximum Amount.............................................. 6.3(c)
Merger...................................................... 1.1
NYSE........................................................ 1.2(b)
OREO........................................................ 2.22
-iv-
<PAGE>
Term Location of Definition
- ---- ----------------------
Outstanding Option.......................................... 1.4(a)
Pension Plan................................................ 2.15
Per Share Merger Consideration.............................. 1.2(b)
Person...................................................... 8.1
Proxy Statement............................................. 2.21
Proxy Statement/Prospectus.................................. 2.21
Real Property............................................... 2.22
Registration Statement...................................... 2.21
Reports..................................................... 2.9
Rights...................................................... 2.3
Sale Agreement.............................................. 5.2(g)
SEC......................................................... 2.9
Securities Exchange Act..................................... 2.9
Securities Act.............................................. 2.21
Starting Date............................................... 7.1(f)
Starting Price.............................................. 7.1(f)
Stock Merger Consideration.................................. 1.2(b)
Subsidiary.................................................. 8.1
Surviving Institution....................................... 1.1
Termination Right Determination Date........................ 7.1(f)
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<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is made this 7th day
of March, 1994, by and between CORESTATES FINANCIAL CORP, a Pennsylvania
corporation ("Acquiror") and GERMANTOWN SAVINGS BANK, a Pennsylvania capital
stock savings bank ("Acquiree").
WHEREAS, the respective Boards of Directors of Acquiror and Acquiree
have approved the acquisition of Acquiree by Acquiror, subject to the terms and
conditions of this Agreement;
WHEREAS, to complete such acquisition, the respective Boards of
Directors of Acquiror and Acquiree have approved the merger of Acquiree into a
Pennsylvania bank subsidiary of Acquiror ("Acquiror Sub"), pursuant to and
subject to the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the foregoing premises and of the
mutual covenants, representations, warranties and agreements herein contained,
the parties, intending to be legally bound hereby, agree as follows:
ARTICLE 1
THE MERGER
----------
1.1. Structure of the Merger. Subject to the terms and conditions
-----------------------
of this Agreement, at the Effective Time (as defined in Section 1.8 hereof),
Acquiree will merge with and into Acquiror Sub (the "Merger"), with Acquiror Sub
being the surviving institution (the "Surviving Institution"). At the Effective
Time, the separate corporate existence of Acquiree shall cease, and Acquiror Sub
shall continue as the Surviving Institution. From and after the Effective Time,
the Merger shall have the effects set forth in Section 1609(g) of the
Pennsylvania Banking Code, 7 P.S. (S)1609(g).
1.2. Conversion of Stock.
-------------------
(a) At the Effective Time, each share of common stock of
Acquiree, par value $0.10 per share (the "Acquiree Common Stock") then issued
and outstanding (other than (i) shares which have not been voted in favor of
the approval of the Merger and with respect to which dissenter's rights shall
have been perfected in accordance with applicable provisions of the
Pennsylvania Banking Code and the Pennsylvania Business Corporation Law (the
"Dissenters' Shares") and (ii) shares held directly or indirectly by Acquiror,
excluding shares held in a fiduciary capacity or in satisfaction of a debt
previously contracted) shall, by virtue of the Merger and without any action
on the part of the holder thereof, be converted into and represent the right
to receive the cash and/or shares of stock of
<PAGE>
the Acquiror constituting the Per Share Merger Consideration (as defined in
paragraph (b) below). As of the Effective Time, each share of the Acquiree
Common Stock held directly or indirectly by Acquiror, excluding shares held in a
fiduciary capacity or in satisfaction of a debt previously contracted, and each
share held as treasury stock of Acquiree, shall be cancelled, retired and cease
to exist, and no exchange or payment shall be made with respect thereto. Each
issued and outstanding share of common stock of Acquiror Sub shall continue to
be an issued and outstanding share of common stock of the Surviving Institution.
(b) As used herein, the term "Per Share Merger Consideration"
shall mean either the amount of cash set forth in clause (i) below (the "Cash
Merger Consideration") or that number of shares of common stock of Acquiror,
par value $1.00 per share ("Acquiror Stock") as set forth in clause (ii) below
(the "Stock Merger Consideration"), at the election of the holder of the share
of Acquiree Common Stock in accordance with Schedule 1.2 hereto, subject
however to proration in accordance with Schedule 1.2 hereto.
(i) If Cash Merger Consideration is to be paid with
respect to a share of Acquiree Common Stock, the Per Share Merger
Consideration with respect to such share of Acquiree Common Stock shall be
cash in the amount of Sixty-Two Dollars ($62).
(ii) If Stock Merger Consideration is to be paid with
respect to a share of Acquiree Common Stock, the Per Share Merger
Consideration with respect to such share of Acquiree Common Stock shall be
that number of shares of Acquiror Stock (the "Conversion Number") having a
Market Value as of the Determination Date equal to Sixty-Two Dollars ($62);
provided, however, that (A) if the Market Value of Acquiror Stock as of the
- -------- -------
Determination Date is less than $ 22.50 per share then the Conversion Number
shall be 2.756, and (B) if the Market Value of Acquiror Stock as of the
Determination Date is greater than $27.50 per share then the Conversion Number
shall be 2.255; and provided further, that if the Acquiror effects a stock
-------- -------
dividend, reclassificati on, recapitalization, split-up, combination, exchange
of shares or similar transaction, after the date hereof and prior to the
Effective Time, the Conversion Number shall be appropriately adjusted.
The term "Determination Date" shall mean the business day prior to
the Closing Date.
The term "Market Value" shall mean the average of the closing price
per share of Acquiror Stock on the New York Stock Exchange ("NYSE"), as reported
by the Wall Street Journal or, if not reported thereby, another authoritative
-------------------
source, for the immediately preceding fifteen NYSE trading days.
-2-
<PAGE>
(c) No fractional shares of Acquiror Stock will be issued
pursuant hereto, and Acquiror shall pay cash in lieu of any fractional shares
of Acquiror Stock which otherwise would be issuable. Any such cash payments
shall be made on the basis of the Market Price of Acquiror Stock as of the
Effective Date.
(d) Dissenters' Shares shall be paid for in accordance with
applicable provisions of the Pennsylvania Banking Code and the Pennsylvania
Business Corporation Law and thereupon shall be cancelled, retired and cease
to exist.
1.3. Exchange Procedures. Certificate(s) which immediately prior to
-------------------
the Effective Time represented outstanding shares of Acquiree Common Stock (the
"Certificates") shall be exchanged in accordance with the procedures set forth
on Schedule 1.3 attached hereto for that amount of cash and/or that number of
shares of Acquiror Stock which results from multiplying the Per Share Merger
Consideration by the number of shares of Acquiree Common Stock represented by
such certificate(s). Until so surrendered, each such certificate shall be
deemed, for all corporate purposes, to evidence the right to receive upon
surrender the Merger Consideration payable on account thereof (without
interest), as specified in the preceding sentence. At and after the Effective
Time, each holder of a certificate shall cease to have any rights as a
shareholder of Acquiree.
1.4. Options.
-------
(a) At the Effective Time, options granted by Acquiree to
purchase shares of the Acquiree Common Stock, which are outstanding and
unexercised immediately prior thereto (each, an "Outstanding Option"), shall
be converted as to each whole share subject to such Outstanding Option at the
holder's election in accordance with Schedule 1.2 hereto, subject however to
proration in accordance with Schedule 1.2, into:
(i) an option (each, an "Exchange Option") to purchase
such number of shares of Acquiror Stock at such exercise price as is
determined as provided below (and otherwise having the same duration and other
terms as the original option):
(A) the number of shares of Acquiror Stock to be
subject to the Exchange Option shall be equal to the product of (A) the number
of shares of the Acquiree Common Stock subject to the original option which
are Stock Election Shares pursuant to Schedule 1.2 hereof, multiplied by (B)
the Conversion Number (as may be adjusted pursuant to Section 1.2(b) above),
the product being rounded, if necessary, up or down, to the nearest whole
share;
-3-
<PAGE>
(B) the per share exercise price under the new
option shall be equal to (A) the per share exercise price under the original
option for the Stock Election Shares to which such new option relates, divided
by (B) the Conversion Number (as may be adjusted pursuant to Section 1.2(b)
above), the result being rounded, if necessary, up or down, to the nearest
cent.
OR:
(ii) cash in an amount equal to the fair market value of
the shares subject to such Outstanding Options which are Cash Election Shares
pursuant to Schedule 1.2 hereof determined as of the close of business on the
business day preceding the Effective Date, less the amount which would have
been required to exercise such options as to such Cash Election Shares (the
"Cash Out").
(b) The adjustments provided herein with respect to any
options which are "incentive stock options" (as defined in Section 422 of the
Code) shall be effected in a manner consistent with Section 424(a) of the
Code.
(c) The Exchange Options and Cash Outs with respect to
Outstanding Options shall be issued and paid in accordance with the procedures
set forth on Schedule 1.3 hereto.
1.5. Articles of Incorporation of the Surviving Institution. The
------------------------------------------------------
Articles of Incorporation of Acquiror Sub, as in effect immediately prior to the
Effective Time, shall be the Articles of Incorporation of the Surviving
Institution until thereafter amended as provided by law.
1.6. By-Laws of the Surviving Institution. The By-Laws of Acquiror
------------------------------------
Sub, as in effect immediately prior to the Effective Time, shall be the By-Laws
of the Surviving Institution until thereafter amended as provided by law.
1.7. Directors and Officers of the Surviving Institution. The
---------------------------------------------------
directors and officers of Acquiror Sub, as in effect immediately prior to the
Effective Time, shall be the directors and officers of the Surviving
Institution.
1.8. Closing. On the third business day after the expiration of all
-------
applicable waiting periods in connection with approvals of governmental
authorities occurs and all conditions to the consummation of this Agreement are
satisfied or waived, or on such earlier or later date as may be agreed by the
parties (the "Closing Date"), articles of merger shall be executed in
accordance with all appropriate legal requirements and shall be filed as
required by law, and the Merger provided for herein shall become effective upon
such filing or on such date as may be specified in such articles of merger by
agreement of the parties
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<PAGE>
hereto. The date of such filing or such later effective date is herein called
the "Effective Date." The "Effective Time" of the Merger shall be such time on
the Effective Date as may be agreed by the parties.
ARTICLE 2
---------
REPRESENTATIONS AND WARRANTIES
------------------------------
Acquiror represents and warrants to Acquiree, and Acquiree represents
and warrants to Acquiror, to the extent applicable as indicated below, that:
2.1. Organization and Capitalization of Acquiror. In the case of
-------------------------------------------
Acquiror, it is a corporation duly organized, validly existing and in good
standing under the laws of the Commonwealth of Pennsylvania and it is a bank
holding company registered under the Bank Holding Company Act of 1956, as
amended; and it's authorized capital stock as of the date hereof consists of 200
million authorized shares of common stock, par value $1.00 per share, of which
117,858,148 shares were issued and outstanding as of December 31, 1993, and 10
million authorized shares of preferred stock, no par value per share, of which
no shares are issued and outstanding.
2.2. Organization and Capitalization of Acquiree. In the case of
-------------------------------------------
Acquiree, it is a capital stock savings bank duly organized, validly existing
and in good standing under the laws of the Commonwealth of Pennsylvania; and
it's authorized capital stock as of the date hereof consists of 35,000,000
authorized shares of Acquiree Common Stock, of which 4,194,647 shares were
issued and outstanding as of March 3, 1994, and 15,000,000 authorized shares of
preferred stock, par value $0.10 per share, of which no shares are issued and
outstanding.
2.3. Rights, etc. In the case of Acquiror and Acquiree,
------------
respectively, except as set forth in Schedule 2.3A with respect to Acquiror and
Schedule 2.3B with respect to Acquiree, there are not any shares of its capital
stock reserved for issuance, or any outstanding or authorized options, warrants,
rights, subscriptions, claims of any character, agreements, obligations,
convertible or exchangeable securities, or other commitments, contingent or
otherwise, relating to its capital stock, pursuant to which it is or may become
obligated to issue shares of capital stock or any securities convertible into,
exchangeable for, or evidencing the right to subscribe for, any shares of its
capital stock (collectively, "Rights").
2.4. Capital Stock. In the case of Acquiror and Acquiree,
-------------
respectively, all outstanding shares of capital stock of it and its Significant
Subsidiaries (as defined in Rule 1-02
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<PAGE>
of Regulation S-X, provided that any Subsidiary that is a bank, savings bank
--------
or trust company shall be deemed a Significant Subsidiary) are duly
authorized, validly issued and outstanding, fully paid and (subject to 12
U.S.C. (S) 55 in the case of a national bank and any similar state statute in
the case of a state-chartered bank, savings bank or trust company)
nonassessable, and subject to no preemptive rights.
2.5. Authority. In the case of Acquiror and Acquiree, respectively,
---------
each of it and its Significant Subsidiaries has the power and authority, and is
duly qualified in all jurisdictions where such qualification is required, to
carry on its business as it is now being conducted and to own all its Material
properties and assets (except for such qualifications the absence of which,
individually or in the aggregate, would not have a Material Adverse Effect (as
defined in Section 8.1)), and it has all federal, state, local, and foreign
governmental authorizations necessary for it to own or lease its properties and
assets and to carry on its business as it is now being conducted, except for
such powers and authorizations the absence of which, either individually or in
the aggregate, would not nave a Material Adverse Effect.
2.6. Subsidiaries. In the case of Acquiree, a list of its
------------
Significant Subsidiaries is contained in Schedule 2.6. In the case of Acquiree,
the shares of capital stock of each of its Significant Subsidiaries are owned by
it (except for director's qualifying shares) free and clear of all liens,
claims, encumbrances and restrictions on transfer and there are no Rights with
respect to such capital stock.
2.7. Authorization and Validity of Agreement. In the case of
---------------------------------------
Acquiror and Acquiree, respectively, it has full power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. In the case of Acquiror, and
subject, in the case of Acquiree, to the receipt of the required shareholder
approval for the Acquiree referred to in Section 5.1(a), this Agreement has been
authorized by all necessary corporate action of it. In the case of Acquiror and
Acquiree, respectively, this Agreement is a valid and binding agreement of it
enforceable against it in accordance with its terms, subject as to enforcement
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
2.8. No Violations. In the case of Acquiror and Acquiree,
-------------
respectively, the execution, delivery and performance of this Agreement by it
does not, and the consummation of the transactions contemplated hereby by it
will not, constitute (i) a breach or violation of, or a default under, any law,
rule or
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<PAGE>
regulation or any judgment, decree, order, governmental permit or license, or
agreement, indenture or instrument of it or its Subsidiaries or to which it or
its Subsidiaries (or any of their respective properties) is subject, which
breach, violation or default would have a Material Adverse Effect, or enable
any person to enjoin the Merger or (ii) a breach or violation of, or a default
under, the articles of incorporation or by-laws of it or any of its
Subsidiaries; and the consummation of the transactions contemplated hereby
will not require any approval, consent or waiver under any such law, rule,
regulation, judgment, decree, order, governmental permit or license or the
approval, consent or waiver of any other party to any such agreement,
indenture or instrument, other than (i) the required approvals, consents and
waivers of governmental authorities referred to in Section 5.1(c), (ii) the
approval of the shareholders of Acquiree referred to in Section 5.1(a), (iii)
such approvals, consents or waivers as are required under the federal and
state securities or "Blue Sky" laws in connection with the transactions
contemplated by this Agreement, and (iv) any other approvals, consents or
waivers the absence of which, individually or in the aggregate, would not
result in a Material Adverse Effect or enable any person to enjoin the Merger.
2.9. Securities Exchange Act Reports. In the case of Acquiror and
-------------------------------
Acquiree, respectively, it has filed with the Securities and Exchange Commission
("SEC"), in the case of Acquiror, and with the Federal Deposit Insurance
Corporation ("FDIC"), in the case of Acquiree, all required forms, reports and
documents required under the Securities Exchange Act of 1934, as amended (the
"Securities Exchange Act"). In the case of Acquiror and Acquiree, respectively,
as of their respective dates, neither its Annual Report on Form 10-K, in the
case of Acquiror, and on Form F-2, in the case of Acquiree, for the fiscal year
ended December 31, 1993, nor any other document filed subsequent to December 31,
1993 under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act,
each in the form (including exhibits) filed with the SEC or FDIC, as applicable
(collectively, its "Reports"), contained, as of the date thereof, any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading. In the case of
Acquiror and Acquiree, respectively, each of the balance sheets or statements of
condition contained or incorporated by reference in its Reports (including any
related notes and schedules) fairly present the financial position of the entity
or entities to which it relates as of its date and each of the statements of
operations and retained earnings and of cash flows and changes in financial
position or equivalent statements contained or incorporated by reference in its
Reports (including any related notes and schedules) fairly present the results
of operations, retained earnings and cash flows of the entity or entities to
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<PAGE>
which it relates for the periods set forth therein (subject, in the case of
unaudited interim statements, to normal year-end audit adjustments that are
not Material in amount or effect), in each case in accordance with generally
accepted accounting principles applicable to bank holding companies, in the
case of Acquiror, and in accordance with generally accepted accounting
principles applicable to banks, in the case of Acquiree, consistently applied
during the periods involved, except as may be noted in the Reports. As of the
date of such Reports, there existed no material liabilities of Acquiree and
its Subsidiaries, contingent or otherwise, that are required to be disclosed
under generally accepted accounting principles applicable to banks, or would
be required to be disclosed in the financial statements contained in the
Annual Report on Form F-2 for the year ended December 31, 1993 or the report
on Form F-4 for the quarter ended September 30, 1993, but are not so disclosed
in such Reports.
2.10. Absence of Certain Changes or Events. In the case of Acquiror
------------------------------------
and Acquiree, respectively, since December 31, 1993, except as disclosed in its
Reports, it has not incurred any Material liability except in the ordinary
course of its business consistent with past practice, and since December 31,
1993 there has not been any change in the financial condition or results of
operations of it or any of its Subsidiaries which, individually or in the
aggregate, has had a Material Adverse Effect (other than as a result of changes
in banking laws or regulations of general applicability or interpretations
thereof).
2.11. Taxes. In the case of Acquiree, except as otherwise would not
-----
have a Material Adverse Effect, all federal, state, local and foreign tax
returns required to be filed by or on behalf of it or any of its Subsidiaries
have been timely filed or requests for extensions have been timely filed and any
such extensions have been granted and not expired. In the case of Acquiree, all
taxes shown on returns filed by or on behalf of it or any of its Subsidiaries
have been paid in full or adequate provision has been made for any such taxes on
its balance sheet (in accordance with generally accepted accounting principles).
Except as disclosed on Schedule 2.11, in the case of Acquiree, as of the date of
this Agreement, there are no assessments or notices of deficiency or proposed
assessments with respect to any taxes of it or any of its Subsidiaries that, if
resolved in a manner adverse to it, would have a Material Adverse Effect. In
the case of Acquiree, except as otherwise would not have a Material Adverse
Effect, it has not executed an extension or waiver of any statute of limitations
on the assessment or collection of any tax due that is currently in effect.
2.12. Absence of Claims. In the case of Acquiror and Acquiree,
-----------------
respectively, no Material litigation, proceeding or controversy before any court
or governmental agency is pending, and there is no pending claim, action or
proceeding against it or
-8-
<PAGE>
any of its Subsidiaries, which is reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect or to materially hinder or delay
consummation of the transactions contemplated hereby.
2.13. Absence of Regulatory Actions. In the case of Acquiror and
-----------------------------
Acquiree, respectively, neither it nor any of its Subsidiaries is a party to any
cease and desist order, written agreement or memorandum of understanding with,
or a party to any commitment letter or similar undertaking to, or is subject to
any order or directive by, or is a recipient of any extraordinary supervisory
letter from, or has adopted any board resolutions at the request of, federal or
state governmental authorities charged with the supervision or regulation of
banks or bank holding companies or engaged in the insurance of bank deposits
("Bank Regulators"), nor has it been advised by any Bank Regulator that it is
contemplated issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, directive, written agreement, memorandum
of understanding, extraordinary supervisory letter, commitment letter, board
resolutions or similar undertaking.
2.14. Labor Matters. In the case of Acquiree, neither it nor any of
-------------
its Subsidiaries is a party to, or is bound by, any collective bargaining
agreement, contract or other agreement or understanding with a labor union or
labor organization, nor is it or any of its Subsidiaries the subject of any
proceeding asserting that it or any such Subsidiary has committed an unfair
labor practice or seeking to compel it or such Subsidiary to bargain with any
labor organization as to wages and conditions of employment, nor is there any
strike or other labor dispute involving it or any of its Subsidiaries pending or
threatened.
2.15. Employee Benefit Plans. In the case of Acquiror and Acquiree,
----------------------
respectively, all "employee benefit plans", as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), that
cover any of its or its Subsidiaries' employees, comply in all Material respects
with all applicable requirements of ERISA, the Code and other applicable laws;
neither it nor any of its Subsidiaries has engaged in a "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code) with respect to
any such plan which is likely to result in any Material penalties or taxes under
Section 502(i) of ERISA or Section 4975 of the Code; no Material liability to
the Pension Benefit Guaranty Corporation has been or is expected by it or them
to be incurred with respect to any such plan which is subject to Title IV of
ERISA ("Pension Plan"), or with respect to any "single-employer plan" (as
defined in Section 4001(a)(15) of ERISA) currently or formerly maintained by it,
them or any entity which is considered one employer with it under Section 4001
of ERISA or Section 414 of the Code; no Pension Plan had an "accumulated funding
deficiency" (as defined
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<PAGE>
in Section 302 of ERISA (whether or not waived) as of the last day of the end
of the most recent plan year ending prior to the date hereof; the fair market
value of the assets of each Pension Plan exceeds the present value of the
"benefit liabilities" (as defined in Section 4001(a)(16) of ERISA) under such
Pension Plan as of the end of the most recent plan year with respect to the
respective Pension Plan ending prior to the date hereof, calculated on the
basis of the actuarial assumptions used in the most recent actuarial valuation
for such Pension Plan as of the date hereof; no notice of a "reportable event"
(as defined in Section 4043 of ERISA) for which the 30-day reporting
requirement has not been waived has been required to be filed for any Pension
Plan within the 12-month period ending on the date hereof; neither it nor any
of its Subsidiaries has provided, or is required to provide, security to any
Pension Plan pursuant to Section 401(a)(29) of the Code; it and its
Subsidiaries have not contributed to any "multiemployer plan," as defined in
Section 3(37) of ERISA, on or after September 26, 1980. In the case of
Acquiree, with respect to each benefit plan for employees that is maintained
or contributed to by Acquiree or any of its Subsidiaries, including, but not
limited to, "employee benefit plans" within the meaning of Section 3(3) of
ERISA (the "Benefit Plans"), it has made available to Acquiror a true and
correct copy of (i) the most recent annual report on Form 5500 filed with the
Internal Revenue Service (the "IRS"), (ii) such Benefit Plan, (iii) each trust
agreement and insurance contract relating to such Benefit Plan, (iv) the most
recent summary plan description for such Benefit Plan, (v) the most recent
actuarial report or valuation if such Benefit Plan is subject to Title IV of
ERISA, (vi) the most recent determination letter issued by the IRS if such
Benefit Plan is intended to be qualified under Section 401(a) of the Code, and
(vii) all outstanding employment contracts or agreements. Schedule 2.15A with
respect to Acquiror, and Schedule 2.15B with respect to Acquiree, contains a
complete list of its Benefit Plans, and, in the case of Acquiree, all
outstanding employment contracts or agreements.
2.16. Title to Assets. In the case of Acquiree, each of it and its
---------------
Subsidiaries has good and marketable title to its properties and assets (other
than property as to which it is lessee) except for such defects in title which
would not, individually or in the aggregate, have a Material Adverse Effect.
2.17. Knowledge as to Conditions. In the case of Acquiror and
--------------------------
Acquiree, respectively, it knows of no reason why the approvals, consents and
waivers of governmental authorities referred to in Section 5.1(c) should not be
obtained without the imposition of any condition of the type referred to in the
provisos thereto.
2.18. Compliance With Laws. In the case of Acquiror and Acquiree,
--------------------
respectively, it and each of its Subsidiaries has
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<PAGE>
all permits, licenses, certificates of authority, orders and approvals of, and
has made all filings, applications and registrations with, federal, state,
local and foreign governmental or regulatory bodies that are required in order
to permit it to carry on its business as it is presently conducted and the
absence of which could, individually or in the aggregate, have a Material
Adverse Effect.
2.19. Acquiror Stock. In the case of Acquiror, the shares of
--------------
Acquiror Stock to be issued pursuant to this Agreement, when issued in
accordance with the terms of this Agreement, will be duly authorized, validly
issued, fully paid and non-assessable and subject to no preemptive rights.
2.20. Fees. In the case of Acquiror and Acquiree, respectively,
----
other than financial advisory services performed for Acquiree by Alex. Brown &
Sons Incorporated (on terms disclosed to Acquiror), neither it nor any of its
Subsidiaries, nor any of their respective officers, directors, employees or
agents has employed any broker or finder or incurred any liability for any
financial advisory fees, brokerage fees, commissions or finder's fees, and no
broker or finder has acted directly or indirectly for it or any of its
Subsidiaries, in connection with this Agreement or the transactions contemplated
hereby.
2.21. Registration Statement; Proxy Statement. In the case of
---------------------------------------
Acquiror and Acquiree, respectively, the information to be supplied by it for
inclusion in (i) the Registration Statement on Form S-4 and/or such other
form(s) as may be appropriate to be filed under the Securities Act of 1933, as
amended (the "Securities Act") with the SEC by Acquiror for the purpose of,
among other things, registering the Acquiror Stock to be issued to the
shareholders of Acquiree in the Merger (the "Registration Statement") will not,
at the time such Registration Statement becomes effective, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, or (ii) the proxy statement to be filed with the FDIC by Acquiree
under the Securities Exchange Act and distributed in connection with Acquiree's
meeting of its shareholders to vote upon this Agreement (as amended or
supplemented from time to time, the "Proxy Statement", and together with the
prospectus included in the Registration Statement, as amended or supplemented
from time to time, the "Proxy Statement/Prospectus") will not, at the time the
Proxy Statement/Prospectus is mailed and at the time of the Acquiree Meeting (as
defined below), contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are made,
not misleading.
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<PAGE>
2.22. Environmental Matters.
---------------------
(a) For purposes of this Section 2.22, the following terms
shall have the indicated meaning:
"Branch Property" means all real property presently or formerly owned
---------------
or operated by Acquiree and each of its Subsidiaries on which branches or
facilities are or were located.
"Environmental Law" means any applicable federal, state or local
-----------------
statute, law, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, order, judgment, decree, injunction, directive, requirement
or agreement with any court, governmental authority or other regulatory or
administrative agency or commission, domestic or foreign ("Governmental Entity")
now existing, relating to: (a) the protection, preservation or restoration of
the environment (including, without limitation, air, water, vapor, surface
water, groundwater, drinking water supply, surface land, subsurface land, plant
and animal life or any other natural resource), or to human health or safety, or
(b) the exposure to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or disposal
of Hazardous Substances, in each as amended or (c) any common law or equitable
doctrine (including, without limitation, injunctive relief and tort doctrines
such as negligence, nuisance, trespass and strict liability) that may impose
liability or obligations for injuries or damages due to, or threatened as a
result of, the presence of or exposure to any Hazardous Substance.
"Hazardous Substance" means any substance, whether liquid, solid or
-------------------
gas, listed, defined, designated or classified as hazardous, toxic, radioactive
or dangerous, under any applicable Environmental Law, whether by type or by
quantity. Hazardous Substance includes, without limitation, (i) any "hazardous
substance" as defined in the Comprehensive Environmental Response, Compensation
and Liability Act, as amended, (ii) any "hazardous waste" as defined in the
Resource Conservation and Recovery Act, as amended, and (iii) any toxic waste,
pollutant, contaminant, hazardous substance, toxic substance, hazardous waste,
special waste or petroleum or any derivative or by-product thereof, radon,
radioactive material, asbestos, asbestos containing material, urea formaldehyde
foam insulation, lead and polychlorinated biphenyls.
"Real Property" means the Branch Property, all real property
-------------
classified by Acquiree and each of its Subsidiaries as other real estate owned
("OREO"), all real property on which Acquiree holds a lien or security interest
and all real property (including property held as trustee or in any other
fiduciary capacity) over which Acquiree and each of its Subsidiaries
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<PAGE>
currently or formerly has exercised dominion, management or control.
(b) In the case of Acquiree, except as disclosed to Acquiror
in writing or as would not individually or in the aggregate have a Material
Adverse Effect on Acquiree;
(i) each of Acquiree and its Subsidiaries is and has been
in substantial compliance with all applicable Environmental Law;
(ii) the Real Property does not contain any Hazardous
Substance in violation of any applicable Environmental Law;
(iii) neither Acquiree nor any of its Subsidiaries has
received any written notices, demand letters or written requests for
information from any Governmental Entity or any third party indicating that
Acquiree or any Subsidiary may be in violation of, or liable under, any
Environmental Law;
(iv) there are no civil, criminal or administrative
actions, suits, demands, claims, hearings, investigation or proceedings
pending or threatened against Acquiree or any Subsidiary alleging that they
may be in violation of, or liable under, any Environmental Law;
(v) no reports have been filed, or are required to be
filed, by Acquiree or any of its Subsidiaries concerning the release of any
Hazardous Substance or the threatened or actual violation or any Environmental
Law on or at the Real Property;
(vi) there are no underground storage tanks on, in or
under any of the Branch Property and no underground storage tanks have been
closed or removed from any Branch Property while such Branch Property was
owned or operated by Acquiree or any of its Subsidiaries, and
(vii) to the knowledge of Acquiree, neither Acquiree nor
any of its Subsidiaries has incurred, and none of the Real Property is
presently subject to, any liabilities (fixed or, to the knowledge or Acquiree,
contingent) relating to any suit, settlement, court order, administrative
order, judgment or claim asserted or arising under any Environmental Law.
(c) For the purposes of this Agreement, "to the knowledge of
Acquiree" shall mean to the knowledge of each person with the title of Senior
Vice President of Acquiree or higher.
(d) In the case of Acquiree, there are no permits or licenses
required under any Environmental Law in respect of
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<PAGE>
the Branch Property presently operated by Acquiree or any of its Subsidiaries or
in respect of OREO presently held by Acquiree or in respect of any real property
held as trustee or in any other fiduciary capacity that are not held and that
the absence of which could, individually or in the aggregate, have a Material
Adverse Effect.
(e) In the case of Acquiree, Acquiree has delivered to Acquiror
copies of all documentation representing the Acquiree's environmental policies
and procedures and has operated and conducted Acquiree's business and operations
in compliance with all such policies and procedures except where the failure to
so operate or conduct would not, individually or in the aggregate, have a
Material Adverse Effect.
2.23. Material Contacts. In the case of Acquiree, neither Acquiree
-----------------
nor any of its Subsidiaries is in default under any Material contract, which
default is reasonably likely to have, either individually or in the aggregate, a
Material Adverse Effect on it, and there has not occurred any event that with
the lapse of time or the giving of notice or both would constitute such a
default. In the case of Acquiree, neither the Acquiree nor any of its
subsidiaries is a party to or is bound by any agreement or subject to or bound
by any judgment, decree, order, writ or injunction that places any Material
restriction on the ability of Acquiree or any of its Subsidiaries to engage in
their respective businesses in accordance with present practices.
2.24. Insurance. In the case of Acquiree, the assets, properties and
---------
operations of Acquiree and its Subsidiaries are insured under various policies
of general liability and other forms of insurance, including surety and bonding
arrangements. Such policies are in amounts and types of coverage which are
adequate in relation to the business and assets of each of them and all premiums
due have been paid in full. All such forms of insurance are in full force and
effect in accordance with their terms, no notice of cancellation has been
received, and there is no existing default or event which, with the giving of
notice or lapse of time or both, would constitute a default thereunder, in each
such case, except which would not have a Material Adverse Effect on Acquiree.
To the knowledge of Acquiree (as defined in Section 2.22 hereof), there has been
no failure to give any notice or to present any Material claim under any
insurance arrangement in due and timely fashion.
2.25. Allowance for Credit Losses. (i) The allowance for credit
---------------------------
losses included in the consolidated financial statements of Acquiree included in
the Acquiree's September 30, 1993 Form F-4 was determined in accordance with
generally accepted accounting principles to be adequate to provide for losses
relating to or inherent in the loan and lease portfolios of, and other
extensions of credit (including letters of credit
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<PAGE>
and commitments to make loans or extend credit) by, Acquiree and its
Subsidiaries. Acquiree has disclosed to Acquiror in writing prior to the date
hereof the aggregate amounts as of a recent date of all loans, losses, advances,
credit enhancements, other extensions of credit, commitments and interest-
bearing assets of Acquiree and its Subsidiaries that have been classified by any
bank examiner (whether regulatory or internal) as "Other Loans Specially
Mentioned," "Special Mention," "Substandard," "Doubtful," "Loss," "Classified,"
"Criticized," "Credit Risk Assets," "Concerned Loans" or words of similar
import, and Acquiree shall promptly on a periodic basis inform Acquiror of any
such classification arrived at any time after the date hereof. The OREO
included in non-performing assets is carried net of reserves at the lower of
cost or market value based on independent appraisals.
(ii) The allowance for credit losses included in the
consolidated financial statements of Acquiror included in Acquiror's September
30, 1993 Form 10-Q was determined in accordance with generally accepted
accounting principles to be adequate to provide for losses relating to or
inherent in the loan and lease portfolios of, and other extensions of credit
(including letters of credit and commitments to make loans or extend credit)
by, Acquiror and its Subsidiaries. Acquiror has disclosed to Acquiree in
writing prior to the date hereof the aggregate amounts as of a recent date of
all loans, losses, advances, credit enhancements, other extensions of credit,
commitments and interest-bearing assets of Acquiror and its Subsidiaries that
have been classified by any bank examiner (whether regulatory or internal) as
"Other Loans Specially Mentioned," "Special Mention," "Substandard,"
"Doubtful," "Loss," "Classified," "Criticized," "Credit Risk Assets,"
"Concerned Loans" or words of similar import, and Acquiror shall promptly on a
periodic basis inform Acquiree of any such classification arrived at any time
after the date hereof. The OREO included in non-performing assets is carried
net of reserves at the lower of cost or market value based on independent
appraisals.
ARTICLE 3
CONDITIONS TO EFFECTIVENESS
---------------------------
This Agreement shall be effective upon execution by each of the
parties hereto and satisfaction of the following conditions:
3.1. Stock Option Agreement. Acquiror and Acquiree shall each have
----------------------
executed and delivered the Stock Option Agreement in the form of Schedule 3.1
attached hereto.
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<PAGE>
ARTICLE 4
COVENANTS PRIOR TO CLOSING
--------------------------
4.1. Access to Information; Notice of Changes; Confidentiality.
---------------------------------------------------------
(a) During the period commencing on the date hereof and ending
on the Closing Date, each of the parties shall (and shall cause each of its
Subsidiaries to) upon reasonable notice, afford the other parties, and their
respective counsel, accountants, officers and employees and other authorized
representatives, reasonable access during normal business hours to the
properties, books, personnel, records, tax returns, work papers of independent
auditors of such party and its Subsidiaries in order that they may have the
opportunity to make such investigations as they shall desire of the affairs of
such party and its Subsidiaries; such investigation shall not, however, affect
or be deemed to modify the representations and warranties made by such party
in this Agreement.
(b) During the period commencing on the date hereof and ending
on the Closing Date, each party shall promptly notify the other parties hereto
in writing of any and all occurrences which, if they had occurred prior to
execution of this Agreement, would have caused the representations and
warranties of such party contained in Article 2 and the Schedules delivered in
conjunction therewith to be incorrect in any material respect.
(c) Acquiror acknowledges that information received by it
concerning Acquiree and its Subsidiaries and their operations is subject to
the Confidentiality Agreement dated October 21, 1993 between Acquiror and
Acquiree. Without limiting the foregoing, each party will not, and will cause
its representatives not to, use any information obtained pursuant to this
Section 4.1 for any purpose unrelated to the consummation of the transactions
contemplated by this Agreement. Subject to the requirements of law, each party
will keep confidential, and will cause its representatives to keep
confidential, all information and documents obtained pursuant to this Section
4.1 unless such information (i) was already known to such party, (ii) becomes
available to such party from other sources not known by such party to be bound
by a confidentiality obligation, (iii) is disclosed with the prior written
approval of the party to which such information pertains, or (iv) is or
becomes readily ascertainable from published information or trade sources. In
the event that this Agreement is terminated or the transactions contemplated
by this Agreement shall otherwise fail to be consummated, each party shall
promptly cause all copies of
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documents or extracts thereof containing information and data as to another
party hereto to be returned to the party which furnished the same.
4.2. Conduct of the Business of Acquiree Pending the Closing Date.
------------------------------------------------------------
Acquiree agrees that, except as expressly permitted by this Agreement or
otherwise consented to or approved in writing by Acquiror, during the period
from the date hereof to the Effective Time:
(a) Acquiree will and will cause each of its Subsidiaries to
conduct their respective operations only in the ordinary course of business
consistent with past practice (subject, in any event, to the provisions of
paragraph (c) below) and will use its best efforts to preserve intact their
respective business organizations, keep available the services of their
officers and employees and maintain satisfactory relationships with licensors,
suppliers, distributors, customers, clients and others having business
relationships with them.
(b) Acquiree shall not, and shall not permit any of its
Subsidiaries to, take any action, engage in any transactions or enter into any
agreement which would adversely affect or delay in any material respect the
ability of Acquiror or Acquiree to obtain any necessary approvals, consents or
waivers of any governmental authority required for the transactions
contemplated hereby or to perform its covenants and agreements on a timely
basis under this Agreement.
(c) Acquiree will not and will not permit any of its
Subsidiaries to:
(i) other than in the ordinary course of business
consistent with past practice, incur any indebtedness for borrowed money,
assume, guarantee, endorse or otherwise as an accommodation become responsible
for the obligations of any other Person, or make any loan or advance;
(ii) adjust, split, combine or reclassify any capital
stock; make, declare or pay any dividend on the Acquiree Common Stock other
than the regular quarterly cash dividend not exceeding $0.15 per share of
Acquiree Common Stock (the record dates for which, after the May 15, 1994
record date, shall be the fourth day of September, December, March and June,
as applicable) or make any other distribution on, or directly or indirectly
redeem, purchase or otherwise acquire, any shares of its capital stock or any
securities or obligations convertible into or exchangeable for any shares of
its capital stock, or grant any stock appreciation rights or grant any Person
any right to acquire any shares of its capital stock, except for dividends
paid by any of the wholly-owned Subsidiaries of Acquiree to Acquiree or any of
its wholly-owned Subsidiaries; or issue any
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additional shares of capital stock except pursuant to the exercise of stock
options outstanding as of the date hereof;
(iii) sell, transfer, mortgage, encumber or otherwise
dispose of any of its Material properties or assets to any individual
corporation or other entity other than a direct or indirect wholly-owned
Subsidiary of Acquiree, or cancel, release or assign any Material indebtedness
of any such person or any claims held by any such person, except pursuant to
contracts or agreements in force at the date of this Agreement;
(iv) other than portfolio investments in the ordinary
course of business consistent with past practice, make any Material investment
either by purchase or stock or securities, contributions to capital, property
transfers, or purchase of any property or assets of any other individual,
corporation or other entity other than a wholly-owned Subsidiary of Acquiree;
(v) except as contemplated by Sections 5.2(g) and (h)
hereof, enter into or terminate any Material contract or agreement, or make
any change in any of its Material leases or contracts, other than renewals of
contracts and leases without Material adverse changes of terms;
(vi) increase in any manner the compensation or fringe
benefits of its employees or pay any pension or retirement allowance not
required by any existing plan or agreement to any such employees, or become a
party to, amend, modify or terminate, or commit itself to any pension,
retirement, profit-sharing or welfare benefit plan or agreement or employment
agreement with or for the benefit of any employee, or adopt, amend, modify or
terminate any bonus, profit sharing, compensation, severance, termination,
stock option, pension, retirement, deferred compensation, employment or other
employee benefit agreements, trusts, plans, funds, employee stock ownership,
consulting, severance or fringe benefit plan, formal or informal, written or
oral, or other arrangements for the benefit of welfare of any director,
officer or employee or voluntarily accelerate the vesting of any stock options
or other stock-based compensation, provided that extensions of employment
--------
contracts in existence on the date hereof pursuant to the terms thereof shall
be deemed to be made in the ordinary course of business consistent with past
practice;
(vii) settle any claim, action or proceeding involving any
liability of the Company or any of its Subsidiaries for Material money damages
or restrictions upon the operations of Acquiree or any of its Subsidiaries;
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(viii) modify in any Material respect the manner in which it
and its Subsidiaries have heretofore conducted or accounted for their
business;
(ix) except as contemplated by this Agreement, amend its
articles of incorporation or its by-laws; or
(x) agree to, or make any commitment to, take any of the
actions prohibits by this Section 4.2;
(xi) elect or appoint any new director or officer of
Acquiree or any of its Subsidiaries, provided that the appointment of an
--------
officer to another office of Acquiree or any of its Subsidiaries shall not be
deemed to be the appointment of a new officer.
4.3. Conduct of the Business of Acquiror Pending the Closing Date.
------------------------------------------------------------
Acquiror agrees that, except as expressly permitted by this Agreement or
otherwise consented to or approved in writing by Acquiree, during the period
from the date of this Agreement to the Effective Time, Acquiror will not (a)
declare or pay any extraordinary or special dividend on the Acquiror Stock, or
(b) take any action that would adversely affect or delay in any material respect
the ability of Acquiree or Acquiror to obtain any necessary approvals, consents
or waivers of any governmental authority required for the transactions
contemplated hereby or to perform its covenants and agreements on a timely basis
under this Agreement.
4.4. No Solicitation of Other Offers. Acquiree agrees that neither
-------------------------------
it nor any of its Subsidiaries nor any of their respective officers, directors
and employees shall, and Acquiree shall direct and use its best efforts to cause
its agents and representatives (including, without limitation, any investment
banker, attorney or accountant retained by it or any of its Subsidiaries) not
to, directly or indirectly, take any action to solicit or initiate any inquiries
or the making of any offer or proposal (including without limitation any
proposal to shareholders of Acquiree) with respect to a merger, consolidation,
business combination, liquidation, reorganization, sale or other disposition of
any significant portion of assets, sale of shares of capital stock, or similar
transactions involving Acquiree or any Subsidiary of Acquiree (any such inquiry,
offer or proposal, an "Acquisition Proposal"), or, except as may be legally
required for the discharge by the board of directors of its fiduciary duties,
engage in any negotiations concerning, or provide any confidential information
or data to, or have any discussions with, any person relating to an Acquisition
Proposal. As of the time hereof, Acquiree is not engaged in any negotiations or
discussions relating to an Acquisition Proposal. Acquiree shall promptly notify
Acquiror orally and in writing of any proposal or offer regarding an
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<PAGE>
Acquisition Proposal or any inquiries with respect thereto, such written
notification to include the identity of the Person making such inquiry or
Acquisition Proposal or offer and such other information with respect thereto as
is reasonably necessary to apprise Acquiror of the material terms of such
Acquisition Proposal or offer and all other material information relating
thereto. Acquiree shall give Acquiror contemporaneous written notice upon
engaging in discussions or negotiations with, or providing any information
regarding Acquiree to, any such person regarding an Acquisition Proposal.
4.5. Certain Filings, Consents and Arrangements. Acquiror and
------------------------------------------
Acquiree shall (a) as soon as practicable make any filings and applications
required to be filed in order to obtain all approvals, consents and waivers of
governmental authorities necessary or appropriate for the consummation of the
transactions contemplated hereby (including without limitation all applications
for required approvals as set forth in Section 5.1(c) hereof), (b) cooperate
with one another (i) in promptly determining what filings are required to be
made and what approvals, consents or waivers are required to be obtained under
any relevant federal, state or foreign law or regulation and (ii) in promptly
making any such filings, furnishing information required in connection therewith
and seeking timely to obtain any such approvals, consents or waivers, and (c)
deliver to the other copies of the publicly available portions of all such
filings and applications promptly after they are filed.
4.6. Best Efforts. Acquiror and Acquiree each will (i) use its best
------------
efforts to take all action necessary to render accurate as of the Closing Date
the representations and warranties of it contained herein, and (ii) use its best
efforts to perform or cause to be satisfied each covenant or condition to be
performed or satisfied by it as contemplated by this Agreement.
4.7. Publicity. The initial press release announcing this Agreement
---------
shall be a joint press release and thereafter Acquiree and Acquiror shall
consult with each other in issuing any press releases or otherwise making public
statements with respect to the transactions contemplated hereby and in making
any filings with any governmental entity or with any national securities
exchange with respect thereto.
4.8. Proxy; Registration Statement. As soon as practicable after
-----------------------------
the date hereof, Acquiror and Acquiree shall cooperate with each other to
prepare the Proxy Statement, file it with the FDIC, respond to comments of the
Staff of the FDIC, clear the Proxy Statement with the Staff of the FDIC and
thereafter and after the effectiveness of the Registration Statement mail the
Proxy Statement to all holders of record (as of the applicable record date) of
shares of Acquiree Common
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<PAGE>
Stock. Acquiror shall promptly prepare the Registration Statement and file it
with the SEC and shall use all reasonable efforts to have the Registration
Statement declared effective by the SEC as promptly as practicable and to
maintain the effectiveness of such Registration Statement. Acquiror shall also
take any action required to be taken under state "Blue Sky" or securities laws
in connection with the issuance of the Acquiror Stock pursuant to the Merger and
Acquiree shall furnish Acquiror all information concerning Acquiree and the
holders of its capital stock and shall take any action as Acquiror may
reasonably request in connection with any such action.
4.9. Shareholders' Meeting. Acquiree shall take all action
---------------------
necessary, in accordance with applicable law and its articles of incorporation
and by-laws, to convene a meeting of the holders of Acquiree Common Stock (the
"Acquiree Meeting") as promptly as practicable for the purpose of considering
and taking action required by this Agreement. Except to the extent legally
required for the discharge by the board of directors of its fiduciary duties,
the board of directors of Acquiree shall recommend that the holders of Acquiree
Common Stock vote in favor of and approve the Merger and adopt this Agreement at
the Acquiree Meeting.
4.10. Acquiror Sub. Acquiror shall take all steps necessary such
------------
that Acquiror Sub shall exist at the Closing Date as a Pennsylvania bank
Subsidiary of Acquiror, the deposits of which are insured by the FDIC, into
which Acquiree may merge under applicable law; and prior to the Closing Date
take all corporate action, and cause Acquiror Sub to take all necessary
corporate action, to approve of and authorize the consummation of the Merger and
the other transactions contemplated hereby by Acquiror Sub.
4.11. Securities Act.
--------------
(a) As soon as practicable after the date of the Acquiree
Meeting, Acquiree shall identify to Acquiror all persons who were, at the time
of the Acquiree Meeting, possible "affiliates" of Acquiree as that term is
used in paragraphs (c) and (d) of Rule 145 under the Securities Act (the
"Affiliates").
(b) Acquiree shall use its best efforts to obtain a written
"affiliate" letter agreement in form and substance satisfactory to each of
Acquiree and Acquiror from each person who is identified as a possible
Affiliate pursuant to clause (a) above. Acquiree shall deliver such written
"affiliates" letter agreements to Acquiror as soon as practicable after the
Acquiree Meeting.
4.12. Additional Agreements. Subject to the terms and conditions
---------------------
herein provided, each of the parties hereto agrees to
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<PAGE>
use all reasonable efforts to take promptly, or cause to be taken promptly, all
actions and to do promptly, or cause to be done promptly, all things necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement as promptly as
practicable, including using efforts to obtain all necessary actions or non-
actions, extensions, waivers, consents and approvals from all applicable
governmental entities, effecting all necessary registrations, applications and
filings (including, without limitation, filings under any applicable state
securities laws) and obtaining any required contractual consents and regulatory
approvals.
4.13. Listing. Acquiror shall use its best efforts to list on the
-------
New York Stock Exchange upon official notice of issuance the Acquiror Stock to
be issued in the Merger.
4.14. Bank Merger. During the period from the date of this Agreement
-----------
to the Effective Time, Acquiree shall, and shall cause its officers, directors
and employees to, cooperate with and assist Acquiror in the formulation of a
plan or plans of integration for the merger of Acquiree into Acquiror Sub.
Notwithstanding that Acquiree believes that it has established all
reserves and taken all provisions for possible loan losses required by generally
accepted accounting principles and applicable laws, rules and regulations,
Acquiree recognizes that Acquiror has adopted different loan, accrual and
reserve policies (including loan classifications and levels of reserves for
possible loan losses). From and after the date of this Agreement to the
Effective Time and in order to formulate the plan or plans of integration for
the Merger, Acquiree and Acquiror shall consult and cooperate with each other
with respect to (i) conforming, as specified in a written notice from Acquiror
to Acquiree, based upon such consultation, Acquiree's loan, accrual and reserve
policies to those policies of Acquiror to the extent appropriate recognizing
that different policies and regulations may apply to a state chartered bank,
(ii) new extensions of credit or material revisions to existing terms of credits
by Acquiree in each case where the aggregate exposure exceeds $1 million and
(iii) conforming, as specified in a written notice from Acquiror to Acquiree,
based upon such consultation, the composition of the investment portfolio and
overall asset/liability management position of Acquiree to the extent
appropriate.
In addition, from and after the date of this Agreement to the
Effective Time and in order to formulate the plan or plans of integration for
the Merger, Acquiree and Acquiror shall consult and cooperate with each other
with respect to determining, as specified in a written notice from Acquiror to
Acquiree, based upon such consultation, appropriate accruals,
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<PAGE>
reserves and charges to establish and take in respect of excess facilities and
equipment capacity, severance costs, litigation matters, write-off or write-down
of various assets and other appropriate accounting adjustments taking into
account the Acquiror's plan or plans of integration and the Merger.
Acquiree and Acquiror shall consult and cooperate with each other with
respect to determining, as specified in a written notice from Acquiror to
Acquiree, based upon such consultation, the amount and the timing for
recognizing for financial accounting purposes the expense of the Merger and the
restructuring charges related to or to be incurred in connection with the
Merger.
At the request of Acquiror, Acquiree shall, prior to the Effective
Time, use its best efforts to establish and take such reserves and accruals as
Acquiror shall request to conform, on a mutually satisfactory basis, Acquiree's
loan, accrual and reserve policies to Acquiror's policies, shall establish and
take such accruals, reserves and charges in order to implement such policies in
respect of excess facilities and equipment capacity, severance costs, litigation
matters, write-off or write-down of various assets and other appropriate
accounting adjustments, and to recognize for financial accounting purposes such
expenses of the Merger and restructuring charges related to or to be incurred in
connection with the Merger; provided, however, that (i) Acquiree shall not be
-----------------
obligated to take any such action pursuant to this paragraph of Section 4.14
unless and until Acquiror specifies its request in a writing delivered by
Acquiror to Acquiree, and acknowledges and all conditions to its obligations to
consummate the Merger set forth in Section 5.1 and 5.2 have been waived (if
waivable) or satisfied, (ii) Acquiree acknowledges that the conditions to its
obligation to consummate the Merger set forth in Section 5.1 and 5.3 have been
satisfied or waived (if waivable) by Acquiree, (iii) Acquiree shall not be
required to take any such action that impairs its regulatory capital, that is
inconsistent with any formal or informal undertaking by Acquiree to any bank
regulatory agency that has been disclosed in writing to Acquiror prior to the
date hereof or is inconsistent with any bank regulatory requirement applicable
to Acquiree, and (iv) Acquiree shall not be required to take any such action
that is not consistent with generally accepted accounting principles. The
Acquiree's representations, warranties and covenants contained in this Agreement
shall not be deemed to be untrue or breached in any respect for any purpose as a
consequence of any action undertaken on account of this Section 4.14.
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<PAGE>
ARTICLE 5
CONDITIONS PRECEDENT TO MERGER
------------------------------
5.1. Conditions Precedent to Obligations of All Parties. The
--------------------------------------------------
respective obligations of Acquiror and Acquiree to effect the Merger are subject
to the satisfaction or waiver (subject to applicable law) at or prior to the
Effective Time of each of the following conditions:
(a) Acquiree Shareholder Approval. This Agreement and the
-----------------------------
transactions contemplated hereby shall have been approved by the requisite vote
of the shareholders of Acquiree in accordance with applicable law.
(b) Acquiror Sub. Acquiror Sub shall exist as a Pennsylvania
------------
bank Subsidiary of Acquiror in accordance with Pennsylvania law, have received
a certificate of authority to conduct business from the Pennsylvania
Department of Banking and have received approval from the FDIC for insurance
of its deposits.
(c) Regulatory Approval. Acquiror shall have procured the
-------------------
required approval, consent, waiver or other administrative action with respect
to this Agreement and the transactions contemplated hereby (i) by the
responsible agency under the Bank Merger Act and the Oakar Amendment, (ii) by
the Pennsylvania Department of Banking pursuant to Pennsylvania law, and (iii)
by the Board of Governors of the Federal Reserve System (the "Federal Reserve
Board") under the Oakar Amendment and under the Bank Holding Company Act of
1956, and all applicable statutory waiting periods shall have expired; and the
parties shall have procured all other regulatory approvals, consents, waiver
or administrative actions of governmental authorities or other person that are
necessary or appropriate to the consummation of the transactions contemplated
by this Agreement; provided, however, that no approval, consent, waiver or
-------- -------
administrative action referred to in this Section 5.1(c) shall be deemed to have
been received if it shall include any condition or requirement that would (i)
result in a Material Adverse Effect on Acquiror or (ii) so materially and
adversely affect the economic or business benefits of the Merger that the
Acquiror would not have entered into this Agreement had such conditions or
requirements been known at the date hereof;
(d) Other Legal Requirements. All other requirements
------------------------
prescribed by law which are necessary to the consummation of the transactions
contemplated by this Agreement shall have been satisfied.
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<PAGE>
(e) Injunction; Legal Proceedings. No preliminary or permanent
-----------------------------
injunction or other order shall have been issued by any court or by any
governmental or regulatory agency, body or authority which prohibits the
consummation of the Merger and the transactions contemplated by this Agreement
and which is in effect at the Effective Time; and no litigation or proceeding
shall be pending against Acquiror or Acquiree or any of their Subsidiaries
brought by any governmental agency seeking to prevent consummation of the
transactions contemplated hereby.
(f) Statutes. No statute, rule, regulation, executive order,
--------
decree or order of any kind shall have been enacted, entered, promulgated or
enforced by any court or governmental authority which prohibits the
consummation of the Merger.
(g) Registration Statement. The Registration Statement shall
----------------------
have become effective and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been initiated or threatened by the SEC.
(h) Tax Opinion. Acquiror and Acquiree each shall have
-----------
received the opinion of Pepper, Hamilton & Scheetz, dated as of the Effective
Date, substantially to the effect that, on the basis of facts, representations
and assumptions set forth in such opinion which are consistent with the state
of facts existing at the Effective Time, the Merger will be treated for
federal income tax purposes as a reorganization within the meaning of Section
368(a) of the Code and that, accordingly: (i) no gain or loss will be
recognized by Acquiror or Acquiree as a result of the Merger; (ii) no gain or
loss will be recognized by the shareholders of Acquiree who exchange their
shares of Acquiree Common Stock solely for shares of Acquiror Stock pursuant
to the Merger (except with respect to cash received in lieu of a factional
share interest in Acquiror Stock); (iii) the tax basis of the shares of
Acquiror Stock received by shareholders who exchange all of their shares of
Acquiree Common Stock solely for shares of Acquiror Stock in the Merger will
be the same as the tax basis of the shares of Acquiree Common Stock
surrendered in exchange therefor (reduced by any amount allocable to a
factional share interest of which cash is received); and (iv) the holding
period of the shares of Acquiror Stock received in the Merger will include the
period during which the shares of Acquiree Common Stock surrendered in
exchange therefor were held, provided such shares of Acquiree Common Stock
were held as capital assets at the Effective Time. In rendering their opinion,
such counsel may require and rely upon representations contained in
certificates of officers of Acquiror, Acquiree and others.
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<PAGE>
(i) Fairness Opinion. The Board of Directors of Acquiree
----------------
shall have received a letter, in form and substance satisfactory to Acquiree,
dated the date on which the SEC declares the Registration Statement effective,
pursuant to which Alex. Brown & Sons Incorporated shall express its opinion
that the consideration to be received by Acquiree's shareholders pursuant to
Section 1.2 hereof is fair from a financial point of view.
5.2. Conditions Precedent to Obligations of Acquiror. The
-----------------------------------------------
obligations of Acquiror to effect the Merger are also subject to the
satisfaction or waiver, at or prior to the Effective Time, of each of the
following conditions unless waived by Acquiror:
(a) Accuracy of Representations and Warranties. All
------------------------------------------
representations and warranties of Acquiree contained herein shall be true and
correct in all material respects as of the date hereof and at and as of the
Closing Date, with the same force and effect as though made on and as of the
Closing Date.
(b) Acquiree's Performance. Acquiree shall have performed in
----------------------
all material respects all obligations and agreements, and complied in all
material respects with all covenants and conditions, contained in this
Agreement to be performed or complied with by them prior to the Closing Date,
as set forth in Article 4 and elsewhere herein.
(c) Officer's Certificate. Acquiror shall have received a
---------------------
certificate signed by the Chief Executive Officer and the Chief Financial
Officer of Acquiree, dated the Closing Date, certifying as to the matters set
forth in subparagraphs 5.2(a) and (b).
(d) Opinion of Counsel. Acquiror shall have received an
------------------
opinion in form and substance satisfactory to Acquiror dated the Closing Date,
of Pepper, Hamilton & Scheetz covering the matter set forth in Sections 2.2,
2.5, 2.7 and 2.8 hereof, subject to such exceptions and qualifications as
shall be acceptable to Acquiror.
(e) Blue Sky. Acquiror shall have received all state
--------
securities laws and "Blue Sky" permits and other authorizations necessary to
consummate the transactions contemplated hereby.
(f) Accountants' Comfort Letters. Acquiror and its directors
----------------------------
and officers who sign the Registration Statement shall have received from
Acquiree's independent certified public accountants "agreed upon procedures"
letters, dated (i) the date of the mailing of the Proxy Statement/Prospectus
to the Acquiree's shareholders and (ii) shortly prior to the Closing Date,
with respect to certain financial information regarding
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<PAGE>
Acquiree in the form customarily issued by such accountants at such time in
transactions of this type.
(g) FUSA Contracts. The Credit Card Portfolio Purchase and Sale
--------------
Agreement ("Sale Agreement") between Acquiree and First USA Bank ("First USA")
dated as of May 28, 1993 shall be terminated. Additionally, the Correspondent
Bank Agreement ("Correspondent Agreement") between Acquiree and First USA also
dated May 28, 1993 which provides that for an initial period of three years
Acquiree will on an exclusive basis promote, publicize and support the
availability of credit cards issued by First USA, shall be terminated. The Sale
Agreement and Correspondent Agreement shall be terminated in accordance with
this subsection (g) at or prior to the Closing Date for an aggregate cash
consideration paid by Acquiree not to exceed $650,000.
(h) Clarke American Contract. The Clarke American Agreement
------------------------
between Acquiree and Clarke American Checks, Inc. ("Clarke") commencing on
September 27, 1992 and which provides that for a term of three years Acquiree
agrees to exclusively promote the sale of Clarke products to Acquiree's
customers shall be terminated at or prior to the Closing Date for cash
consideration paid by Acquiree not to exceed $5,000 for each month remaining
in the contract as of the date of termination.
5.3. Conditions Precedent to Obligation of Acquiree. The obligation
----------------------------------------------
of Acquiree to effect the Merger is also subject to the satisfaction or waiver,
at or prior to the Effective Time, of each of the following conditions unless
waived by Acquiree:
(a) Accuracy of Representations and Warranties. All
------------------------------------------
representations and warranties of Acquiror contained herein shall be true and
correct in all material respects as of the date hereof and at and as of the
Closing, with the same force and effect as though made on and as of the
Closing Date, and the additional representations and warranties with respect
to Acquiror Sub set forth on Schedule 5.3(a) shall be true and correct as of
the Closing Date.
(b) Acquiror's Performance. Acquiror shall have performed in
----------------------
all material respects all obligations and agreements, and complied in all
material respects with all covenants and conditions, contained in this
Agreement to be performed or complied with by it prior to the Closing Date, as
set forth in Article 4 and elsewhere herein.
(c) Officer's Certificate. Acquiree shall have received a
---------------------
certificate signed by the Chief Executive Officer and the Chief Financial
Officer of Acquiror and Acquiror Sub, dated the Closing Date, certifying as to
the matters set forth in subparagraphs 5.3(a) and (b).
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(d) Opinion of Counsel. Acquiree shall have received an
------------------
opinion in form and substance satisfactory to Acquiree, dated the Closing
Date, of counsel for Acquiror and Acquiror Sub covering the matters set forth
in Section 2.1, 2.5, 2.7 and 2.8, with such exceptions and qualifications as
shall be acceptable to Acquiree.
(e) Stock Listing. The Acquiror Stock to be issued in the
-------------
Merger has been approved for listing on the New York Stock Exchange, subject
to official notice of issuance.
(f) Accountants' Comfort Letters. Acquiree and its directors
----------------------------
shall have received from Acquiror's independent certified public accountants
"agreed upon procedures" letters, dated (i) the date of the mailing of the
Proxy Statement/Prospectus to Acquiree's shareholders and (ii) shortly prior
to the Closing Date, with respect to certain financial information regarding
Acquiror in the form customarily issued by such accountants at such time in
transactions of this type.
ARTICLE 6
COVENANTS
---------
6.1. Tax-Free Reorganization Treatment. Neither Acquiror nor
---------------------------------
Acquiree shall take or cause to be taken any action, whether before or after the
Effective Time, which would disqualify the Merger as a "reorganization" within
the meaning of Section 368 of the Code.
6.2. Employee Benefits.
-----------------
(a) Acquiror hereby unconditionally agrees to, and agrees to
cause its Subsidiaries to, honor, without modification, offset or
counterclaim, all contracts, agreements and commitments of Acquiree or any of
its Subsidiaries authorized by Acquiree or any of its Subsidiaries prior to
the date of this Agreement which apply to any current or former employee or
current or former director of Acquiree or any of its Subsidiaries, including
without limitation the contracts with the employees listed on Schedule 6.2
attached hereto which have been entered into or authorized prior to the date
hereof (the "Contract Employees"). In accordance with the terms of such
contracts, agreements and commitments, Acquiror hereby assumes, subject to the
consummation of the Merger, all of Acquiree's and its Subsidiaries'
obligations under such contracts, agreements and commitments. With respect to
each Contract Employee, Acquiror expressly agrees that: (i) in the event of
any dispute under such employee's contract or under the terms of this Section
6.2, Acquiror shall pay all reasonable fees and disbursements of
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<PAGE>
such employee's counsel in connection with all matters as to which such
employee is the prevailing party; (ii) following the Effective Time, and so
long as the employee remains employed by the Acquiror, until Acquiror merges
Acquiree's pension plan into Acquiror's retirement plan, such employee shall
be entitled to accrue benefits under Acquiree's pension plan in accordance
with its provisions in effect immediately prior to the Effective Time; (iii)
upon the merger of Acquiree's pension plan with Acquiror's retirement plan,
such employee shall be granted prior service credit under Acquiror's plan for
eligibility and vesting purposes, and shall begin to accrue benefits under
Acquiror's retirement plan.
(b) Without limiting the provisions of subparagraph (a),
Acquiror hereby unconditionally agrees to, and to cause its Subsidiaries to,
provide to officers and employees of Acquiree and its Subsidiaries who become
or remain employees of the Acquiror or any of its Subsidiaries employee
benefits, including, without limitation, pension benefits, health and welfare
benefits, life insurance and vacation, which are no less favorable in the
aggregate to those provided from time to time by the Acquiror and its
Subsidiaries to their similarly situated officers and employees. Any employee
of Acquiree or any of its Subsidiaries who becomes a participant in any
employee benefit plan, program, policy, or arrangement of the Acquiror or any
of its Subsidiaries shall be given credit under such plan, program, policy, or
arrangement for all service with Acquiree or any of its Subsidiaries prior to
becoming such a participant for purposes of eligibility and vesting.
6.3. Indemnification; Directors' and Officers' Insurance.
---------------------------------------------------
(a) From and after the Effective Time, Acquiror agrees to
indemnify and hold harmless each present and former director and officer of
Acquiree or its Subsidiaries (the "Indemnified Parties"), against any and all
costs or expenses (including reasonable attorneys' fees), judgments, fines,
losses, claims, damages or liabilities (collectively, "Costs") incurred in
connection with any and all claims, actions, suits, proceedings or
investigations, whether civil, criminal, administrative or investigative,
arising out of or pertaining to matters arising out of or in connection with
such party's position as, or actions taken as, a director or officer of
Acquiree or a Subsidiary, at or prior to the Effective Time, whether asserted
or claimed prior to, at or after the Effective Time, to the fullest extent
permitted by applicable law (and also advance expenses incurred to the fullest
extent permitted by applicable law); provided, however, that Acquiror shall
-------- -------
not have any obligation hereunder to any Indemnified Party when and if a court
of competent jurisdiction shall ultimately determine, and such determination
shall have become final and nonappealable,
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<PAGE>
that the indemnification of such Indemnified Party in the manner contemplated
hereby is prohibited by applicable law.
(b) Any Indemnified Party wishing to claim indemnification under
Section 6.3(a), upon learning of any such claim, action, suit, proceeding or
investigation, shall within thirty (30) days thereof notify Acquiror thereof,
but the failure to so notify shall not relieve Acquiror of any liability it may
have to such Indemnified Party if such failure does not materially prejudice
Acquiror. In the event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the Effective Time): (i) Acquiror
shall have the right to assume the defense thereof and Acquiror shall not be
liable to such Indemnified Parties for any legal expenses of other counsel or
any other expenses subsequently incurred by such Indemnified Parties in
connection with the defense thereof, except that if Acquiror elects not to
assume such defense, or counsel for the Indemnified Parties advises that there
are issues which raise conflicts of interest between Acquiror and the
Indemnified Parties, the Indemnified Parties may retain counsel satisfactory to
them, and Acquiror shall pay the reasonable fees and expenses of such counsel
for the Indemnified Parties promptly as statements therefor are received; (ii)
the Indemnified Parties will cooperate in the defense of any such matter; and
(iii) Acquiror shall not be liable for any settlement effected without its prior
written consent which shall not be unreasonably withheld.
(c) For a period of three years after the Effective Time,
Acquiror shall use all reasonable efforts to cause to be maintained in effect
the current policies of directors' and officers' liability insurance
maintained by Acquiree (provided that Acquiror may substitute therefor
policies of at least the same coverage and amounts containing terms and
conditions which are substantially no less advantageous to such directors and
officers) with respect to claims arising from facts or events which occurred
before the Effective Time; provided, however, that in no event shall Acquiror
-------- -------
be obligated to expend, in order to maintain or provide insurance coverage
pursuant to this Subsection 6.3(c), any amount per annum in excess of 200% of
the amount of the annual premiums paid as of the date hereof by Acquiree for
such insurance (the "Maximum Amount"). If the amount of the annual premiums
necessary to maintain or procure such insurance coverage exceeds the Maximum
Amount, Acquiror shall use all reasonable efforts to maintain the most
advantageous policies of directors' and officers' insurance obtainable for an
annual premium equal to the Maximum Amount.
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<PAGE>
ARTICLE 7
TERMINATION
-----------
7.1. Termination. This Agreement may be terminated, and the Merger
-----------
abandoned, prior to the Effective Date, either before or after its approval by
the shareholders of Acquiree:
(a) by the mutual consent of the Acquiror and Acquiree, if the
board of directors of each so determines by vote of a majority of the members
of its entire board;
(b) by Acquiror or Acquiree, if its board of directors so
determines by vote of a majority of the members of its entire board, in the
event of the failure of the shareholders of Acquiree to approve this Agreement
at its meeting called to consider such approval;
(c) by Acquiror or Acquiree, if its board of directors so
determines by vote of a majority of the members of its entire board, in the
event of a material breach by the other party hereto of any representation,
warranty, covenant or agreement contained herein which is not cured or not
curable within 60 days after written notice of such breach is given to the
party committing such breach by the other party;
(d) by Acquiror or Acquiree by written notice to the other
party if prior to March 31, 1995 either (i) any approval, consent or waiver of
a governmental authority required to permit consummation of the transactions
contemplated hereby shall have been denied or (ii) any governmental authority
of competent jurisdiction shall have issued a final, unappealable order
enjoining or otherwise prohibiting consummation of the transactions
contemplated by this Agreement;
(e) by Acquiror or Acquiree, if its board of directors so
determines by vote of a majority of the members of its entire board, in the
event that the Merger is not consummated by March 31, 1995, unless the failure
to so consummate by such time is due to the breach of any representation,
warranty, agreement or covenant contained in this Agreement by the party
seeking to terminate; or
(f) by Acquiree, if its board of directors so determines by a
majority vote of the members of its entire board, at any time during the ten-
day period commencing with the Termination Right Determination Date (as
defined below) if the Market Value on the Termination Right Determination Date
of shares of Acquiror Stock shall be less than $20 per share.
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<PAGE>
For purposes of this Section 7.1(f), the term "Termination Right
Determination Date" means the fifteenth day after the required approval of the
responsible agency under the Bank Merger Act for the Merger.
7.2. Effect of Termination. In the event of the termination of this
---------------------
Agreement by either Acquiror or Acquiree, as provided above, except as otherwise
provided in Section 8.3 hereof, this Agreement shall thereafter become void and
there shall be no liability on the part of any party hereto or their respective
officers or directors, except that any such termination shall be without
prejudice to the rights of any party hereto arising out of the willful breach of
any other party of any covenant or willful misrepresentation contained in this
Agreement.
ARTICLE 8
MISCELLANEOUS
-------------
8.1. Certain Definitions; Interpretation. As used in this
-----------------------------------
Agreement, the following terms shall have the meanings indicated:
"Control" shall have the meaning ascribed thereto in the Bank
Holding Company Act of 1956, as amended.
"Material" means material to Acquiror or Acquiree (as the case may be)
and its respective Subsidiaries, taken as a whole.
"Material Adverse Effect," with respect to a Person, means any
condition, event, change or occurrence that is reasonably likely to have a
material adverse effect upon (A) the financial condition, business or results of
operations of such Person and its Subsidiaries, taken as a whole, or (B) the
ability of such Person to perform its obligations under, and to consummate the
transactions contemplated by, this Agreement; provided, that reduction in
Acquiree's net income attributable to narrowing interest rate spreads shall not
by itself constitute a Material Adverse Effect as to Acquiree so long as
Acquiree manages its portfolio gap position in a manner consistent with past
practices.
"Person" includes an individual, corporation, partnership,
association, trust or unincorporated organization.
"Subsidiary," with respect to a Person, means any other Person
controlled by such person.
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<PAGE>
When a reference is made in this Agreement to Articles, Sections, or Schedules,
such reference shall be to a Section or Article of, or Schedule to, this
Agreement unless otherwise indicated. The table of contents, tie sheet and
headings contained in this Agreement are for ease of reference only and shall
not affect the meaning or interpretation of this Agreement. Whenever the words
"include," "includes," or "including" are used in this Agreement, they shall be
deemed followed by the words "without limitation." Any singular term in this
Agreement shall be deemed to include the plural, and any plural term the
singular.
8.2. Fees and Expenses. All costs and expenses incurred in
-----------------
connection with this Agreement and the consummation of the transactions
contemplated hereby shall, if incurred by Acquiror, be paid by Acquiror and
shall, if incurred by Acquiree, be paid by Acquiree.
8.3. Survival. Only those agreements and covenants of the parties
--------
that are applicable in whole or in part after the Effective Time shall survive
the Effective Time. All other representations, warranties, agreements and
covenants shall be deemed to be conditions of this Agreement and shall not
survive the Effective Time. If this Agreement shall be terminated, the
agreements of the parties in Sections 4.1(c) and 8.2 shall survive such
termination.
8.4. Public Announcements. Unless required by applicable law,
--------------------
Acquiree and Acquiror will not issue any press release or otherwise make any
public statement with respect to the transactions contemplated hereby without
the prior written consent of the other party.
8.5. Notices. All notices, requests, demands, waivers and other
-------
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered in person or
mailed, certified or registered mail with postage prepaid, or sent by telex,
telegram or telecopier, as follows:
(a) if to Acquiree, to it at:
Germantown Savings Bank
Belmont and City Line Avenues
Bala Cynwyd, PA 19004
Attention: Martin I. Kleppe, President and
Chairman of the Board
Telecopier: (215) 668-9152
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<PAGE>
with a copy to:
Pepper, Hamilton & Scheetz
3000 Two Logan Square
Eighteenth & Arch Streets
Philadelphia, PA 19103-2799
Attention: L. Garrett Dutton, Jr., Esquire
Telecopier: (215) 981-4750
(b) if to Acquiror, to it at:
CoreStates Financial Corp
1500 Market Street
Philadelphia, PA 19102
Attention: David C. Carney,
Chief Financial Officer
Telecopier: (215) 786-8963
with a copy to:
David T. Walker
Deputy General Counsel
CoreStates Financial Corp
PNB Building
17th Floor
Philadelphia, PA 19107
Telecopier: (215) 973-8156
or to such other Person or address as any party shall specify by notice in
writing to each of the other parties. All such notices, requests, demands,
waivers and communications shall be deemed to have been received on the date of
delivery unless if mailed in which case on the third business day after the
mailing thereof except for a notice of a change of address, which shall be
effective only upon receipt thereof.
8.6. Entire Agreement. This Agreement and the Schedules, Exhibits
----------------
and other documents referred to herein or delivered pursuant hereto collectively
contain the entire understanding of the parties hereto with respect to the
subject matter contained herein and supersede all prior and contemporaneous
agreements and understandings, oral and written, with respect thereto.
8.7. Binding Effect; Benefit; Assignment. This Agreement shall
-----------------------------------
inure to the benefit of and be binding upon the parties hereto and their
respective successors, heirs and permitted assigns, but neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto without the prior written consent of the other
parties. Nothing in this Agreement, expressed or
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<PAGE>
implied, is intended to confer on any person, other than the parties hereto or
their respective successors and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
8.8. Waiver. Prior to the Effective Time, any provision of this
------
Agreement may be (i) waived by the party benefitted by the provision or by both
parties by a writing executed by an executive officer, or (ii) amended or
modified at any time (including the structure of the transaction) by an
agreement in writing between the parties hereto approved by their respective
boards of directors, except that, after the vote by the shareholders of
Acquiror, no such amendment or modification may be made which reduces or changes
the form and amount of consideration payable pursuant to this Agreement without
further shareholder approval.
8.9. Further Actions. Each of the parties hereto agrees that,
---------------
subject to its legal obligations, it will use its best efforts to fulfill all
conditions precedent specified herein, to the extent that such conditions are
within its control, and to do all things reasonably necessary to consummate the
transactions contemplated hereby.
8.10. Counterparts. This Agreement may be executed in several
------------
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.
8.11. Applicable Law. This Agreement and the legal relations between
--------------
the parties hereto shall be governed by and construed in accordance with the
laws of the Commonwealth of Pennsylvania, without regard to the conflict of laws
rules thereof.
8.12. Severability. If any term, provision, covenant or restriction
------------
contained in this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions
contained in
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<PAGE>
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
IN WITNESS WHEREOF, each of Acquiror and Acquiree have executed this
Agreement as of the date first above written.
CORESTATES FINANCIAL CORP
By: /s/ David C. Carney
___________________________
Name: David C. Carney
Title: Chief Financial Officer
GERMANTOWN SAVINGS BANK
By: /s/ Martin I. Kleppe
___________________________
Name: Martin I. Kleppe
Title: President
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<PAGE>
Schedule 1.2
Election and Allocation Procedures
----------------------------------
A. Election and Allocation.
-----------------------
1. Subject to and in accordance with the allocation and election
procedures set forth in this Schedule 1.2, each record holder of share of
Acquiree Common Stock (other than holders of Dissenters' Shares) (the
"Shareholders") shall, prior to the Election Deadline (as hereinafter defined)
specify (a) the number of whole shares of Acquiree Common Stock held by such
Shareholder as to which such Shareholder shall desire to receive the Cash Merger
Consideration, and (b) the number of whole shares of Acquiree Common Stock held
by such Shareholder as to which such Shareholder shall desire to receive the
Stock Merger Consideration.
2. Subject to and in accordance with the allocation and election
procedures set forth in this Schedule 1.2, each holder of an Outstanding Option
(the "Option Holders," and together with the Shareholders, the "Holders") shall,
prior to the Election Deadline (as hereinafter defined) specify (a) the number
of whole shares of Acquiree Common Stock subject to such Option Holder's
Outstanding Option as to which the Option Holder shall desire to receive the
Cash Out, and (b) the number of whole shares of Acquiree Common Stock subject
to such Option Holder's Outstanding Option as to which the Option Holder shall
desire to receive an Exchange Option.
3. An election as described in clause (a) of Paragraph 1 or Paragraph
2 is herein referred to as a "Cash Election," and shares of Acquiree Common
Stock as to which a Cash Election has been made are herein referred to as "Cash
Election Shares." An election as described in clause (b) of Paragraph 1 or
Paragraph 2 is herein referred to as a "Stock Election," and shares as to which
a Stock Election has been made are herein referred to as "Stock Election
Shares." A failure to indicate a preference in accordance herewith is herein
referred to as a "Non-Election," and shares as to which there is a Non-Election
are herein referred to as "Non-Electing Shares."
4. Payment of cash pursuant to the Cash Merger Consideration and the
Cash Out, and issuance of Exchange Options and of Acquiror Stock pursuant to the
Stock Merger Consideration, shall be allocated to Holders such that the number
of shares of Acquiree Common Stock (outstanding and subject to Outstanding
Options, and including Dissenters' Shares) as to which cash is paid shall equal
45% of the aggregate number of shares of Acquiree Common Stock outstanding
(including Dissenters' Shares) plus those subject to Outstanding Options (the
"Aggregate Shares"), and the number of shares of Acquiree Common Stock
(outstanding or subject to Outstanding Options) as to which Acquiror Stock or
Exchange Options are issued shall equal 55% of the Aggregate Shares, as follows:
<PAGE>
a. If the number of Cash Election Shares plus the number of
Dissenters' Shares is in excess of 45% of the Aggregate Shares, then (i) Non-
Electing Shares shall be deemed to be Stock Election Shares, (ii) Cash Election
Shares of Option Holders shall be treated as Cash Election Shares without
adjustment, and (iii) (A) Cash Election Shares of each Shareholder shall be
reduced pro rata by multiplying the number of Cash Election Shares of such
Shareholder by a fraction, the numerator of which is the number of shares of
Acquiree Common Stock equal to 45% of the Aggregate Shares minus the aggregate
number of Dissenters' Shares and the aggregate number of Cash Election Shares of
Option Holders and the denominator of which is the aggregate number of Cash
Election Shares of all Shareholders, and (B) the shares of such Shareholder
representing the difference between such Shareholder's initial Cash Election and
such Shareholder's reduced Cash Election pursuant to clause (A) shall be
converted into and be deemed to be Stock Election Shares.
b. If the number of Stock Election Shares is in excess of 55%
of the Aggregate Shares, then (i) Non-Electing Shares shall be deemed to be
Cash Election Shares, and (ii) (A) Stock Election Shares of each Holder shall
be reduced pro rata by multiplying the number of Stock Election Shares of such
Holder by a fraction, the numerator of which is the number of shares of
Acquiree Common Stock equal to 55% of the Aggregate Shares and the denominator
of which is the aggregate number of Stock Election Shares of all Holders, and
(B) the shares of such Holder representing the difference between such
Holder's initial Stock Election and such Holder's reduced Stock Election
pursuant to clause (A) shall be converted into to and be deemed to be Cash
Election Shares.
c. If the number of Cash Election Shares plus Dissenter's
Shares is less than or equal to 45% of the Aggregate Shares and the number of
Stock Election Shares is less than or equal to 55% of the Aggregate Shares,
then (i) there shall be no adjustment to the elections made by electing
Holders, and (ii) Non-Electing Shares of each Holder shall be treated as Stock
Election Shares and/or as Cash Election Shares in proportion to the respective
amounts by which the Cash Election Shares and the Stock Election Shares are
less than the 45% and 55% limits, respectively.
5. After taking into account the foregoing adjustment provisions,
each Cash Election Share (including those deemed to be Cash Election Shares)
shall receive in the Merger the Cash Merger Consideration pursuant to Section
1.2 or the Cash Out pursuant to Section 1.4, as applicable, and each Stock
Election Share (including those deemed to be Stock Election Shares) shall
receive in the Merger the Stock Merger Consideration (and cash in
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<PAGE>
lieu of fractional shares) pursuant to Section 1.2 or the Exchange Options
pursuant to Section 1.4, as applicable.
B. Procedures.
----------
1. Acquiree and Acquiror shall prepare a form for purposes of making
elections and containing instructions with respect thereto (the "Election
Form"). The Election Form shall be distributed to each Holder at such time as
Acquiree and Acquiror shall determine and shall specify the date by which all
such elections must be made (the "Election Deadline"), which date shall be
determined by Acquiree and Acquiror but shall be not later than the business day
prior to the Closing Date.
2. Elections shall be made by Holders by mailing to First Chicago
Trust Company of New York, or such other bank or entity as may be mutually
acceptable to Acquiror and Acquiree as the exchange agent ("Exchange Agent"), a
duly completed Election Form. To be effective, an Election Form must be
properly completed, signed and submitted to the Exchange Agent accompanied by
certificates representing the shares of Acquiree Common Stock or by the
Outstanding Option as to which the election is being made (or by an appropriate
guaranty of delivery by a commercial bank or trust company in the United States
or a member of a registered national security exchange or the National
Association of Security Dealers, Inc.), or by evidence that such certificates
have been lost, stolen or destroyed accompanied by such security or indemnity as
shall be reasonably requested by Acquiror. An Election Form and accompanying
share certificates or Outstanding Options, as the case may be, must be received
by the Exchange Agent by the close of business on the Election Deadline. An
election may be changed or revoked but only by written notice received by the
Exchange Agent prior to the Election Deadline including, in the case of a
change, a properly completed revised Election Form. Any share certificate or
Outstanding Options which were submitted in connection with an election shall be
returned to the holder thereof in the event such election is revoked as
aforesaid and such holder requests in writing the return of such certificates.
3. Acquiror will have the discretion, which it may delegate in whole
or in part to the Exchange Agent, to determine whether the Election Forms have
been properly completed, signed and submitted or changed or revoked and to
disregard immaterial defects in Election Forms. The decision of Acquiror (or
the Exchange Agent) in such matters shall be conclusive and binding. Neither
Acquiror nor the Exchange Agent will be under any obligation to notify any
person of any defect in an Election Form submitted to the Exchange Agent. The
Exchange Agent shall also make all computations contemplated by Part A of this
Schedule 1.2.
-3-
<PAGE>
4. For the purposes hereof, a Holder who does not submit an effective
Election Form to the Exchange Agent prior to the Election Deadline shall be
deemed to have made a Non-Election. If Acquiror or the Exchange Agent shall
determine that any purported Cash Election or Stock Election was not
effectively made, such purported Cash Election or Stock Election shall be
deemed to be of no force and effect and the shareholder making such purported
Cash Election or Stock Election shall, for purposes hereof, be deemed to have
made a Non-Election.
5. In the event that this Agreement is terminated pursuant to the
provisions hereof and any shares or Outstanding Options have been transmitted to
the Exchange Agent pursuant to the provisions hereof, Acquiror and Acquiree
shall cause the Exchange Agent to promptly return such shares to the person
submitting the same.
-4-
<PAGE>
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated March 7, 1994, between Corestates
Financial Corp, a Pennsylvania corporation ("Grantee"), and Germantown Savings
Bank, a Pennsylvania capital stock savings bank ("Issuer").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Grantee and Issuer have entered into an Agreement and Plan of
Merger of even date herewith (the "Merger Agreement"), which agreement has been
executed by the parties hereto prior to this Agreement; and
WHEREAS, as a condition to Grantee's entering into the Merger
Agreement and in consideration therefor, Issuer has agreed to grant Grantee the
Option (as hereinafter defined):
NOW, THEREFORE, in consideration of the foregoing and the covenants
and agreements set forth herein and in the Merger Agreement, the parties hereto
agree as follows:
1. Issuer hereby grants to Grantee an unconditional, irrevocable
option (the "Option") to purchase, subject to the terms hereof, up to 419,000
shares of common stock, par value $0.10 per share ("Common Stock"), of Issuer at
a price per share equal to $53.75 (such price as adjusted pursuant to Section 5
hereof is hereinafter referred to as the "Option Price"); and agrees that upon
receipt of approval from the Pennsylvania Department of Banking the number of
shares of Common Stock subject to the Option hereunder shall be automatically
increased to 834,000 shares. The number of shares of Common Stock that may be
received upon the exercise of the Option and the Option Price are subject to
adjustment as herein set forth.
2. (a) The Holder (as hereinafter defined) may exercise the Option,
in whole or in part, if, but only if, both an Initial Triggering Event (as
hereinafter defined) and a Subsequent Triggering Event (as hereinafter defined)
shall have occurred prior to the occurrence of an Exercise Termination Event (as
hereinafter defined), provided that the Holder shall have sent the written
--------
notice of such exercise (as provided in subsection (e) of this Section 2) within
30 days following such Subsequent Triggering Event. Each of the following shall
be an Exercise Termination Event: (i) the Effective Time of the Merger; (ii)
termination of the Merger Agreement in accordance with the provisions thereof if
such termination occurs prior to the occurrence of an Initial Triggering Event;
or (iii) the passage of nine months after termination of the Merger Agreement if
such termination follows the occurrence of an Initial
<PAGE>
Triggering Event (provided that if an Initial Triggering Event continues or
--------
occurs beyond such termination, the Exercise Termination Event shall be nine
months from the expiration of the Last Triggering Event but in no event more
than twelve months after such termination). The "Last Triggering Event" shall
mean the last Initial Triggering Event to occur. The term "Holder" shall mean
the holder or holders of the option. Notwithstanding the foregoing, the Option
may not be exercised if, at the time of exercise or repurchase, Grantee is in
breach of any covenant or obligation contained in the Merger Agreement.
(b) The term "Initial Triggering Event" shall mean any of the
following events or transactions occurring after the date hereof:
(i) Issuer, without having received Grantee's prior written
consent, shall have entered into an agreement to engage in an Acquisition
Transaction (as hereinafter defined) with any person (the term "person" for
purposes of this Agreement having the meaning assigned thereto in Sections
3(a)(9) and 13(d)(3) of the Securities Exchange Act, and the rules and
regulations thereunder) other than Grantee or any of its subsidiaries (each a
"Grantee Subsidiary") or the Board of Directors of Issuer shall have
recommended that the shareholders of Issuer approve or accept any Acquisition
Transaction other than as contemplated by the Merger Agreement. For purposes
of this Agreement, "Acquisition Transaction" shall mean (x) a merger or
consolidation, or any similar transaction, involving Issuer or an Issuer
Subsidiary, (y) a purchase, lease or other acquisition of all or substantially
all of the assets of Issuer or an Issuer Subsidiary, or (z) a purchase or
other acquisition (including by way of merger, consolidation, share exchange
or otherwise) of securities representing 20% or more of the voting power of
Issuer or an Issuer Subsidiary;
(ii) Any person other than Grantee, any Grantee subsidiary or
Issuer acting in a fiduciary capacity shall have acquired beneficial ownership
or the right to acquire beneficial ownership of 20% or more of the outstanding
shares of Common Stock (the term "beneficial ownership" for purposes of this
option Agreement having the meaning assigned thereto in Section 13(d) of the
Securities Exchange Act and the rules and regulations thereunder);
(iii) Any person other than Grantee or any Grantee
Subsidiary shall have made a bona fide proposal to Issuer or its shareholders
by public announcement or written communication that is or becomes the subject
of public disclosure to engage in an Acquisition Transaction;
(iv) After a proposal is made by a third party to Issuer or
its shareholders to engage in an Acquisition
-2-
<PAGE>
Transaction, Issuer shall have breached any covenant or obligation contained in
the Merger Agreement and such breach (x) would entitle Grantee to terminate the
Merger Agreement and (y) shall not have been cured prior to the Notice Date (as
defined below); or
(v) Any person other than Grantee or any Grantee Subsidiary,
other than in connection with a transaction to which Grantee has given its
prior written consent, shall have filed an application or notice with the
Federal Reserve Board, or other federal or state bank regulatory authority,
which application or notice has been accepted for processing, for approval to
engage in an Acquisition Transaction.
(c) The term "Subsequent Triggering Event" shall mean either
of the following events or transactions occurring after the date hereof:
(i) The acquisition by any person of beneficial ownership of
25% or more of the then outstanding Common stock; or
(ii) The occurrence of an Initial Triggering Event
described in clause (i) of subsection (b) of this Section 2, except that the
percentage referred to in clause (z) thereof shall be 25%.
(d) Issuer shall notify Grantee promptly in writing of the
occurrence of any Initial Triggering Event or Subsequent Triggering Event
(together, a "Triggering Event") after it becomes aware that such an event has
occurred, it being understood that the giving of such notice by Issuer shall
not be a condition to the right of the Holder to exercise the Option.
(e) In the event the Holder is entitled to and wishes to
exercise the option, it shall send to Issuer a written notice (the date of
which being herein referred to as the "Notice Date") specifying (i) the total
number of shares it will purchase pursuant to such exercise and (ii) a place
and date not earlier than three business days nor later than 30 business days
from the Notice Date for the closing of such purchase (the "Closing Date");
provided that if prior notification to or approval of the Federal Reserve
- --------
Board or any other regulatory agency is required in connection with such
purchase, the Holder shall promptly file the required notice or application
for approval and shall expeditiously process the same and the period of time
that otherwise would run pursuant to this sentence shall run instead from the
date on which any required notification periods have expired or been
terminated or such approvals have been obtained and any requisite waiting
period or periods shall have passed. Any exercise of the Option shall be
deemed to occur on the Notice Date relating thereto.
-3-
<PAGE>
(f) At the closing referred to in subsection (e) of this
Section 2, the Holder shall pay to Issuer the aggregate purchase price for the
shares of Common Stock purchased pursuant to the exercise of the Option in
immediately available funds by wire transfer to a bank account designated by
Issuer, provided that failure or refusal of Issuer to designate such a bank
--------
account shall not preclude the Holder from exercising the Option.
(g) At such closing, simultaneously with the delivery of
immediately available funds as provided in subsection (f) of this Section 2,
Issuer shall deliver to the Holder a certificate or certificates representing
the number of shares of Common Stock purchased by the Holder and, if the
Option should be exercised in part only, a new Option evidencing the rights of
the Holder thereof to purchase the balance of the shares purchasable
hereunder, and the Holder shall deliver to Issuer a copy of this Agreement and
a letter agreeing that the Holder will not offer to sell or otherwise dispose
of such shares in violation of applicable law or the provisions of this
Agreement.
(h) Upon the giving by the Holder to Issuer of the written
notice of exercise of the Option provided for under subsection (e) of this
Section 2 and the tender of the applicable purchase price in immediately
available funds, the Holder shall be deemed to be the holder of record of the
shares of Common Stock issuable upon such exercise, notwithstanding that the
stock transfer books of Issuer shall then be closed or that certificates
representing such shares of Common Stock shall not then be actually delivered
to the Holder. Issuer shall pay all expenses, and any and all United States
federal, state and local taxes and other charges that may be payable in
connection with the preparation, issue and delivery of stock certificates
under this Section 2 in the name of the Holder or its assignee, transferee or
designee.
3. Issuer agrees: (i) that it shall at all times maintain, free from
preemptive rights, sufficient authorized but unissued or treasury shares of
Common Stock so that the Option may be exercised without additional
authorization of Common Stock after giving effect to all other options,
warrants, convertible securities and other rights to purchase Common Stock; (ii)
that it will not, by charter amendment or through reorganization, consolidation,
merger, dissolution or sale of assets, or by any other voluntary act, avoid or
seek to avoid the observance or performance of any of the covenants,
stipulations or conditions to be observed or performed hereunder by Issuer;
(iii) promptly to take all action as may from time to time be required
(including (x) complying with all premerger notification, reporting and waiting
period requirements specified in 15 U.S.C. (S) 18a and regulations promulgated
thereunder, if applicable, and (y) in the event, under the Bank Holding Company
Act of 1956, as
-4-
<PAGE>
amended, or the Change in Bank Control Act of 1978, as amended, or any state
banking law, prior approval of or notice to the Federal Reserve Board or any
state regulatory authority is necessary before the Option may be exercised,
cooperating fully with the Holder in preparing such applications or notices and
providing such information to the Federal Reserve Board or such state regulatory
authority as they may require) in order to permit the Holder to exercise the
Option and Issuer duly and effectively to issue shares of Common Stock pursuant
hereto; and (iv) promptly to take all action provided herein to protect the
rights of the Holder against dilution.
4. This Agreement (and the Option granted hereby) is exchangeable,
without expense, at the option of the Holder, upon presentation and surrender of
this Agreement at the principal office of Issuer, for other Agreements providing
for Options of different denominations entitling the holder thereof to purchase,
on the same terms and subject to the same conditions as are set forth herein, in
the aggregate the same number of shares of Common Stock purchasable hereunder.
The terms "Agreement" and "Option" as used herein include any Stock Option
Agreements and related Options for which this Agreement (and the Option granted
hereby) may be exchanged. Upon receipt by Issuer of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Issuer will execute and deliver a new Agreement of like
tenor and date.
5. The number of shares of Common Stock purchasable upon the
exercise of the Option shall be subject to adjustment from time to time as
provided in this Section 5.
(a) In the event of any change in Common Stock by reason of
stock dividends, split-ups, mergers, recapitalizations, combinations,
subdivisions, conversions, exchanges of shares or the like, the type and
number of shares of Common Stock purchasable upon exorcise hereof shall be
appropriately adjusted.
(b) Whenever the number of shares of Common Stock purchasable
upon exercise hereof is adjusted as provided in this Section 5, the Option
Price shall he adjusted by multiplying the Option Price by a fraction, the
numerator of which shall be equal to the number of shares of Common Stock
purchasable prior to the adjustment and the denominator of which shall be
equal to the number of shares of Common Stock purchasable after the
adjustment.
6. (a) In the event that prior to an Exercise Termination Event,
Issuer shall enter into an agreement (i) to consolidate with or merge into any
person, other than Grantee or
-5-
<PAGE>
a Grantee Subsidiary, and shall not be the continuing or surviving corporation
of such consolidation or merger, (ii) to permit any person, other than Grantee
or a Grantee Subsidiary, to merge into Issuer and Issuer shall be the continuing
or surviving corporation, but, in connection with such merger, the then
outstanding shares of Common Stock shall be changed into or exchanged for stock
or other securities of any other person or cash or any other property or the
then outstanding shares of Common stock shall after such merger represent less
than 50% of the outstanding shares and share equivalents of the merged company,
or (iii) to sell or otherwise transfer all or substantially all of its assets to
any person, other than Grantee or a Grantee Subsidiary, then, and in each such
case, the agreement governing such transaction shall make proper provision so
that the Option shall, upon the consummation of any such transaction and upon
the terms and conditions set forth herein, be converted into, or exchanged for,
an option (the "Substitute Option"), at the election of the Holder, of either
(x) the Acquiring Corporation (as hereinafter defined) or (y) any person that
controls the Acquiring Corporation (the "Substitute Option Issuer").
(b) The following terms have the meanings indicated:
(1) "Acquiring Corporation" shall mean (i) the continuing
or surviving corporation of a consolidation or merger with Issuer (if other
than Issuer), (ii) Issuer in a merger in which Issuer is the continuing or
surviving person, and (iii) the transferee of all or substantially all of
Issuer's assets.
(2) "Substitute Common Stock" shall mean the common stock
issued by the issuer of the Substitute Option upon exercise of the Substitute
Option.
(3) "Assigned Value" shall mean the highest of (i) the
price per share of Common Stock at which a tender offer or exchange offer
therefor has been made, (ii) the price per share of Common Stock to be paid by
any third party pursuant to an agreement with Issuer, (iii) the highest
closing price for shares of Common Stock within the 30 day period prior to the
event resulting in the issuance of the Substitute Option, or (iv) in the event
of a sale of all or substantially all of Issuer's assets, the sum of the price
paid in such sale for such assets and the current market value of the
remaining net assets of Issuer as determined by a nationally recognized
investment banking firm selected by the Holder divided by the number of shares
of Common Stock of Issuer outstanding at the time of such sale. In determining
the Assigned Value, the value of consideration other than cash shall be
determined by a nationally recognized investment banking firm selected by the
Holder.
-6-
<PAGE>
(4) "Average Price" shall mean the average closing price of
a share of the Substitute Common Stock for the one year immediately preceding
the consolidation, merger or sale in question, but in no event higher than the
closing price of the shares of Substitute Common Stock on the day preceding
such consolidation, merger or sale; provided that if Issuer is the issuer of
--------
the Substitute Option, the Average Price shall be computed with respect to a
share of common stock issued by the person merging into Issuer or by any
company which controls or is controlled by such person, as the Holder may
elect.
(c) The Substitute Option shall have the same terms as the
Option, provided, that if the terms of the Substitute Option cannot, for legal
--------
reasons, be the same as the Option, such terms shall be as similar as possible
and in no event less advantageous to the Holder. The issuer of the Substitute
Option shall also enter into an agreement with the then Holder or Holders of
the Substitute Option in substantially the same form as this Agreement, which
shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number
of shares of Substitute Common Stock as is equal to the Assigned Value
multiplied by the number of shares of Common Stock for which the Option is
then exercisable, divided by the Average Price. The exercise price of the
Substitute Option per share of Substitute Common Stock shall then be equal to
the Option Price multiplied by a fraction, the numerator of which shall be the
number off shares of Common Stock for which the Option is then exercisable and
the denominator of which shall be the number of shares of Substitute Common
Stock for which the Substitute Option is exercisable.
(e) In no event, pursuant to any of the foregoing paragraphs,
shall the Substitute Option be exercisable for more than 19.9% of the
outstanding shares of common stock of the Substitute Option Issuer outstanding
prior to exercise of the Substitute Option. In the event that the Substitute
Option would be exercisable for more than 19.9% of the shares of outstanding
common stock of the Substitute Option Issuer outstanding prior to exercise but
for this clause (e), the Substitute Option Issuer shall make a cash payment to
Holder equal to the excess off (i) the value of the Substitute option without
giving effect to the limitation in this clause (e) over (ii) the value of the
Substitute Option after giving effect to the limitation in this clause (e).
This difference in value shall be determined by a nationally recognized
investment banking firm selected by the Holder.
7. The 30-day period for exercise of certain rights under Sections 2
and 9 shall be extended: (i) to the extent
-7-
<PAGE>
necessary to obtain all regulatory approvals for the exercise of such rights and
for the expiration of all statutory waiting periods; and (ii) to the extent
necessary to avoid liability under Section 16(b) of the Securities Exchange Act
by reason of such exercise. Nothing contained in this Agreement shall restrict
Grantee from specifying alternative exercising of rights pursuant to Section 2
hereof in the event that the exercising of any such rights shall not have
occurred due to the failure to obtain any required approval referred to in this
Section 7.
8. Issuer hereby represents and warrants to Grantee as follows:
(a) Issuer has the corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly approved by the Board of
Directors of Issuer and no other corporate proceedings on the part of Issuer are
necessary to authorize this Agreement or to consummate the transactions so
contemplated. This Agreement has been duly executed and delivered by Issuer.
This Agreement is the valid and legally binding obligation of Issuer.
(b) Issuer has taken all necessary corporate action to
authorize and reserve and to permit it to issue, and at all times from the
date hereof through the termination of this Agreement in accordance with its
terms will have reserved for issuance upon the exercise of the Option, that
number of shares of Common Stock equal to the maximum number of shares of
Common Stock at any time and from time to time issuable hereunder, and all
such shares, upon issuance pursuant hereto, will be duly authorized, validly
issued, fully paid, nonassessable, and will be delivered free and clear of all
claims, liens, encumbrance and security interests and not subject to any
preemptive rights.
9. Neither of the parties hereto may assign any of its rights or
obligations under this Option Agreement or the Option created hereunder to any
other person, without the express written consent of the other party, except
that in the event a Subsequent Triggering Event shall have occurred prior to an
Exercise Termination Event, Grantee, subject to the express provisions hereof,
may assign in whole or in part its rights and obligations hereunder within 30
days following such subsequent Triggering Event (or such later period as
provided in section 7); provided, however, that until the date 30 days following
-------- -------
the date on which the Federal Reserve Board approves an application by Grantee
under the Bank Holding Company Act to acquire the shares of Common Stock subject
to the Option, Grantee may not assign its rights under the Option except in (i)
a widely dispersed public distribution, (ii) a private placement in which no one
party acquires the right to purchase in excess of 2% of the voting
-8-
<PAGE>
shares of Issuer, (iii) an assignment to a single party (e.g., a broker or
----
investment banker) for the purpose of conducting a widely dispersed public
distribution on Grantee's behalf, or (iv) any other manner approved by the
Federal Reserve Board.
10. Each of Grantee and Issuer will use its best efforts to make all
filings with, and to obtain consents of, all third parties and governmental
authorities necessary to the consummation of the transactions contemplated by
this Agreement, including without limitation applying to the Federal Reserve
Board under the Bank Holding Company Act for approval to acquire the shares
issuable hereunder.
11. The parties hereto acknowledge that damages would be an
inadequate remedy for a breach of this Agreement by either party hereto and that
the obligations of the parties hereto shall be enforceable by either party
hereto through injunctive or other equitable relief.
12. If any term, provision, covenant or restriction contained in this
Agreement is held by a court or a federal or state regulatory agency of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions and covenants and restrictions contained in this Agreement
shall remain in full force and effect, and shall in no way be affected, impaired
or invalidated. If for any reason such court or regulatory agency determineS
that the Holder is not permitted to acquire the full number of shares of Common
Stock provided in Section 1(a) hereof (as adjusted pursuant to Section 1(b) or 5
hereof), it is the express intention of Issuer to allow the Holder to acquire
such lesser number of shares as may be permissible, without any amendment or
modification hereof.
13. All notices, requests, claims, demands and other communications
hereunder shall be deemed to have been duly given when delivered in person, by
cable, telegram, telecopy or telex, or by registered or certified mail (postage
prepaid, return receipt requested) at the respective addresses of the parties
set forth in the Merger Agreement.
14. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
15. This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original, but all of which shall constitute
one and the same agreement.
16. Except as otherwise expressly provided herein, each of the
parties hereto shall bear and pay all costs and expenses incurred by it or on
its behalf in connection with the
-9-
<PAGE>
transactions contemplated hereunder, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel.
17. Except as otherwise expressly provided herein or in or pursuant
to the Merger Agreement, this Agreement contains the entire agreement between
the parties with respect to the transactions contemplated hereunder and
supersedes all prior arrangements or understandings with respect thereof,
written or oral. The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, expressed or
implied, is intended to confer upon any party, other than the parties hereto,
and their respective successors except as assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except as
expressly provided herein.
18. Capitalized terms used in this Agreement and not defined herein
shall have the meanings assigned thereto in the Merger Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf by its officers thereunto duly authorized, all as of
the date first above written.
GERMANTOWN SAVINGS BANK
By:/s/ Martin I Kleppe
_______________________________
Name: Martin I. Kleppe
Title: President
CORESTATES FINANCIAL CORP
By:/s/ David C. Carney
_______________________________
Name: David C. Carney
Title: Chief Financial Officer
<PAGE>
Exhibit 4(d)
DRAFT 5/19/94
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS
NOTE 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 NOTE 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 IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
THESE NOTES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY
INSURED DEPOSITARY INSTITUTION OR OTHER SUBSIDIARY OF THE ISSUER AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
REGISTERED REGISTERED
No. FXR- $
CUSIP:
CORESTATES CAPITAL CORP
MEDIUM-TERM NOTE
(Senior Fixed Rate)
Payment of Principal, Premium, if any, and Interest Guaranteed by
CORESTATES FINANCIAL CORP
ORIGINAL ISSUE DATE: INTEREST RATE: STATED MATURITY DATE:
____________________ __________% ____________________
INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION DATE:
PERCENTAGE: PERCENTAGE REDUCTION:
____________________ __________________ ____________________
OPTIONAL REPAYMENT
DATE(S):
____________________
<PAGE>
CoreStates Capital Corp, a Pennsylvania corporation (the "Company"), for
value received, hereby promises to pay to
, or registered
assigns, the principal sum of DOLLARS on the
Stated Maturity Date specified above (except to the extent redeemed or repaid
prior to the Stated Maturity Date), and to pay interest thereon at the Interest
Rate per annum specified above, until the principal hereof is paid or duly made
available for payment, semiannually on March 15 and September 15 (each, an
"Interest Payment Date") in each year commencing on the first Interest Payment
Date next succeeding the Original Issue Date specified above, unless the
Original Issue Date occurs between a Regular Record Date (as defined below) and
the next succeeding Interest Payment Date, in which case commencing on the
second Interest Payment Date succeeding the Original Issue Date, to the Holder
(as defined below) of such Note on the Regular Record Date with respect to such
Interest Payment Date, and on the Stated Maturity Date shown above (or any
Redemption Date as defined on the reverse hereof or any Holder's Optional
Repayment Date with respect to which such option has been exercised, each such
Stated Maturity Date, Redemption Date and Optional Repayment Date being herein
referred to as a "Maturity Date" with respect to the principal repayable on such
date). Interest on this Note will accrue from the most recent Interest Payment
Date to which interest has been paid or duly provided for or, if no interest has
been paid, from the Original Issue Date specified above, until the principal
hereof has been paid or duly made available for payment. If the Maturity Date or
an Interest Payment Date falls on a day which is not a Business Day (as defined
below), principal, premium, if any, and interest payable with respect to such
Maturity Date or Interest Payment Date will be paid on the next succeeding
Business Day with the same force and effect as if made on such Maturity Date or
Interest Payment Date, as the case may be, and no interest on each payment shall
accrue for the period from and after such Maturity Date or Interest Payment
Date. The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, subject to certain exceptions, be paid to the Person
(the "Holder") in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the Regular Record Date, which shall be
the March 1 or September 1 (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date; provided, however, that interest
-------- -------
payable on the Maturity Date will be payable to the Person to whom the principal
hereof shall be payable. Any such interest not so punctually paid or duly
provided for ("Defaulted Interest") will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Note (or one or more
2
<PAGE>
predecessor Notes) is registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest to be fixed by the Trustee
referred to on the reverse hereof, notice whereof shall be given to the Holder
of this Note not less than 10 days prior to such Special Record Date, or be paid
at any time in any other lawful manner, all as more fully provided in the
Indenture (as defined on the reverse hereof). As used herein, "Business Day"
means any day other than a Saturday, Sunday, legal holiday or other day on which
banks in The City of New York are required or authorized by law or executive
order to close.
Payment of the principal of, and premium, if any, and interest on, this
Note will be made in immediately available funds at the corporate trust office
of CoreStates Bank, N.A. (the "Paying Agent") in the City of Philadelphia, or
at such other agency of the Company maintained for that purpose in the Borough
of Manhattan, The City of New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts. Payment of interest on any Interest Payment Date
other than the Maturity Date may be made at the option of the Company by check
mailed to the address of the Holder as such address shall appear in the
Security Register; provided, however, that a Holder of not less than
-------- -------
$10,000,000 aggregate principal amount of the Notes (whether having identical
terms and provisions) may, by written notice to the Paying Agent at its
corporate trust office in the City of Philadelphia (or at such other address
as the Company shall give notice in writing) on or before the Regular Record
Date preceding an Interest Payment Date, arrange to have the interest payable
on all Notes held by such Holder on such Interest Payment Date, and all
subsequent Interest Payment Dates until written notice to the contrary is
given to the Paying Agent, made by wire transfer of immediately available
funds to an account maintained at a bank in The City of New York (or other
bank consented to by the Company, which consent may not be unreasonably
withheld) as such Holder shall have designated; provided that such bank has
appropriate facilities therefor. Notwithstanding the preceding sentence,
payments of principal of, and premiums, if any, and interest on, any Maturity
Date will be made by wire transfer of immediately available funds to a
designated account maintained in the United States upon (i) receipt of written
notice by the Paying Agent from the Holder hereof not less than one Business
Day prior to such Maturity Date and (ii) presentation of this Note at the
corporate trust office of the Paying Agent in the City of Philadelphia or at
such other agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions
3
<PAGE>
shall for all purposes have the same effect as if set forth at this place.
Unless the Certificate of Authentication hereon has been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
officers, this Note shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and a facsimile of its corporate seal to be
imprinted hereon.
[SEAL] CORESTATES CAPITAL CORP
By: ______________________
Name:
Title:
Attest:
By: __________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series
designated, referred to in the within-mentioned
Indenture.
NATIONSBANK OF GEORGIA, NATIONAL ASSOCIATION,
as Trustee
By:__________________________
Authorized Signatory
By: CORESTATES BANK, N.A.
As Authenticating Agent
By: _______________________
Authorized Signatory
4
<PAGE>
[REVERSE OF NOTE]
CORESTATES CAPITAL CORP
MEDIUM-TERM NOTE
(Senior Fixed Rate)
This Medium-Term Note is one of a duly authorized series of Securities
(the "Securities") of the Company issued and to be issued under a Senior
Indenture, dated as of December 1, 1990 (the "Indenture"), among the Company,
the Guarantor (as defined below) and NationsBank of Georgia, National
Association, as trustee and successor to Wachovia Bank of Georgia, N.A. (the
"Trustee", which term shall include any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights thereunder
of the Company, the Guarantor, the Trustee and the Holders of the Notes and
the terms upon which the Notes are, and are to be, authenticated and
delivered. The Medium-Term Notes (the "Notes") may bear different dates,
mature at different times, bear interest at different rates and vary in such
other ways as are provided in the Indenture.
This Note may be subject to repayment at the option of the Holder on the
Optional Repayment Date(s), if any, indicated on the face hereof. If no
Optional Repayment Dates are set forth on the face hereof, this Note may not
be so repaid at the option of the Holder hereof prior to the Stated Maturity
Date. On any Optional Repayment Date, this Note shall be repayable in whole or
in part in increments of $1,000 at the option of the Holder hereof at a
repayment price equal to 100% of the principal amount to be repaid together
with accrued interest thereon payable to the applicable Optional Repayment
Date. For this Note to be repaid in whole or in part at the option of the
Holder hereof, this Note must be received, with the form entitled "Option to
Elect Repayment" below duly completed, by the Paying Agent at its corporate
trust office in the City of Philadelphia, or at such other place or places as
the Company shall from time to time notify the Holders of the Notes, not more
than 60 nor less than 30 days prior to the applicable Optional Repayment Date.
Exercise of such repayment option by the Holder hereof shall be irrevocable.
This Note may be redeemed at the option of the Company on any date on and
after the Initial Redemption Date, if any, specified on the face hereof (each
such date fixed for redemption, a "Redemption Date"). If no Initial Redemption
Date is set forth on the face hereof, this Note may not be redeemed at the
option of the Company prior to the Stated Maturity Date. On
5
<PAGE>
and after the Initial Redemption Date, if any, this Note may be redeemed at any
time in whole or from time to time in part in increments of $1,000 at the option
of the Company at the applicable Redemption Price referred to below together
with accrued interest thereon payable to the Redemption Date, on notice given
not more than 60 nor less than 30 days prior to the Redemption Date. In the
event of redemption of this Note in part only, a new Note for the unredeemed
portion hereof shall be issued in the name of the Holder hereof upon the
surrender hereof.
If this Note is redeemable at the option of the Company, the "Redemption
Price" shall initially be the Initial Redemption Percentage, specified on the
face hereof, of the principal amount of this Note to be redeemed and shall
decline at each anniversary of the Initial Redemption Date by the Annual
Redemption Percentage Reduction, if any, specified on the face hereof, of the
principal amount to be redeemed until the Redemption Price is 100% of such
principal amount.
Interest payments on this Note will include interest accrued to but
excluding the Interest Payment Date or the Maturity Date, as the case may be.
Interest payments for this Note will be computed and paid on the basis of a
360-day year of twelve 30-day months.
Except as may be provided in the Indenture, if an Event of Default with
respect to the Notes shall occur and be continuing, the Trustee or the Holders
of not less than 25% in principal amount of the Outstanding Notes may declare
the principal of all the Notes due and payable in the manner and with the
effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the Guarantor and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company, the
Guarantor, and the Trustee with the consent of the Holders of not less than
66 2/3% in aggregate principal amount of the Securities at the time Outstanding
of each series affected thereby. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of each series, to waive compliance by the Company
or the Guarantor with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon
the
6
<PAGE>
registration of transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note.
The Guarantor, or a Subsidiary (as defined in the Indenture) thereof, may
directly assume, by a supplemental indenture, the due and punctual payment of
the principal of, and premium, if any, and interest on, all of the Securities,
in which case the Company shall be released from its liability as obligor on
the Securities.
The Indenture provides that the Company and the Guarantor, at their
option, (a) will be discharged from any and all obligations in respect of the
Notes (except for certain obligations to register the transfer of or exchange
Notes, replace stolen, lost or mutilated Notes and maintain paying agencies)
or (b) need not comply with certain provisions of the Indenture, in each case
if the Company or the Guarantor deposits, in trust, with the Trustee money or
U.S. Government Obligations (as defined in the Indenture) which, with respect
to U.S. Government Obligations, through the payment of interest thereon and
principal thereof in accordance with their terms will provide money, in an
amount in cash sufficient to pay all the principal of and interest on the
Securities on the dates such payments are due in accordance with the terms of
such Notes, and certain other conditions are satisfied.
No reference herein to the Indenture and no provision of this Note 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 Note at the times, places and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture, and subject to certain limitations therein
set forth, the transfer of this Note may be registered on the Security
Register of the Company upon surrender of this Note for registration of
transfer at the corporate trust office of CoreStates Bank, N.A., as Security
Registrar, in the City of Philadelphia or at such other agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company, and this Note duly executed by, the Holder hereof
or by his attorney duly authorized in writing and thereupon one or more new
Notes, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
7
<PAGE>
The Notes are issuable only in registered form without coupons in minimum
denominations of $1,000 or any amount in excess thereof which is an integral
multiple of $1,000. As provided in the Indenture, and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal amount of Notes in authorized denominations, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer or
exchange, the Company, the Guarantor, the Trustee and any agent of the
Company, the Guarantor or the Trustee may treat the Holder as the owner hereof
for all purposes, whether or not this Note is overdue, and neither the
Company, the Guarantor, the Trustee nor any agent thereof shall be affected by
notice to the contrary.
The Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to agreements
made and to be performed in such State.
All terms used but not defined herein shall have the meanings assigned to
such terms in the Indenture.
GUARANTEE OF CORESTATES FINANCIAL CORP
For value received, CoreStates Financial Corp, a Pennsylvania corporation
(the "Guarantor"), hereby unconditionally guarantees to the Holder of this
Note the due and punctual payment of the principal of, and premium, if any,
and interest on (including any Additional Amounts payable in respect thereof),
this Note when and as the same shall become due and payable, whether at the
Stated Maturity Date or upon acceleration, redemption, repayment or otherwise,
according to the terms of the Indenture. In case of the failure of the Company
punctually to make any such payment of principal, premium, if any, or
interest, the Guarantor hereby agrees to cause any such payment to be made
punctually when and as the same shall become due and payable, whether at the
Stated Maturity Date or upon acceleration, redemption, repayment or otherwise,
and as if such payment were made by the Company.
The Guarantor hereby agrees that its obligations under this Guarantee
shall be as principal and not merely as surety, and
8
<PAGE>
shall be absolute and unconditional, irrespective of, and shall be unaffected
by, any invalidity, irregularity or unenforceability of this Note or the
Indenture, any failure to enforce the provisions of this Note or the Indenture,
or any waiver, modification, consent or indulgence granted to the Company with
respect thereto by the Holder of this Note or the Trustee, the recovery of any
judgment against the Company or any action to enforce the same, or any other
circumstance which may otherwise constitute a legal or equitable discharge of a
surety or guarantor. The Guarantor hereby waives diligence, presentment, demand
of payment, filing of claims with a court in the event of merger or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest or notice with respect to this Note or the indebtedness evidenced hereby
and all demands whatsoever, and covenants that this Guarantee will not be
discharged except by payment in full of the principal of, and premium, if any,
and interest on, this Note and the complete performance of all other obligations
contained herein.
The Guarantor shall be subrogated to all rights of the Holder of this
Note against the Company in respect of any amounts paid to such Holder by the
Guarantor pursuant to the provisions of this Guarantee; provided, however,
-------- -------
that the Guarantor shall not be entitled to enforce, or to receive any
payments arising out of or based upon, such right of subrogation until payment
in full of the principal of, and premium, if any, and interest on, the Note
and the complete performance of all other obligations contained herein.
Subject to the next following paragraph, the Guarantor hereby certifies
and warrants that all acts, conditions and things required to be done and
performed and to have happened precedent to the creation and issuance of this
Guarantee and to constitute the same the valid obligation of the Guarantor
have been done and performed and have happened in due compliance with all
applicable laws.
Unless the Certificate of Authentication hereon has been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
officers, this Guarantee shall not be valid or obligatory for any purposes.
This Guarantee shall be governed by, and construed in accordance with,
the laws of the State of New York.
9
<PAGE>
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly
executed in facsimile by its duly authorized officer under its corporate seal.
Dated:_____________________
[SEAL] CORESTATES FINANCIAL CORP
By:______________________
Name:
Title:
Attest:
By:____________________________
Name:
Title:
10
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the Company
to repay this Note (or portion hereof specified below) pursuant to its terms at
a price equal to the principal amount hereof together with interest to the
repayment date, to the undersigned, at __________________________________
_______________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Paying Agent must receive at its corporate
trust office in the City of Philadelphia, or at such other place or places of
which the Company shall from time to time notify the Holder of this Note, not
more than 60 nor less than 30 days prior to an Optional Repayment Date, if any,
shown on the face of this Note, this Note with this "Option to Elect Repayment"
form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be in increments of $1,000) which the
Holder elects to have repaid and specify the denomination or denominations
(which shall be in denominations of $1,000 and integral multiples thereof) of
the Notes to be issued to the Holder for the portion of this Note not being
repaid (in the absence of any such specification, one such Note will be issued
for the portion not being repaid): $_______.
Dated: ________________ _________________________________
NOTICE: The signature on this Option to Elect
Repayment must correspond with the name as written
upon the face of this Note in every particular,
without alteration or enlargement or any change
whatever.
11
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM--as tenants in common
UNIF GIFT MIN ACT--.............Custodian............
(Minor)
Under Uniform Gifts to Minors Act
.................................
(State)
TEN ENT--as tenants by the entireties
JT TEN-- as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not
in the above list.
_____________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please Insert Social Security or Other
Identifying Number of Assignee:
_____________________________
_________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING ZIP CODE OF ASSIGNEE:
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing _____________________________________
12
<PAGE>
______________________________________________________ attorney to transfer said
Note on the books of the Company, with full power of substitution in the
premises.
Dated: ___________________ _________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Note within instrument
in every particular, without alteration or
enlargement, or any change whatever.
13
<PAGE>
Exhibit 4(e)
DRAFT 5/19/94
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS
NOTE 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 NOTE 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 IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
THESE NOTES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY
INSURED DEPOSITARY INSTITUTION OR OTHER SUBSIDIARY OF THE ISSUER AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
REGISTERED REGISTERED
No. FLR $
CUSIP:
CORESTATES CAPITAL CORP
MEDIUM-TERM NOTE
(Senior Floating Rate)
Payment of Principal, Premium, if any, and Interest Guaranteed by
CORESTATES FINANCIAL CORP
<TABLE>
<CAPTION>
<S> <C> <C>
INTEREST RATE BASIS: ORIGINAL ISSUE DATE: STATED MATURITY DATE:
INDEX MATURITY: INITIAL INTEREST RATE: INTEREST PAYMENT
DATES:
SPREAD: INITIAL INTEREST RESET DATE: INTEREST RESET DATES:
SPREAD MULTIPLIER: INITIAL REDEMPTION DATE: MAXIMUM INTEREST RATE:
ANNUAL REDEMPTION INITIAL REDEMPTION MINIMUM INTEREST RATE:
PERCENTAGE REDUCTION: PERCENTAGE:
OPTIONAL REPAYMENT DATE(S): CALCULATION AGENT:
</TABLE>
<PAGE>
CoreStates Capital Corp, a corporation duly organized and validly existing
under the laws of the Commonwealth of Pennsylvania (the "Company"), for value
received, hereby promises to pay to
, or registered assigns, the principal sum of
DOLLARS
on the Stated Maturity Date specified above (except to the extent redeemed or
repaid prior to the Stated Maturity Date), and to pay interest thereon at a
rate per annum equal to the Initial Interest Rate specified above until the
Initial Interest Reset Date specified above and thereafter at a rate determined
in accordance with the provisions on the reverse hereof, depending upon the
Interest Rate Basis specified above, until the principal hereof is paid or duly
made available for payment. The Company will pay interest on Interest Payment
Dates specified above, commencing with the first Interest Payment Date next
succeeding the Original Issue Date specified above, and on the Stated Maturity
Date (or any Redemption Date as defined on the reverse hereof or any Holder's
Optional Repayment Date with respect to which such option has been exercised,
each such Stated Maturity Date, Redemption Date and Optional Repayment Date
being hereinafter referred to as a "Maturity Date" with respect to the
principal repayable on such date); provided, however, that if the Original
-------- -------
Issue Date occurs between a Regular Record Date (as defined below) and the next
succeeding Interest Payment Date, interest payments will commence on the second
Interest Payment Date next succeeding the Original Issue Date, to the Holder
(as defined below) of this Note on the Regular Record Date with respect to such
Interest Payment Date Regular Record Date; and provided, further, that if an
-------- -------
Interest Payment Date would fall on a day that is not a Business Day (as
defined on the reverse hereof) such Interest Payment Date shall be the
following day that is a Business Day, except that in the case the Interest Rate
Basis is LIBOR, if such next Business Day falls in the next succeeding calendar
month, such Interest Payment Date will be the preceding day that is a Business
Day. Interest payable on this Note on any Interest Payment Date will include
interest accrued from the Original Issue Date, or the most recent date for
which interest has been paid, to, but excluding, such Interest Payment Date;
provided, however, that if the Interest Rate Reset period with respect to this
-------- -------
Note is daily or weekly, interest payable on any Interest Payment Date will
include interest accrued to and including the Regular Record Date next
preceding such Interest Payment Date, except that interest payable on any such
Maturity Date will include interest accrued to, but excluding, such Maturity
Date. If any Maturity Date falls on a day which is not a Business Day,
principal, premium, if any, or interest payable with respect to such Maturity
Date will be paid on the next
2
<PAGE>
succeeding Business Day with the same force and effect as if made on such
Maturity Date, and no interest on such payment shall accrue for the period from
and after such Maturity Date. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, subject to certain
exceptions, be paid to the Person (the "Holder") in whose name this Note (or
one or more predecessor Notes) is registered at the close of business on the
date 15 calendar days prior to an Interest Payment Date (whether or not a
Business Day) (the "Regular Record Date"); provided, however, that interest
-------- -------
payable on any Maturity Date will be payable to the Person to whom the
principal hereof shall be payable. Any such interest not so punctually paid or
duly provided for ("Defaulted Interest") will forthwith cease to be payable to
the Holder on such Regular Record Date and may either be paid to the Person in
whose name this Note (or one or more Predecessor Securities) is registered at
the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee referred to on the reverse
hereof, notice whereof shall be given to the Holder of this Note not less than
10 days prior to such Special Record Date, or be paid at any time in any other
lawful manner, all as more fully provided in the Indenture (as defined on the
reverse hereof).
Payment of the principal of, and premium, if any, and interest on, this
Note will be made in immediately available funds at the corporate trust office
of CoreStates Bank, N.A. (the "Paying Agent") in the City of Philadelphia, or
at such other agency of the Company maintained for that purpose in the Borough
of Manhattan, The City of New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts. Payment of interest on any Interest Payment Date
other than the Maturity Date may be made at the option of the Company by check
mailed to the address of the Holder as such address shall appear in the
Security Register; provided, however, that a Holder of not less than
-------- -------
$10,000,000 aggregate principal amount of the Notes (whether having identical
terms and provisions) may, by written notice to the Paying Agent at its
corporate trust office in the City of Philadelphia (or at such other address as
the Company shall give notice in writing) on or before the Regular Record Date
preceding an Interest Payment Date, arrange to have the interest payable on all
Notes held by such Holder on such Interest Payment Date, and all subsequent
Interest Payment Dates until written notice to the contrary is given to the
Paying Agent, made by wire transfer of immediately available funds to an
account maintained at a bank in The City of New York (or other bank consented
to by the Company, which consent may not be unreasonably withheld) as such
Holder shall have designated; provided that such bank has appropriate
facilities therefor. Notwithstanding the preceding sentence, payments of
principal of, and premiums, if any, and interest on,
3
<PAGE>
any Maturity Date will be made by wire transfer of immediately available funds
to a designated account maintained in the United States upon (i) receipt of
written notice by the Paying Agent from the Holder hereof not less than one
Business Day prior to such Maturity Date and (ii) presentation of this Note at
the corporate trust office of the Paying Agent in the City of Philadelphia or
at such other agency of the Company maintained for that purpose in the Borough
of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the Certificate of Authentication hereon has been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
officers, this Note shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.
4
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and a facsimile of its corporate seal to be
imprinted hereon.
[SEAL] CORESTATES CAPITAL CORP
By: ______________________
Name:
Title:
Attest:
By: ______________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series
designated therein, referred to in the
within-mentioned Indenture.
NATIONSBANK OF GEORGIA, NATIONAL ASSOCIATION,
as Trustee
By: _____________________
Authorized Signatory
By: CORESTATES BANK, N.A.
As Authorized Agent
By: _____________________
Authorized Signatory
5
<PAGE>
[REVERSE OF NOTE]
CORESTATES CAPITAL CORP
MEDIUM-TERM NOTE
(Senior Floating Rate)
This Medium-Term Note is one of a duly authorized series of Securities
(the "Securities") of the Company issued and to be issued under a Senior
Indenture, dated as of December 1, 1990 (the "Indenture"), among the Company,
the Guarantor (as defined below) and NationsBank of Georgia, National
Association, as trustee and successor to Wachovia Bank of Georgia, N.A. (the
"Trustee", which term shall include any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights thereunder of the Company, the
Guarantor, the Trustee and the Holders of the Notes and the terms upon which
the Notes are, and are to be, authenticated and delivered. The Medium-Term
Notes (the "Notes") may bear different dates, mature at different times, bear
interest at different rates and vary in such other ways as are provided in the
Indenture.
This Note may be subject to repayment at the option of the Holder on the
Optional Repayment Date(s), if any, indicated on the face hereof. If no
Optional Repayment Dates are set forth on the face hereof, this Note may not be
so repaid at the option of the Holder hereof prior to the Stated Maturity Date.
On any Optional Repayment Date, this Note shall be repayable in whole or in
part in increments of $1,000 at the option of the Holder hereof at a repayment
price equal to 100% of the principal amount to be repaid together with accrued
interest thereon payable to the applicable Optional Repayment Date. For this
Note to be repaid in whole or in part at the option of the Holder hereof, this
Note must be received, with the form entitled "Option to Elect Repayment" below
duly completed, by the Paying Agent at its corporate trust office in the City
of Philadelphia, or at such other place or places as the Company shall from
time to time notify the Holders of the Notes, not more than 60 nor less than 30
days prior to the applicable Optional Repayment Date. Exercise of such
repayment option by the Holder hereof shall be irrevocable.
This Note may be redeemed at the option of the Company on any date on and
after the Initial Redemption Date, if any, specified on the face hereof (each
such date fixed for redemption, a "Redemption Date"). If no Initial Redemption
Date is set forth on the face hereof, this Note may not be redeemed at the
option of the Company prior to the Stated Maturity Date. On
6
<PAGE>
and after the Initial Redemption Date, if any, this Note may be redeemed at any
time in whole or from time to time in part in increments of $1,000 at the
option of the Company at the applicable Redemption Price referred to below
together with accrued interest thereon payable to the Redemption Date, on
notice given not more than 60 nor less than 30 days prior to the Redemption
Date. In the event of redemption of this Note in part only, a new Note for the
unredeemed portion hereof shall be issued in the name of the Holder hereof upon
the surrender hereof.
If this Note is redeemable at the option of the Company, the "Redemption
Price" shall initially be the Initial Redemption Percentage, specified on the
face hereof, of the principal amount of this Note to be redeemed and shall
decline at each anniversary of the Initial Redemption Date by the Annual
Redemption Percentage Reduction, if any, specified on the face hereof, of the
principal amount to be redeemed until the Redemption Price is 100% of such
principal amount.
Except as described below, this Note will bear interest at the rate
determined by reference to the Interest Rate Basis shown on the face hereof (i)
plus or minus the Spread, if any, and/or (ii) multiplied by the Spread
Multiplier, if any, specified on the face hereof. The interest rate in effect
on each day shall be (a) if such day is an Interest Reset Date, the interest
rate with respect to the Interest Determination Date referred to below
pertaining to such Interest Reset Date or (b) if such day is not an Interest
Reset Date, the interest rate with respect to the Interest Determination Date
pertaining to the next preceding Interest Reset Date, provided that (i) the
interest rate in effect from the Original Issue Date to the first Interest
Reset Date shall be the Initial Interest Rate specified on the face hereof, and
(ii) the interest rate in effect for the ten days immediately prior to the
Maturity Date shall be the rate in effect on the tenth day preceding the
Maturity Date. If any Interest Reset Date would otherwise be a day that is not
a Business Day, such Interest Reset Date shall be postponed to the next day
that is a Business Day, except that if the Interest Rate Basis specified on the
face hereof is LIBOR, if such Business Day is in the next succeeding calendar
month, such Interest Reset Date shall be the immediately preceding Business
Day.
Accrued interest hereon shall be an amount calculated by multiplying the
face amount hereof by an accrued interest factor. Such accrued interest factor
shall be computed by adding the interest factor calculated for each day from
the Original Issue Date or from the day succeeding the last date for which
interest shall have been paid, as the case may be, to the date for which
accrued interest is being calculated. The interest factor for
7
<PAGE>
each such day shall be computed by dividing the interest rate applicable to
such day by 360 or, in the case of Notes having the Treasury Rate as their
Interest Rate Basis, by the actual number of days in the year.
The Interest Determination Date with respect to the Certificate of Deposit
Rate, Commercial Paper Rate, Federal Funds Rate and Prime Rate will be the
second Business Day preceding the Interest Reset Date. The Interest
Determination Date with respect to the Eleventh District Cost of Funds Rate
will be the last working day of the month immediately preceding such Interest
Rate Reset Date on which the Federal Home Loan Bank of San Francisco (the "FHLB
of San Francisco") publishes the Index (as defined below). The Interest
Determination Date with respect to LIBOR shall be the second London Banking Day
(as defined below) preceding an Interest Reset Date. The Interest
Determination Date with respect to the Treasury Rate shall be the day of the
week in which such Interest Reset Date falls on which Treasury bills normally
would be auctioned; provided, however, that if as a result of a legal holiday
-------- -------
an auction is held on the Friday of the week preceding the Interest Reset Date,
the related Interest Determination Date shall be such preceding Friday; and
provided, further, that if an auction shall fall on any Interest Reset Date
-------- -------
then the Interest Reset Date shall instead be the first Business Day following
such auction.
The "Calculation Date" pertaining to any Interest Determination Date shall
be the earlier of (i) the tenth calendar day after such Interest Determination
Date or, if such day is not a Business Day, the next succeeding Business Day or
(ii) the Business Day preceding the applicable Interest Payment Date or
Maturity Date, as the case may be.
All percentages resulting from any calculation on the Notes will be
rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upward, and all
dollar amounts used in or resulting from such calculation on the Notes will be
rounded to the nearest cent (with one-half cent being rounded upward).
As used herein, "Business Day" means any day other than a Saturday,
Sunday, legal holiday or other day on which banking institutions in The City of
New York are authorized or required by law or executive order to close and,
with respect to Notes having LIBOR as the Interest Rate Basis, is also a London
Banking Day. "London Banking Day" means any day on which dealings in deposits
in U.S. dollars are transacted in the London interbank market.
8
<PAGE>
Determination of CD Rate. Certificate of Deposit Rate ("CD Rate") means,
------------------------
with respect to any Interest Determination Date (a "CD Interest Determination
Date"), the rate on such day for negotiable certificates of deposit having the
Index Maturity specified on the face hereof as published by the Board of
Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates," or any successor publication ("H.15(519)"), under the
heading "CDs (Secondary Market)," or, if not so published by 3:00 P.M., New
York City time, on the Calculation Date pertaining to such CD Interest
Determination Date, the CD Rate will be the rate on such CD Interest
Determination Date for negotiable certificates of deposit of the Index Maturity
specified on the face hereof as published by the Federal Reserve Bank of New
York in its daily statistical release "Composite 3:30 P.M. quotations for U.S.
Government Securities" ("Composite Quotations") under the heading "Certificates
of Deposit." If such rate is not published in either H.15(519) or the
Composite Quotations by 3:00 P.M., New York City time, on such Calculation
Date, then the CD Rate on such CD Interest Determination Date will be
calculated by the Calculation Agent and will be the arithmetic mean of the
secondary market offered rates as of 10:00 A.M., New York City time, on such CD
Interest Determination Date, of three leading nonbank dealers in negotiable
U.S. dollar certificates of deposit in The City of New York selected by the
Calculation Agent for negotiable certificates of deposit of major United States
money center banks (in the market for negotiable certificates of deposit) with
a remaining maturity closest to the Index Maturity specified on the face hereof
in denominations of $5,000,000; provided, however, that if the dealers selected
-------- -------
as aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the CD Rate with respect to such CD Interest Determination Date will
be the CD Rate in effect on such CD Interest Determination Date.
Determination of LIBOR. LIBOR means, with respect to any Interest
----------------------
Determination Date relating to a LIBOR Note (a "LIBOR Interest Determination
Date"), the rate determined by the Calculation Agent in accordance with the
following provisions:
(i) LIBOR will be determined as set forth on the face hereof, as either
(a) the arithmetic mean of the offered rates for deposits in U.S. dollars
having the Index Maturity specified on the face hereof, commencing on the
second London Banking Day immediately following such LIBOR Interest
Determination Date, that appear on the Reuters Screen LIBO Page as of 11:00
A.M., London time, on such LIBOR Interest Determination Date, if at least two
such offered rates appear on the Reuters Screen LIBO Page ("LIBOR Reuters"), or
(b) the rate for deposits in U.S. dollars having the Index Maturity specified
on the face hereof, commencing on the second London Banking Day immediately
following
9
<PAGE>
such LIBOR Interest Determination Date, that appears on Telerate Page 3750 as
of 11:00 A.M., London time, on such LIBOR Interest Determination Date ("LIBOR
Telerate"). "Reuters Screen LIBO Page" means the display designated as page
"LIBO" on the Reuters Monitor Money Rates Service (or such other page as may
replace page LIBO on that service for the purpose of displaying London
interbank offered rates of major banks). "Telerate Page 3750" means the
display designated as page "3750" on the Telerate Service (or such other page
as may replace the 3750 page on that service or such other service or services
as may be nominated by the British Bankers' Association for the purpose of
displaying London interbank offered rates for U.S. dollar deposits). If
neither LIBOR Reuters nor LIBOR Telerate is specified above, LIBOR will be
determined if LIBOR Telerate had been specified. If at least two such offered
rates appear on the Reuters Screen LIBO Page, the rate in respect of such LIBOR
Interest Determination Date will be the arithmetic mean of such offered rates
as determined by the Calculation Agent. If fewer than two offered rates appear
on the Reuters Screen LIBO Page, or if no rate appears on Telerate Page 3750,
as applicable, LIBOR in respect of such LIBOR Interest Determination Date will
be determined as if the parties had specified the rate described in (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which fewer
than two offered rates for the applicable Index Maturity appear on the Reuters
Screen LIBO Page, as specified in (i)(a) above, or on which no rate appears on
Telerate Page 3750, as specified in (i)(b) above, as applicable, LIBOR will be
determined on the basis of the rates at which deposits in U.S. dollars having
the Index Maturity specified above are offered at approximately 11:00 A.M.,
London time, on such LIBOR Interest Determination Date by four major banks in
the London interbank market selected by the Calculation Agent (the "Reference
Banks") to prime banks in the London interbank market, commencing on the second
London Banking Day immediately following such LIBOR Interest Determination Date
and in a principal amount equal to an amount of not less than U.S. $1 million
that is representative for a single transaction in such market at such time.
The Calculation Agent will request the principal London office of each of the
Reference Banks to provide a quotation of its rates. If at least two such
quotations are provided, LIBOR for such LIBOR Interest Determination Date will
be the arithmetic mean of such quotations. If fewer than two quotations are
provided, LIBOR for such LIBOR Interest Determination Date will be the
arithmetic mean of the rates quoted by 11:00 A.M., New York City time, on such
LIBOR Interest Determination Date by three major banks in The City of New York
selected by the Calculation Agent for loans in U.S. dollars to leading European
banks, having the Index Maturity specified in the applicable Pricing
Supplement,
10
<PAGE>
commencing on the second London Banking Day immediately following such LIBOR
Interest Determination Date and in a principal amount equal to an amount of not
less than U.S. $1 million that is representative for a single transaction in
such market at such time; provided, however, that if the banks selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, LIBOR will be LIBOR in effect on such LIBOR Interest Determination
Date.
Determination of Commercial Paper Rate. The Commercial Paper Rate means,
--------------------------------------
with respect to any Interest Determination Date (a "Commercial Paper Interest
Determination Date"), the Money Market Yield (as defined below) on such date of
the rate for commercial paper having the Index Maturity specified on the face
hereof as published H.15(519) under the heading "Commercial Paper." In the
event such rate is not published by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Commercial Paper Interest Determination
Date, then the Commercial Paper Rate shall be the Money Market Yield on such
Commercial Paper Interest Determination Date of the rate for commercial paper
having the Index Maturity shown on the face hereof as published in Composite
Quotations under the heading "Commercial Paper." If the rate for a Commercial
Paper Interest Determination Date is not published in either H.15(519) or
Composite Quotations by 3:00 P.M., New York City time, on such Calculation
Date, the Commercial Paper Rate for that Commercial Paper Rate Interest
Determination Date shall be calculated by the Calculation Agent and shall be
the Money Market Yield of the arithmetic mean of the offered rates as of 11:00
A.M., New York City time, on such Commercial Paper Interest Determination Date
of three leading dealers of commercial paper in The City of New York selected
by the Calculation Agent on such Commercial Paper Interest Determination Date,
for commercial paper of the Index Maturity specified on the face hereof placed
for an industrial issuer whose bond rating is "AA," or the equivalent, from a
nationally recognized statistical rating agency; provided, however, that if the
-------- -------
dealers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Commercial Paper Rate with respect to such
Commercial Paper Interest Determination Date will be the Commercial Paper Rate
then in effect on such Commercial Paper Interest Determination Date.
"Money Market Yield" shall be the yield (expressed as a percentage)
calculated in accordance with the following formula:
Money Market Yield = D x 360
--------------------- x 100
360 - (D x M)
11
<PAGE>
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal, and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
Determination of Federal Funds Rate. The Federal Funds Rate means, with
-----------------------------------
respect to any Interest Determination Date (a "Federal Funds Rate Interest
Determination Date"), the rate on that date for Federal Funds as published in
H.15(519) under the heading "Federal Funds (Effective)" or, if not so published
by 3:00 P.M., New York City time, on the Calculation Date pertaining to such
Federal Funds Rate Interest Determination Date, the Federal Funds Rate will be
the rate on such Federal Funds Rate Interest Determination Date as published in
Composite Quotations under the heading "Federal Funds/Effective Rate." If such
rate is not yet published in either H.15(519) or Composite Quotations by 3:00
P.M., New York City time, on the Calculation Date pertaining to such Federal
Funds Rate Interest Determination Date, the Federal Funds Rate for such Federal
Funds Rate Interest Determination Date will be calculated by the Calculation
Agent and will be the arithmetic mean of the rates for the last transaction in
overnight Federal Funds arranged by three leading brokers of Federal Funds
transactions in The City of New York selected by the Calculation Agent as of
9:00 A.M., New York City time, on such Federal Funds Rate Interest
Determination Date; provided, however, that if the brokers selected as
-------- -------
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Federal Funds Rate with respect to such Federal Funds Rate
Interest Determination Date will be the Federal Funds Rate then in effect on
such Federal Funds Rate Interest Determination Date.
Determination of Prime Rate. Prime Rate means, with respect to any
---------------------------
Interest Determination Date (a "Prime Rate Interest Determination Date") means
the rate set forth in H.15(519) for such date opposite the caption "Bank Prime
Loan." If such rate is not yet published by 9:00 A.M., New York City time, on
the Calculation Date, the Prime Rate for such Prime Rate Interest Determination
Date will be the arithmetic mean of the rates of interest publicly announced by
each bank named on the Reuters Screen NYMF Page as such bank's prime rate or
base lending rate as in effect for such Prime Rate Interest Determination Date
as quoted on the Reuters Screen NYMF Page on such Prime Rate Interest
Determination Date, or, if fewer than four such rates appear on the Reuters
Screen NYMF Page for such Prime Rate Interest Determination Date, the rate
shall be the arithmetic mean of the prime rates quoted on the basis of the
actual number of days in the year divided by 360 as of the close of business on
such Prime Rate Interest Determination Date by at least two of the three major
money center banks in The City of New York
12
<PAGE>
selected by the Calculation Agent from which quotations are requested. If
fewer than two quotations are provided, the Prime Rate shall be calculated by
the Calculation Agent and shall be determined as the arithmetic mean of the
prime rates quoted in The City of New York on such date by the approximate
number of banks or trust companies organized and doing business under the laws
of the United States, or any State thereof, each having total equity capital of
at least $500 million and being subject to supervision or examination by a
Federal or State authority, selected by the Calculation Agent to quote such
rate or rates; provided, however, that if the Prime Rate is not published in
-------- -------
H.15(519) and the banks or trust companies selected as aforesaid are not
quoting as mentioned in this sentence, the Prime Rate with respect to such
Prime Rate Interest Determination Date will be the interest rate otherwise in
effect on such Prime Rate Interest Determination Date. "Reuters Screen NYMF
Page" means the display designated as page "NYMF" on the Reuters Monitor Money
Rates Service (or such other page as may replace page NYMF on that service for
the purpose of displaying prime rates or base lending rates of major United
States banks).
Determination of Treasury Rate. Treasury Rate means, with respect to any
------------------------------
Interest Determination Date (a "Treasury Interest Determination Date"), the
rate applicable to the most recent auction of direct obligations of the United
States ("Treasury Bills") having the Index Maturity specified on the face
hereof, as such rate is published in H.15(519) under the heading "Treasury
Bills -- auction average (investment)" or, if not so published by 3:00 P.M.,
New York City time, on the Calculation Date pertaining to such Treasury
Interest Determination Date, the auction average rate (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United States
Department of the Treasury. In the event that the results of the auction of
Treasury bills having the Index Maturity specified on the face hereof are not
reported as provided by 3:00 P.M., New York City time, on such Calculation
Date, or if no such auction is held in a particular week, then the Treasury
Rate shall be a yield to maturity (expressed as a bond equivalent, on the basis
of a year of 365 or 366 days, as applicable, and applied on a daily basis) of
the arithmetic mean of the secondary market bid rates, as of approximately 3:30
P.M., New York City time, on such Treasury Interest Determination Date, of
three leading primary United States government securities dealers selected by
the Calculation Agent, for the issue of Treasury bills with a remaining
maturity closest to the Index Maturity specified on the face hereof; provided,
--------
however, that if the dealers selected as aforesaid by the Calculation Agent are
-------
not quoting as mentioned in this sentence, Treasury Rate with respect to such
Treasury
13
<PAGE>
Rate Interest Determination Date will be the Treasury Rate then in effect on
such Treasury Rate Interest Determination Date.
Determination of Eleventh District Cost of Funds Rate. Eleventh District
-----------------------------------------------------
Cost of Funds Rate means, with respect to any Interest Determination Date (an
"Eleventh District Cost of Funds Interest Determination Date"), the rate equal
to the monthly weighted average cost of funds for the calendar month preceding
such Eleventh District Cost of Funds Rate Interest Determination Date as set
forth under the caption "11th District" on Telerate Page 7058 as of 11:00 A.M.,
San Francisco time, on such Eleventh District Cost of Funds Rate Interest
Determination Date. If such rate does not appear on Telerate Page 7058 on any
related Eleventh District Cost of Funds Rate Interest Determination Date, the
Eleventh District Cost of Funds Rate for such Eleventh District Cost of Funds
Rate Interest Determination Date shall be the monthly weighted average cost of
funds paid by member institutions of the Eleventh Federal Home Loan Bank
District that was most recently announced (the "Index") by the FHLB of San
Francisco as such cost of funds for the calendar month preceding the date of
such announcement. If the FHLB of San Francisco fails to announce such rate
for the calendar month next preceding such Eleventh District Cost of Funds Rate
Interest Determination Date, then the Eleventh District Cost of Funds Rate for
such Eleventh District Cost of Funds Rate Interest Determination Date will be
the Eleventh District Cost of Funds Rate in effect on such Eleventh District
Cost of Funds Rate Interest Determination Date.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, specified on the face hereof. The Calculation Agent
shall calculate the interest rate hereon in accordance with the foregoing on or
before each Calculation Date. The interest rate on this Note will in no event
be higher than the maximum rate permitted by New York law, as the same may be
modified by United States law of general application.
At the request of the Holder hereof, the Calculation Agent will provide to
the Holder hereof the interest rate hereon then in effect and, if determined,
the interest rate which will become effective as of the next Interest Reset
Date.
Except as may be provided in the Indenture, if an Event of Default with
respect to the Notes shall occur and be continuing, the Trustee or the Holders
of not less than 25% in principal amount of the Outstanding Notes may declare
the principal of all the Notes due and payable in the manner and with the
effect provided in the Indenture.
14
<PAGE>
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the Guarantor and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company, the
Guarantor, and the Trustee with the consent of the Holders of not less than
66 2/3% in aggregate principal amount of the Securities at the time
Outstanding of each series affected thereby. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of each series, to waive compliance
by the Company or the Guarantor with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent or waiver is made upon
this Note.
The Guarantor, or a Subsidiary (as defined in the Indenture) thereof, may
directly assume, by a supplemental indenture, the due and punctual payment of
the principal of, and premium, if any, and interest on, all of the Securities,
in which case the Company shall be released from its liability as obligor on
the Securities.
The Indenture provides that the Company and the Guarantor, at their
option, (a) will be discharged from any and all obligations in respect of the
Notes (except for certain obligations to register the transfer of or exchange
Notes, replace stolen, lost or mutilated Notes and maintain paying agencies) or
(b) need not comply with certain provisions of the Indenture, in each case if
the Company or the Guarantor deposits, in trust, with the Trustee money or U.S.
Government Obligations (as defined in the Indenture) which, with respect to
U.S. Government Obligations, through the payment of interest thereon and
principal thereof in accordance with their terms will provide money, in an
amount in cash sufficient to pay all the principal of and interest on the
Securities on the dates such payments are due in accordance with the terms of
such Notes, and certain other conditions are satisfied.
No reference herein to the Indenture and no provision of this Note 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 Note at the times, places and rate, and in the coin or
currency, herein prescribed.
15
<PAGE>
As provided in the Indenture, and subject to certain limitations therein
set forth, the transfer of this Note may be registered on the Security Register
of the Company upon surrender of this Note for registration of transfer at the
corporate trust office of CoreStates Bank, N.A., as Security Registrar, in the
City of Philadelphia or at such other agency of the Company maintained for that
purpose in the Borough of Manhattan, The City of New York, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company, and this Note duly executed by, the Holder hereof or by his attorney
duly authorized in writing and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in minimum
denominations of $1,000 or any amount in excess thereof which is an integral
multiple of $1,000. As provided in the Indenture, and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal amount of Notes in authorized denominations, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer or
exchange, the Company, the Guarantor, the Trustee and any agent of the Company,
the Guarantor or the Trustee may treat the Holder as the owner hereof for all
purposes, whether or not this Note is overdue, and neither the Company, the
Guarantor, the Trustee nor any agent thereof shall be affected by notice to the
contrary.
The Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to agreements
made and to be performed in such State.
All terms used but not defined herein shall have the meanings assigned to
such terms in the Indenture.
GUARANTEE OF CORESTATES FINANCIAL CORP
For value received, CoreStates Financial Corp, a Pennsylvania corporation
(the "Guarantor"), hereby unconditionally guarantees to the Holder of this Note
the due and punctual payment of the principal of, and premium, if any, and
16
<PAGE>
interest on (including any Additional Amounts payable in respect thereof), this
Note when and as the same shall become due and payable, whether at the Stated
Maturity Date or upon acceleration, redemption, repayment or otherwise,
according to the terms of the Indenture. In case of the failure of the Company
punctually to make any such payment of principal, premium, if any, or interest,
the Guarantor hereby agrees to cause any such payment to be made punctually
when and as the same shall become due and payable, whether at the Stated
Maturity Date or upon acceleration, redemption, repayment or otherwise, and as
if such payment were made by the Company.
The Guarantor hereby agrees that its obligations under this Guarantee
shall be as principal and not merely as surety, and shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of this Note or the Indenture, any failure to
enforce the provisions of this Note or the Indenture, or any waiver,
modification, consent or indulgence granted to the Company with respect thereto
by the Holder of this Note or the Trustee, the recovery of any judgment against
the Company or any action to enforce the same, or any other circumstance which
may otherwise constitute a legal or equitable discharge of a surety or
guarantor. The Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of merger or bankruptcy of
the Company, any right to require a proceeding first against the Company,
protest or notice with respect to this Note or the indebtedness evidenced
hereby and all demands whatsoever, and covenants that this Guarantee will not
be discharged except by payment in full of the principal of, and premium, if
any, and interest on, this Note and the complete performance of all other
obligations contained herein.
The Guarantor shall be subrogated to all rights of the Holder of this Note
against the Company in respect of any amounts paid to such Holder by the
Guarantor pursuant to the provisions of this Guarantee; provided, however, that
-------- -------
the Guarantor shall not be entitled to enforce, or to receive any payments
arising out of or based upon, such right of subrogation until payment in full
of the principal of, and premium, if any, and interest on, the Note and the
complete performance of all other obligations contained herein.
Subject to the next following paragraph, the Guarantor hereby certifies
and warrants that all acts, conditions and things required to be done and
performed and to have happened precedent to the creation and issuance of this
Guarantee and to constitute the same the valid obligation of the Guarantor have
been done and performed and have happened in due compliance with all applicable
laws.
17
<PAGE>
Unless the Certificate of Authentication hereon has been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
officers, this Guarantee shall not be valid or obligatory for any purposes.
This Guarantee shall be governed by, and construed in accordance with, the
laws of the State of New York.
18
<PAGE>
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly
executed in facsimile by its duly authorized officer under its corporate seal.
Dated:
[SEAL] CORESTATES FINANCIAL CORP
By: _____________________________
Name:
Title:
Attest:
By: _________________________
Name:
Title:
19
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the Company
to repay this Note (or portion hereof specified below) pursuant to its terms at
a price equal to the principal amount hereof together with interest to the
repayment date, to the undersigned, at ___________________________________
__________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Paying Agent must receive at its corporate
trust office in the City of Philadelphia, or at such other place or places of
which the Company shall from time to time notify the Holder of this Note, not
more than 60 nor less than 30 days prior to an Optional Repayment Date, if any,
shown on the face of this Note, this Note with this "Option to Elect Repayment"
form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be in increments of $1,000) which the
Holder elects to have repaid and specify the denomination or denominations
(which shall be in denominations of $1,000 and integral multiples thereof) of
the Notes to be issued to the Holder for the portion of this Note not being
repaid (in the absence of any such specification, one such Note will be issued
for the portion not being repaid): $_______.
Date ________________ ________________________________________
NOTICE: The signature on this Option to
Elect Repayment must correspond with the
name as written upon the face of this
Note in every particular, without
alteration or enlargement or any change
whatever.
20
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM--as tenants in common
UNIF GIFT MIN ACT--.............Custodian............
(Minor)
Under Uniform Gifts to Minors Act
.................................
(State)
TEN ENT--as tenants by the entireties
JT TEN-- as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not
in the above list.
_____________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please Insert Social Security or Other
Identifying Number of Assignee:
_____________________________
_________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING ZIP CODE OF ASSIGNEE:
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing _____________________________________
21
<PAGE>
______________________________________________________ attorney to transfer
said Note on the books of the Company, with full power of substitution in the
premises.
Dated: ___________________ _________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Note within
instrument in every particular, without
alteration or enlargement, or any change
whatever.
22
<PAGE>
Exhibit 4(f)
DRAFT 5/19/94
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS
NOTE 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 NOTE 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 IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
THESE NOTES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY
INSURED DEPOSITARY INSTITUTION OR OTHER SUBSIDIARY OF THE ISSUER AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
REGISTERED REGISTERED
No. FXR- $
CUSIP:
CORESTATES CAPITAL CORP
MEDIUM-TERM NOTE
(Subordinated Fixed Rate)
Payment of Principal, Premium, if any, and Interest Guaranteed by
CORESTATES FINANCIAL CORP
ORIGINAL ISSUE DATE: INTEREST RATE: STATED MATURITY DATE:
____________________ __________% _______________________
INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION DATE:
PERCENTAGE: PERCENTAGE REDUCTION:
____________________ _________________ _______________________
OPTIONAL REPAYMENT
DATE(S):
____________________
<PAGE>
CoreStates Capital Corp, a Pennsylvania corporation (the "Company"), for
value received, hereby promises to pay to
, or registered
assigns, the principal sum of
DOLLARS
on the Stated Maturity Date specified above (except to the extent redeemed or
repaid prior to the Stated Maturity Date), and to pay interest thereon at the
Interest Rate per annum specified above, until the principal hereof is paid or
duly made available for payment, semiannually on March 15 and September 15
(each, an "Interest Payment Date") in each year commencing on the first
Interest Payment Date next succeeding the Original Issue Date specified above,
unless the Original Issue Date occurs between a Regular Record Date (as
defined below) and the next succeeding Interest Payment Date, in which case
commencing on the second Interest Payment Date succeeding the Original Issue
Date, to the Holder (as defined below) of such Note on the Regular Record Date
with respect to such Interest Payment Date, and on the Stated Maturity Date
shown above (or any Redemption Date as defined on the reverse hereof or any
Holder's Optional Repayment Date with respect to which such option has been
exercised, each such Stated Maturity Date, Redemption Date and Optional
Repayment Date being herein referred to as a "Maturity Date" with respect to
the principal repayable on such date). Interest on this Note will accrue from
the most recent Interest Payment Date to which interest has been paid or duly
provided for or, if no interest has been paid, from the Original Issue Date
specified above, until the principal hereof has been paid or duly made
available for payment. If the Maturity Date or an Interest Payment Date falls
on a day which is not a Business Day (as defined below), principal, premium,
if any, and interest payable with respect to such Maturity Date or Interest
Payment Date will be paid on the next succeeding Business Day with the same
force and effect as if made on such Maturity Date or Interest Payment Date, as
the case may be, and no interest on each payment shall accrue for the period
from and after such Maturity Date or Interest Payment Date. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment
Date will, subject to certain exceptions, be paid to the Person (the "Holder")
in whose name this Note (or one or more predecessor Notes) is registered at
the close of business on the Regular Record Date, which shall be the March 1
or September 1 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date; provided, however, that interest payable
-------- -------
on the Maturity Date will be payable to the Person to whom the principal
hereof shall be payable. Any such interest not so punctually paid or duly
provided for ("Defaulted Interest") will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in
whose name this Note (or one or more
2
<PAGE>
predecessor Notes) is registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest to be fixed by the Trustee
referred to on the reverse hereof, notice whereof shall be given to the Holder
of this Note not less than 10 days prior to such Special Record Date, or be paid
at any time in any other lawful manner, all as more fully provided in the
Indenture (as defined on the reverse hereof). As used herein, "Business Day"
means any day other than a Saturday, Sunday, legal holiday or other day on which
banks in The City of New York or Columbus, Ohio are required or authorized by
law or executive order to close.
Payment of the principal of, and premium, if any, and interest on, this
Note will be made in immediately available funds at the corporate trust office
of CoreStates Bank, N.A. (the "Paying Agent") in the City of Philadelphia, or at
such other agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York, in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts. Payment of interest on any Interest Payment Date other than the
Maturity Date may be made at the option of the Company by check mailed to the
address of the Holder as such address shall appear in the Security Register;
provided, however, that a Holder of not less than $10,000,000 aggregate
- -------- -------
principal amount of the Notes (whether having identical terms and provisions)
may, by written notice to the Paying Agent at its corporate trust office in the
City of Philadelphia (or at such other address as the Company shall give notice
in writing) on or before the Regular Record Date preceding an Interest Payment
Date, arrange to have the interest payable on all Notes held by such Holder on
such Interest Payment Date, and all subsequent Interest Payment Dates until
written notice to the contrary is given to the Paying Agent, made by wire
transfer of immediately available funds to an account maintained at a bank in
The City of New York (or other bank consented to by the Company, which consent
may not be unreasonably withheld) as such Holder shall have designated; provided
that such bank has appropriate facilities therefor. Notwithstanding the
preceding sentence, payments of principal of, and premiums, if any, and interest
on, any Maturity Date will be made by wire transfer of immediately available
funds to a designated account maintained in the United States upon (i) receipt
of written notice by the Paying Agent from the Holder hereof not less than one
Business Day prior to such Maturity Date and (ii) presentation of this Note at
the corporate trust office of the Paying Agent in the City of Philadelphia or at
such other office or agency of the Company maintained for that purpose in the
Borough of Manhattan, The City of New York.
3
<PAGE>
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the Certificate of Authentication hereon has been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
officers, this Note shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and a facsimile of its corporate seal to be
imprinted hereon.
[SEAL] CORESTATES CAPITAL CORP
By: ______________________
Name:
Title:
Attest:
By: ___________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series
designated therein, referred to in the
within-mentioned Indenture.
CITIBANK, N.A.,
as Trustee
By: _______________________
Authorized Signatory
By: CORESTATES BANK, N.A.
As Authenticating Agent
By: _______________________
Authorized Signatory
4
<PAGE>
[REVERSE OF NOTE]
CORESTATES CAPITAL CORP
MEDIUM-TERM NOTE
(Subordinated Fixed Rate)
This Medium-Term Note is one of a duly authorized series of Securities (the
"Securities") of the Company issued and to be issued under a Subordinated
Indenture, dated as of December 1, 1990, as amended by a First Supplemental
Indenture, dated as of March 1, 1993 and a Second Supplemental Indenture, dated
as of ______ __, 1994 (together, the "Indenture"), among the Company, the
Guarantor (as defined below) and Citibank, N.A., as trustee and successor to
Wachovia Bank of Georgia, N.A. (the "Trustee", which term shall include any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights thereunder of the Company, the Guarantor, the Trustee and the Holders of
the Notes and the terms upon which the Notes are, and are to be, authenticated
and delivered. The Medium-Term Notes (the "Notes") may bear different dates,
mature at different times, bear interest at different rates and vary in such
other ways as are provided in the Indenture.
The payment of principal of and premium, if any, and interest (including
any Additional Amounts payable in respect thereof) on this Note is expressly
subordinated and subject in right of payment, as provided in the Indenture, to
the prior payment of any and all Senior Company Indebtedness, as defined in the
Indenture, and this Note is subject to such provisions, and each Holder of this
Note, by accepting the same, agrees, expressly for the benefit of present and
future holders of Senior Company Indebtedness, whether now or hereafter
outstanding, to and shall be bound by such provisions.
This Note may be subject to repayment at the option of the Holder on the
Optional Repayment Date(s), if any, indicated on the face hereof. If no
Optional Repayment Dates are set forth on the face hereof, this Note may not be
so repaid at the option of the Holder hereof prior to the Stated Maturity Date.
On any Optional Repayment Date, this Note shall be repayable in whole or in part
in increments of $1,000 at the option of the Holder hereof at a repayment price
equal to 100% of the principal amount to be repaid together with accrued
interest thereon payable to the applicable Optional Repayment Date. For this
Note to be repaid in whole or in part at the option of the Holder hereof, this
Note must be received, with the form entitled "Option to Elect Repayment" below
duly completed, by the Paying Agent at its
5
<PAGE>
corporate trust office in the City of Philadelphia, or at such other place or
places as the Company shall from time to time notify the Holders of the Notes,
not more than 60 nor less than 30 days prior to the applicable Optional
Repayment Date. Exercise of such repayment option by the Holder hereof shall be
irrevocable.
This Note may be redeemed at the option of the Company on any date on and
after the Initial Redemption Date, if any, specified on the face hereof (each
such date fixed for redemption, a "Redemption Date"). If no Initial Redemption
Date is set forth on the face hereof, this Note may not be redeemed at the
option of the Company prior to the Stated Maturity Date. On and after the
Initial Redemption Date, if any, this Note may be redeemed at any time in whole
or from time to time in part in increments of $1,000 at the option of the
Company at the applicable Redemption Price referred to below together with
accrued interest thereon payable to the Redemption Date, on notice given not
more than 60 nor less than 30 days prior to the Redemption Date. In the event
of redemption of this Note in part only, a new Note for the unredeemed portion
hereof shall be issued in the name of the Holder hereof upon the surrender
hereof.
If this Note is redeemable at the option of the Company, the "Redemption
Price" shall initially be the Initial Redemption Percentage, specified on the
face hereof, of the principal amount of this Note to be redeemed and shall
decline at each anniversary of the Initial Redemption Date by the Annual
Redemption Percentage Reduction, if any, specified on the face hereof, of the
principal amount to be redeemed until the Redemption Price is 100% of such
principal amount.
Interest payments on this Note will include interest accrued to but
excluding the Interest Payment Date or the Maturity Date, as the case may be.
Interest payments for this Note will be computed and paid on the basis of a
360-day year of twelve 30-day months.
Except as may be provided in the Indenture, if an Event of Default with
respect to the Notes shall occur and be continuing, the Trustee or the Holders
of not less than 25% in principal amount of the Outstanding Notes may declare
the principal of all the Notes due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the Guarantor and the rights of the Holders of the Securities of
each series to be
6
<PAGE>
affected under the Indenture at any time by the Company, the Guarantor, and the
Trustee with the consent of the Holders of not less than 66 2/3% in aggregate
principal amount of the Securities at the time Outstanding of each series
affected thereby. The Indenture also contains provisions permitting the Holders
of specified percentages in aggregate principal amount of the Securities of each
series at the time Outstanding, on behalf of the Holders of all Securities of
each series, to waive compliance by the Company or the Guarantor with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note.
The Guarantor, or a Subsidiary (as defined in the Indenture) thereof, may
directly assume, by a supplemental indenture, the due and punctual payment of
the principal of, and premium, if any, and interest on, all of the Securities,
in which case the Company shall be released from its liability as obligor on the
Securities.
No reference herein to the Indenture and no provision of this Note 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 Note at the times, places and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture, and subject to certain limitations therein
set forth, the transfer of this Note may be registered on the Security Register
of the Company upon surrender of this Note for registration of transfer at the
corporate trust office of CoreStates Bank, N.A., as Security Registrar, in the
City of Philadelphia or at such other agency of the Company maintained for that
purpose in the Borough of Manhattan, The City of New York, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company, and this Note duly executed by, the Holder hereof or by his attorney
duly authorized in writing and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Notes are issuable only in registered form without coupons in minimum
denominations of $1,000 or any amount in excess thereof which is an integral
multiple of $1,000. As provided in the Indenture, and subject to certain
limitations
7
<PAGE>
therein set forth, the Notes are exchangeable for a like aggregate principal
amount of Notes in authorized denominations, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer or
exchange, the Company, the Guarantor, the Trustee and any agent of the Company,
the Guarantor or the Trustee may treat the Holder as the owner hereof for all
purposes, whether or not this Note is overdue, and neither the Company, the
Guarantor, the Trustee nor any agent thereof shall be affected by notice to the
contrary.
The Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to agreements made
and to be performed in such State.
All terms used but not defined herein shall have the meanings assigned to
such terms in the Indenture.
GUARANTEE OF CORESTATES FINANCIAL CORP
For value received, CoreStates Financial Corp, a Pennsylvania corporation
(the "Guarantor"), hereby unconditionally guarantees to the Holder of this Note
the due and punctual payment of the principal of, and premium, if any, and
interest on (including any Additional Amounts payable in respect thereof), this
Note when and as the same shall become due and payable, whether at the Stated
Maturity Date or upon acceleration, redemption, repayment or otherwise,
according to the terms of the Indenture. In case of the failure of the Company
punctually to make any such payment of principal, premium, if any, or interest,
the Guarantor hereby agrees to cause any such payment to be made punctually when
and as the same shall become due and payable, whether at the Stated Maturity
Date or upon acceleration, redemption, repayment or otherwise, and as if such
payment were made by the Company.
The payment of principal of and premium, if any, and interest (including
any Additional Amounts payable in respect thereof) on the Notes under the
Guarantee is expressly subordinated and subject in right of payment, as provided
in the Indenture, to the prior payment of any and all Senior Guarantor
Indebtedness, as defined in the Indenture, and this Guarantee and
8
<PAGE>
the related Note are subject to such provisions, and each Holder of the Notes,
by accepting the same, agrees, expressly for the benefit of present and future
holders of Senior Guarantor Indebtedness, whether now or hereafter outstanding,
to and shall be bound by such provisions.
The Guarantor hereby agrees that its obligations under this Guarantee shall
be as principal and not merely as surety, and shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of this Note or the Indenture, any failure to
enforce the provisions of this Note or the Indenture, or any waiver,
modification, consent or indulgence granted to the Company with respect thereto
by the Holder of this Note or the Trustee, the recovery of any judgment against
the Company or any action to enforce the same, or any other circumstance which
may otherwise constitute a legal or equitable discharge of a surety or
guarantor. The Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of merger or bankruptcy of
the Company, any right to require a proceeding first against the Company,
protest or notice with respect to this Note or the indebtedness evidenced hereby
and all demands whatsoever, and covenants that this Guarantee will not be
discharged except by payment in full of the principal of, and premium, if any,
and interest on, this Note and the complete performance of all other obligations
contained herein.
The Guarantor shall be subrogated to all rights of the Holder of this Note
against the Company in respect of any amounts paid to such Holder by the
Guarantor pursuant to the provisions of this Guarantee; provided, however, that
-------- -------
the Guarantor shall not be entitled to enforce, or to receive any payments
arising out of or based upon, such right of subrogation until payment in full of
the principal of, and premium, if any, and interest on, the Note and the
complete performance of all other obligations contained herein.
Subject to the next following paragraph, the Guarantor hereby certifies and
warrants that all acts, conditions and things required to be done and performed
and to have happened precedent to the creation and issuance of this Guarantee
and to constitute the same the valid obligation of the Guarantor have been done
and performed and have happened in due compliance with all applicable laws.
Unless the Certificate of Authentication hereon has been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
officers, this Guarantee shall not be valid or obligatory for any purposes.
9
<PAGE>
This Guarantee shall be governed by, and construed in accordance with, the
laws of the State of New York.
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly
executed in facsimile by its duly authorized officer under its corporate seal.
Dated:_____________________
[SEAL] CORESTATES FINANCIAL CORP
By:______________________
Name:
Title:
Attest:
By:________________________
Name:
Title:
10
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the Company
to repay this Note (or portion hereof specified below) pursuant to its terms at
a price equal to the principal amount hereof together with interest to the
repayment date, to the undersigned, at _______________________________________
______________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Paying Agent must receive at its corporate
trust office in the City of Philadelphia, or at such other place or places of
which the Company shall from time to time notify the Holder of this Note, not
more than 60 nor less than 30 days prior to an Optional Repayment Date, if any,
shown on the face of this Note, this Note with this "Option to Elect Repayment"
form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be in increments of $1,000) which the
Holder elects to have repaid and specify the denomination or denominations
(which shall be in denominations of $1,000 and integral multiples thereof) of
the Notes to be issued to the Holder for the portion of this Note not being
repaid (in the absence of any such specification, one such Note will be issued
for the portion not being repaid): $_______.
Dated: ________________ _________________________________
NOTICE: The signature on this Option to Elect
Repayment must correspond with the name as written
upon the face of this Note in every particular,
without alteration or enlargement or any change
whatever.
11
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM--as tenants in common
UNIF GIFT MIN ACT--.............Custodian............
(Minor)
Under Uniform Gifts to Minors Act
.................................
(State)
TEN ENT--as tenants by the entireties
JT TEN-- as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not
in the above list.
_____________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please Insert Social Security or Other
Identifying Number of Assignee:
_____________________________
_________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING ZIP CODE OF ASSIGNEE:
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing _____________________________________
12
<PAGE>
______________________________________________________ attorney to transfer said
Note on the books of the Company, with full power of substitution in the
premises.
Dated: ___________________ _________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Note within instrument
in every particular, without alteration or
enlargement, or any change whatever.
13
<PAGE>
Exhibit 4(g)
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS
NOTE 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 NOTE 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 IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
THESE NOTES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY
INSURED DEPOSITARY INSTITUTION OR OTHER SUBSIDIARY OF THE ISSUER AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
REGISTERED REGISTERED
No. FLR $
CUSIP:
CORESTATES CAPITAL CORP
MEDIUM-TERM NOTE
(Subordinated Floating Rate)
Payment of Principal, Premium, if any, and Interest Guaranteed by
CORESTATES FINANCIAL CORP
INTEREST RATE BASIS: ORIGINAL ISSUE DATE: STATED MATURITY DATE:
INDEX MATURITY: INITIAL INTEREST RATE: INTEREST PAYMENT
DATES:
SPREAD: INITIAL INTEREST RESET DATE: INTEREST RESET DATES:
SPREAD MULTIPLIER: INITIAL REDEMPTION DATE: MAXIMUM INTEREST RATE:
ANNUAL REDEMPTION INITIAL REDEMPTION MINIMUM INTEREST RATE:
PERCENTAGE REDUCTION: PERCENTAGE:
OPTIONAL REPAYMENT DATE(S): CALCULATION AGENT:
<PAGE>
CoreStates Capital Corp, a corporation duly organized and validly existing
under the laws of the Commonwealth of Pennsylvania (the "Company"), for value
received, hereby promises to pay to
, or registered assigns, the principal sum of
DOLLARS
on the Stated Maturity Date specified above (except to the extent redeemed or
repaid prior to the Stated Maturity Date), and to pay interest thereon at a
rate per annum equal to the Initial Interest Rate specified above until the
Initial Interest Reset Date specified above and thereafter at a rate determined
in accordance with the provisions on the reverse hereof, depending upon the
Interest Rate Basis specified above, until the principal hereof is paid or duly
made available for payment. The Company will pay interest on Interest Payment
Dates specified above, commencing with the first Interest Payment Date next
succeeding the Original Issue Date specified above, and on the Stated Maturity
Date (or any Redemption Date as defined on the reverse hereof or any Holder's
Optional Repayment Date with respect to which such option has been exercised,
each such Stated Maturity Date, Redemption Date and Optional Repayment Date
being hereinafter referred to as a "Maturity Date" with respect to the
principal repayable on such date); provided, however, that if the Original
-------- -------
Issue Date occurs between a Regular Record Date (as defined below) and the next
succeeding Interest Payment Date, interest payments will commence on the second
Interest Payment Date next succeeding the Original Issue Date, to the Holder
(as defined below) of this Note on the Regular Record Date with respect to such
Interest Payment Date Regular Record Date; and provided, further, that if an
-------- -------
Interest Payment Date would fall on a day that is not a Business Day (as
defined on the reverse hereof) such Interest Payment Date shall be the
following day that is a Business Day, except that in the case the Interest Rate
Basis is LIBOR, if such next Business Day falls in the next succeeding calendar
month, such Interest Payment Date will be the preceding day that is a Business
Day. Interest payable on this Note on any Interest Payment Date will include
interest accrued from the Original Issue Date, or the most recent date for
which interest has been paid, to, but excluding, such Interest Payment Date;
provided, however, that if the Interest Rate Reset period with respect to this
- -------- -------
Note is daily or weekly, interest payable on any Interest Payment Date will
include interest accrued to and including the Regular Record Date next
preceding such Interest Payment Date, except that interest payable on any such
Maturity Date will include interest accrued to, but excluding, such Maturity
Date. If any Maturity Date falls on a day which is not a Business Day,
principal, premium, if any, or interest payable with respect to such Maturity
Date will be paid on the next succeeding Business Day with the same force and
effect as if made
2
<PAGE>
on such Maturity Date, and no interest on such payment shall accrue for the
period from and after such Maturity Date. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will,
subject to certain exceptions, be paid to the Person (the "Holder") in whose
name this Note (or one or more predecessor Notes) is registered at the close of
business on the date 15 calendar days prior to an Interest Payment Date
(whether or not a Business Day) (the "Regular Record Date"); provided, however,
-------- -------
that interest payable on any Maturity Date will be payable to the Person to
whom the principal hereof shall be payable. Any such interest not so
punctually paid or duly provided for ("Defaulted Interest") will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Note (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee referred to
on the reverse hereof, notice whereof shall be given to the Holder of this Note
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner, all as more fully provided in the Indenture (as
defined on the reverse hereof).
Payment of the principal of, and premium, if any, and interest on, this
Note will be made in immediately available funds at the corporate trust office
of CoreStates Bank, N.A. (the "Paying Agent") in the City of Philadelphia, or
at such other agency of the Company maintained for that purpose in the Borough
of Manhattan, The City of New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts. Payment of interest on any Interest Payment Date
other than the Maturity Date may be made at the option of the Company by check
mailed to the address of the Holder as such address shall appear in the
Security Register; provided, however, that a Holder of not less than
-------- -------
$10,000,000 aggregate principal amount of the Notes (whether having identical
terms and provisions) may, by written notice to the Paying Agent at its
corporate trust office in the City of Philadelphia (or at such other address as
the Company shall give notice in writing) on or before the Regular Record Date
preceding an Interest Payment Date, arrange to have the interest payable on all
Notes held by such Holder on such Interest Payment Date, and all subsequent
Interest Payment Dates until written notice to the contrary is given to the
Paying Agent, made by wire transfer of immediately available funds to an
account maintained at a bank in The City of New York (or other bank consented
to by the Company, which consent may not be unreasonably withheld) as such
Holder shall have designated; provided that such bank has appropriate
facilities therefor. Notwithstanding the preceding sentence, payments of
principal of, and premiums, if any, and interest on, any Maturity Date will be
made by wire transfer of immediately
3
<PAGE>
available funds to a designated account maintained in the United States upon
(i) receipt of written notice by the Paying Agent from the Holder hereof not
less than one Business Day prior to such Maturity Date and (ii) presentation of
this Note at the corporate trust office of the Paying Agent in the City of
Philadelphia or at such other agency of the Company maintained for that purpose
in the Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the Certificate of Authentication hereon has been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
officers, this Note shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.
4
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and a facsimile of its corporate seal to be
imprinted hereon.
[SEAL] CORESTATES CAPITAL CORP
By: ______________________
Name:
Title:
Attest:
By: _____________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series
designated therein, referred to in the
within-mentioned Indenture.
CITIBANK, N.A.,
as Trustee
By: _________________________
Authorized Signatory
By: CORESTATES BANK, N.A.
As Authenticating Agent
By: _________________________
Authorized Signatory
5
<PAGE>
[REVERSE OF NOTE]
CORESTATES CAPITAL CORP
MEDIUM-TERM NOTE
(Subordinated Floating Rate)
This Medium-Term Note is one of a duly authorized series of Securities
(the "Securities") of the Company issued and to be issued under a Subordinated
Indenture, dated as of December 1, 1990, as amended by a First Supplemental
Indenture, dated as of March 1, 1993 and a Second Supplemental Indenture, dated
as of _______ __, 1994 (together, the "Indenture"), among the Company, the
Guarantor (as defined below) and Citibank, N.A., as trustee (the "Trustee",
which term shall include any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for
a statement of the respective rights thereunder of the Company, the Guarantor,
the Trustee and the Holders of the Notes and the terms upon which the Notes
are, and are to be, authenticated and delivered. The Medium-Term Notes (the
"Notes") may bear different dates, mature at different times, bear interest at
different rates and vary in such other ways as are provided in the Indenture.
The payment of principal of and premium, if any, and interest (including
any Additional Amounts payable in respect thereof) on this Note is expressly
subordinated and subject in right of payment, as provided in the Indenture, to
the prior payment of any and all Senior Company Indebtedness, as defined in the
Indenture, and this Note is subject to such provisions, and each Holder of this
Note, by accepting the same, agrees, expressly for the benefit of present and
future holders of Senior Company Indebtedness, whether now or hereafter
outstanding, to and shall be bound by such provisions.
This Note may be subject to repayment at the option of the Holder on the
Optional Repayment Date(s), if any, indicated on the face hereof. If no
Optional Repayment Dates are set forth on the face hereof, this Note may not be
so repaid at the option of the Holder hereof prior to the Stated Maturity Date.
On any Optional Repayment Date, this Note shall be repayable in whole or in
part in increments of $1,000 at the option of the Holder hereof at a repayment
price equal to 100% of the principal amount to be repaid together with accrued
interest thereon payable to the applicable Optional Repayment Date. For this
Note to be repaid in whole or in part at the option of the Holder hereof, this
Note must be received, with the form entitled "Option to Elect Repayment" below
duly completed, by the Paying Agent at its corporate trust office in the City
of Philadelphia, or at such
6
<PAGE>
other place or places as the Company shall from time to time notify the Holders
of the Notes, not more than 60 nor less than 30 days prior to the applicable
Optional Repayment Date. Exercise of such repayment option by the Holder
hereof shall be irrevocable.
This Note may be redeemed at the option of the Company on any date on and
after the Initial Redemption Date, if any, specified on the face hereof (each
such date fixed for redemption, a "Redemption Date"). If no Initial Redemption
Date is set forth on the face hereof, this Note may not be redeemed at the
option of the Company prior to the Stated Maturity Date. On and after the
Initial Redemption Date, if any, this Note may be redeemed at any time in whole
or from time to time in part in increments of $1,000 at the option of the
Company at the applicable Redemption Price referred to below together with
accrued interest thereon payable to the Redemption Date, on notice given not
more than 60 nor less than 30 days prior to the Redemption Date. In the event
of redemption of this Note in part only, a new Note for the unredeemed portion
hereof shall be issued in the name of the Holder hereof upon the surrender
hereof.
If this Note is redeemable at the option of the Company, the "Redemption
Price" shall initially be the Initial Redemption Percentage, specified on the
face hereof, of the principal amount of this Note to be redeemed and shall
decline at each anniversary of the Initial Redemption Date by the Annual
Redemption Percentage Reduction, if any, specified on the face hereof, of the
principal amount to be redeemed until the Redemption Price is 100% of such
principal amount.
Except as described below, this Note will bear interest at the rate
determined by reference to the Interest Rate Basis shown on the face hereof (i)
plus or minus the Spread, if any, and/or (ii) multiplied by the Spread
Multiplier, if any, specified on the face hereof. The interest rate in effect
on each day shall be (a) if such day is an Interest Reset Date, the interest
rate with respect to the Interest Determination Date referred to below
pertaining to such Interest Reset Date or (b) if such day is not an Interest
Reset Date, the interest rate with respect to the Interest Determination Date
pertaining to the next preceding Interest Reset Date, provided that (i) the
interest rate in effect from the Original Issue Date to the first Interest
Reset Date shall be the Initial Interest Rate specified on the face hereof, and
(ii) the interest rate in effect for the ten days immediately prior to the
Maturity Date shall be the rate in effect on the tenth day preceding the
Maturity Date. If any Interest Reset Date would otherwise be a day that is not
a Business Day, such Interest Reset Date shall be postponed to the
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<PAGE>
next day that is a Business Day, except that if the Interest Rate Basis
specified on the face hereof is LIBOR, if such Business Day is in the next
succeeding calendar month, such Interest Reset Date shall be the immediately
preceding Business Day.
Accrued interest hereon shall be an amount calculated by multiplying the
face amount hereof by an accrued interest factor. Such accrued interest factor
shall be computed by adding the interest factor calculated for each day from
the Original Issue Date or from the day succeeding the last date for which
interest shall have been paid, as the case may be, to the date for which
accrued interest is being calculated. The interest factor for each such day
shall be computed by dividing the interest rate applicable to such day by 360
or, in the case of Notes having the Treasury Rate as their Interest Rate Basis,
by the actual number of days in the year.
The Interest Determination Date with respect to the Certificate of Deposit
Rate, Commercial Paper Rate, Federal Funds Rate and Prime Rate will be the
second Business Day preceding the Interest Reset Date. The Interest
Determination Date with respect to the Eleventh District Cost of Funds Rate
will be the last working day of the month immediately preceding such Interest
Rate Reset Date on which the Federal Home Loan Bank of San Francisco (the "FHLB
of San Francisco") publishes the Index (as defined below). The Interest
Determination Date with respect to LIBOR shall be the second London Banking Day
(as defined below) preceding an Interest Reset Date. The Interest
Determination Date with respect to the Treasury Rate shall be the day of the
week in which such Interest Reset Date falls on which Treasury bills normally
would be auctioned; provided, however, that if as a result of a legal holiday
-------- -------
an auction is held on the Friday of the week preceding the Interest Reset Date,
the related Interest Determination Date shall be such preceding Friday; and
provided, further, that if an auction shall fall on any Interest Reset Date
- -------- -------
then the Interest Reset Date shall instead be the first Business Day following
such auction.
The "Calculation Date" pertaining to any Interest Determination Date shall
be the either of (i) the tenth calendar day after such Interest Determination
Date or, if such day is not a Business Day, the next succeeding Business Day or
(ii) the Business Day preceding the applicable Interest Payment Date or
Maturity Date, as the case may be.
All percentages resulting from any calculation on the Notes will be
rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upward, and all
dollar amounts used in or resulting from such calculation on the
8
<PAGE>
Notes will be rounded to the nearest cent (with one-half cent being rounded
upward).
As used herein, "Business Day" means any day other than a Saturday,
Sunday, legal holiday or other day on which banking institutions in The City of
New York or Columbus, Ohio are authorized or required by law or executive order
to close and, with respect to Notes having LIBOR as the Interest Rate Basis, is
also a London Banking Day. "London Banking Day" means any day on which
dealings in deposits in U.S. dollars are transacted in the London interbank
market.
Determination of CD Rate. Certificate of Deposit Rate ("CD Rate") means,
------------------------
with respect to any Interest Determination Date (a "CD Interest Determination
Date"), the rate on such day for negotiable certificates of deposit having the
Index Maturity specified on the face hereof as published by the Board of
Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates," or any successor publication ("H.15(519)"), under the
heading "CDs (Secondary Market)," or, if not so published by 3:00 P.M., New
York City time, on the Calculation Date pertaining to such CD Interest
Determination Date, the CD Rate will be the rate on such CD Interest
Determination Date for negotiable certificates of deposit of the Index Maturity
specified on the face hereof as published by the Federal Reserve Bank of New
York in its daily statistical release "Composite 3:30 P.M. quotations for U.S.
Government Securities" ("Composite Quotations") under the heading "Certificates
of Deposit." If such rate is not published in either H.15(519) or the
Composite Quotations by 3:00 P.M., New York City time, on such Calculation
Date, then the CD Rate on such CD Interest Determination Date will be
calculated by the Calculation Agent and will be the arithmetic mean of the
secondary market offered rates as of 10:00 A.M., New York City time, on such CD
Interest Determination Date, of three leading nonbank dealers in negotiable
U.S. dollar certificates of deposit in The City of New York selected by the
Calculation Agent for negotiable certificates of deposit of major United States
money center banks (in the market for negotiable certificates of deposit) with
a remaining maturity closest to the Index Maturity specified on the face hereof
in denominations of $5,000,000; provided, however, that if the dealers selected
-------- -------
as aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the CD Rate with respect to such CD Interest Determination Date will
be the CD Rate in effect on such CD Interest Determination Date.
Determination of LIBOR. LIBOR means, with respect to any Interest
----------------------
Determination Date relating to a LIBOR Note (a "LIBOR Interest Determination
Date"), the rate determined by the Calculation Agent in accordance with the
following provisions:
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<PAGE>
(i) LIBOR will be determined as set forth on the face hereof, as either
(a) the arithmetic mean of the offered rates for deposits in U.S. dollars
having the Index Maturity specified on the face hereof, commencing on the
second London Banking Day immediately following such LIBOR Interest
Determination Date, that appear on the Reuters Screen LIBO Page as of 11:00
A.M., London time, on such LIBOR Interest Determination Date, if at least two
such offered rates appear on the Reuters Screen LIBO Page ("LIBOR Reuters"), or
(b) the rate for deposits in U.S. dollars having the Index Maturity specified
on the face hereof, commencing on the second London Banking Day immediately
following such LIBOR Interest Determination Date, that appears on Telerate Page
3750 as of 11:00 A.M., London time, on such LIBOR Interest Determination Date
("LIBOR Telerate"). "Reuters Screen LIBO Page" means the display designated as
page "LIBO" on the Reuters Monitor Money Rates Service (or such other page as
may replace page LIBO on that service for the purpose of displaying London
interbank offered rates of major banks). "Telerate Page 3750" means the
display designated as page "3750" on the Telerate Service (or such other page
as may replace the 3750 page on that service or such other service or services
as may be nominated by the British Bankers' Association for the purpose of
displaying London interbank offered rates for U.S. dollar deposits). If
neither LIBOR Reuters nor LIBOR Telerate is specified above, LIBOR will be
determined if LIBOR Telerate had been specified. If at least two such offered
rates appear on the Reuters Screen LIBO Page, the rate in respect of such LIBOR
Interest Determination Date will be the arithmetic mean of such offered rates
as determined by the Calculation Agent. If fewer than two offered rates appear
on the Reuters Screen LIBO Page, or if no rate appears on Telerate Page 3750,
as applicable, LIBOR in respect of such LIBOR Interest Determination Date will
be determined as if the parties had specified the rate described in (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which fewer
than two offered rates for the applicable Index Maturity appear on the Reuters
Screen LIBO Page, as specified in (i)(a) above, or on which no rate appears on
Telerate Page 3750, as specified in (i)(b) above, as applicable, LIBOR will be
determined on the basis of the rates at which deposits in U.S. dollars having
the Index Maturity specified above are offered at approximately 11:00 A.M.,
London time, on such LIBOR Interest Determination Date by four major banks in
the London interbank market selected by the Calculation Agent (the "Reference
Banks") to prime banks in the London interbank market, commencing on the second
London Banking Day immediately following such LIBOR Interest Determination Date
and in a principal amount equal to an amount of not less than U.S. $1 million
that is representative for a single transaction in such market at such time.
The
10
<PAGE>
Calculation Agent will request the principal London office of each of the
Reference Banks to provide a quotation of its rates. If at least two such
quotations are provided, LIBOR for such LIBOR Interest Determination Date will
be the arithmetic mean of such quotations. If fewer than two quotations are
provided, LIBOR for such LIBOR Interest Determination Date will be the
arithmetic mean of the rates quoted by 11:00 A.M., New York City time, on such
LIBOR Interest Determination Date by three major banks in The City of New York
selected by the Calculation Agent for loans in U.S. dollars to leading European
banks, having the Index Maturity specified in the applicable Pricing
Supplement, commencing on the second London Banking Day immediately following
such LIBOR Interest Determination Date and in a principal amount equal to an
amount of not less than U.S. $1 million that is representative for a single
transaction in such market at such time; provided, however, that if the banks
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, LIBOR will be LIBOR in effect on such LIBOR Interest
Determination Date.
Determination of Commercial Paper Rate. The Commercial Paper Rate means,
--------------------------------------
with respect to any Interest Determination Date (a "Commercial Paper Interest
Determination Date"), the Money Market Yield (as defined below) on such date of
the rate for commercial paper having the Index Maturity specified on the face
hereof as published H.15(519) under the heading "Commercial Paper." In the
event such rate is not published by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Commercial Paper Interest Determination
Date, then the Commercial Paper Rate shall be the Money Market Yield on such
Commercial Paper Interest Determination Date of the rate for commercial paper
having the Index Maturity shown on the face hereof as published in Composite
Quotations under the heading "Commercial Paper." If the rate for a Commercial
Paper Interest Determination Date is not published in either H.15(519) or
Composite Quotations by 3:00 P.M., New York City time, on such Calculation
Date, the Commercial Paper Rate for that Commercial Paper Rate Interest
Determination Date shall be calculated by the Calculation Agent and shall be
the Money Market Yield of the arithmetic mean of the offered rates as of 11:00
A.M., New York City time, on such Commercial Paper Interest Determination Date
of three leading dealers of commercial paper in The City of New York selected
by the Calculation Agent on such Commercial Paper Interest Determination Date,
for commercial paper of the Index Maturity specified on the face hereof placed
for an industrial issuer whose bond rating is "AA," or the equivalent, from a
nationally recognized statistical rating agency; provided, however, that if the
-------- -------
dealers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Commercial Paper Rate with respect to such
Commercial Paper
11
<PAGE>
Interest Determination Date will be the Commercial Paper Rate then in effect on
such Commercial Paper Interest Determination Date.
"Money Market Yield" shall be the yield (expressed as a percentage)
calculated in accordance with the following formula:
D x 360
Money Market Yield = --------------------- x 100
360 - (D x M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal, and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
Determination of Federal Funds Rate. The Federal Funds Rate means, with
-----------------------------------
respect to any Interest Determination Date (a "Federal Funds Rate Interest
Determination Date"), the rate on that date for Federal Funds as published in
H.15(519) under the heading "Federal Funds (Effective)" or, if not so published
by 3:00 P.M., New York City time, on the Calculation Date pertaining to such
Federal Funds Rate Interest Determination Date, the Federal Funds Rate will be
the rate on such Federal Funds Rate Interest Determination Date as published in
Composite Quotations under the heading "Federal Funds/Effective Rate." If such
rate is not yet published in either H.15(519) or Composite Quotations by 3:00
P.M., New York City time, on the Calculation Date pertaining to such Federal
Funds Rate Interest Determination Date, the Federal Funds Rate for such Federal
Funds Rate Interest Determination Date will be calculated by the Calculation
Agent and will be the arithmetic mean of the rates for the last transaction in
overnight Federal Funds arranged by three leading brokers of Federal Funds
transactions in The City of New York selected by the Calculation Agent as of
9:00 A.M., New York City time, on such Federal Funds Rate Interest
Determination Date; provided, however, that if the brokers selected as
-------- -------
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Federal Funds Rate with respect to such Federal Funds Rate
Interest Determination Date will be the Federal Funds Rate then in effect on
such Federal Funds Rate Interest Determination Date.
Determination of Prime Rate. Prime Rate means, with respect to any
---------------------------
Interest Determination Date (a "Prime Rate Interest Determination Date") means
the rate set forth in H.15(519) for such date opposite the caption "Bank Prime
Loan." If such rate is not yet published by 9:00 A.M., New York City time, on
the Calculation Date, the Prime Rate for such Prime Rate Interest Determination
Date will be the arithmetic mean of the rates of interest publicly announced by
each bank named on the Reuters
12
<PAGE>
Screen NYMF Page as such bank's prime rate or base lending rate as in effect
for such Prime Rate Interest Determination Date as quoted on the Reuters Screen
NYMF Page on such Prime Rate Interest Determination Date, or, if fewer than
four such rates appear on the Reuters Screen NYMF Page for such Prime Rate
Interest Determination Date, the rate shall be the arithmetic mean of the prime
rates quoted on the basis of the actual number of days in the year divided by
360 as of the close of business on such Prime Rate Interest Determination Date
by at least two of the three major money center banks in The City of New York
selected by the Calculation Agent from which quotations are requested. If
fewer than two quotations are provided, the Prime Rate shall be calculated by
the Calculation Agent and shall be determined as the arithmetic mean of the
prime rates quoted in The City of New York on such date by the approximate
number of banks or trust companies organized and doing business under the laws
of the United States, or any State thereof, each having total equity capital of
at least $500 million and being subject to supervision or examination by a
Federal or State authority, selected by the Calculation Agent to quote such
rate or rates; provided, however, that if the Prime Rate is not published in
-------- -------
H.15(519) and the banks or trust companies selected as aforesaid are not
quoting as mentioned in this sentence, the Prime Rate with respect to such
Prime Rate Interest Determination Date will be the interest rate otherwise in
effect on such Prime Rate Interest Determination Date. "Reuters Screen NYMF
Page" means the display designated as page "NYMF" on the Reuters Monitor Money
Rates Service (or such other page as may replace page NYMF on that service for
the purpose of displaying prime rates or base lending rates of major United
States banks).
Determination of Treasury Rate. Treasury Rate means, with respect to any
------------------------------
Interest Determination Date (a "Treasury Interest Determination Date"), the
rate applicable to the most recent auction of direct obligations of the United
States ("Treasury Bills") having the Index Maturity specified on the face
hereof, as such rate is published in H.15(519) under the heading "Treasury
Bills -- auction average (investment)" or, if not so published by 3:00 P.M.,
New York City time, on the Calculation Date pertaining to such Treasury
Interest Determination Date, the auction average rate (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United States
Department of the Treasury. In the event that the results of the auction of
Treasury bills having the Index Maturity specified on the face hereof are not
reported as provided by 3:00 P.M., New York City time, on such Calculation
Date, or if no such auction is held in a particular week, then the Treasury
Rate shall be a yield to maturity (expressed as a bond equivalent, on the basis
of a year of 365 or 366 days, as applicable, and applied on a
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<PAGE>
daily basis) of the arithmetic mean of the secondary market bid rates, as of
approximately 3:30 P.M., New York City time, on such Treasury Interest
Determination Date, of three leading primary United States government
securities dealers selected by the Calculation Agent, for the issue of Treasury
bills with a remaining maturity closest to the Index Maturity specified on the
face hereof; provided, however, that if the dealers selected as aforesaid by
-------- -------
the Calculation Agent are not quoting as mentioned in this sentence, Treasury
Rate with respect to such Treasury Rate Interest Determination Date will be the
Treasury Rate then in effect on such Treasury Rate Interest Determination Date.
Determination of Eleventh District Cost of Funds Rate. Eleventh District
-----------------------------------------------------
Cost of Funds Rate means, with respect to any Interest Determination Date (an
"Eleventh District Cost of Funds Interest Determination Date"), the rate equal
to the monthly weighted average cost of funds for the calendar month preceding
such Eleventh District Cost of Funds Rate Interest Determination Date as set
forth under the caption "11th District" on Telerate Page 7058 as of 11:00 A.M.,
San Francisco time, on such Eleventh District Cost of Funds Rate Interest
Determination Date. If such rate does not appear on Telerate Page 7058 on any
related Eleventh District Cost of Funds Rate Interest Determination Date, the
Eleventh District Cost of Funds Rate for such Eleventh District Cost of Funds
Rate Interest Determination Date shall be the monthly weighted average cost of
funds paid by member institutions of the Eleventh Federal Home Loan Bank
District that was most recently announced (the "Index") by the FHLB of San
Francisco as such cost of funds for the calendar month preceding the date of
such announcement. If the FHLB of San Francisco fails to announce such rate
for the calendar month next preceding such Eleventh District Cost of Funds Rate
Interest Determination Date, then the Eleventh District Cost of Funds Rate for
such Eleventh District Cost of Funds Rate Interest Determination Date will be
the Eleventh District Cost of Funds Rate in effect on such Eleventh District
Cost of Funds Rate Interest Determination Date.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, specified on the face hereof. The Calculation Agent
shall calculate the interest rate hereon in accordance with the foregoing on or
before each Calculation Date. The interest rate on this Note will in no event
be higher than the maximum rate permitted by New York law, as the same may be
modified by United States law of general application.
At the request of the Holder hereof, the Calculation Agent will provide to
the Holder hereof the interest rate hereon then
14
<PAGE>
in effect and, if determined, the interest rate which will become effective as
of the next Interest Reset Date.
Except as may be provided in the Indenture, if an Event of Default with
respect to the Notes shall occur and be continuing, the Trustee or the Holders
of not less than 25% in principal amount of the Outstanding Notes may declare
the principal of all the Notes due and payable in the manner and with the
effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the Guarantor and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company, the
Guarantor, and the Trustee with the consent of the Holders of not less than
66 2/3% in aggregate principal amount of the Securities at the time Outstanding
of each series affected thereby. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of each series, to waive compliance by the Company or
the Guarantor with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note.
The Guarantor, or a Subsidiary (as defined in the Indenture) thereof, may
directly assume, by a supplemental indenture, the due and punctual payment of
the principal of, and premium, if any, and interest on, all of the Securities,
in which case the Company shall be released from its liability as obligor on
the Securities.
No reference herein to the Indenture and no provision of this Note 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 Note at the times, places and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture, and subject to certain limitations therein
set forth, the transfer of this Note may be registered on the Security Register
of the Company upon surrender of this Note for registration of transfer at the
corporate trust office of CoreStates Bank, N.A., as Security Registrar, in the
15
<PAGE>
City of Philadelphia or at such other agency of the Company maintained for that
purpose in the Borough of Manhattan, The City of New York, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company, and this Note duly executed by, the Holder hereof or by his attorney
duly authorized in writing and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in minimum
denominations of $1,000 or any amount in excess thereof which is an integral
multiple of $1,000. As provided in the Indenture, and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal amount of Notes in authorized denominations, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer or
exchange, the Company, the Guarantor, the Trustee and any agent of the Company,
the Guarantor or the Trustee may treat the Holder as the owner hereof for all
purposes, whether or not this Note is overdue, and neither the Company, the
Guarantor, the Trustee nor any agent thereof shall be affected by notice to the
contrary.
The Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to agreements
made and to be performed in such State.
All terms used but not defined herein shall have the meanings assigned to
such terms in the Indenture.
GUARANTEE OF CORESTATES FINANCIAL CORP
For value received, CoreStates Financial Corp, a Pennsylvania corporation
(the "Guarantor"), hereby unconditionally guarantees to the Holder of this Note
the due and punctual payment of the principal of, and premium, if any, and
interest on (including any Additional Amounts payable in respect thereof), this
Note when and as the same shall become due and payable, whether at the Stated
Maturity Date or upon acceleration, redemption, repayment or otherwise,
according to the terms of the Indenture. In case of the failure of the
16
<PAGE>
Company punctually to make any such payment of principal, premium, if any, or
interest, the Guarantor hereby agrees to cause any such payment to be made
punctually when and as the same shall become due and payable, whether at the
Stated Maturity Date or upon acceleration, redemption, repayment or otherwise,
and as if such payment were made by the Company.
The payment of the principal of and premium, if any, and interest
(including any Additional Amounts payable in respect thereof) on the Notes
under the Guarantee is expressly subordinated and subject in right of payment,
as provided in the Indenture, to the prior payment of any and all Senior
Guarantor Indebtedness, as defined in the Indenture, and this Guarantee and the
related Note are subject to such provisions, and each Holder of the Notes, by
accepting the same, agrees, expressly for the benefit of present and future
holders of Senior Guarantor Indebtedness, whether now or hereafter outstanding,
to and shall be bound by such provisions.
The Guarantor hereby agrees that its obligations under this Guarantee
shall be as principal and not merely as surety, and shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of this Note or the Indenture, any failure to
enforce the provisions of this Note or the Indenture, or any waiver,
modification, consent or indulgence granted to the Company with respect thereto
by the Holder of this Note or the Trustee, the recovery of any judgment against
the Company or any action to enforce the same, or any other circumstance which
may otherwise constitute a legal or equitable discharge of a surety or
guarantor. The Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of merger or bankruptcy of
the Company, any right to require a proceeding first against the Company,
protest or notice with respect to this Note or the indebtedness evidenced
hereby and all demands whatsoever, and covenants that this Guarantee will not
be discharged except by payment in full of the principal of, and premium, if
any, and interest on, this Note and the complete performance of all other
obligations contained herein.
The Guarantor shall be subrogated to all rights of the Holder of this Note
against the Company in respect of any amounts paid to such Holder by the
Guarantor pursuant to the provisions of this Guarantee; provided, however, that
-------- -------
the Guarantor shall not be entitled to enforce, or to receive any payments
arising out of or based upon, such right of subrogation until payment in full
of the principal of, and premium, if any, and interest on, the Note and the
complete performance of all other obligations contained herein.
17
<PAGE>
Subject to the next following paragraph, the Guarantor hereby certifies
and warrants that all acts, conditions and things required to be done and
performed and to have happened precedent to the creation and issuance of this
Guarantee and to constitute the same the valid obligation of the Guarantor have
been done and performed and have happened in due compliance with all applicable
laws.
Unless the Certificate of Authentication hereon has been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
officers, this Guarantee shall not be valid or obligatory for any purposes.
This Guarantee shall be governed by, and construed in accordance with, the
laws of the State of New York.
18
<PAGE>
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly
executed in facsimile by its duly authorized officer under its corporate seal.
Dated:
[SEAL] CORESTATES FINANCIAL CORP
By: _____________________________
Name:
Title:
Attest:
By: ______________________________
Name:
Title:
19
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the Company
to repay this Note (or portion hereof specified below) pursuant to its terms at
a price equal to the principal amount hereof together with interest to the
repayment date, to the undersigned, at ___________________________________
______________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Paying Agent must receive at its corporate
trust office in the City of Philadelphia, or at such other place or places of
which the Company shall from time to time notify the Holder of this Note, not
more than 60 nor less than 30 days prior to an Optional Repayment Date, if any,
shown on the face of this Note, this Note with this "Option to Elect Repayment"
form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be in increments of $1,000) which the
Holder elects to have repaid and specify the denomination or denominations
(which shall be in denominations of $1,000 and integral multiples thereof) of
the Notes to be issued to the Holder for the portion of this Note not being
repaid (in the absence of any such specification, one such Note will be issued
for the portion not being repaid): $_______.
Date ________________ _________________________________
NOTICE: The signature on this Option to Elect
Repayment must correspond with the name as
written upon the face of this Note in every
particular, without alteration or enlargement or
any change whatever.
20
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM--as tenants in common
UNIF GIFT MIN ACT--.............Custodian............
(Minor)
Under Uniform Gifts to Minors Act
.................................
(State)
TEN ENT--as tenants by the entireties
JT TEN-- as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not
in the above list.
_____________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please Insert Social Security or Other
Identifying Number of Assignee:
_____________________________
_________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING ZIP CODE OF ASSIGNEE:
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing _____________________________________
21
<PAGE>
______________________________________________________ attorney to transfer
said Note on the books of the Company, with full power of substitution in the
premises.
Dated: ___________________ _________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Note within
instrument in every particular, without
alteration or enlargement, or any change
whatever.
22
<PAGE>
EXHIBIT 23(A)
CONSENT OF INDEPENDENT AUDITORS
We consent to reference to our firm under the caption "Experts" in Amendment
No. 1 to the Registration Statement (Form S-3) and related Prospectus of
CoreStates Financial Corp and CoreStates Capital Corp for the registration of
$1,000,000,000 of various classes of securities and to the incorporation by
reference therein of our report dated February 1, 1994, except for Note 2, as
to which the date is March 16, 1994, with respect to the consolidated financial
statements of CoreStates Financial Corp for the year ended December 31, 1993
(restated to include Constellation Bancorp which was acquired on March 16,
1994), included in CoreStates Financial Corp's Form 8-K dated May 5, 1994,
filed with the Securities and Exchange Commission.
Ernst & Young
Philadelphia, Pennsylvania
June 7, 1994
<PAGE>
EXHIBIT 23(B)
INDEPENDENT AUDITORS' CONSENT
We consent to the use of our report, incorporated herein by reference, dated
March 16, 1994, except as to the last paragraph of Notes 2 and 16 which are as
of March 29, 1994, relating to the consolidated statements of condition of
Constellation Bancorp and subsidiaries as of December 31, 1993 and 1992, and
the related consolidated statements of operations, changes in shareholders'
equity, and cash flows for each of the years in the three-year period ended
December 31, 1993, which report appears in the March 16, 1994 Form 8-K, as
amended on May 5, 1994, of CoreStates Financial Corp. Our report refers to a
change in accounting for postretirement benefits other than pensions, income
taxes and certain investments in debt and equity securities in 1993. We also
consent to the reference to our Firm under the heading "Experts" in the
Registration Statement.
KPMG Peat Marwick
Short Hills, New Jersey
June 3, 1994
<PAGE>
EXHIBIT 23(C)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement
on Form S-3 of CoreStates Financial Corp and CoreStates Capital Corp of our
report, which includes an explanatory paragraph related to a change in the
method of accounting for investments in 1993, dated January 19, 1994, on our
audit of the consolidated financial statements of Independence Bancorp, Inc. as
of December 31, 1993 and for the year ended December 31, 1993 included in Form
8-K of CoreStates Financial Corp dated June 8, 1994. We also consent to the
reference to our Firm under the caption "Experts."
/s/ Coopers & Lybrand
Philadelphia, Pennsylvania
June 8, 1994
<PAGE>
EXHIBIT 23(D)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of CoreStates Capital Corp and CoreStates Financial Corp on Form S-3 of our
report dated January 21, 1994, except for Note 16 which is dated March 7, 1994,
relating to the consolidated financial statements of Germantown Savings Bank
for the year ended December 31, 1993, which appears in the Current Report on
Form 8-K of CoreStates Financial Corp dated April 29, 1994 and to the reference
to us under the heading "Experts" in the Registration Statement.
/s/ Deloitte & Touche
Philadelphia, Pennsylvania
June 8, 1994
<PAGE>
Exhibit 26(a)
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)
---------------
NATIONSBANK OF GEORGIA, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
58-0193243
(I.R.S. employer identification no.)
600 Peachtree Street, N.E.
Suite 900
Atlanta, Georgia 30308
(Address of principal executive offices)
(Zip Code)
-----------------------------
John T. Henderson
NationsBank of Georgia, National Association
Area Administration
6000 Feldwood Road
College Park, Georgia 30349
(404) 774-6074
(Name, Address and telephone number of agent for service)
---------------
with a copy to:
NationsBank of Georgia, National Association
Corporate Trust
600 Peachtree Street, Suite 900
Atlanta, GA 30308
------------------------
CORESTATES CAPITAL CORP CORESTATES FINANCIAL CORP
(Exact name of obligor as specified in its charter)
PENNSYLVANIA PENNSYLVANIA
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
23-1946384 23-1899716
(IRS employer identification (IRS employer identification
<PAGE>
no.) no.)
Centre Square West Centre Square West
1500 Market Street 1500 Market Street
Philadelphia, Pennsylvania Philadelphia, Pennsylvania
19102 19102
(215) 973-3986 (215) 973-3986
(Name, address, including zip code, and telephone number,
including area code, of principal executive office)
------------------------------------------
Debt Securities
(Title of the indenture securities)
- --------------------------------------------------------------------------------
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.
The Comptroller of the Currency,
Washington, D.C.
Federal Reserve Bank of Atlanta
104 Marietta Street, N.W.
Atlanta, Georgia
Federal Deposit Insurance Corporation
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
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. (See Exhibit 1 to Form T-1, Exhibit 25 to Registration No.
33-50233, which is incorporated herein by reference.)
(2) A copy of the certificate of authority of the trustee
<PAGE>
to commence business. (See Exhibit 2 to Form T-1, Exhibit 25 to
Registration No. 33-50233, which is incorporated herein by
reference.)
(3) A copy of the authorization of the trustee to exercise corporate
trust powers. (See Exhibit 3 to Form T-1, Exhibit 25 to Registration
No. 33-50233, which is incorporated herein by reference.)
(4) A copy of the existing by-laws of the trustee, as amended to date.
(See Exhibit 4 to Form T-1, Exhibit 25 to Registration No. 33-50233,
which is incorporated herein by reference.)
(6) The consent of the trustee required by Section 321(b) of the Trust
Indenture Act of 1939.
(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.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
trustee, NationsBank of Georgia, National Association, a corporation organized
and existing under the laws of the United States of America, has duly caused
this statement of eligibility and qualification to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City of Atlanta and the
State of Georgia, on the 21st day of April, 1994.
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION
By: /s/ Sandra Carreker .
Sandra Carreker
Vice President
EXHIBIT 6 TO FORM T-1
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939 in connection with the proposed issuance of Corestates Capital
Corp Debt Securities, NationsBank of Georgia, National Association hereby
consents that reports of examinations by Federal, State, Territorial or
District Authorities may be furnished by such authorities to the Securities
and Exchange Commission upon request therefor.
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION
<PAGE>
By: /s/ Sandra Carreker
Sandra Carreker
Vice President
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
trustee, NationsBank of Georgia, National Association, a corporation organized
and existing under the laws of the United States of America, has duly caused
this statement of eligibility and qualification to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City of Atlanta and the
State of Georgia, on the 21st day of April, 1994.
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION
By:
Sandra Carreker
Vice President
EXHIBIT 6 TO FORM T-1
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939 in connection with the proposed issuance of Corestates Capital
Corp Debt Securities, NationsBank of Georgia, National Association hereby
consents that reports of examinations by Federal, State, Territorial or
District Authorities may be furnished by such authorities to the Securities
and Exchange Commission upon request therefor.
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION
By:
Sandra Carreker
Vice President
EXHIBIT 7 TO FORM T-1
Comptroller of the Currency
Administrator of National Banks
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the NATIONSBANK OF GEORGIA,
N.A. OF ATLANTA, in the state of Georgia,
<PAGE>
at the close of business on December 31, 1993 published in response to call
made by Comptroller of the Currency, under Title 12, United States Code,
Section 161. Charter Number 13281, Comptroller of the Currency, Atlanta
District.
Statement of Resources and Liabilities
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
ASSETS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin 1,205,514
Securities 3,232,925
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 IBFs:
Federal funds sold 470,850
Securities purchased under agreements to resell 0
Loans and lease financing receivables:
Loans and leases, net of unearned income 9,788,433
LESS: Allowance for loan and lease losses 125,977
LESS: Allocated transfer risk reserve 140
Loans and leases, net of unearned income,
allowance, and reserve 9,662,316
Assets held in trading accounts 22,617
Premises and fixed assets (including capitalized leases) 180,489
Other real estate owned 22,817
Customers' liability to this bank on acceptances outstanding 286,671
Intangible assets 46,554
Other assets 177,429
Total assets 15,308,182
LIABILITIES
Deposits:
In domestic offices 8,852,404
Noninterest-bearing 2,893,166
Interest-bearing 5,959,238
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 IBFs:
Federal funds purchased 3,512,809
Securities sold under agreements to repurchase 386,885
Demand notes issued to the U.S. Treasury 250,000
Other borrowed money 180,734
Bank's liability on acceptances executed and outstanding 286,671
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Other liabilities 814,806
Total liabilities 14,284,309
<CAPTION>
EQUITY CAPITAL
<S> <C>
Common stock 97,747
Surplus 229,412
Undivided profits and capital reserves 680,766
Less: Net unrealized loss on marketable equity securities (15,948)
Total equity capital 1,023,873
Total liabilities, limited-life preferred stock, and equity
capital 15,308,182
</TABLE>
We, the undersigned directors, attest to the correctness of this statement of
resources and liabilities. We 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 and is true and correct.
James R.Lientz, Jr.
Willard A. Alexander Directors
Hugh M. Chapman
<PAGE>
Exhibit 26(b)
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)________
---------------------------
CITIBANK, N.A.
(Exact name of trustee as specified in its charter)
13-5266470
(I.R.S. employer
identification no.)
399 Park Avenue, New York, New York 10043
(Address of principal executive office) (Zip Code)
---------------------------
CORESTATES CAPITAL CORP.
(Exact name of obligor as specified in its charter)
Delaware 06-1274088
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1345 Avenue of the Americas
New York, New York 10105
(Address of Principal Executive Offices) (Zip Code)
---------------------------
Debt Securities
(Title of the indenture securities)
<PAGE>
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.
<TABLE>
<CAPTION>
Name Address
---- -------
<S> <C>
Comptroller of the Currency, Washington, D.C.
Federal Reserve Bank of New York, New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. List of Exhibits
Exhibit 1 - Copy of Articles of Association of the Trustee, as
now in effect. (Exhibit 1 to T-1 to Registration Statement
No. 2-79983)
Exhibit 2 - Copy of certificate of authority of the Trustee to
commence business. (Exhibit 2 to T-1 to Registration Statement
No. 2-29577)
Exhibit 3 - Copy of authorization of the Trustee to exercise
corporate trust powers. (Exhibit 3 to T-1 to Registration
Statement No. 2-55519)
Exhibit 4 - Copy of existing By-Laws of the Trustee. (Exhibit 4
to T-1 to Registration Statement No. 33-34988)
Exhibit 5 - Not applicable.
Exhibit 6 - The consent of the Trustee required by Section 321(b)
of the Trust Indenture Act of 1939. (Exhibit 6 to T-1 to
Registration Statement No. 33-19227.)
<PAGE>
Exhibit 7 - Copy of the latest Report of Condition of Citibank,
N.A (as of December 31, 1993 - attached).
Exhibit 8 - Not applicable.
Exhibit 9 - Not applicable.
-----------------------------------
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Citibank, N.A., a national banking association organized and existing
under the laws of the United States of America, 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 18th day
of April, 1994.
CITIBANK, N.A.
By
------------------------
Eugene J. Jaworski
Vice President
<PAGE>
Exhibit 7 - Copy of the latest Report of Condition of Citibank,
N.A (as of December 31, 1993 - attached).
Exhibit 8 - Not applicable.
Exhibit 9 - Not applicable.
-----------------------------------
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Citibank, N.A., a national banking association organized and existing
under the laws of the United States of America, 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 18th day
of April, 1994.
CITIBANK, N.A.
By /s/ Eugene J. Jaworski
---------------------------
Eugene J. Jaworski
Vice President
<PAGE>
Charter No. 1461
Comptroller of the Currency
Northeastern District
REPORT OF CONDITION
CONSOLIDATING
DOMESTIC AND FOREIGN
SUBSIDIARIES OF
Citibank, N. A.
of New York in the State of New York, at the close of business on
December 31, 1993 published in response to call made by Comptroller
of the Currency, under Title 12, United States Code, Section 161.
Charter Number 1461 Comptroller of the Currency Northeastern District.
<TABLE>
<CAPTION>
ASSETS
Thousands
of dollars
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin $ 5,863,000
Interest-bearing balances: 7,137,000
Securities 11,442,000
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 IBFs:
Federal funds sold 1,467,000
Securities purchased under agreements to resell 1,261,000
Loans and lease financing receivables:
Loans and leases, net of unearned income $115,952,000
LESS: Allowance for loan and lease losses 3,471,000
------------
Loans and leases, net of unearned income and allowance 112,481,000
Assets held in trading accounts 15,529,000
Premises and fixed assets (including capitalized leases) 3,041,000
Other real estate owned 3,371,000
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Investments in unconsolidated subsidiaries and
associated companies 983,000
Customers' liability to this bank on acceptances outstanding 1,512,000
Intangible assets 29,000
Other assets 11,866,000
------------
TOTAL ASSETS $175,712,000
============
LIABILITIES
Deposits:
In domestic offices $ 34,236,000
Noninterest-bearing $ 11,921,000
Interest-bearing 22,315,000
------------
In foreign offices, Edge and Agreement subsidiaries, and IBFs 94,076,000
Noninterest-bearing 6,515,000
Interest-bearing 87,561,000
------------
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 IBFs:
Federal funds purchased 4,113,000
Securities sold under agreements to repurchase 1,190,000
Other borrowed money 12,053,000
Mortgage indebtedness and obligations under capitalized leases 285,000
Bank's liability on acceptances executed and outstanding 1,530,000
Notes and debentures subordinated to deposits 4,700,000
Other liabilities 12,462,000
</TABLE>
<PAGE>
<TABLE>
<S> <C>
------------
TOTAL LIABILITIES $164,645,000
============
EQUITY CAPITAL
Common stock $ 751,000
Surplus 5,912,000
Undivided profits and capital reserves 5,066,000
Cumulative foreign currency translation adjustments (662,000)
------------
TOTAL EQUITY CAPITAL $ 11,067,000
------------
TOTAL LIABILITIES AND EQUITY CAPITAL $175,712,000
============
</TABLE>
I, Roger W. Trupin, Controller of the above-named bank do hereby declare
that this Report of Condition is true and correct to the best of my
knowledge and belief.
ROGER W. TRUPIN
We, the undersigned directors, attest to the correctness of this Report of
Condition. We 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 and is true and correct.
CHRISTOPHER J. STEFFEN
PEI-YUAN CHIA Directors
PAUL J. COLLINS
