UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of The Securities
Exchange Act of 1934
For the quarter ended September 30, 1995 Commission File Number 0-13030
TRANS FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
Kentucky 61-1048868
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
500 East Main Street, Bowling Green, Kentucky 42101
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (502)781-5000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes X No _
The number of shares outstanding of the issuer's class of common stock
on November 9, 1995: 11,285,291 shares.
The Exhibit Index is on page 21. This filing contains 127
pages (including this facing sheet).
<PAGE>
Part I - Financial Information
Item 1. Financial Statements
<PAGE>
<TABLE>
<CAPTION>
Consolidated Balance Sheets
(Unaudited)
In thousands, except share data September 30 December 31 September 30
1995 1994 1994
Assets
<S> <C> <C> <C>
Cash and due from banks ..................... $ 68,751 $ 80,828 $ 83,037
Interest-bearing deposits with banks ........ 197 197 197
Federal funds sold and
resale agreements ........................ 575 -- 2,500
Mortgage loans held for sale ................ 30,631 6,541 4,886
Securities available for sale (amortized
cost of $212,236 as of September 30, 1995;
$242,079 as of December 31, 1994;
and $254,389 as of September 30, 1994) ... 209,357 229,643 245,129
Securities held to maturity (market
value of $80,116 as of September 30, 1995;
$81,209 as of December 31, 1994;
and $85,741 as of September 30, 1994) .... 78,478 84,758 87,380
Loans, net of unearned income ............... 1,237,038 1,143,716 1,101,982
Less allowance for loan losses .............. 13,659 12,529 12,539
----------- ----------- -----------
Net loans ................................ 1,223,379 1,131,187 1,089,443
Premises and equipment, net ................. 38,600 36,440 36,012
Other assets ................................ 65,182 48,241 47,287
=========== =========== ===========
Total assets ............................. $ 1,715,150 $ 1,617,835 $ 1,595,871
=========== =========== ===========
Liabilities and Shareholders' Equity
Deposits:
Non-interest bearing ..................... $ 171,788 $ 192,433 $ 180,314
Interest bearing ......................... 1,240,421 1,143,076 1,165,157
----------- ----------- -----------
Total deposits ........................... 1,412,209 1,335,509 1,345,471
Federal funds purchased and
repurchase agreements .................... 76,429 74,553 47,349
Other short-term borrowings ................. 38,019 48,033 43,243
Long-term debt .............................. 36,891 37,334 37,541
Other liabilities ........................... 24,873 10,774 11,355
----------- ----------- -----------
Total liabilities ........................ 1,588,421 1,506,203 1,484,959
Shareholders' equity:
Common stock, no par value. Authorized
50,000,000 shares; issued and
outstanding 11,284,604; 11,203,247;
and 11,190,342 shares, respectively ... 21,154 21,006 20,982
Additional paid-in capital ............... 43,754 42,810 42,641
Retained earnings ........................ 66,988 59,587 57,106
Unrealized net loss on
securities available for sale,
net of tax ............................ (1,887) (8,073) (5,982)
Employee Stock Ownership Plan shares
purchased with debt ................... (3,280) (3,698) (3,835)
----------- ----------- -----------
Total shareholders' equity ............... 126,729 111,632 110,912
Total liabilities
and shareholders' equity ............... $ 1,715,150 $ 1,617,835 $ 1,595,871
=========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
Consolidated Statements of Income
<TABLE>
<CAPTION>
(Unaudited)
In thousands, except per share data Three Months Nine Months
For the periods ended September 30 1995 1994 1995 1994
Interest income
<S> <C> <C> <C> <C>
Loans, including fees .............. $ 29,197 $ 23,684 $ 84,026 $ 67,440
Federal funds sold and resale
agreements ....................... 177 215 730 525
Securities available for sale ...... 3,083 3,203 9,581 8,768
Securities held to maturity ........ 1,234 1,613 3,812 5,825
Mortgage loans held for sale ....... 527 136 969 1,031
Interest-bearing deposits with banks 4 75 13 99
-------- -------- -------- --------
Total interest income .............. 34,222 28,926 99,131 83,688
Interest expense
Deposits ........................... 14,839 10,630 41,809 30,815
Federal funds purchased
and repurchase agreements ........ 522 297 1,379 749
Long-term debt and other
borrowings ....................... 1,325 1,045 4,167 3,108
-------- -------- -------- --------
Total interest expense ............. 16,686 11,972 47,355 34,672
-------- -------- -------- --------
Net interest income .................. 17,536 16,954 51,776 49,016
Provision for loan losses .......... 780 555 2,080 1,567
-------- -------- -------- --------
Net interest income after
provision for loan losses .......... 16,756 16,399 49,696 47,449
Non-interest income
Service charges on deposit accounts 2,127 1,914 6,272 5,492
Mortgage banking income ............ 1,658 778 3,691 1,900
Gains losses) on sales of securities
available for sale, net .......... (21) 33 (21) 121
Gain on sale of mortgage servicing . -- -- 1,687 --
Trust services ..................... 329 310 979 932
Brokerage income ................... 438 184 1,316 720
Other .............................. 1,233 1,055 3,425 3,064
-------- -------- -------- --------
Total non-interest income .......... 5,764 4,274 17,349 12,229
Non-interest expenses
Compensation and benefits .......... 7,891 6,474 22,584 19,365
Net occupancy expense .............. 1,266 1,186 3,554 3,264
Furniture and equipment expense .... 1,529 1,390 4,535 3,805
Deposit insurance .................. 215 785 1,754 2,399
Professional fees .................. 685 691 2,404 2,484
Postage, printing & supplies ....... 826 941 2,659 2,706
Communications ..................... 365 270 1,155 796
Other .............................. 3,024 3,259 9,904 9,378
-------- -------- -------- --------
Total non-interest expenses ........ 15,801 14,996 48,549 44,197
-------- -------- -------- --------
Income before income taxes ........... 6,719 5,677 18,496 15,481
Income tax expense ................... 2,175 1,870 6,038 5,112
------- ------- -------- --------
Net income ........................... $ 4,544 $ 3,807 $ 12,458 $ 10,369
======== ======== ======== ========
Net income available
for common stock ................... 4,544 $ 3,793 $ 12,458 $ 10,315
======== ======== ======== ========
Primary earnings per share ........... $ 0.40 $ 0.34 $ 1.10 $ 0.92
Fully-diluted earnings per share ..... $ 0.40 $ 0.34 $ 1.09 $ 0.92
======== ======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
Consolidated Statements of Changes in Shareholders' Equity
(Unaudited)
In thousands
For the nine months ended September 30 1995 1994
Balance January 1 ................... $ 111,632 $ 112,036
Net income ........................ 12,458 10,369
Issuance of common stock .......... 1,093 462
Retirement of preferred stock .... -- (1,010)
Cash dividends declared:
Common stock .................... (5,059) (4,216)
Preferred stock ................. -- (54)
Change in unrealized gain (loss) on
securities available for sale,
net of taxes .................... 6,186 (6,700)
ESOP debt reduction ............... 419 277
ESOP shares purchased with debt ... -- (252)
========= =========
Balance September 30 ................ $ 126,729 $ 110,912
========= =========
See accompanying notes to consolidated financial statements.
<PAGE>
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
In thousands
For the nine months ended September 30 1995 1994
Cash flows from operating activities:
<S> <C> <C>
Net income ................................................. $ 12,458 $ 10,369
Adjustments to reconcile net income to cash provided be operating activities:
Provision for loan losses .............................. 2,080 1,567
Losses/(gains) on sales of securities available for sale 21 (121)
Losses (gains) on sales of mortgage loans
held for sale, net ................................... (935) 160
Gain on sale of mortgage servicing rights .............. (1,687) --
Gain on sale of premises and equipment ................. (174) (193)
Depreciation, amortization and accretion, net .......... 6,074 4,561
Proceeds from sale of mortgage loans held for sale ......... 76,694 161,175
Originations of mortgage loans held for sale ............... (99,849) (121,043)
(Increase) in other assets ................................ (13,003) (9,925)
Increase in other liabilities ............................. 10,394 4,821
--------- ---------
Net cash provided by (used in) operating activities ...... (7,927) 51,371
Cash flows from investing activities:
Net decrease in interest-bearing deposits
with banks ............................................... -- 250
Net decrease (increase) in federal funds sold
and resale agreements .................................... (575) 30,278
Proceeds from sales of securities available for sale ....... 20,092 6,989
Proceeds from maturities, prepayment and call of securities:
Available for sale ....................................... 34,116 54,533
Held to maturity ......................................... 6,383 25,391
Purchases of securities:
Available for sale ....................................... (22,493) (19,301)
Held to maturity ......................................... (3,000) (26,350)
Net increase in loans ...................................... (94,109) (97,912)
Purchases of premises and equipment ........................ (6,153) (5,294)
Proceeds from disposals of premises and equipment .......... 644 885
Net cash and cash equivalents inflow from acquisition ...... 37,479 --
--------- ---------
Net cash used in investing activities .................... (27,616) (30,531)
Cash flows from financing activities:
Net increase (decrease) in deposits ........................ 35,595 (30,756)
Net increase in federal funds purchased
and repurchase agreements ................................ 1,876 17,645
Net increase (decrease) in other short-term borrowings ..... (10,014) 18,243
Repayment of long-term debt ................................ (25) (6,650)
Retirement of preferred stock .............................. -- (1,010)
Proceeds from issuance of common stock ..................... 1,093 462
Dividends paid ............................................. (5,059) (4,270)
--------- ---------
Net cash provided by (used in) financing activities ...... 23,466 (6,336)
--------- ---------
Net increase/(decrease) in cash and cash equivalents ....... (12,077) 14,504
Cash and cash equivalents at beginning of year ............. 80,828 68,533
========= =========
Cash and cash equivalents at end of period (note 3) ........ $ 68,751 $ 83,037
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
Notes to Consolidated Financial Statements
(1) Summary of Significant Accounting Policies
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and, therefore, do not
include all information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting only of normal recurring accruals) considered necessary
for a fair presentation have been reflected in the accompanying unaudited
financial statements. Results of interim periods are not necessarily indicative
of results to be expected for the full year.
The accounting and reporting policies of Trans Financial, Inc. and its
subsidiaries ("the company") conform to generally accepted accounting principles
and general practices within the banking industry. The consolidated financial
statements include the accounts of Trans Financial, Inc. and its wholly-owned
subsidiaries. All significant inter-company accounts and transactions have been
eliminated in consolidation. A description of other significant accounting
policies is presented in the 1994 annual report to shareholders.
(2) Allowance for Loan Losses
An analysis of the changes in the allowance for loan losses follows:
<TABLE>
<CAPTION>
In thousands Three Months Nine Months
For the periods ended September 30 1995 1994 1995 1994
<S> <C> <C> <C> <C>
Balance beginning of period $13,429 $12,836 $12,529 $12,505
Provision for loan losses 780 555 2,080 1,567
Loans charged off (681) (996) (1,313) (1,957)
Recoveries of loans previously charged off 131 144 363 424
------------- ------------- ------------- -------------
Net charge-offs (550) (852) (950) (1,533)
------------- ------------- ------------- -------------
Balance September 30 $13,659 $12,539 $13,659 $12,539
============= ============= ============= =============
</TABLE>
(3) Statement of Cash Flows
For purposes of reporting cash flows, cash and cash equivalents include
cash on hand and amounts due from banks. Certain non-cash investing and
financing transactions are summarized as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Nine months ended September 30 (Dollars in thousands) 1995 1994
Securities transferred from held to maturity to available for sale $ - $52,920
Increase (decrease) in unrealized loss
on securities available for sale, net of tax (6,186) 6,700
Loans transferred to foreclosed property 197 1,158
Reclassification of borrowings from long-term to short-term - 10,000
Debt transactions of Employee Stock Ownership Plan (net) 419 (25)
</TABLE>
(4) Impaired Loans
The company adopted on a prospective basis effective January 1, 1995,
Statement of Financial Accounting Standards No. 114, Accounting by Creditors for
Impairment of a Loan ("SFAS 114"). SFAS 114 requires that impaired loans be
measured at the present value of expected future cash flows, discounted at the
loan's effective interest rate, at the loan's observable market price, or at the
fair value of the collateral if the loan is collateral dependent. The company
accrues interest income daily on impaired loans classified as accruing. Cash
receipts on impaired loans are applied to the recorded investment in the loan,
including accrued interest receivable. The adoption of SFAS 114 did not have a
material effect on the company's consolidated financial statements.
The company's recorded investment in impaired loans was $8,224,000 at
September 30, 1995. Of that amount, $7,444,000 represents loans for which an
allowance for loan losses, in the amount of $2,646,000, has been established
under SFAS 114. The average recorded investment of impaired loans was $8,518,000
for the three months ended September 30, 1995, and $6,713,000 for the nine
months then ended. Interest income recognized on impaired loans totaled $-0- for
the three months ended September 30, 1995, and $59,000 for the nine-month period
ended September 30, 1995.
(5) Mortgage Servicing Rights
The company adopted on a prospective basis effective January 1, 1995,
Statement of Financial Accounting Standards No. 122, Accounting for Mortgage
Servicing Rights ("SFAS 122"). SFAS 122 requires that rights to service mortgage
loans for others be recognized as assets, without regard to whether those assets
were acquired in purchase transactions or were acquired through loan
originations. SFAS 122 also eliminates the previous requirement that gains on
mortgage loan sales be offset against the related mortgage servicing right
asset. The adoption of this statement resulted in an $818,000 increase in
mortgage banking income in the first nine months of 1995.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
Incorporated in 1981, Trans Financial, Inc. ("the company") is a bank and
savings and loan holding company registered under the Bank Holding Company Act
of 1956 and the Home Owners' Loan Act, which has two commercial bank
subsidiaries and one thrift subsidiary: Trans Financial Bank, National
Association, headquartered in Bowling Green, Kentucky ("TFB-KY"); Trans
Financial Bank Tennessee, National Association, headquartered in Cookeville,
Tennessee; and Trans Financial Bank, F. S.B., with its home office in
Russellville, Kentucky.
In addition, the company operates as subsidiaries of TFB-KY a full-service
securities broker/dealer, Trans Financial Investment Services, Inc.; a mortgage
banking company, Trans Financial Mortgage Company; and a full-service travel
agency, Trans Travel, Inc.
The company had total consolidated assets of $1.715 billion on September
30, 1995. Loans totaled $1.237 billion on that date, deposits were $1.412
billion and shareholders' equity was $127 million.
The discussion that follows is intended to provide additional insight into
the company's financial condition and results of operations. This discussion
should be read in conjunction with the consolidated financial statements and
accompanying notes presented in Item 1 of Part I of this report.
Results of Operations
Overview
For the nine months ended September 30, 1995, the company's net income
increased 20%, from $10.3 million, or $.92 per common share, to $12.5 million,
or $1.10 per share, as compared to the first nine months of 1994. Results for
the first nine months of 1995 produced an annualized return on average assets of
1.01% and a return on average common equity of 13.95%, compared with returns of
0.87% and 12.40%, respectively, for the comparable period of 1994.
For the third quarter of 1995, net income increased from $3.8 million, or
$.34 per common share, to $4.5 million, or $.40 per share, as compared to the
third quarter of 1994. Return on average assets for the third quarter of 1995
was 1.07% and a return on average common equity was 14.58%, compared with
returns of 0.96% and 13.53%, respectively, for the third quarter of 1994.
The company recognized during the third quarter 1995 refunds from the
Federal Deposit Insurance Corp. (FDIC) associated with the over-capitalization
of the Bank Insurance Fund. The refunds, covering the four-month period
beginning June 1, when the lowered premiums retroactively took effect, amounted
to approximately $585 thousand on a pre-tax basis. Excluding the after-tax
impact of these refunds on third quarter earnings, the company would have
reported earnings of $0.37 per common share, an increase of 9% over the same
period in 1994.
Net Interest Income
Net interest income totaled $51.8 million in the first nine months of 1995,
compared with $49.0 million in the comparable 1994 period - a 6% increase. For
the first nine months of 1995, net interest margin (net interest income as a
percentage of average interest-earning assets) increased 10 basis points, from
4.48% to 4.58%. This reflects the positive impact of prime rate increases during
1994 and early in 1995 as well as a more favorable mix of earning assets,
primarily due to continued loan growth and the redeployment of funds from
matured investment securities. Approximately $575 million of the company's
commercial and consumer loans are tied to the prime rate. Consequently,
increases in the prime lending rate had a positive impact on net interest
margin. At the same time, while rates on earning assets rose, increases in the
company's funding costs had not kept pace with the increase in loan yields.
In the third quarter of 1995, net interest income increased to $17.5
million - a 3% increase from the $17.0 million reported for the third quarter of
1994. Net interest margin for the third quarter declined 8 basis points, from
4.64% to 4.52%, from the comparable quarter of the prior year. As the prime rate
leveled off in the second quarter of 1995, increases in the company's funding
costs, which had lagged behind the increases in loan yields, continued to rise.
As a result, the company's net interest spread (the difference between the gross
yield on interest-earning assets and the rate paid on interest-bearing
liabilities) decreased, negatively impacting the net interest margin. The
negative impact of this phenomenon was offset by increased net interest income
due to loan growth.
The following tables show, for the nine- and three-month periods ended
September 30, 1995 and 1994, the relationships between interest income and
expense and the levels of interest-earning assets and interest-bearing
liabilities.
<PAGE>
Average Consolidated Balance Sheets and Net Interest Analysis
For the Nine Months Ended September 30
Dollars in thousands
<TABLE>
<CAPTION>
1995 1994
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Assets:
Interest-earning assets:
<S> <C> <C> <C> <C> <C> <C>
Loans, net of unearned income $1,172,796 $84,026 9.58% $1,058,221 $67,440 8.52%
Securities available for sale 222,008 9,581 5.77% 224,935 8,768 5.21%
Securities held to maturity 84,201 3,812 6.05% 138,851 5,825 5.61%
Mortgage loans held for sale 14,564 969 8.90% 21,525 1,031 6.40%
Federal funds sold
and other interest income 16,803 743 5.91% 17,876 624 4.67%
-------------- ----------- -------------- ------------
Total interest-earning assets /
interest income 1,510,372 99,131 8.78% 1,461,408 83,688 7.66%
----------- ------------
Non-interest-earning assets:
Cash and due from banks 63,874 65,261
Premises and equipment 37,659 34,804
Other assets 38,614 25,918
============== ==============
Total assets $1,650,519 $1,587,391
============== ==============
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing demand (NOW) $137,668 $2,678 2.60% $143,898 $2,582 2.40%
TransPlus (SuperNOW) 93,715 1,948 2.78% 101,121 1,817 2.40%
Savings deposits 133,800 2,917 2.91% 158,291 3,305 2.79%
Money market accounts 47,292 1,124 3.18% 55,982 1,099 2.62%
Certificates of deposit 725,912 29,620 5.46% 636,841 19,044 4.00%
Other time deposits 88,653 3,522 5.31% 93,714 2,968 4.23%
-------------- ----------- -------------- ------------
Total interest-bearing deposits 1,227,040 41,809 4.56% 1,189,847 30,815 3.46%
Federal funds purchased
and repurchase agreements 44,465 1,379 4.15% 36,023 749 2.78%
Long-term debt and
and other borrowings 79,664 4,167 6.99% 74,789 3,108 5.56%
-------------- ----------- -------------- ------------
Total borrowed funds 124,129 5,546 5.97% 110,812 3,857 4.65%
-------------- ----------- -------------- ------------
Total interest-bearing liabilities /
interest expense 1,351,169 47,355 4.69% 1,300,659 34,672 3.56%
----------- ------------
Non-interest-bearing liabilities:
Non-interest-bearing deposits 165,522 166,718
Other liabilities 14,435 7,870
-------------- --------------
Total liabilities 1,531,126 1,475,247
Shareholders' equity 119,393 112,144
-------------- --------------
Total liabilities
and shareholders' equity $1,650,519 $1,587,391
============== ==============
Net interest-rate spread 4.09% 4.10%
Impact of non-interest bearing
sources and other changes in
balance sheet composition 0.49% 0.38%
------------ -----------
Net interest income /
margin on interest-earning $51,776 4.58% $49,016 4.48%
assets
=========== ============ ============ ===========
</TABLE>
Net interest margin is net interest income divided by average interest-earning
assets. For computational purposes, non-accrual loans are included in
interest-earning assets. Net interest spread is the difference between the
average rate of interest earned on interest-earning assets and the average rate
of interest expensed on interest-bearing liabilities.
Average balances are based on daily balances.
<PAGE>
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended September 30
Dollars in thousands
<TABLE>
<CAPTION>
1995 1994
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Assets:
Interest-earning assets:
<S> <C> <C> <C> <C> <C> <C>
Loans, net of unearned income $1,204,297 $29,197 9.62% $1,079,153 $23,684 8.71%
Securities available for sale 217,123 3,083 5.63% 217,917 3,203 5.83%
Securities held to maturity 81,236 1,234 6.03% 123,568 1,613 5.18%
Mortgage loans held for sale 23,616 527 8.85% 8,454 136 6.38%
Federal funds sold
and other interest income 12,302 181 5.84% 20,402 290 5.64%
-------------- ----------- -------------- ------------
Total interest-earning assets /
interest income 1,538,574 34,222 8.82% 1,449,494 28,926 7.92%
----------- ------------
Non-interest-earning assets:
Cash and due from banks 60,091 67,994
Premises and equipment 38,253 36,158
Other assets 42,378 26,333
============== ==============
Total assets
$1,679,296 $1,579,979
============== ==============
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing demand (NOW) $138,988 $930 2.65% $143,373 $891 2.47%
TransPlus (SuperNOW) 93,333 660 2.81% 98,711 623 2.50%
Savings deposits 131,183 954 2.89% 156,326 1,095 2.78%
Money market accounts 46,611 382 3.25% 53,729 375 2.77%
Certificates of deposit 745,842 10,658 5.67% 638,673 6,617 4.11%
Other time deposits 89,292 1,255 5.58% 91,459 1,029 4.46%
-------------- ----------- -------------- ------------
Total interest-bearing deposits 1,245,249 14,839 4.73% 1,182,271 10,630 3.57%
Federal funds purchased
and repurchase agreements 49,234 522 4.21% 39,954 297 2.95%
Long-term debt and
and other borrowings 75,007 1,325 7.01% 71,444 1,045 5.80%
-------------- ----------- -------------- ------------
Total borrowed funds 124,241 1,847 5.90% 111,398 1,342 4.78%
-------------- ----------- -------------- ------------
Total interest-bearing liabilities /
interest expense 1,369,490 16,686 4.83% 1,293,669 11,972 3.67%
----------- ------------
Non-interest-bearing liabilities:
Non-interest-bearing deposits 167,794 167,830
Other liabilities 18,330 6,575
-------------- --------------
Total liabilities 1,555,614 1,468,074
Shareholders' equity 123,682 111,905
-------------- --------------
Total liabilities
and shareholders' equity
$1,679,296 $1,579,979
============== ==============
Net interest-rate spread 3.99% 4.25%
Impact of non-interest bearing
sources and other changes in
balance sheet composition 0.53% 0.39%
------------ -----------
Net interest income /
margin on interest-earning 4.52% $16,954 4.64%
assets $17,536
=========== ============ ============ ===========
</TABLE>
Net interest margin is net interest income divided by average interest-earning
assets. For computational purposes, non-accrual loans are included in
interest-earning assets. Net interest spread is the difference between the
average rate of interest earned on interest-earning assets and the average rate
of interest expensed on interest-bearing liabilities.
Average balances are based on daily balances.
<PAGE>
Analysis of Changes in Net Interest Income
Shown in the following tables are changes in interest income and interest
expense resulting from changes in volumes (average balances) and changes in
interest rates for the nine- and three-month periods ended September 30, 1995,
as compared to the same periods in 1994.
Nine Months 1995 vs. 1994 Increase (decrease)
in interest income and expense
In thousands due to changes in:
Volume Rate Total
Interest-earning assets:
Loans ............................. $ 7,724 $ 8,862 $ 16,586
Securities available for sale ..... (115) 928 813
Securities held to maturity ....... (2,444) 431 (2,013)
Mortgage loans held for sale ...... (392) 330 (62)
Federal funds sold
and other interest income ....... (39) 158 119
-------- -------- --------
Total interest-earning assets ..... 4,734 10,709 15,443
Interest-bearing liabilities:
Interest-bearing demand (NOW) ..... (115) 211 96
TransPlus (SuperNOW) .............. (140) 271 131
Savings deposits .................. (529) 141 (388)
Money market accounts ............. (186) 211 25
Certificates of deposit ........... 2,933 7,643 10,576
Other time deposits ............... (167) 721 554
-------- -------- --------
Total interest-bearing deposits . 1,796 9,198 10,994
Federal funds purchased
and repurchase agreements ....... 203 427 630
Long-term debt and
and other borrowings ............ 213 846 1,059
-------- -------- --------
Total borrowed funds ............ 416 1,273 1,689
-------- -------- --------
Total interest-bearing liabilities 2,212 10,471 12,683
-------- -------- --------
Increase in net interest income ... $ 2,522 $ 238 $ 2,760
======== ======== ========
The change in interest due to both rate and volume has been allocated to
changes in average volume and changes in average rates in proportion to the
relationship of absolute dollar amounts of the change in each.
<PAGE>
Third Quarter 1995 vs. 1994 Increase (decrease)
in interest income and expense
In thousands due to changes in:
Volume Rate Total
Interest-earning assets:
Loans ............................ $ 2,898 $ 2,615 $ 5,513
Securities available for sale .... (12) (108) (120)
Securities held to maturity ...... (614) 235 (379)
Mortgage loans held for sale ..... 322 69 391
Federal funds sold
and other interest income ...... (119) 10 (109)
------- ------- -------
Total interest-earning assets .... 2,475 2,821 5,296
Interest-bearing liabilities:
Interest-bearing demand (NOW) .... (28) 67 39
TransPlus (SuperNOW) ............. (35) 72 37
Savings deposits ................. (182) 41 (141)
Money market accounts ............ (53) 60 7
Certificates of deposit .......... 1,239 2,802 4,041
Other time deposits .............. (25) 251 226
------- ------- -------
Total interest-bearing deposits 916 3,293 4,209
Federal funds purchased
and repurchase agreements ...... 79 146 225
Long-term debt and
and other borrowings ........... 54 226 280
------- ------- -------
Total borrowed funds ........... 133 372 505
------- ------- -------
Total interest-bearing liabilities 1,049 3,665 4,714
------- ------- -------
Increase (decrease)
in net interest income ......... $ 1,426 $ (844) $ 582
======= ======= =======
The change in interest due to both rate and volume has been allocated to changes
in average volume and changes in average rates in proportion to the relationship
of absolute dollar amounts of the change in each.
The preceding tables reflect the general increase in interest rates over
the past year. The tables also reflect increased volumes of loans and
certificates of deposit, while nearly all other categories of interest-bearing
assets and liabilities have decreased.
Provision for Loan Losses
The provision for loan losses was $2,080 thousand (.24% of average loans,
on an annualized basis, excluding mortgage loans held for sale) in the first
nine months of 1995, compared with $1,567 thousand (.20% of average loans) in
the comparable period of 1994. Net loan charge-offs were $950 thousand (.11% of
average loans) for the first nine months of 1995, compared with $1,533 thousand
(.19% of average loans) for the first nine months of 1994.
For the third quarter of 1995, the provision for loan losses was $780
thousand (.26% of average loans, on an annualized basis, excluding mortgage
loans held for sale), compared with $555 thousand (.20% of average loans) in the
comparable period of 1994. Net loan charge-offs were $550 thousand (.18% of
average loans) for the third quarter of 1995, and $852 thousand (.31% of average
loans) for the third quarter of 1994.
The provision for loan losses and the level of the allowance for loan
losses reflect the quality of the loan portfolio and result from management's
evaluation of the risks in the loan portfolio. Further discussion on loan
quality and the allowance for loan losses is included in the Asset Quality
discussion later in this review.
<PAGE>
Non-Interest Income
Non-interest income for the first nine months of 1995 increased $5.1
million over the first nine months of 1994. Comparing the third quarter of 1995
to the comparable period of 1994, non-interest income increased $1.5 million.
This reflects an increase in service charges on deposit accounts of $213
thousand, due in part to the company's repricing of checking and savings
products which took effect in April of this year. The strong growth in the
mortgage servicing portfolio during the past year resulted in a
quarter-to-quarter increase of $880 thousand of mortgage banking income. An
increase in brokerage income of $254 thousand, reflecting the company's
expanding brokerage services, accounts for most of the remaining improvement in
non-interest income.
During the second quarter of 1995, the company realized a $1.7 million
pre-tax gain on the sale of servicing rights related to $168 million of mortgage
loans serviced for others. Other mortgage banking income increased $1,791
thousand for the nine months (which includes $818 thousand due to the adoption
of Statement of Financial Accounting Standards No. 122, Accounting for Mortgage
Servicing Rights). Brokerage revenues increased $596 thousand for the nine
months, while service charges on deposit accounts increased $780 thousand. The
1995 increases reflect the company's expanding mortgage banking and brokerage
businesses, as well as continued improvement in its traditional line of banking
products and services.
Non-Interest Expenses
Non-interest expenses increased $4.4 million for the first nine months of
1995, compared to the first nine months of 1994. Comparing the third quarter of
1995 to the comparable period of 1994, non-interest expense increased $805
thousand. Compensation and benefits increased $1.4 million, of which
approximately $400 thousand represents payments associated with the company's
implementation of an incentive-based compensation system. These increases were
partially offset by a reduction in professional fees and acquisition costs and
the previously-mentioned FDIC refunds.
The increase in non-interest expenses reflect the company's continued
investment in new technology, product lines, distribution channels and people,
to provide enhanced customer service and support future growth.
The efficiency ratio (non-interest expenses as a percentage of net interest
income before provision for loan losses plus non-interest income) for the third
quarter of 1995 was 67.8%, versus 70.6% for the same period in 1994. Excluding
the FDIC refunds, the efficiency ratio for the third quarter of 1995 would have
been 70.3%.
Income Taxes
Income tax expense totaled $6.0 million in the first nine months of 1995,
compared with $5.1 million in the comparable 1994 period. These represent
effective tax rates of 33.6% and 33.0%, respectively. For the third quarter of
1995, income tax expense was $2.2 million, versus $1.9 million in the third
quarter of 1994, reflecting effective tax rates of 32.4% and 32.9%,
respectively.
Balance Sheet Review
Overview
Assets at September 30, 1995, totaled $1.715 billion, compared with $1.618
billion at December 31, 1994, and $1.596 billion a year ago. Average total
assets for the third quarter increased $99 million (6%) over the past year to
$1.679 billion. Average interest-earning assets increased $49.0 million to
$1.510 billion.
Loans
Total loans, net of unearned income, averaged $1.204 billion in the third
quarter of 1995, excluding mortgage loans held for sale of $23.6 million. For
the comparable period in 1994, loans averaged $1.079 million, excluding the $8.4
million of mortgage loans held for sale.
The company continues to experience strong loan growth. At September 30,
1995, loans net of unearned income (excluding mortgage loans held for sale)
totaled $1.237 billion, compared with $1.144 billion at December 31, 1994, and
$1.102 billion a year ago. During the first quarter of 1995, the company sold to
a non-affiliate bank $16 million of participations in its commercial loan
portfolio. Excluding the impact of these participations, loans increased at an
annualized rate of 11% from year-end 1994 to September 30, 1995.
Asset Quality
With respect to asset quality, management considers three categories of
assets to merit additional scrutiny. These categories include (a) loans which
are currently nonperforming, (b) foreclosed real estate, and (c) loans which are
currently performing but which management believes require special attention.
Nonperforming loans, which include nonaccrual loans, accruing loans past
due 90 days or more and restructured loans, totaled $13.1 million at September
30, 1995, up $5.2 million from December 31, 1994, and up $3.2 million from the
end of the third quarter of 1994. The ratio of nonperforming loans to total
loans (net of unearned income) was 1.06% at September 30, 1995, compared with
.69% at the end of 1994 and .90% a year ago. Nonperforming assets, which include
nonperforming loans and foreclosed property, totaled $17.8 million at September
30, 1995. The ratio of nonperforming assets to total assets increased to 1.04%
at September 30, 1995, from .98% a year ago.
The following table presents information concerning nonperforming assets,
including nonaccrual and restructured loans. Management classifies a loan as
nonaccrual when principal or interest is past due 90 days or more and the loan
is not adequately collateralized and in the process of collection, or when, in
the opinion of management, principal or interest is not likely to be paid in
accordance with the terms of the obligation. Consumer installment loans are
charged off after 120 days of delinquency unless adequately secured and in the
process of collection. Loans are not reclassified as accruing until principal
and interest payments are brought current and future payments appear certain.
Loans are categorized as restructured if the original interest rate, repayment
terms, or both were restructured due to a deterioration in the financial
condition of the borrower. However, restructured loans that demonstrate
performance under restructured terms and that yield a market rate of interest
may be removed from restructured status in the year following the restructure.
Nonperforming Assets
Dollars in thousands
<TABLE>
<CAPTION>
September 30 June 30 December 31 September 30
1995 1995 1994 1994
<S> <C> <C> <C> <C>
Nonaccrual loans ................................ $ 9,497 $10,032 $ 4,375 $ 6,839
Accruing loans which are contractually
past due 90 days or more ...................... 3,625 2,609 3,514 3,003
Restructured loans .............................. 17 22 30 34
------- ------- ------- -------
Total nonperforming and restructured loans .... 13,139 12,663 7,919 9,876
Foreclosed real estate .......................... 4,115 4,367 4,998 5,156
Other foreclosed property ....................... 569 307 199 531
------- ------- ------- -------
Total nonperforming assets and restructured ... $17,823 $17,337 $13,116 $15,563
loans
======= ======= ======= =======
Nonperforming and restructured loans
as a percentage of net loans .................. 1.06% 1.06% 0.69% 0.90%
Total nonperforming assets and restructured loans
as a percentage of total assets ............... 1.04% 1.03% 0.81% 0.98%
</TABLE>
Five credit relationships account for $7.9 million, or 83%, of the
September 30, 1995, nonaccrual balance. The first of these loans is to a
manufacturing firm in the amount of $3,475,000 and is secured by all the real
estate, equipment, receivables and inventory of the company, as well as the
personal guarantee of the owner and the pledge of some non-business-related real
estate. The firm experienced cash flow problems due to declining sales and
rising costs and has been unable to meet scheduled payments in a timely manner.
The loan was placed on nonaccrual during the second quarter of 1995. The second
loan is a $1,596,000 credit to a coal mining company secured by real estate and
equipment. The company experienced operating problems and, when the owner had
severe health problems, it ceased operations. The loan was placed on nonaccrual
in the second quarter of 1995 and the borrower has subsequently filed a Chapter
11 bankruptcy petition. An orderly liquidation of all collateral as well as
personal assets of the principal is planned in an effort to satisfy the debt.
The third loan is to a manufacturing concern and is secured by commercial real
estate and equipment. The loan has been on nonaccrual since 1992. During 1993,
$775,000 of the loan balance was charged off, reducing the carrying value of the
loan to $1.5 million. During the third quarter of 1995, the borrower ceased
operations and has instituted an orderly liquidation of the firm's assets. Any
additional loss from a collateral shortfall is not expected to be significant.
The fourth loan has an outstanding balance of $783,000 and is secured by a first
mortgage on an apartment complex. The borrower experienced cash flow
difficulties due to high vacancy rates, and the loan was placed on nonaccrual in
1994, when it became apparent that payments would not remain timely. The
property was sold subsequent to September 30, 1995, at a price sufficient to
liquidate the principal balance. The fifth credit, with a balance of $595,000,
represents a 13.3% participation in a loan secured by a first mortgage on an
apartment complex. Increasing vacancy rates and unusually high maintenance
expenses adversely affected cash flow. The credit was placed on nonaccrual in
February 1995, when the borrower was no longer able to make timely payments.
Foreclosure proceedings were instituted, but have been delayed by the borrower
filing a bankruptcy petition. The estimated value of the collateral is expected
to provide for the full repayment of the principal balance. Appropriate amounts
have been specifically allocated in the evaluation of the allowance for loan
losses for the above credit exposures. The remaining September 30, 1995
nonaccrual balance consists of various commercial and consumer loans, with no
single loan exceeding $150,000.
Foreclosed real estate at September 30, 1995 includes two properties with
an aggregate book value of $2.0 million, or 48% of the outstanding balance.
The first property was acquired through foreclosure in 1986
with an unsatisfied loan balance at the time of $1.8 million.
In order to facilitate the disposal of the property, the company
entered into a joint venture with a real estate developer and developed the land
for industrial and other commercial use. During 1993, the company dissolved the
joint venture and retained title to the property. Several parcels have been sold
above carrying value. The book value of the property at September 30, 1995,
including development costs, was $1.0 million. Based on an appraisal of the
property and previous sales experience, management does not anticipate any
significant loss to be incurred on disposition. The second property included in
foreclosed real estate relates to a wood products manufacturing facility. Based
on an appraisal of the property, the company wrote down its carrying value by
$210 thousand in the third quarter of 1994 and by another $550 thousand in the
second quarter of 1995, reducing it to its current balance of $1.0 million. The
facility was closed in 1992 and is presently listed for sale with a commercial
real estate firm. Subsequent to September 30, 1995, a contract for the sale of
the property for $850,000 was accepted, with closing expected prior to year-end
1995.
As of September 30, 1995, the company had $9.5 million of loans which were
not included in the past due, nonaccrual or restructured categories, but for
which known information about possible credit problems caused management to have
serious doubts as to the ability of the borrowers to comply with the present
loan repayment terms. Based on management's evaluation, including current market
conditions, cash flow generated and appraisals, no significant losses are
anticipated to be incurred in connection with these loans. These loans are
subject to continuing management attention and are considered in determining the
level of the allowance for loan losses.
The allowance for loan losses is established through a provision for loan
losses charged to expense. The allowance represents an amount which, in
management's judgment, will be adequate to absorb probable losses on existing
loans. At September 30, 1995, the allowance was $13.7 million, up from $12.5
million at December 31, 1994, and $12.5 million at September 30, 1994. The
allowance as a percentage of nonperforming loans (an indication of the relative
ability to cover problem loans with existing reserves) declined to 104% at
September 30, 1995, from 158% at year-end 1994 and 127% at September 30, 1994.
The ratio of the allowance for loan losses to total loans (excluding mortgage
loans held for sale) at September 30, 1995, was 1.10%, compared with 1.10% at
December 31, 1994, and 1.14% at the end of 1994's third quarter.
The adequacy of the allowance for loan losses is determined on an ongoing
basis through analysis of the overall quality of the loan portfolio, historical
loan loss experience, loan delinquency trends and the economic conditions within
the company's market area. Additional allocations from the allowance are based
on specifically identified potential loss situations. These potential loss
situations are identified by account officers' evaluations of their own
portfolios as well as by an independent loan review function.
Securities, Federal Funds Sold and Resale Agreements
Securities, including those classified as held to maturity and available
for sale, decreased from $333 million at September 30, 1994, to $314 million at
year-end 1994, and $288 million at September 30, 1995 - the result of
maturities, prepayments and calls. Funds provided by the reduction in securities
were utilized to fund growth in the loan portfolio.
Deposits and Borrowed Funds
Total deposits averaged $1.413 billion in the third quarter of 1995, an
increase of $62.9 million (5%) from the comparable 1994 period. Interest-bearing
accounts increased $63.0 million, while non-interest-bearing accounts remained
flat over the past year. During the first quarter of 1995, the company issued
$30 million of 24-month brokered certificates of deposit and purchased
approximately $40 million of deposits from Fifth Third Bank of Kentucky, Inc., a
portion of which has been utilized to fund growth in the loan portfolio.
Long-term debt averaged $37.0 million in the third quarter of 1995,
a decrease of $3.2 million from the third quarter of 1994.
Capital Resources and Liquidity
The company's capital ratios at September 30, 1995, December 31, 1994, and
September 30, 1994 (calculated in accordance with regulatory guidelines) were as
follows:
September 30, December 31, September 30,
1995 1994 1994
Tier 1 risk based ..... 8.95% 9.50% 9.42%
Regulatory minimum 4.00 4.00 4.00
Total risk based ...... 12.47 13.35 13.34
Regulatory minimum 8.00 8.00 8.00
Leverage 6.94 ......... 6.97 6.88
Regulatory minimum 3.00 3.00 3.00
Capital ratios of all of the company's subsidiaries are in excess of
applicable minimum regulatory capital ratio requirements at September 30, 1995.
Generally speaking, the company relies upon net inflows of cash from
financing activities, supplemented by net inflows of cash from operating
activities, to provide cash used in its investing activities. As is typical of
most banking companies, significant financing activities include issuance of
common stock and long-term debt, deposit gathering, and the use of short term
borrowing facilities, such as federal funds purchased, repurchase agreements,
advances from the Federal Home Loan Bank and lines of credit. The company's
primary investing activities include loan originations, offset by maturities,
prepayments and sales of securities, and loan payments.
In order to support internally-generated growth in the loan portfolio,
TFB-KY issued subsequent to September 30, 1995, $20 million of two-year notes
and $30 million of three-year notes under a $250 million Bank Note program. The
notes issued to date bear interest at fixed rates of 6.32% and 6.48%,
respectively, and have been effectively converted to floating rate instruments
through the use of interest rate swap transactions. Under these swap agreements,
TFB-KY pays interest at the prime rate and receives a fixed rate of 8.60%. Bank
Notes may be issued from time to time under this book-entry program in
maturities of from 30 days to 30 years.
Asset/Liability Management
Managing interest rate risk is fundamental to the financial services
industry. The company manages the inherently different maturity and repricing
characteristics of the lending and deposit acquisition lines of business to
achieve a desired interest sensitivity position and to limit exposure to
interest rate risk. The maturity and repricing characteristics of the company's
lending and deposit activities create a naturally asset-sensitive structure. By
using a combination of on- and off-balance-sheet financial instruments, the
company manages interest rate sensitivity within established policy guidelines.
The company's Asset/Liability Committee approves policy guidelines,
provides oversight to the asset/liability management process, and monitors and
adjusts exposure to interest rates in response to loan and deposit flows.
Asset/liability activity is reviewed monthly by the company's board of
directors.
An earnings simulation model is used to monitor and evaluate the exposure
and impact of changing interest rates on earnings. In today's interest rate
environment, which includes a complex array of both on- and off-balance-sheet
financial instruments, traditional static interest rate gap tables do not
provide the most comprehensive and informative disclosures about interest-rate
risks. The simulation model used by the company reflects the dynamics of all
interest-earning assets, interest-bearing liabilities and off-balance-sheet
financial instruments. It combines the various factors affecting rate
sensitivity into a two-year earnings outlook that incorporates management's view
of the most likely interest rate environment. The model is updated monthly for
multiple interest rate scenarios, projecting changes in balance sheet categories
and other relevant assumptions. In developing multiple rate scenarios, an
econometric model is employed to forecast key rates, based on the cyclical
nature of those rates, with a probability assigned to potential future events
which might affect those rates.
Among the factors the model utilizes which traditional interest rate gap
tables do not are rate of change differentials, such as federal funds rates
versus savings account rates, maturity effects, such as calls on securities, and
rate barrier effects, such as caps or floors on loans. It also captures changing
balance sheet levels, such as loans and investment securities, and floating rate
loans that may be tied or related to prime, treasury notes, CD rates or other
rate indices, which do not necessarily move identically as rates change. In
addition, it captures leads and lags that occur as rates move away from current
levels, and the effects of prepayments on various fixed rate assets such as
residential mortgages, mortgage-backed securities and consumer loans. These, and
certain other effects, are evaluated to develop multiple scenarios from which
the sensitivity of earnings to changes in interest rates is determined.
The following illustrates the effects on net interest income of multiple
rate environments compared to the rate environment of September 1995 (the "flat"
scenario). For example, in the scenario considered "most likely" the company
assumed that the federal funds rate and prime rate would be 5.25% and 8.25%,
respectively, in September of 1996, and would be higher for four of the twelve
months from September 30, 1995 to September 30, 1996.
<TABLE>
<CAPTION>
Flat Most Likely Rising Declining
Assumptions:
<S> <C> <C> <C> <C>
Federal funds rate, September 1996 .. 5.75 5.25% 8.00% 3.00%
Prime rate, September 1996 .......... 8.75 8.25 11.00% 6.00%
Increase (decrease) in net interest income -0-% (0.18% (0.51% (1.51%)
</TABLE>
The company's simulation model shows that under each of the three
scenarios, net interest income would be lower than if rates remained constant,
with a declining rate environment having the greatest negative impact. Due to
the recent restructuring of the balance sheet, along with off-balance-sheet
transactions, management believes that the company's rate sensitivity position
is essentially balanced at September 30, 1995, indicating that net interest
income would not be impacted significantly under a reasonably foreseeable rising
or falling interest rate scenario. It should be noted that the results of the
simulation model do not take into account any future actions which could be
undertaken to reduce an adverse impact if there were a change in interest rate
expectations or in the actual level of interest rates.
To assist in achieving a desired level of interest rate sensitivity the
company has entered into off-balance-sheet interest rate swap transactions which
effectively neutralize the asset sensitive position which is inherent in the
balance sheet. The company pays a variable interest rate on each swap and
receives a fixed rate, as shown below (as of September 30, 1995):
Notional Fixed Rate Floating Rate
Amount (Receiving) (Paying)
$20,000,000 4.38% 5.875(LIBOR)
30,000,000 10.40 8.75 (Prime)
50,000,000 9.58 8.75 (Prime)
50,000,000 9.25 8.75 (Prime)
50,000,000 8.33 8.75 (Prime)
50,000,000 8.50 8.75 (Prime)
In a higher interest rate environment, the increased contribution to net
interest income from on-balance-sheet assets will substantially offset any
negative impact on net interest income from these swap transactions. Conversely,
if interest rates decline, these off-balance-sheet transactions will mitigate
the company's exposure to reduced net interest income.
<PAGE>
Part II - Other Information
Item 1. Legal Proceedings
In the ordinary course of operations, the company and its subsidiaries are
defendants in various legal proceedings. In the opinion of management, there is
no proceeding pending or, to the knowledge of management, threatened in which an
adverse decision could result in a material adverse change in the business or
consolidated financial position of the company.
Item 2 through 5.
No information is required to be filed for these items.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The exhibits listed on the Exhibit Index on page 21 of this Form 10-Q are
filed as a part of this report.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the period covered by this
report.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Trans Financial, Inc.
(Registrant)
Principal Executive Officer:
Date: November 14, 1995 /s/ Douglas M. Lester
----------------- ---------------------
Douglas M. Lester
Chairman of the Board, President
and Chief Executive Officer
Principal Financial Officer:
Date: November 14, 1995 /s/ Edward R. Matthews
----------------- ----------------------
Edward R. Matthews
Chief Financial Officer
<PAGE>
==============================================================================
==============================================================================
39
Exhibits
Sequentially
Numbered Pages
4(a) Restated Articles of Incorporation of the registrant are incorporated
by reference to Exhibit 4(a) of the registrant's report on Form 10-Q
for the quarter ended March 31, 1995.
4(b) Articles of Amendment to the Restated Articles of Incorporation of
the registrant are incorporated by reference to Exhibit 4(b) of the
registrant's report on Form 10-Q for the quarter ended March 31,
1995.
4(c) Restated Bylaws of the registrant are incorporated by reference to
Exhibit 4(b) of the registrant's report on Form 10-K for the year
ended December 31, 1993.
4(d) Rights Agreement dated January 20, 1992 between Manufacturers Hanover
Trust Company (subsequently assigned to First Union National Bank of
North Carolina) and the registrant is incorporated by reference to
Exhibit 1 to the registrant's report on Form 8-K dated January 24,
1992.
4(e) Form of Indenture (including Form of Subordinated Note) dated as of
September 1, 1993, between the registrant and First Tennessee Bank
National Association as Trustee, relating to the issuance of 7.25%
Subordinated Notes due 2003, is incorporated by reference to Exhibit
4 of the Registration Statement on Form S-2 of the registrant (File
No. 33-67686).
10(a) Distribution Agreement dated September 28, 1995 between Registrant,
Trans Financial Bank, N.A. and Donaldson, Lufkin & Jenrette
Securities Corporation............................................22
10(b) Fiscal and Paying Agency Agreement dated September 28, 1995 between
Trans Financial Bank, N.A. and First Fidelity Bank, N.A...........62
11 Statement Regarding Computation of Per Share Earnings............127
* Denotes a management contract or compensatory plan or arrangement of the
registrant required to be filed as an exhibit pursuant to Item 601 (10) (iii)
of Regulation S-K.
<PAGE>
[TYPE]EX-10
Exhibit 10(a).
U.S. $250,000,000
TRANS FINANCIAL BANK, NATIONAL ASSOCIATION
SENIOR AND SUBORDINATED BANK NOTES
DISTRIBUTION AGREEMENT
September 28, 1995
Donaldson, Lufkin & Jenrette
Securities Corporation
140 Broadway
New York, New York 10005
Dear Sirs:
Trans Financial Bank, National Association (the "Bank") and Trans
Financial, Inc. (the "Corporation") confirm their agreement with you (the
"Agent") with respect to the issuance and sale by the Bank of its senior bank
notes and subordinated bank notes (collectively, the "Notes") in an aggregate
principal amount outstanding at any one time not in excess of $250,000,000, due
from 30 days to 30 years from their date of issue in the case of senior bank
notes and from 5 years to 30 years from their date of issue in the case of
subordinated bank notes. The Bank may authorize the issuance of an additional
outstanding amount of Notes to be distributed hereunder as though authorized as
of the date hereof. The Notes are to be issued from time to time pursuant to a
fiscal and paying agency agreement, dated as of September 28, 1995 (as it may be
supplemented or amended from time to time, the "Fiscal and Paying Agency
Agreement"), between the Bank and First Fidelity Bank, N.A., as fiscal and
paying agent (the "Fiscal and Paying Agent").
The Notes shall have the applicable interest rates or interest rate
formulas, issue price, redemption and repayment provisions and other terms set
forth in the Offering Circular referred to in Section 1(a), as it may be amended
or supplemented from time to time, including any supplement providing for the
interest rate, maturity and other terms of any Note (a "Pricing Supplement").
The Notes will be issued, and the terms thereof established, from time to time,
by the Bank in accordance with the Fiscal and Paying Agency Agreement and the
Procedures referred to below. This Agreement shall only apply to sales of the
Notes and not to sales of any other securities or evidences of indebtedness of
the Bank and only on the specific terms set forth herein.
Subject to the terms and conditions stated herein and to the reservation
by the Bank of the right to sell Notes directly on its own behalf, the Bank
hereby (i) appoints the Agent as the agent of the Bank for the purpose of
soliciting and receiving offers to purchase Notes from the Bank and (ii) agrees
that whenever the Bank determines to sell Notes directly to the Agent as
principal it will enter into a separate agreement (each, a "Purchase
Agreement"). Each such Purchase Agreement, which shall be confirmed in writing,
shall be with respect to such information (as applicable) as specified in
Exhibit C hereto relating to such sale in accordance with Section 3(e) hereof.
. Representations and Warranties of the Bank.
The Bank represents and warrants to the Agent as of the date hereof,
as of the Closing Date (as defined herein) and as of the times referred to in
Sections 7(a) and 7(b) hereof (the Closing Date and each such time being
hereinafter sometimes referred to as a "Representation Date"), as follows:
(a) The Bank has prepared an offering circular (such offering
circular, together with the documents now or hereafter incorporated by
reference therein (the "Incorporated Documents"), and as such offering
circular may hereafter be amended or supplemented, the "Offering
Circular") to be used by the Agent in connection with the Agent's
solicitation of purchasers of or offering of the Notes (as used herein,
any reference to an amendment or supplement of or to the Offering Circular
shall be deemed to include any document which is, by the terms of the
Offering Circular, incorporated by reference therein);
(b) Each of the Incorporated Documents heretofore filed by the Bank
with the Federal Deposit Insurance Corporation ("FDIC"), on behalf of the
Office of the Comptroller of Currency or other federal bank regulatory
authority complied in all material respects with the applicable
requirements of the FDIC or such other federal bank regulatory authority
and of the Federal Financial Institutions Examination Council ("FFIEC"),
and none of such Incorporated Documents, when so filed, contained an
untrue statement of a material fact 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 in which they were made, not
misleading; any Incorporated Documents hereafter filed with the FDIC or
other federal bank regulatory authority and incorporated by reference in
the Offering Circular, when such documents are filed with the FDIC or such
other federal bank regulatory authority, will comply in all material
respects with the applicable requirements of the FDIC or such other
federal bank regulatory authority and the FFIEC 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 in which they were made, not
misleading; the financial data relating to the Bank set forth in the
Offering Circular and in any Incorporated Documents filed with the FDIC or
other federal bank regulatory authority present fairly (or will present
fairly, when so filed with the FDIC or such other federal bank regulatory
authority) in all material respects the consolidated financial position
and results of operations of the Bank and its consolidated subsidiaries at
the respective dates and for the respective periods for which such
information is shown, in each case in accordance with regulatory
accounting principles promulgated by the FFIEC consistently applied
throughout the periods involved except as otherwise disclosed therein;
(c) The Offering Circular does not, and will not as of the applicable
Representation Date, contain an untrue statement of a material fact with
respect to the Bank or the offering of Notes by the Bank or omit to state
a material fact with respect to the Bank or the offering of Notes by the
Bank 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; provided, however, that the representations and
warranties in this paragraph shall not apply to statements in or omissions
from the Offering Circular made in reliance upon and in conformity with
information furnished to the Bank in writing by the Agent expressly for
use therein;
(d) The Bank and each of its significant subsidiaries (as defined in
Regulation S-X of the rules and regulations of the Securities and Exchange
Commission (the "Commission"), hereinafter "significant subsidiaries") has
been duly organized and is validly existing in good standing under the
laws of its jurisdiction of organization with power and authority
(corporate and other) to own its properties and conduct its business as
described in the Offering Circular, and has been duly qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of each jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such qualification,
other than where the failure to be so qualified or in good standing would
not have a material adverse effect on the Bank and its subsidiaries taken
as a whole; and all of the issued shares of capital stock of each
significant subsidiary of the Bank have been duly authorized and validly
issued, are fully paid and non-assessable, and are owned directly or
through subsidiaries by the Bank, free and clear of any mortgage, pledge,
lien, claim or encumbrance;
(e) Each of this Agreement, any applicable Purchase Agreement and the
Fiscal and Paying Agency Agreement has been duly authorized, executed and
delivered by the Bank and constitutes the valid and binding agreement of
the Bank enforceable in accordance with its terms, except as rights to
indemnity and contribution hereunder or thereunder may be limited by
applicable federal or state securities laws;
(f) The Notes to be issued by the Bank have been duly authorized and,
when issued in accordance with the terms and provisions of the Fiscal and
Paying Agency Agreement and delivered to and paid for by the purchasers
thereof in accordance with this Agreement and any applicable Purchase
Agreement, will have been duly executed, issued and delivered by the Bank
and will constitute valid and binding obligations of the Bank enforceable
in accordance with their terms and entitled to the benefits provided by
the Fiscal and Paying Agency Agreement; the Fiscal and Paying Agency
Agreement has been duly authorized by the Bank and duly executed and
delivered by the Bank and constitutes a valid and binding instrument
enforceable against the Bank in accordance with its terms; and the Fiscal
and Paying Agency Agreement conforms, and the Notes of any particular
issuance of Notes of the Bank will conform, to the descriptions thereof in
the Offering Circular as amended or supplemented, if applicable, to relate
to such issuance of Notes;
(g) Neither the Bank nor any of its subsidiaries is, or with the
giving of notice or lapse of time or both would be, in violation of or in
default under (i) any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Bank or any such subsidiary
is a party or by which it or any of its properties is bound except for
violations and defaults which individually or in the aggregate are not
material to the Bank and its subsidiaries taken as a whole or (ii) its
charter or by-laws; the issue and sale of such Notes and the performance
by the Bank of all of its obligations under such Notes, the Fiscal and
Paying Agency Agreement, this Agreement and any Purchase Agreement, and
the consummation of the transactions herein and therein contemplated, will
not conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Bank or any
of its subsidiaries is a party or by which the Bank or any of its
subsidiaries is bound or to which any of the property or assets of the
Bank or any of its subsidiaries is subject, nor will such action result in
any violation of the provisions of the charter or the by-laws of the Bank
or any applicable law or any order, rule or regulation of any court or any
state or federal bank regulatory or other governmental agency or body
having jurisdiction over the Bank, its subsidiaries or any of its
properties; and no consent, approval, authorization, order, registration
or qualification of or with any such court or any such state or federal
bank regulatory or other governmental agency or body is required for the
issue and sale of such Notes or the consummation by the Bank of the other
transactions contemplated by this Agreement or any applicable Purchase
Agreement or the Fiscal and Paying Agency Agreement, except such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws or the regulations of the
Office of the Comptroller of the Currency in connection with the offer and
sale of the Notes;
(h) Other than as set forth in the Offering Circular, there are no
legal or governmental proceedings pending or, to the knowledge of the
Bank, threatened or contemplated to which the Bank or any of its
subsidiaries is or may be a party or to which any property of the Bank or
any of its subsidiaries is or may be the subject which might individually
or in the aggregate reasonably be expected to have a material adverse
effect on the general affairs, business, prospects, management,
consolidated financial position, stockholders' equity or results of
operations of the Bank and its subsidiaries taken as a whole;
(i) Immediately after any sale of Notes by the Bank hereunder or
under any applicable Purchase Agreement, the aggregate amount of Notes
which shall have been issued and sold by the Bank hereunder or under any
Purchase Agreement will not exceed $250,000,000;
(j) The Notes are exempt securities under Section 3(a)(2) of the
Securities Act of 1933, as amended (the "Securities Act"), and neither
registration of the Notes under the Securities Act nor qualification of an
indenture under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), is required in connection with the offer, sale, issuance
or delivery of the Notes as contemplated by this Agreement;
(k) The Bank is an insured bank under the provisions of the Federal
Deposit Insurance Act, as amended, and no proceedings for the termination
of such insurance are pending or threatened; and
(l) All of the shares of capital stock of the Bank (other than
directors' qualifying shares, if any) are owned by the Corporation either
directly or through wholly-owned subsidiaries of the Corporation.
SECTION 2 . REPRESENTATIONS AND WARRANTIES OF THE CORPORATION.
The Corporation represents and warrants to the Agent as of the date
hereof, as of the Closing Date and as of each Representation Date as follows:
(a) The Corporation has participated in the preparation of the
Offering Circular to be used by the Agent in connection with the Agent's
solicitation of purchasers of or offering of the Notes;
(b) The Corporation has authorized the Bank to incorporate by
reference in the Offering Circular reports and other documents filed by
the Corporation with the Commission pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations of the Commission thereunder; and each such Incorporated
Document complied, or when filed with the Commission will comply, in all
material respects with the requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder;
(c) The Offering Circular does not, and as of the applicable
Representation Date will not, contain an untrue statement of a material
fact with respect to the Corporation or omit to state a material fact with
respect to the Corporation 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; provided, however, that the
representations and warranties in this paragraph shall not apply to
statements in or omissions from the Offering Circular made in reliance
upon and in conformity with information furnished to the Bank in writing
by the Agent expressly for use therein;
(d) The financial statements, together with the related schedules and
notes thereto, and other financial data relating to the Corporation set
forth in the Offering Circular and in any Incorporated Documents filed
with the Commission present fairly (or will present fairly, when so filed
with the Commission) in all material respects the consolidated financial
position and results of operations of the Corporation and its consolidated
subsidiaries at the respective dates and for the respective periods for
which such information is shown, in each case in accordance with generally
accepted accounting principles consistently applied throughout the periods
shown, except as otherwise disclosed therein;
(e) This Agreement has been duly authorized, executed and delivered
by the Corporation and constitutes the valid and binding agreement of the
Corporation enforceable in accordance with its terms, except as rights to
indemnity and contribution hereunder may be limited by applicable federal
or state securities laws; and
(f) Neither the Corporation nor any of its subsidiaries is, or with
the giving of notice or lapse of time or both would be, in violation of or
in default under, (i) any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Corporation or any
of its subsidiaries is a party or by which it or any of its subsidiaries
is bound or to which any of the property or assets of the Corporation or
any of its subsidiaries is subject, except for violations and defaults
which individually or in the aggregate are not material to the Corporation
and its subsidiaries taken as a whole or (ii) its charter or by-laws; the
performance by the Corporation of all of its obligations under this
Agreement, and the consummation of the transactions herein contemplated,
will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Corporation or any of its subsidiaries is a party or by which the
Corporation or any of its subsidiaries is bound or to which any of the
property or assets of the Corporation or any of its subsidiaries is
subject, nor will such action result in any violation of the provisions of
the charter or the by-laws of the Corporation or any applicable law or any
order, rule or regulation of any court or any state or federal bank
regulatory or other governmental agency or body having jurisdiction over
the Corporation, its subsidiaries or any of its properties; and no
consent, approval, authorization, order, registration or qualification of
or with any such court or any such state or federal bank regulatory or
other governmental agency or body is required for the consummation by the
Corporation of the other transactions contemplated by this Agreement,
except such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws
in connection with the offer and sale of the Notes.
SECTION 3 . SOLICITATIONS AS AGENT; PURCHASES AS PRINCIPAL.
(a) Subject to the terms and conditions stated herein, the Bank hereby
appoints the Agent as the agent of the Bank for the purpose of soliciting or
receiving offers to purchase the Notes from the Bank by others. On the basis of
the representations and warranties contained herein, but subject to the terms
and conditions herein set forth, the Agent agrees, as the agent of the Bank, to
use its reasonable efforts to solicit offers to purchase the Notes upon the
terms and conditions set forth in the Offering Circular. It is understood that
if from time to time the Bank is approached by a prospective agent offering to
solicit a specific purchase of Notes, the Bank, may engage such agent with
respect to such specific purchase; provided that the Agent is given notice of
such purchase promptly, including the terms thereof, in each case after the
purchase is agreed upon; provided further, however that such agent shall make in
writing the representations and agreements of an Agent set forth herein and that
the Bank and such agent shall otherwise agree to be bound by the terms and
conditions of this Agreement. The Agent may also purchase Notes from the Bank as
principal for purposes of resale, as more fully described in paragraph (e) of
this Section.
(b) The Bank reserves the right, in its sole discretion, to suspend
solicitation of offers to purchase Notes commencing at any time for any period
of time or indefinitely. Upon receipt of at least one business day's prior
written notice from the Bank, the Agent will forthwith suspend solicitation of
offers to purchase Notes from the Bank until such time as the Bank has advised
the Agent that such solicitation may be resumed. For the purpose of the
foregoing sentence, "business day" shall mean any day which is not a Saturday or
Sunday and which is not a day on which (i) banking institutions are generally
authorized or obligated by law to close in The City of New York or (ii) The New
York Stock Exchange, Inc. is closed for trading.
Upon receipt of notice from the Bank as contemplated by this
Section 3(b), the Agent shall suspend its solicitation of offers to purchase the
Notes until such time as the Bank shall have furnished it with an amendment or
supplement to the Offering Circular contemplated by Section 4(b), if required by
the terms of such Section, and the Bank shall have advised the Agent that such
solicitation may be resumed.
(c) Promptly upon the closing of the sale of any Notes sold by the Bank as
a result of a solicitation made by or offer to purchase received by the Agent,
the Bank agrees to pay the Agent a commission, in the form of a discount, in
accordance with the schedule set forth in Exhibit A hereto.
(d) The Agent is authorized to solicit offers to purchase the Notes only
in such denominations as are specified in the Offering Circular at a purchase
price as shall be specified by the Bank. The Agent shall communicate to the
Bank, orally or in writing, each reasonable offer to purchase Notes received by
it as an Agent. The Bank shall have the sole right to accept offers to purchase
such Notes and may reject any such offer in whole or in part. The Agent shall
have the right, in its discretion reasonably exercised without advising the
Bank, to reject any offer to purchase the Notes received by it, in whole or in
part, and any such rejection shall not be deemed a breach of its agreement
contained herein.
No Note which the Bank has agreed to sell pursuant to this
Agreement shall be deemed to have been purchased and paid for, or sold by the
Bank, until such Note shall have been delivered to the purchaser thereof against
payment by such purchaser.
(e) Each sale of Notes to the Agent as principal, for resale to one or
more investors or to another broker-dealer (acting as principal for purposes of
resale), shall be made in accordance with the terms of this Agreement and a
Purchase Agreement, which shall be confirmed in writing, which will provide for
the sale of such Notes to, and the purchase thereof by, the Agent. A Purchase
Agreement may also specify certain provisions relating to the reoffering of such
Notes by the Agent. The commitment of the Agent to purchase Notes from the Bank
as principal shall be deemed to have been made on the basis of the
representations and warranties of the Bank herein contained and shall be subject
to the terms and conditions herein set forth. Each Purchase Agreement shall
specify the principal amount and terms of the Notes of the Bank to be purchased
by the Agent, the time and date (each such time and date being referred to
herein as a "Time of Delivery") and place of delivery of and payment for such
Notes and such other information (as applicable) as is set forth in Exhibit C
hereto. The Bank agrees that if the Agent purchases its Notes as principal for
resale the Agent shall receive such compensation, in the form of a discount or
otherwise, as shall be indicated in the applicable Purchase Agreement or, if no
compensation is indicated therein, a commission in accordance with Exhibit A
hereto. The Agent may utilize a selling or dealer group in connection with the
resale of such Notes. In addition, the Agent may offer the Notes it has
purchased as principal to other dealers. The Agent may sell Notes to any dealer
at a discount and, unless otherwise specified in an applicable Purchase
Agreement, such discount allowed to any dealer will not be in excess of 66-2/3%
of the discount or commission to be received by the Agent from the Bank. Such
Purchase Agreement shall also specify any requirements for delivery of opinions
of counsel and officers' certificates pursuant to Section 6 hereof.
(f) Administrative procedures relating to the sale of Notes (the
"Procedures") are set forth in Exhibit B hereto and may be amended in writing
from time to time by agreement between the Agent and the Bank. The Agent and the
Bank agree to perform the respective duties and obligations specifically
provided to be performed by each of them herein and in the Procedures. The
Procedures shall apply to all transactions contemplated hereunder, including
sales of Notes to the Agent as principal pursuant to a Purchase Agreement,
unless otherwise set forth in such Purchase Agreement.
(g) The documents required to be delivered pursuant to Section 6 hereof on
the Closing Date (as defined below) shall be delivered at the offices of Simpson
Thacher & Bartlett, 425 Lexington Avenue, New York, New York 10017, at 10:00
A.M., New York City time, on the date of this Agreement, which date and time of
such delivery may be postponed by agreement between the Agent and the Bank but
in no event shall be later than the day prior to the date on which solicitation
of offers to purchase Notes is commenced (such time and date being referred to
herein as the "Closing Date").
SECTION 4 . COVENANTS OF THE BANK.
The Bank covenants and agrees with the Agent:
(a) To make no amendment or supplement to the Offering Circular (excluding
Incorporated Documents) prior to the Closing Date or the date on which any
Purchase Agreement is executed which shall be disapproved by the Agent in its
reasonable discretion promptly after reasonable notice thereof, or after the
date of any Purchase Agreement and prior to the related Time of Delivery which
shall be disapproved by the Agent promptly after reasonable notice thereof, and
to make no such amendment or supplement at any other time prior to having
afforded the Agent a reasonable opportunity to review and comment on it. The
Bank will advise the Agent as promptly as practicable of the institution by any
federal or state bank or securities regulatory authority of any proceedings in
respect of the Offering Circular (including any proceeding relating to any
Incorporated Documents) or the offering of Notes and will use its reasonable
best efforts to prevent the issuance of any order interfering with the offering
of such Notes and to obtain as soon as possible its lifting, if issued.
(b) To furnish the Agent with copies of the Offering Circular and each
amendment or supplement thereto in such quantities as the Agent may reasonably
request from time to time; and if at any time while this Agreement is in effect
or, in the event this Agreement is terminated, at any time the Agent is holding
Notes it purchased as a principal, any event shall have occurred as a result of
which the Offering Circular as then amended or supplemented would include 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 made, not misleading, or if for
any other reason it shall be necessary or required during such period to amend
or supplement the Offering Circular, the Bank shall notify the Agent by
telephone, with confirmation in writing, to suspend solicitations of offers to
purchase Notes, and upon the request of the Agent, shall prepare and furnish
without charge to the Agent and to any person designated by the Agent as many
copies as the Agent may from time to time reasonably request of an amended
Offering Circular or a supplement to the Offering Circular which will correct
such statement or omission.
(c) To advise the Agent immediately (i) of receipt by the Bank of any
notification with respect to the suspension of the qualification of the Bank's
Notes for sale in any jurisdiction or the initiation or threat of any proceeding
for that purpose and (ii) of any downgrading in the rating of such Notes or any
other debt securities or deposits of the Bank or any debt securities of the
Corporation, or any proposal to downgrade the rating of such Notes or any other
debt securities or deposits of the Bank or any debt securities of the
Corporation, by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Securities Act), or any public
announcement that any such organization has under surveillance or review its
rating of any debt securities or deposits of the Bank or any debt securities of
the Corporation (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading of such rating)
as soon as the Bank or the Corporation learns of any such downgrading, proposal
to downgrade or public announcement.
(d) To endeavor, in cooperation with the Agent, to qualify the Bank's
Notes for offering and sale under the securities laws of such jurisdictions as
the Agent may designate, and to maintain such qualifications in effect for as
long as may be required for the distribution of such Notes; and to file such
statements and reports as may be required by the laws of each jurisdiction in
which such Notes have been qualified as above provided.
(e) To prepare with respect to any Notes to be sold through or to the
Agent pursuant to this Agreement, a Pricing Supplement with respect to such
Notes in a form previously approved by the Agent.
(f) To furnish the Agent with copies of any Incorporated Documents,
promptly, after the filing thereof, at any time while this Agreement is in
effect or, in the event this Agreement is terminated, at any time the Agent is
holding Notes it purchased as a principal.
(g) In the event subordinated Notes are to be issued, to prepare a
supplement to the Offering Circular in a form reasonably acceptable to the Agent
which shall include the terms of such Notes.
SECTION 5 . PAYMENT OF EXPENSES.
The Bank agrees to pay or cause to be paid:
(i) the costs incident to the authorization, issuance,
sale and delivery of the Notes and any taxes payable in that connection;
(ii) the costs incident to the preparation and printing
of the Offering Circular and any
amendments and supplements thereto and the mailing and delivery of copies
thereof to the Agent;
(iii) the fees and expenses of the Fiscal and Paying Agent and any
agent of the Fiscal and Paying Agent and the fees and disbursements of
counsel to the Fiscal and Paying Agent or such agent in connection with
the Fiscal and Paying Agency Agreement and the Notes;
(iv) the cost and fees in connection with any filings with the
National Association of Securities Dealers, Inc.;
(v) the fees and disbursements of counsel to the Corporation,
the Bank and counsel to the Agent; provided that the fees and
disbursements of counsel to the Agent shall not exceed $60,000;
(vi) the fees paid to rating agencies in connection with the
rating of the Notes;
(vii) the fees and expenses of qualifying the Notes under
the securities laws of the several jurisdictions as provided in
Section 4(d) hereof;
(viii) all advertising expenses in connection with the offering
of the Notes incurred in accordance with the Procedures; and
(ix) all other costs and expenses arising out of the transactions
contemplated hereunder and incident to the performance of the obligations
of the Bank under this Agreement or otherwise in connection with the
activities of the Agent under this Agreement.
SECTION 6 . CONDITIONS OF OBLIGATIONS OF AGENT.
The obligation of the Agent, as the agent of the Bank, under this
Agreement to solicit offers to purchase the Notes, the obligation of any person
who has agreed to purchase Notes to make payment for and take delivery of Notes,
and the obligation of the Agent to purchase Notes pursuant to any Purchase
Agreement, is subject to the accuracy, on each Representation Date, of the
representations and warranties of the Corporation and the Bank contained herein,
to the accuracy of the statements of the officers of the Corporation and the
Bank made in any certificate furnished pursuant to the provisions hereof, to the
performance by the Bank of its obligations hereunder, and to each of the
following additional terms and conditions:
(a) No order suspending the sale of the Notes in any jurisdiction
designated by the Agent pursuant to Section 4(d) hereof shall have been issued,
and no proceeding for that purpose shall have been initiated or threatened.
(b) The Agent shall not have discovered and disclosed to the Bank that the
Offering Circular contains an untrue statement of a fact which, in the opinion
of counsel for the Agent, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Notes, the Offering
Circular (other than financial statements and other financial data) and all
other legal matters relating to this Agreement and the transactions contemplated
hereby shall be satisfactory in all respects to counsel for the Agent, and the
Corporation and the Bank shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon such
matters.
(d) At the Closing Date, the Agent shall have received an opinion or
opinions, addressed to the Agent and dated the Closing Date, of Wyatt Tarrant &
Combs, counsel to the Bank, in form and substance satisfactory to the Agent and
their counsel, to the effect that:
(i) The Corporation and the Bank has each been duly organized and is
validly existing and in good standing under the laws of its jurisdiction
of organization, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Offering Circular;
(ii) Each of the Corporation's and the Bank's significant
subsidiaries, if any, has been duly incorporated and is validly existing
and in good standing as a corporation under the laws of its jurisdiction
of incorporation with power and authority (corporate and other) to own its
properties and conduct its business as described in the Offering Circular;
all of the outstanding shares of capital stock of the Bank (other than
directors' qualifying shares, if any) are owned of record and, to the best
knowledge of such counsel, beneficially by the Corporation either directly
or through wholly-owned subsidiaries; and, to the best of such counsel's
knowledge, all of the issued shares of capital stock of each significant
subsidiary of the Corporation and of the Bank have been duly authorized
and validly issued, are fully paid and non-assessable (subject to 12 USC
ss.55 in the case of the Corporation's national bank subsidiaries), and
except for directors' qualifying shares, if any, are owned directly or
through subsidiaries by the Corporation or the Bank, as the case may be,
free and clear, to the best of such counsel's knowledge, of any mortgage,
pledge, lien, claim or encumbrance;
(iii) The Bank has the power and authority (corporate and other)
necessary to execute and deliver this Agreement, the Fiscal and Paying
Agency Agreement and any applicable Purchase Agreement and to perform its
obligations hereunder and thereunder (including the sale and delivery of
the Notes under this Agreement); this Agreement, any applicable Purchase
Agreement and the Fiscal and Paying Agency Agreement have been duly
authorized, executed and delivered by the Bank; and the Fiscal and Paying
Agency Agreement is a valid and legally binding obligation of the Bank
enforceable in accordance with its terms, except as any rights thereunder
to indemnity and contribution may be limited by applicable federal or
state securities laws;
(iv) The Corporation has the power and authority (corporate and
other) necessary to execute and deliver this Agreement and to perform its
obligations hereunder; this Agreement has been duly authorized, executed
and delivered by the Corporation;
(v) The Notes are in the form contemplated by the Fiscal and Paying
Agency Agreement and the Bank's Notes have been duly authorized by all
necessary corporate action and, when executed and authenticated in
accordance with the terms of the Fiscal and Paying Agency Agreement and
delivered to and paid for by any purchaser of such Notes sold through the
Agent as agent or by the Agent as principal pursuant to any Purchase
Agreement, will constitute legal, valid and binding obligations of the
Bank enforceable in accordance with their terms and entitled to the
benefits provided by the Fiscal and Paying Agency Agreement;
(vi) To the best of such counsel's knowledge, none of the
Corporation, the Bank or any of their respective significant subsidiaries
(if any) is, or with the giving of notice or lapse of time or both would
be, in violation of or in default under, its charter or by-laws or any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Corporation or the Bank or any of their respective
significant subsidiaries is a party or by which it or any of them or any
of their respective properties is bound, except for violations or defaults
which individually or in the aggregate are not material to the Corporation
or the Bank, as the case may be, and its significant subsidiaries taken as
a whole;
(vii) The issue and sale of the Notes and the performance by the Bank
of its obligations under the Notes, the execution, delivery and
performance of the Fiscal and Paying Agency Agreement, this Agreement and
any applicable Purchase Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in the
creation or imposition of any lien, charge, or encumbrance upon any of the
assets of the Corporation, the Bank or their respective significant
subsidiaries pursuant to the terms of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Corporation or the Bank or
any of their respective significant subsidiaries is a party or by which
the Corporation or the Bank or any of their respective significant
subsidiaries is bound or to which any of the property or assets of the
Corporation or the Bank or any of their respective significant
subsidiaries is subject, nor will any such action result in any violation
of the charter or the by-laws of the Corporation or the Bank or any of
their respective significant subsidiaries or any applicable law or statute
or any order, rule or regulation of any court or any state or federal bank
regulatory or other governmental agency or body having jurisdiction over
the Corporation or the Bank, their respective significant subsidiaries or
any of their respective properties, except for violations or defaults
which individually or in the aggregate are not material to the Corporation
or the Bank, as the case may be, and its significant subsidiaries taken as
a whole;
(viii) No consent, approval, authorization, order, filing, registration
or qualification of or with any court or any state or federal bank
regulatory or other governmental agency or body is required for the issue
and sale of the Notes by the Bank or the consummation of the other
transactions contemplated by this Agreement, any applicable Purchase
Agreement or the Fiscal and Paying Agency Agreement, except such consents,
approvals, authorizations, filings, registrations or qualifications as may
be required under state securities or Blue Sky laws or the regulations of
the Office of the Comptroller of the Currency, in connection with the
offers and sales of the Notes by the Bank;
(ix) The statements made in the Offering Circular under the caption
"Description of the Bank Notes," insofar as they purport to constitute a
summary of the terms of documents referred to therein, constitute accurate
summaries of the terms of such documents (subject to the insertion in the
Notes of the maturity dates, interest rates and other similar terms
thereof);
(x) Other than as set forth in the Offering Circular, to the best of
such counsel's knowledge, there are no legal or governmental proceedings
pending or threatened or contemplated to which the Corporation or the
Bank, or any of their respective significant subsidiaries, is or may be a
party or to which any property of the Corporation or the Bank, or any of
their respective significant subsidiaries, is or may be the subject which
could individually or in the aggregate reasonably be expected to have a
material adverse effect on the general affairs, business, prospects,
management, consolidated financial position, stockholders' equity or
results of operations of the Corporation or the Bank and its subsidiaries
taken as a whole;
(xi) No facts have come to such counsel's attention which lead it to
believe that the Offering Circular as of its date, as of the settlement
date with respect to the sale of any Notes sold to the Agent as principal
pursuant to Section 3(e) hereof and as of any date an opinion is required
to be delivered by such counsel pursuant to Section 7(c) hereof, contains
an untrue statement of a material fact or omits 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 were made, not
misleading (except that such counsel need not express any opinion as to
the financial statements or schedules and other financial or operating
data included or incorporated by reference therein); the descriptions in
the Offering Circular of statutes, regulations, legal and governmental
proceedings and other documents which pertain to the Bank, the Corporation
or the Notes are accurate in all respects and fairly present the
information required to be shown;
(xii) To the best of such counsel's knowledge, no investigation, no order
directed to any document incorporated by reference in the Offering
Circular has been issued and no challenge has been made to the accuracy or
adequacy of any such document;
(xiii) The Notes are exempt securities under Section 3(a)(2) of the
Securities Act, and neither registration of the Notes under the Securities
Act nor qualification of an indenture under the Trust Indenture Act is
required in connection with the offer, sale, issuance or delivery of such
Notes as contemplated by this Agreement; and
(xiv) The Bank is an insured bank under the applicable provisions of
the Federal Deposit Insurance Act, as amended.
Such counsel may state that the opinions set forth in
paragraphs (iii) and (v) above are subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other laws of
general applicability relating to or affecting the rights of creditors generally
or of creditors of depository institutions the accounts of which are insured by
FDIC and by general equitable principles (whether considered in a proceeding in
equity or at law). Such counsel may rely on the opinion of counsel to the Agent
as to matters of New York law.
(e) The Bank and the Corporation shall each have furnished to the Agent on
the Closing Date a certificate, dated the Closing Date, of its Chief Executive
Officer or Executive Vice President and its Chief Financial Officer, Treasurer
or Assistant Treasurer stating that:
(i) The representations, warranties and agreements of the Bank and
of the Corporation in Sections 1 and 2 hereof, as the case may be, are
true and correct as of the Closing Date; the Bank has complied with all
its agreements contained herein; and the conditions set forth in Section
6(a) hereof have been fulfilled; and
(ii) They have carefully examined the Offering Circular and, in their
opinion, the Offering Circular does not contain any 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.
(f) The Agent shall have received from Simpson Thacher & Bartlett,
counsel to the Agent, such opinion or opinions, dated the Closing Date, with
respect to the issuance and sale of the Notes, the Fiscal and Paying Agency
Agreement, the Offering Circular and other related matters as the Agent may
reasonably require, and the Corporation and the Bank shall have furnished to
such counsel such documents as they may request for the purpose of enabling them
to pass upon such matters.
(g) No order shall have been issued by any federal or state bank or
securities regulatory authority in respect of the Offering Circular or the
offering of Notes contemplated thereby which would interfere with such offering
of the Notes and no proceedings for that purpose shall have been instituted or
threatened or to the knowledge of the Corporation or the Bank shall be
contemplated by any such authority.
(h) There shall not have occurred: (i) any adverse change or development
involving a prospective adverse change in the capital stock or long-term debt of
the Corporation or any of its subsidiaries or the Bank or any of its
subsidiaries or in the condition, financial or otherwise, of the Corporation or
any of its subsidiaries or of the Bank or any of its subsidiaries or the
earnings, affairs, or business prospects of the Corporation or any of its
subsidiaries or of the Bank or any of its subsidiaries, whether or not arising
in the ordinary course of business, which would, in the opinion of the Agent,
materially impair the investment quality of the Bank's Notes; (ii) any
downgrading, or any notice given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any of the Corporation's or any of the
Bank's securities by any "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; (iii) any liability or obligation, direct or contingent, which
is material to the Corporation and its subsidiaries, taken as a whole, other
than those reflected in the Offering Circular; (iv) any outbreak or escalation
of hostilities or other national or international calamity or crisis or change
in economic conditions or in the financial markets of the United States or
elsewhere that, in the judgment of the Agent, is material and adverse and would,
in the judgment of the Agent, make it impracticable to market the Notes on the
terms and in the manner contemplated in the Offering Circular; (v) the
suspension or material limitation of trading in any securities of the Company on
any exchange or the over-the-counter ("OTC") market or limitation on prices for
any securities on any exchange or the OTC market; (vi) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority which in
the opinion of the Agent materially and adversely affects, or will materially
and adversely affect, the business or operations of the Corporation or any of
its subsidiaries; (vii) the declaration of a banking moratorium by either
federal or New York State authorities or (viii) the taking of any action by any
federal, state or local government or agency in respect of its monetary or
fiscal affairs which in the opinion of the Agent has a material adverse effect
on the financial markets in the United States.
For purposes of this section 6(h), it is understood that with
respect to any person who has agreed to purchase Notes as a result of an offer
to purchase solicited by the Agent the judgment or opinion of such person shall
be substituted for the respective judgments or opinions referred to herein of
the Agent, and that the Agent shall have no duty or obligation whatsoever to
exercise such judgment or opinion on behalf of any such person.
(i) Prior to the Closing Date, the Corporation and the Bank shall have
furnished to the Agent such further information, certificates and documents as
the Agent or counsel to the Agent may reasonably request.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in the form and substance satisfactory to
counsel for the Agent.
SECTION 7 . ADDITIONAL COVENANTS OF THE CORPORATION AND THE BANK. Each of
the Corporation and the Bank covenants and agrees that:
(a) Each acceptance by the Bank of an offer for the purchase of Notes
shall be deemed to be an affirmation that the representations and warranties of
the Corporation and the Bank contained in this Agreement and in any certificate
theretofore given to the Agent pursuant hereto are true and correct at the time
of such acceptance, and an undertaking that such representations and warranties
will be true and correct at the time of delivery to the purchaser or his agent
of the Notes relating to such acceptance as though made at and as of each such
time (and such representations and warranties shall relate to the Offering
Circular as amended or supplemented to each such time).
(b) During each period preceding the date, if any, on which the Bank has
advised the Agent to suspend solicitations of offers to purchase Notes pursuant
to Section 3(b) or after which the Bank has advised the Agent that the
solicitation of offers to purchase Notes which was suspended may be resumed (the
"Marketing Period"), each time that the Offering Circular shall be amended or
supplemented (other than by a Pricing Supplement providing solely for the
interest rates or maturities of the Notes or the principal amount of Notes
remaining to be sold or similar changes and other than as a result of the filing
with the FDIC of an Incorporated Document by the Bank or other than as a result
of the filing of a Current Report on Form 8-K by the Corporation solely for the
purpose of filing with the Commission a press release with respect to quarterly
or annual earnings) or each time the Bank sells Notes to the Agent as principal
and the applicable Purchase Agreement specifies the delivery of an officers'
certificate under this Section 7(b) as a condition to the purchase of Notes
pursuant to such Purchase Agreement, the Bank and the Corporation shall submit
to the Agent certificates, (i) as of the date of such amendment or supplement or
as of the Time of Delivery relating to such sale or (ii) if such Offering
Circular was not amended or supplemented during a Marketing Period, as of the
first day of the next succeeding Marketing Period, representing that the
statements contained in the certificates referred to in Section 6(e) hereof
which were last furnished to the Agent are true and correct at the time of such
amendment or supplement, Time of Delivery or first day of such Marketing Period,
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 Offering Circular as amended and
supplemented to such time).
(c) During each Marketing Period, each time that the Offering Circular
shall be amended or supplemented (other than by a Pricing Supplement providing
solely for the interest rates or maturities of the Notes or the principal amount
of Notes remaining to be sold or similar changes and other than as a result of
the filing with the FDIC of an Incorporated Document by the Bank or other than
as a result of the filing of a Current Report on Form 8-K by the Corporation
solely for the purpose of filing with the Commission a press release with
respect to quarterly or annual earnings) or each time the Bank sells Notes to
the Agent as principal and the applicable Purchase Agreement specifies the
delivery of a legal opinion under this Section 7(c) as a condition to the
purchase of Notes pursuant to such Purchase Agreement, the Bank shall, (i)
concurrently with such amendment, supplement or Time of Delivery relating to
such sale or (ii) if such Offering Circular was not amended or supplemented
during a Marketing Period, on the first day of the next succeeding Marketing
Period, furnish the Agent and its counsel with the written opinion of Wyatt
Tarrant & Combs, counsel to the Bank, or of such other counsel acceptable to the
Agent, addressed to the Agent and dated the date of delivery of such opinion, in
form satisfactory to the Agent, of the same effect as the opinion referred to in
Section 6(d) hereof but modified, as necessary, to relate to the Offering
Circular as amended or supplemented to the time of delivery of such opinion;
provided, however, that in lieu of such opinion, such counsel may furnish the
Agent with a letter to the effect that the Agent may rely on such counsel's
prior opinion to the same extent as though it was dated the date of such letter
authorizing reliance (except that statements in such prior opinion shall be
deemed to relate to the Offering Circular as amended or supplemented to the time
of delivery of such letter authorizing reliance).
(d) On any settlement date for the sale of Notes, the Bank shall, if
requested by the Agent, furnish the Agent with a written opinion of Wyatt
Tarrant & Combs, counsel to the Bank, or of such other counsel acceptable to the
Agent, dated such settlement date, in form satisfactory to the Agent, to the
effect set forth in Section 6(d) hereof, but modified, as necessary, to relate
to the Offering Circular relating to the Notes to be delivered on such
settlement date; provided, however, that in lieu of such opinion, such counsel
may furnish the Agent with a letter to the effect that the Agent may rely on
such counsel's prior opinion to the same extent as though it was dated such
settlement date (except that statements in such prior opinion shall be deemed to
relate to the Offering Circular as amended or supplemented to the time of
delivery of such letter authorizing reliance).
SECTION 8 . INDEMNIFICATION AND CONTRIBUTION BY THE BANK.
(a) The Bank agrees to indemnify and hold harmless the Agent and each
person, if any, who controls the Agent within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages, liabilities and judgments arising out of or related to
any untrue statement or alleged untrue statement of a material fact contained in
any Offering Circular (as amended or supplemented if the Bank shall have
furnished any amendments or supplements thereto), or arising out of or related
to any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to the Agent furnished in writing to the Bank by or on
behalf of the Agent expressly for use therein.
(b) In case any action shall be brought against the Agent or any person
controlling the Agent, based upon the Offering Circular or any amendment or
supplement thereto and with respect to which indemnity may be sought against the
Bank, the Agent shall promptly notify the Bank in writing and the Bank shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses. The
Agent or any such controlling person shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the Agent or such
controlling person unless (i) the employment of such counsel shall have been
specifically authorized in writing by the Bank, (ii) the Bank shall have failed
to assume the defense and employ counsel or (iii) the named parties to any such
action (including any impleaded parties) include both the Agent or such
controlling person and the Bank and the Agent or such controlling person shall
have been advised by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
Bank (in which case the Bank shall not have the right to assume the defense of
such action on behalf of the Agent or such controlling person, it being
understood, however, that the Bank shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for the Agent and controlling persons, which firm
shall be designated in writing by the Agent and that all such fees and expenses
shall be reimbursed as they are incurred). The Bank shall not be liable for any
settlement of any such action effected without its written consent but if
settled with the written consent of the Bank, the Bank agrees to indemnify and
hold harmless the Agent and any such controlling person from and against any
loss or liability by reason of such settlement. Notwithstanding the immediately
preceding sentence, if in any case where the fees and expenses of counsel are at
the expense of the indemnifying party and an indemnified party shall have
requested the indemnifying party to reimburse the indemnified party for such
fees and expenses of counsel as incurred, such indemnifying party agrees that it
shall be liable for any settlement of any action effected without its written
consent if (i) such settlement is entered into more than ten business days after
the receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall have failed to reimburse the indemnified party in
accordance with such request for reimbursement prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(c) The Agent agrees to indemnify and hold harmless the Bank and any
person controlling the Bank within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, to the same extent as the foregoing
indemnity from the Bank to the Agent but only with reference to information
relating to the Agent furnished in writing to the Bank by or on behalf of the
Agent expressly for use in the Offering Circular. In case any action shall be
brought against the Bank, any of its directors or any person controlling the
Bank based on the Offering Circular and in respect of which indemnity may be
sought against the Agent, the Agent shall have the rights and duties given to
the Bank (except that if the Bank shall have assumed the defense thereof, the
Agent shall not be required to do so, but may employ separate counsel therein
and participate in the defense thereof but the fees and expenses of such counsel
shall be at the expense of the Agent), and the Bank and any person controlling
the Bank shall have the rights and duties given to the Agent, by Section 8(b)
hereof.
(d) If the indemnification provided for in this Section 8 is unavailable
to an indemnified party in respect of any losses, claims, damages, liabilities
or judgments referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities and judgments (i) in such proportion as is appropriate to reflect
the relative benefits received by the Bank on the one hand and the Agent on the
other hand from the offering of the Bank's Notes or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Bank and the Agent in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Bank and the
Agent shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Bank's Notes (before deducting expenses) received by
the Bank, and the total underwriting discounts and commissions received by the
Agent from the offering of the Bank's Notes, bear to the total price to the
public of the Bank's Notes. The relative fault of the Bank and the Agent shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Bank or the Agent and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
SECTION 9 . INDEMNIFICATION AND CONTRIBUTION BY THE CORPORATION.
(a) The Corporation agrees to indemnify and hold harmless the Agent and
each person, if any, who controls the Agent within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and against any and
all losses, claims, damages, liabilities and judgments arising out of or
relating to any untrue statement or alleged untrue statement of a material fact
contained in the Offering Circular (as amended or supplemented if the
Corporation shall have furnished any amendments or supplements thereto), or
arising out of or related to any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or judgments are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to the
Agent furnished in writing to the Bank by or on behalf of the Agent expressly
for use therein.
(b) In case any action shall be brought against the Agent or any person
controlling the Agent, based upon any Offering Circular or any amendment or
supplement thereto and with respect to which indemnity may be sought against the
Corporation, the Agent shall promptly notify the Corporation in writing and the
Corporation shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to such indemnified party and payment of all
fees and expenses. The Agent or any such controlling person shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the Agent or such controlling person unless (i) the employment of such counsel
shall have been specifically authorized in writing by the Corporation, (ii) the
Corporation shall have failed to assume the defense and employ counsel or (iii)
the named parties to any such action (including any impleaded parties) include
both the Agent or such controlling person and the Corporation and the Agent or
such controlling person shall have been advised by such counsel that there may
be one or more legal defenses available to it which are different from or
additional to those available to the Corporation (in which case the Corporation
shall not have the right to assume the defense of such action on behalf of the
Agent or such controlling person, it being understood, however, that the
Corporation shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for the Agent and any controlling persons, which firm shall be
designated in writing by the Agent, and that all such fees and expenses shall be
reimbursed as they are incurred). The Corporation shall not be liable for any
settlement of any such action effected without its written consent but if
settled with the written consent of the Corporation, the Corporation agrees to
indemnify and hold harmless the Agent and any such controlling person from and
against any loss or liability by reason of such settlement. Notwithstanding the
immediately preceding sentence, if in any case where the fees and expenses of
counsel are at the expense of the indemnifying party and an indemnified party
shall have requested the indemnifying party to reimburse the indemnified party
for such fees and expenses of counsel as incurred, such indemnifying party
agrees that it shall be liable for any settlement of any action effected without
its written consent if (i) such settlement is entered into more than ten
business days after the receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall have failed to reimburse the
indemnified party in accordance with such request for reimbursement prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
(c) The Agent agrees to indemnify and hold harmless the Corporation and
any person controlling the Corporation within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Corporation to the Agent but only with reference to
information relating to the Agent furnished in writing by or on behalf of such
Agent through you expressly for use in any Offering Circular. In case any action
shall be brought against the Corporation or any person controlling the
Corporation based on the Offering Circular and in respect of which indemnity may
be sought against the Agent, the Agent shall have the rights and duties given to
the Corporation (except that if the Corporation shall have assumed the defense
thereof, the Agent shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof but the fees and expenses
of such counsel shall be at the expense of the Agent), and the Corporation and
any person controlling the Corporation shall have the rights and duties given to
the Agent, by Section 9(b) hereof.
(d) If the indemnification provided for in this Section 9 is unavailable
to an indemnified party in respect of any losses, claims, damages, liabilities
or judgments referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities and judgments (i) in such proportion as is appropriate to reflect
the relative benefits received by the Corporation on the one hand and the Agent
on the other hand from the offering of Notes by the Bank or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Corporation
and the Agent in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Corporation and the Agent shall be deemed to be in the same proportion as the
total net proceeds from the offering of Notes (before deducting expenses)
received by the Bank, and the total underwriting discounts and commissions
received by the Agent, bear to the total price to the public of the Notes issued
by the Bank. The relative fault of the Corporation and the Agent shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Corporation or the Agent and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Corporation and the Agent agree that it would not be just
and equitable if contribution pursuant to this Section 9(d) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, the Agent shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Notes purchased by or sold through such Agent and distributed
to the public were offered to the public exceeds the amount of any damages which
such Agent has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
SECTION 10 . STATUS OF THE AGENT.
In soliciting offers to purchase Notes from the Bank pursuant to
this Agreement (other than in respect of any Purchase Agreement), the Agent is
acting solely as agent for the Bank and not as principal. The Agent will make
reasonable efforts to assist the Bank in obtaining performance by each purchaser
whose offer to purchase Notes from the Bank has been solicited by the Agent and
accepted by the Bank but the Agent shall have no liability to the Bank in the
event any such purchase is not consummated for any reason. If the Bank shall
default in its obligations to deliver Notes to a purchaser whose offer it has
accepted, the Bank shall (i) hold the Agent harmless against any loss, claim or
damage arising from or as a result of such default by the Bank and (ii) pay to
the Agent any commission to which it would be entitled in connection with such
sale.
SECTION 11 REPRESENTATIONS, WARRANTIES AND OBLIGATIONS TO SURVIVE
DELIVERY.
The respective indemnities, agreements, representations, warranties
and other statements of the Corporation, the Bank and the Agent contained in
this Agreement, or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain operative and in full force and effect, regardless of
any investigation made by or on behalf of the Agent or any person controlling
such Agent or by or on behalf of the Corporation or the Bank, and shall survive
each delivery of and payment for any of the Notes.
SECTION 12 . TERMINATION.
This Agreement may be terminated for any reason with respect to any
party hereto, at any time, by any party hereto upon the giving of sixty day's
written notice of such termination to the other parties hereto; provided,
however, that such termination shall be effective only with respect to such
terminating party. If, at the time of a termination, an offer to purchase any of
the Notes has been accepted by the Bank but the time of delivery to the
purchaser has not occurred, the provisions of this Agreement shall remain in
effect with respect to the Agent, the Corporation and the Bank until such Notes
are delivered. The provisions of Sections 3(c), 5, 8, 9, 10 and 11 hereof shall
survive any termination of this Agreement.
SECTION 13 . NOTICES.
Except as otherwise provided herein, 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 Agent shall be directed to it as
follows: Donaldson, Lufkin & Jenrette Securities Corporation,
140 Broadway, New York, New York 10005, Attention: Roger Thomson,
Telephone No.: (212)504-3192, Facsimile No.: (212) 504-8244;
notices to the Bank shall be directed to it as follows: 500 East Main
Street, Bowling Green, Kentucky 42101 Attention: Edward R. Matthews;
Telephone No.: (502) 793-7717; Facsimile No.: (502) 793-7753.
SECTION 14 . BINDING EFFECT; BENEFITS.
This Agreement shall be binding upon the Agent, the Corporation, the
Bank and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(a) the representations, warranties, indemnities and agreements of the
Corporation and the Bank contained in this Agreement shall also be deemed to be
for the benefit of the person or persons, if any, who control the Agent within
the meaning of Section 15 of the Securities Act, and (b) the indemnity agreement
of the Agent contained in Section 8 and Section 9 hereof shall be deemed to be
for the benefit of any person controlling the Corporation and the Bank. Nothing
in this Agreement is intended or shall be construed to give any person, other
than the person referred to in this Section, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained
herein.
SECTION 15 . GOVERNING LAW; COUNTERPARTS.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. This Agreement may be executed in
counterparts and the executed counterparts shall together constitute a single
instrument.
SECTION 16 . PARAGRAPH HEADINGS.
The paragraph headings used in this Agreement are for convenience of
reference only, and are not to affect the construction hereof or be taken into
consideration in the interpretation hereof.
<PAGE>
If the foregoing correctly sets forth our agreement, please indicate
your acceptance hereof in the space provided for that purpose below.
Very truly yours,
TRANS FINANCIAL BANK, NATIONAL ASSOCIATION
By:
Title:
TRANS FINANCIAL, INC.
By:
Title:
CONFIRMED AND ACCEPTED, as of the date first above written:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:
Authorized Signatory
<PAGE>
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B-58
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EXHIBIT A
TRANS FINANCIAL BANK, NATIONAL ASSOCIATION
Senior Bank Notes
SCHEDULE OF PAYMENTS
The Bank agrees to pay the Agent a commission not to exceed the following
percentage of the aggregate U.S. dollar equivalent of the principal amount of
the Senior Bank Notes issued by the Bank:
============================================= =============================
TERM COMMISSION RATE
============================================= =============================
30 days to less than 6 months .075%
============================================= =============================
6 months to less than 9 months .100%
============================================= =============================
9 months to less than 12 months .125%
============================================= =============================
12 months to less than 18 months .150%
============================================= =============================
18 months to less than 2 years .200%
============================================= =============================
2 years to less than 3 years .250%
============================================= =============================
3 years to less than 4 years .350%
============================================= =============================
4 years to less than 5 years .450%
============================================= =============================
5 years to less than 6 years .500%
============================================= =============================
6 years to less than 7 years .550%
============================================= =============================
7 years to less than 10 years .625%
============================================= =============================
10 years to less than 12 years .650%
============================================= =============================
12 years to less than 15 years .675%
============================================= =============================
15 years to less than 20 years .750%
============================================= =============================
20 years or more .875%
============================================= =============================
<PAGE>
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EXHIBIT B
===============================================================================
ADMINISTRATIVE PROCEDURES
TRANS FINANCIAL BANK, NATIONAL ASSOCIATION
Bank Notes (the "Notes") are to be offered on a continuing basis by Trans
Financial Bank, National Association (the "Issuing Bank"). Donaldson, Lufkin &
Jenrette Securities Corporation as agent (the "Agent"), has agreed to use its
reasonable best efforts to solicit offers to purchase the Notes. The Notes are
being sold pursuant to a Distribution Agreement among the Bank, Trans Financial,
Inc. and the Agent dated September 28, 1995 (as it may be supplemented or
amended from time to time, the "Distribution Agreement") to which these
administrative procedures are attached as an exhibit. The Notes will be issued
under a Fiscal and Paying Agency Agreement, dated as of September 28, 1995
between the Bank and First Fidelity Bank, N.A., as fiscal and paying agent (the
"Fiscal and Paying Agent"). The Notes may be issued as either "Senior Bank
Notes", which will rank equally with all other unsecured and unsubordinated
indebtedness (other than deposits, to the extent provided by federal law and any
applicable state law) of the Bank, or "Subordinated Bank Notes", which will be
subordinated to all present and future claims of depositors and general
creditors of the Bank. Senior Bank Notes will have maturities of from thirty
days to thirty years from the date of issue; Subordinated Bank Notes will have
maturities of from five years to thirty years from the date of issue. Terms
defined in the Offering Circular relating to the Notes (the "Offering Circular")
and in the Distribution Agreement shall have the same meaning when used in this
exhibit.
The Notes will be issued in book-entry form (each a "Book-Entry Note")
represented by one or more fully registered global Notes (each a "Global
Security") delivered to the Fiscal and Paying Agent, as custodian for The
Depository Trust Company as depositary or its nominee or a successor depositary
or its nominee (the "Depositary"), and recorded in the book-entry system
maintained by the Depositary. Owners of beneficial interests in Book-Entry Notes
will be entitled to physical delivery of Notes in certificated form (each a
"Certificated Note") equal in principal amount to their respective beneficial
interests only upon certain limited circumstances described in the Offering
Circular.
Administrative responsibilities, document control and record-keeping
functions to be performed by the Bank will be performed by the Fiscal and Paying
Agent. Administrative procedures for the offering are explained below.
PRICE TO PUBLIC
Each Note will be issued at 100% of its principal amount, unless otherwise
determined by the Bank.
DATE OF ISSUANCE
Each Note will be dated and issued as of the date of its authentication by
the Fiscal and Paying Agent.
MATURITIES
Each Note will mature on a Business Day (as defined below) selected by the
purchaser and agreed upon by the Bank, such date being at least thirty days but
not more than thirty years from the date of issuance, in the case of Senior Bank
Notes, and from five years to thirty years from the date of issuance in the case
of Subordinated Bank Notes. Each Floating Rate Note will mature on an Interest
Payment Date (as defined below).
"Business Day" shall mean any day which is not a Saturday or Sunday and
which is not a day on which banking institutions are generally authorized or
obligated by law to close in the City of New York, New York and the City of
Bowling Green, Kentucky (or, with respect to LIBOR Notes, the City of London).
REGISTRATION
Notes will be issued only in fully registered form either as a Book-Entry
Note or a Certificated Note.
INTEREST PAYMENTS
Each Note bearing interest at a fixed rate (a "Fixed Rate Note") will bear
interest from its issue date at the annual rate stated on the face thereof,
payable on March 15 and September 15 of each year (each an "Interest Payment
Date" with respect to such Fixed Rate Note) and at Stated Maturity or upon
redemption, if applicable.
Special provisions are set forth in the Offering Circular relating to
Notes bearing interest at a rate or rates determined by reference to an interest
rate formula ("Floating Rate Notes") stated on the face thereof, payable in
arrears on such dates as are specified therein (each an "Interest Payment Date"
with respect to such Floating Rate Note).
Interest on Fixed Rate Notes will be calculated and paid on the basis of a
360-day year of twelve 30-day months. Interest will be payable to the person in
whose name a Note is registered at the close of business on the fifteenth day
(whether or not a Business Day) next preceding an Interest Payment Date with
respect to such Note (the "Record Date"); provided, however, that interest
payable at Stated Maturity will be payable to the person to whom principal shall
be payable. Any payment of principal and interest on such Note required to be
paid on an Interest Payment Date or at Stated Maturity or upon redemption, if
applicable, which is not a Business Day shall be postponed to the next day which
is a Business Day. The first payment of interest on any Note originally issued
between a Record Date and an Interest Payment Date will be made on the Interest
Payment Date following the next succeeding Record Date. Except as set forth
under "Procedures for Book-Entry Notes," all interest payments, excluding
interest payments made at Stated Maturity or upon redemption, if applicable,
will be made by check mailed to the person entitled thereto as provided above,
or, at the option of the Bank, by wire transfer to an account maintained by such
person with a bank located in the United States. Notwithstanding the foregoing,
the holder of $1 million or more in aggregate principal amount of Notes with the
same Interest Payment Date may receive payment by wire transfer by delivering to
the Fiscal and Paying Agent in writing on or prior to the applicable Record Date
its request for payment by wire transfer, providing the Fiscal and Paying Agent
with the appropriate wire transfer information and upon compliance with the
reasonable requirements of the Fiscal and Paying Agent.
ACCEPTANCE AND REJECTION OF OFFERS
The Bank shall have the sole right to accept offers to purchase its Notes
and may reject any such offer in whole or in part. Each acceptance or rejection
by the Bank of an offer to purchase its Notes shall be communicated by the Bank
to the Agent and the Agent shall be entitled to rely on any such acceptance or
rejection. The Agent shall promptly communicate to the Bank, orally or in
writing, each reasonable offer to purchase Notes received by it other than those
rejected by such Agent. The Agent shall have the right, in its discretion
reasonably exercised without advising the Bank, to reject any offers in whole or
in part.
SETTLEMENT
The receipt of immediately available funds in U.S. Dollars by the Bank in
payment for a Note (less the applicable commission) and the authentication and
issuance of such Note shall, with respect to such Note, constitute "Settlement."
All offers accepted by the Bank will be settled from one to five Business Days
from the date of acceptance by the Bank pursuant to the timetable for Settlement
set forth below unless the Bank and the purchaser agree to Settlement on a later
date; provided, however, that the Bank will so notify the Fiscal and Paying
Agent of any such later date on or before the Business Day immediately prior to
the Settlement date.
REDEMPTION AND REPAYMENT
Unless one or more Redemption Dates are specified on the Global Security
and applicable Pricing Supplement, the Notes will not be redeemable prior to
their Stated Maturity. If one or more Redemption Dates are so specified with
respect to any Note, the Global Security and applicable Pricing Supplement, will
also specify one or more redemption prices (expressed as a percentage of the
principal amount of such Note) ("Redemption Prices") and the redemption period
or periods ("Redemption Periods") during which such Redemption Prices shall
apply. Unless otherwise specified on the Global Security and applicable Pricing
Supplement, any such Note shall be redeemable at the option of the Bank at the
specified Redemption Price applicable to the Redemption Period during which such
Note is to be redeemed, together with interest accrued to the Redemption Date.
Unless otherwise specified on the Global Security and applicable Pricing
Supplement, the Notes will not be subject to any sinking fund. The Bank may
redeem any of its Notes that are redeemable and remain outstanding either in
whole or from time to time in part, upon not less than 30 nor more than 45 days'
notice. In the event of a redemption in part of any Note, a new Note for the
amount of the unredeemed portion shall be issued in the name of the Holder upon
cancellation of the redeemed Note.
The Global Security and applicable Pricing Supplement, relating to each
Note will indicate either that such Note cannot be repaid at the option of the
Holder prior to Stated Maturity or that such Note will be repayable at the
option of the Holder on a date or dates specified prior to Stated Maturity at a
price or prices set forth on the Global Security and applicable Pricing
Supplement, together with accrued interest to the date of repayment.
Subordinated Bank Notes shall not be redeemable at the option of the Holder.
In order for a Note that is redeemable at the option of the Holder to be
repaid, the Fiscal and Paying Agent must receive at least 30 days but not more
than 45 days prior to the repayment date (a) appropriate wire instructions and
(b) either (i) the Note with the form entitled "Option to Elect Repayment"
attached to the Note duly completed or (ii) a telegram, telex, facsimile
transmission or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company in the United States setting forth the name of the Holder of the Note,
the principal amount of the Note, the portion of the principal amount of the
Note to be repaid, the certificate number or a description of the tenor and
terms of the Note, a statement that the option to elect repayment is being
exercised thereby and a guarantee that the Note to be repaid with the form
entitled "Option to Elect Repayment" attached to the Note duly completed will be
received by the Fiscal and Paying Agent not later than five Business Days after
the date of such telegram, telex, facsimile transmission or letter and such Note
and form duly completed must be received by the Fiscal and Paying Agent by such
fifth Business Day. Exercise of the repayment option by the Holder of a Note
shall be irrevocable, except as otherwise described in the Offering Circular.
The repayment option may be exercised by the Holder of a Note for less than the
entire principal amount of the Note provided that the principal amount of the
Note remaining outstanding after repayment is an authorized denomination. No
transfer or exchange of any Note (or, in the event that any Note is to be repaid
in part, the portion of the Note to be repaid) will be permitted after exercise
of a repayment option. All questions as to the validity, eligibility (including
time of receipt) and acceptance of any Note for repayment will be determined by
the Fiscal and Paying Agent, whose determination will be final, binding and
non-appealable.
If a Note is represented by a Global Security, the Depositary's nominee
will be the Holder of such Note and therefore will be the only entity that can
exercise a right to repayment. In order to ensure that the Depositary's nominee
will timely exercise a right to repayment with respect to a particular Note, the
beneficial owner of such Note must instruct the broker or other direct or
indirect participant through which it holds an interest in such Note to notify
the Depositary of its desire to exercise a right to repayment. Different firms
have different cut-off times for accepting instructions from their customers
and, accordingly, each beneficial owner should consult the broker or other
direct or indirect participant through which it holds an interest in a Note in
order to ascertain the cut-off time by which such an instruction must be given
in order for timely notice to be delivered to the Depositary.
Unless otherwise specified on the Global Security and applicable Pricing
Supplement, if a Note is an Original Issue Discount Note, the amount payable on
such Note in the event of redemption or repayment prior to its Stated Maturity
shall be the Amortized Face Amount of such Note, as specified on the Global
Security and applicable Pricing Supplement, as of the Redemption Date or the
date of repayment, as the case may be.
PROCEDURES FOR ESTABLISHING THE TERMS OF THE NOTES
The Bank and the Agent will discuss from time to time the rates to be
borne by the Notes that may be sold as a result of the solicitation of offers by
the Agent. Once the Agent has recorded any indication of interest in Notes of
the Bank upon certain terms, and communicated with the Bank, if the Bank accepts
an offer to purchase Notes upon such terms and if requested by the purchaser of
such Notes or the Agent, it will prepare a supplement to the Offering Circular
in the form previously approved by the Agent, reflecting the terms of such Notes
and, after approval from the Agent, will supply an appropriate number of copies
of the Offering Circular, as then amended or supplemented, together with such
supplement, to the Agent. See "Delivery of Offering Circular" below. If such a
supplement to the Offering Circular is requested by a purchaser of Notes, no
settlements with respect to Notes upon such terms may occur prior to receipt by
the Agent of copies of such supplement, and the Agent will not, prior to receipt
of such supplement, mail a confirmation to a customer who has offered to
purchase Notes upon such terms and has requested such a supplement. After
receipt by the Agent of such supplement, sales, mailing of confirmations and
settlements may occur with respect to Notes upon such terms, subject to the
provisions of "Delivery of Offering Circular" below.
If the Bank decides to post rates and a decision has been reached to
change interest rates, the Bank will promptly notify the Agent. The Agent will
forthwith suspend solicitation of purchases. At that time, the Agent will
recommend and the Bank will establish rates to be so "posted." Following
establishment of posted rates, the Agent may only record indications of interest
in purchasing Notes at the posted rates. See "Delivery of Offering Circular"
below. If such a supplement to the Offering Circular is requested by a purchaser
of Notes, no settlements at the posted rates may occur prior to the receipt of
such Offering Circular by the Agent and the Agent will not, prior to such
receipt, mail confirmations to customers who have offered to purchase Notes at
the posted rates. After receipt by the Agent of such supplement, sales, mailing
of confirmations and settlements may resume, subject to the provisions of
"Delivery of Offering Circular" below.
SUSPENSION OF SOLICITATION; AMENDMENT OR SUPPLEMENT
In the event that at the time the Agent, at the direction of the Bank,
suspends solicitation of offers to purchase from the Bank there shall be any
orders outstanding which have not been settled, the Bank will promptly advise
the Agent and the Fiscal and Paying Agent whether such orders may be settled and
whether copies of the Offering Circular as theretofore amended and/or
supplemented as in effect at the time of the suspension may be delivered in
connection with the settlement of such orders. The Bank will have the sole
responsibility for such decision and for any arrangements which may be made in
the event that the Bank determine that such orders may not be settled or that
copies of such Offering Circular may not be so delivered.
DELIVERY OF OFFERING CIRCULAR
A copy of the Offering Circular as most recently amended or supplemented
on the date of delivery thereof together with the applicable Pricing Supplement
thereto, must be delivered to a purchaser prior to or together with the earlier
of the delivery of (i) the written confirmation of a sale sent to a purchaser or
his agent and (ii) any Note purchased by such purchaser. The Bank shall ensure
that the Agent receives copies of the Offering Circular and each amendment or
supplement thereto (including any applicable Pricing Supplement thereto) in such
quantities and within such time limits as will enable the Agent to deliver such
confirmation or Note to a purchaser as contemplated by these procedures and in
compliance with the preceding sentence. Copies of Pricing Supplements should be
delivered by telecopy to Donaldson, Lufkin & Jenrette Securities Corporation,
140 Broadway, New York, New York 10005, Telecopy No.: (212) 504-8244, Attention:
Roger Thomson and by hand to Donaldson, Lufkin & Jenrette Securities
Corporation, 140 Broadway, New York, New York 10005. If, since the date of
acceptance of a purchaser's offer, the Offering Circular shall have been
supplemented solely to reflect any sale of Notes on terms different from those
agreed to between the Bank and such purchaser or a change in posted rates not
applicable to such purchaser, such purchaser shall not receive the Offering
Circular as supplemented by such new supplement, but shall receive the Offering
Circular as supplemented to reflect the terms of the Notes being purchased by
such purchaser and otherwise as most recently amended or supplemented on the
date of delivery of the Offering Circular. The Fiscal and Paying Agent will make
all such deliveries with respect to all Notes sold directly by the Bank.
AUTHENTICITY OF SIGNATURES
The Bank will cause the Fiscal and Paying Agent to furnish the Agent from
time to time with the specimen signatures of each of the Fiscal and Paying
Agent's officers, employees and agents who have been authorized by the Fiscal
and Paying Agent to authenticate Notes, but the Agent will have no obligation or
liability to the Bank or the Fiscal and Paying Agent in respect of the
authenticity of the signature of any officer, employee or agent of the Bank or
the Fiscal and Paying Agent on any Note.
The Bank shall deliver the Notes signed on behalf of the Bank by its Chief
Executive Officer, any Executive Vice President, Treasurer, Assistant Treasurer,
Chief Financial Officer or Senior Vice President and General Counsel or any
other officer designated in writing by the Chief Executive Officer and attested
by its Secretary or one of its Assistant Secretaries, provided that the
signature of any such officer may, but need not, be a facsimile signature
imprinted or otherwise reproduced on the Notes; and in case any of the
above-named officers of the Bank whose facsimile signature shall appear thereon
shall cease to hold such office before the Notes have been authenticated and
delivered or disposed of by the Bank, such Notes shall be valid as though such
person had not ceased to hold such position.
ADVERTISING COSTS
The Bank will determine with the Agent the amount and nature of
advertising that may be appropriate in offering the Notes. Advertising expenses
paid with the consent of the Bank will be paid by the Bank.
<PAGE>
PROCEDURES FOR BOOK-ENTRY NOTES
Each Note will be represented by either a Global Security delivered to the
Fiscal and Paying Agent, as custodian for the Depositary, and recorded in the
book-entry system maintained by the Depositary or a certificate delivered to the
holder thereof or a person designated by such holder. An owner of a Book-Entry
Note will not be entitled to receive a certificate representing such Note. In
connection with the qualification of the Book-Entry Notes for eligibility in the
book-entry system maintained by the Depositary, the Fiscal and Paying Agent will
perform the custodial, document control and administrative functions described
below, in accordance with its respective obligations under Letters of
Representations from the Bank and the Fiscal and Paying Agent to the Depositary
and a Bank Note Certificate Agreement previously entered into between the Fiscal
and Paying Agent and the Depositary, and its obligations as a participant in the
Depositary, including the Depositary's Same-Day Funds Settlement System
("SDFS"). Except as otherwise set forth in this Exhibit B, Book-Entry Notes will
be issued in accordance with the administrative procedures set forth below.
ISSUANCE
On any date of settlement (as defined under "Settlement" above) for one or
more Fixed Rate Book-Entry Notes, the Bank will issue one or more single Global
Securities in fully registered form without coupons each representing up to
$200,000,000 principal amount of all of such Notes that have the same original
issuance date, interest rate, redemption and repayment provisions, if any, and
Stated Maturity. Similarly, on any settlement date for one or more Floating Rate
Book-Entry Notes, the Bank will issue a single Global Security each representing
up to $200,000,000 principal amount of all of such Notes that have the same
interest rate formula, original issuance date, Initial Interest Rate, Interest
Payment Dates, Index Maturity, Spread, Spread Multiplier, minimum interest rate
(if any), maximum interest rate (if any) and Stated Maturity. Each Global
Security will be dated and issued as of the date of its authentication by the
Fiscal and Paying Agent. Each Global Security will have an interest accrual date
(the "Interest Accrual Date"), which will be (i) with respect to an original
Global Security (or any portion thereof), its original issuance date and (ii)
with respect to any Global Security (or portion thereof) issued subsequently
upon exchange of a Global Security or in lieu of a destroyed, lost or stolen
Global Security, the most recent Interest Payment Date to which interest has
been paid or duly provided for on the predecessor Global Security or Securities
(or if no such payment or provision has been made, the original issuance date of
the predecessor Global Security), regardless of the date of authentication of
such subsequently issued Global Security. No Global Security will represent (i)
both Fixed Rate and Floating Rate Book-Entry Notes or (ii) any Certificated
Note.
IDENTIFICATION NUMBERS
The Bank, will arrange, on or prior to commencement of a program for the
offering of the Bank's Book-Entry Notes, with the CUSIP Service Bureau of
Standard & Poor's Corporation (the "CUSIP Service Bureau") for the reservation
of a series of CUSIP numbers (including tranche numbers), consisting of
approximately 900 CUSIP numbers and relating to Global Securities representing
the Book-Entry Notes. The Fiscal and Paying Agent has or will obtain from the
CUSIP Service Bureau a written list of such series of reserved CUSIP numbers and
will deliver to the Bank and the Depositary such written list of 900 CUSIP
numbers of such series. The Bank will assign CUSIP numbers to Global Securities
as described below under Settlement Procedure "B." The Depositary will notify
the CUSIP Service Bureau periodically of the CUSIP numbers that have been
assigned to Global Securities. The Fiscal and Paying Agent will notify the Bank
at any time when fewer than 100 of the reserved CUSIP numbers remain unassigned
to Global Securities, and if it deems necessary, the Bank will reserve
additional CUSIP numbers for assignment to Global Securities representing
Book-Entry Notes. Upon obtaining such additional CUSIP numbers the Fiscal and
Paying Agent shall deliver such additional CUSIP numbers to the Bank and the
Depositary.
REGISTRATION
Each Global Security will be registered in the name of Cede & Co., as
nominee for the Depositary, on the Securities Register maintained under the
Fiscal and Paying Agency Agreement governing such Global Security. The
beneficial owner of a Book-Entry Note (or one or more indirect participants in
the Depositary designated by such owner) will designate one or more participants
in the Depositary (with respect to such Note, the "Participants") to act as
agent or agents for such owner in connection with the book-entry system
maintained by the Depositary, and the Depositary will record in book-entry form,
in accordance with instructions provided by such Participants, a credit balance
with respect to such Note in the account of such Participants. The ownership
interest of such beneficial owner in such Note will be recorded through the
records of such Participants or through the separate records of such
Participants and one or more indirect participants in the Depositary.
TRANSFERS
Transfers of a Book-Entry Note will be accomplished by book entries made
by the Depositary and, in turn, by Participants (and in certain cases, one or
more indirect participants in the Depositary) acting on behalf of beneficial
transferors and transferees of such Note.
CONSOLIDATION AND EXCHANGE
The Fiscal and Paying Agent may deliver to the Depositary and the CUSIP
Service Bureau at any time a written notice of consolidation specifying (i) the
CUSIP numbers of two or more outstanding Global Securities that represent (A)
Fixed Rate Book-Entry Notes having the same original issuance date, interest
rate and Stated Maturity and with respect to which interest has been paid to the
same date or (B) Floating Rate Book-Entry Notes having the same interest rate
formula, original issuance date, redemption and repayment provisions, if any,
Initial Interest Rate, Interest Payment Dates, Index Maturity, Spread or Spread
Multiplier, minimum interest rate (if any), maximum interest rate (if any) and
with respect to which interest has been paid to the same date, (ii) a date,
occurring at least thirty days after such written notice is delivered and at
least thirty days before the next Interest Payment Date for such Book-Entry
Notes, on which such Global Securities shall be exchanged for a single
replacement Global Security and (iii) a new CUSIP number, obtained from the Bank
to be assigned to such replacement Global Security. Upon receipt of such a
notice, the Depositary will send to its Participants (including the Fiscal and
Paying Agent) a written reorganization notice to the effect that such exchange
will occur on such date. Prior to the specified exchange date, the Fiscal and
Paying Agent will deliver to the CUSIP Service Bureau a written notice setting
forth such exchange date and the new CUSIP number and stating that, as of such
exchange date, the CUSIP numbers of the Global Securities to be exchanged will
no longer be valid. On the specified exchange date, the Fiscal and Paying Agent
will exchange such Global Securities for a single Global Security bearing the
new CUSIP number and a new Interest Accrual Date, and the CUSIP numbers of the
exchanged Global Securities will, in accordance with CUSIP Service Bureau
procedures, be cancelled and not immediately reassigned. Notwithstanding the
foregoing, if the Global Securities to be exchanged exceed $200,000,000 in
aggregate principal amount, one Global Security will be authenticated and issued
to represent each $200,000,000 of principal amount of the exchanged Global
Securities and an additional Global Security will be authenticated and issued to
represent any remaining principal amount of such Global Securities (see
"Denominations" below).
MATURITIES
Each Book-Entry Note which is a Senior Bank Note will mature on a date not
less than thirty days or more than thirty years after the settlement date for
such Note. Each Book-Entry Note which is a Subordinated Bank Note will mature on
a date not less than five years nor more than thirty years after the settlement
date for such Note. A Floating Rate Book-Entry Note will mature only on an
Interest Payment Date for such Note.
NOTICE OF REDEMPTION AND REPAYMENT DATES
The Fiscal and Paying Agent will give notice to the Depositary prior to
each redemption date or repayment date (as specified in the Note), if any, at
the time and in the manner set forth in the letter of redemption. With respect
to redemptions, such notice shall specify the amount of the redemption and the
date such notice is to be mailed to the beneficial owners or published (the
"Publication Date"). Such notice shall be sent to the Depositary by a secure
means (e.g., legible telecopy, registered or certified mail, overnight delivery)
in a timely manner designed to assure that such notice is in the Depositary's
possession no later than two business days before the Publication Date. The
Fiscal and Paying Agent shall forward such notice either in a separate secure
transmission for each CUSIP number or in a secure transmission for multiple
CUSIP numbers (if applicable) which includes a manifest or list of each CUSIP
number submitted in that transmission. The Fiscal and Paying Agent shall verify
the use of such means and the timeliness of such notice. The Publication Date
shall not be less than 30 days nor more than 45 days prior to the redemption
date.
With respect to repayment of Notes at the option of the holder, the Fiscal
and Paying Agent shall send notice to the Depositary on the day which is the
earlier of 60 days prior to the purchase date or 5 days prior to the
commencement of the tender exercise period, and such notice shall specify the
CUSIP number of such issue, the start date and end date of the tender exercise
period, the repayment price, and the purchase date. The Fiscal and Paying Agent
shall send such notice with respect to an issue of Notes with a "one time only"
repayment option when such option arises; in the case of an issue of Notes that
are repayable on a regular quarterly, semi-annual, annual, or less frequent
cycle, the Fiscal and Paying Agent shall send such notice with respect to each
repayment option as it arises, or shall send such notice with respect to all
repayment options when the first such option arises; and, for an issue of Notes
that are repayable on a regular monthly cycle, the Fiscal and Paying Agent shall
send such notice with respect to the first repayment option and annually
thereafter; provided, however, the Fiscal and Paying Agent shall in all cases
promptly send notice of any change in the issue's operational terms affecting
the repayment options (e.g. an upcoming mandatory tender), when known. The
Fiscal and Paying Agent recognizes that the Depositary will use its Repayment
Option Procedures, a copy of which previously has been furnished to the Fiscal
and Paying Agent, to process tenders of the Notes. It is understood that under
the Repayment Option Procedures the Depositary will receive daily instructions
from its Participants to tender Notes for purchase. On the purchase date, if
after paying the Depositary for tendered Notes the Fiscal and Paying Agent
wishes to retire the tendered Notes, it shall notify the Depositary to reduce
the principal amount of the issue of the Notes by the aggregate principal amount
of the tendered Notes and shall reduce the principal amount of the Global
Security evidencing the tendered Notes accordingly.
DENOMINATIONS
Book-Entry Notes will be issued in principal amounts of $250,000 or any
amount in excess thereof that is an integral multiple of $1,000. Global
Securities representing one or more Book-Entry Notes will be denominated in
principal amounts not in excess of $200,000,000. If one or more Book-Entry Notes
having an aggregate principal amount in excess of $200,000,000 would, but for
the preceding sentence, be represented by a single Global Security, then one
Global Security will be issued to represent each $200,000,000 principal amount
of such Book-Entry Note or Notes and an additional Global Security will be
issued to represent any remaining principal amount of such Book-Entry Note or
Notes. In such a case, each of the Global Securities representing such
Book-Entry Note or Notes shall be assigned the same CUSIP number.
INTEREST
General. Interest on each Book-Entry Note will accrue from the Interest
Accrual Date of the Global Security representing such Note. Each payment of
interest on a Book-Entry Note will include interest accrued through the day
preceding, as the case may be, the Interest Payment Date or maturity; provided,
however, that if the Interest Reset Dates with respect to any such Note are
daily or weekly, interest payable on any Interest Payment Date, other than
interest payable on any date on which principal for such Note is payable, will
include interest accrued from but excluding the second preceding Regular Record
Date to and including the next preceding Regular Record Date. Interest payable
at the maturity of a Book-Entry Note will be payable to the person to whom the
principal of such Note is payable. Standard & Poor's Corporation will use the
information received in the pending deposit message described under Settlement
Procedure "C" below in order to include the amount of any interest payable and
certain other information regarding the related Global Security in the
appropriate weekly bond report published by Standard & Poor's Corporation.
On the first Business Day of January, April, July and October of each
year, the Fiscal and Paying Agent will deliver to the Bank and the Depositary a
written list of Regular Record Dates and Interest Payment Dates that will occur
with respect to Floating Rate Book-Entry Notes during the six-month period
beginning on such first Business Day. Promptly after each Interest Determination
Date for Floating Rate Notes, the Bank will notify the Fiscal and Paying Agent,
and the Fiscal and Paying Agent in turn will notify Standard & Poor's
Corporation, of the interest rates determined on such Interest Determination
Date. The Bank and the Fiscal and Paying Agent shall take all steps necessary in
order for any interest payment date on any issue of the Notes together with the
amount of interest payable, as well as changes in the interest rates on Floating
Rate Notes as they occur from time to time, to be listed in the appropriate
daily bond report published by Standard & Poor's Corporation.
PAYMENTS OF PRINCIPAL AND INTEREST
Payments of Interest Only. Promptly after each Regular Record Date, the
Fiscal and Paying Agent will deliver to the Bank and the Depositary a written
notice specifying by CUSIP number the amount of interest to be paid on each
Global Security on the following Interest Payment Date (other than an Interest
Payment Date coinciding with maturity or an earlier redemption or repayment
date) and the total of such amounts. The Depositary will confirm the amount
payable on each Global Security on such Interest Payment Date by reference to
the daily bond reports published by Standard & Poor's Corporation. The Bank will
pay to the Fiscal and Paying Agent, as paying agent, the total amount of
interest due on such Interest Payment Date (other than at maturity or an earlier
redemption or repayment date), and the Fiscal and Paying Agent will pay such
amount to the Depositary at the times and in the manner set forth below under
"Manner of Payment."
Payments at Maturity or Upon Redemption or Repayment. On or about the
first Business Day of each month, the Fiscal and Paying Agent will deliver to
the Bank, the Depositary and the Fiscal and Paying Agent a written list of
principal and interest to be paid on each Global Security maturing either at
maturity or any redemption or repayment date in the following month. The Bank,
the Fiscal and Paying Agent and the Depositary will confirm the amounts of such
principal and interest payments with respect to each such Global Security on or
about the fifth Business Day preceding the maturity or redemption or repayment
date of such Global Security. The Bank will pay to the Fiscal and Paying Agent,
as the paying agent, the principal amount of such Global Security, together with
interest due at such maturity or redemption or repayment date, as the case may
be. The Fiscal and Paying Agent will pay such amount to the Depositary at the
times and in the manner set forth below under "Manner of Payment."
Promptly after payment to the Depositary of the principal and interest due
at the maturity or redemption or repayment date, as the case may be, of such
Global Security, the Fiscal and Paying Agent will cancel such Global Security
and deliver it to the Bank with an appropriate debit advice. On the first
Business Date of each month, the Fiscal and Paying Agent will prepare a written
statement indicating the total principal amount of outstanding Global Securities
for which it serves as fiscal and paying agent as of the immediately preceding
Business Day.
Manner of Payment. The total amount of any principal and interest due on
Global Securities on any Interest Payment Date or at maturity or upon redemption
or repayment shall be paid by the Bank to the Fiscal and Paying Agent in funds
available for use by the Fiscal and Paying Agent as of 9:30 A.M. (New York City
time) on such date. The Bank will make such payment on such Global Securities by
instructing the Fiscal and Paying Agent to withdraw funds from an account
maintained by the Bank at the Fiscal and Paying Agent. The Bank will confirm
such instructions in writing to the Fiscal and Paying Agent. For maturity,
redemption or any other principal payments: prior to 10 A.M. (New York City
time) on such date or as soon as possible thereafter, the Fiscal and Paying
Agent will make such payments to the Depositary in same day funds in accordance
with the Depositary's Same Day Funds Settlement Paying Agent Operating
Procedures. For interest payments: the Fiscal and Paying Agent will make such
payments to the Depositary in accordance with existing arrangements between the
Depositary and the Fiscal and Paying Agent. The Depositary will allocate such
payments to its participants in accordance with its existing operating
procedures. Neither the Bank nor the Fiscal and Paying Agent shall have any
direct responsibility or liability for the payment by the Depositary to such
Participants of the principal of and interest on the Book-Entry Notes.
Indexed Notes. For all Indexed Notes the Fiscal and Paying Agent shall
notify the Depositary of the amount of dollars to be paid per $1,000 principal
amount of Notes on any maturity date. Such notice shall be hand delivered to the
Depositary's Reorganization Department by the close of business on the second
Business Day prior to the maturity date and shall list the CUSIP number(s)
assigned to the Note(s), the dollar amount of interest to be paid per $1,000
principal amount of Notes and the maturity date. Such notices shall be given to
the Depositary by facsimile and hard copy.
Withholding Taxes. The amount of any taxes required under applicable law
to be withheld from any interest payment on a Book-Entry Note will be determined
and withheld by the Participant, indirect participant in the Depositary or other
person responsible for forwarding payments and materials directly to the
beneficial owner of such Note.
EXTENSIONS OF MATURITY AND INTEREST RATE RESETS
Extensions of Maturity. In the event of an extension of maturity of a
Note, the Bank shall give notice to the Fiscal and Paying Agent of such
extension at least 36 days prior to the original maturity date. The Fiscal and
Paying Agent will, at least 35 days prior to the original maturity date, deliver
a notice to the Depositary specifying the CUSIP number of the Note, the new
maturity date of the Note and if the rate is being changed, the new interest
rate for the Note and the day such rate takes effect. The holder of the Note
will have the option to elect repayment of such Note on the original maturity
date. Therefore, such notice to the Depositary shall also list the start date
and end date of the upcoming exercise period, the repayment price and the
purchase date (original maturity date). The Fiscal and Paying Agent will notify
Standard & Poor's Corporation and Interactive Data Corporation of any maturity
extensions. Such notice shall include the CUSIP number of the Note, the revised
Stated Maturity, and if the rate is being changed, the new interest rate for the
Note and the day such rate takes effect. If the Note is a Floating Rate Note,
the Fiscal and Paying Agent will continue to notify Standard & Poor's
Corporation and Interactive Data Corporation of the rate change information.
Interest Rate Reset. In the event the Bank elects to change the rate on a
Fixed Rate Note, it shall give notice to the Fiscal and Paying Agent of such
change at least 36 days prior to the date the new rate is to take effect. The
Fiscal and Paying Agent will, at least 35 days prior to the date the new rate is
to take effect, deliver a notice to the Depositary specifying the CUSIP number
of the Note, the new interest rate on the Note and the date such rate change
takes effect. The Holder will have the option to elect repayment of such Note on
the next interest payment date. Therefore, such notice to the Depositary shall
also list the start date and the end date of the upcoming exercise period, the
repayment price and the purchase date. The Fiscal and Paying Agent will also
notify Standard & Poor's Corporation and Interactive Data Corporation of rate
changes on Fixed Rate Notes. Such notice shall include the CUSIP number of the
Note, the new interest rate on the Note and the date such rate change is to take
effect. All resets of rates on Floating Rate Notes will be communicated to
Standard & Poor's and Interactive Data Corporation.
After the end of the repayment exercise periods with respect to the Bank's
option to reset interest rate or extend maturities as set forth above, the Bank
may elect to increase the interest rates on the Notes and allow holders to
withdraw their repayment instructions. In such event, the Fiscal and Paying
Agent will, at least 15 days prior to the repayment date, deliver a notice to
the Depositary specifying the CUSIP number of the Note, the new interest rate
for the Note, the date such rate change takes effect and the final date for the
submission of withdrawal of repayment option instructions. The Fiscal and Paying
Agent will also notify Standard & Poor's Corporation and Interactive Data
Corporation of any such increase in interest rates.
SETTLEMENT PROCEDURES
Settlement Procedures with regard to each Book-Entry Note sold by the Bank
through the Agent, as agent, shall be as follows:
<PAGE>
================================================================================
The Agent will advise the Bank by telephone, telex or facsimile, of the
following settlement information:
==============================================================================
1. Exact name in which the Note is to be
registered ("Registered Owner").
2. Exact address of the Registered Owner
and address for payments of principal
and interest, if any.
3. Taxpayer identification number of the
Registered Owner.
4. Principal amount of the Note (and, if
multiple Notes are to be issued,
denominations thereof).
5. Settlement date.
6. Stated Maturity and whether the Stated
Maturity can be extended.
7. Issue Price and any OID information.
8. Trade date.
9. The Depositary Participant account number
of the Agent.
10. Interest rate:
(a) Fixed Rate Notes:
i) interest rate
ii) overdue rate, if any
iii) interest payment dates
iv) date or dates, if any, on which the
interest rate may be reset and the basis
or formula, if any, for such resetting
(b) Floating Rate Notes:
i) interest rate basis
ii) initial interest rate
iii) spread or spread multiplier, if any
iv) interest rate reset periods
v) interest payment dates
vi) index maturity
vii) maximum and minimum interest rates, if any
viii) record dates
ix) interest determination dates
x) overdue rate, if any
xi) date or dates, if any, on which the spread or spread
multiplier may be reset and the basis or formula, if any,
for such resetting.
11. The date on or after which the Notes
are redeemable at the option of the
Bank, and additional redemption or repurchase provisions, if any.
12. Wire transfer information.
13. Agent's commission (to be paid in the
form of a discount from the proceeds
remitted to the Bank upon settlement).
14. Whether the Note is a Senior Bank Note or a Subordinated Bank Note.
B. The Bank will assign a CUSIP number to the Global Security representing
such Note and then advise the Fiscal and Paying Agent by telephone
(confirmed in writing at any time on the same date) or electronic
transmission of the information set forth in Settlement Procedure "A"
above, such CUSIP number and the name of the Agent.
C. The Fiscal and Paying Agent will enter a pending deposit message through
the Depositary's Participant Terminal System, providing the following
settlement information to the Depositary, the Agent and Standard & Poor's
Corporation:
1. The information set forth in Settlement Procedure "A."
2. Identification as a Fixed Rate Book-Entry Note or a Floating
Rate Book-Entry Note.
3. Initial Interest Payment Date for such Note, number of days by which
such date succeeds the related "Depositary Record Date" (which term
means the Regular Record Date except in the case of floating rate notes
which reset daily or weekly in which case it means the date 5 calendar
days immediately preceding the Interest Payment Date) and amount of
interest payable on such Interest Payment Date.
4. Frequency of interest payments (monthly, semiannually, quarterly,
etc.).
5. CUSIP number of the Global Security representing such Note.
6. Whether such Global Security will represent any other Book-Entry
Note (to the extent known at such time).
7. The number of Participant accounts to be maintained by the
Depositary on behalf of the Agent or the Fiscal and Paying Agent.
D. The Fiscal and Paying Agent will complete and authenticate
the note certificate evidencing the Global Security representing such
Book-Entry Note.
E. The Depositary will credit such Note to such Fiscal and
Paying Agent's participant account at the Depositary.
F. The Fiscal and Paying Agent will enter an SDFS deliver order through the
Depositary's Participant Terminal System instructing the Depositary to (i)
debit such Note to such Fiscal and Paying Agent's participant account and
credit such Note to the Agent's participant account and (ii) debit the
Agent's settlement account and credit such Fiscal and Paying Agent's
settlement account for an amount equal to the price of such Note less the
Agent's commission.
G. The Agent will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary (i) to debit such
Note to the Agent's participant account and credit such Note to the
participant accounts of the Participants with respect to such Note and (ii)
to debit the settlement accounts of such Participants and credit the
settlement account of the Agent for an amount equal to the price of such
Note.
H. Transfers of funds in accordance with SDFS deliver orders described in
Settlement Procedures "F" and "G" will be settled in accordance with SDFS
operating procedures in effect on the settlement date.
I. The Fiscal and Paying Agent will credit to an account of the Bank
maintained at such Fiscal and Paying Agent funds available for immediate
use in the amount transferred to such Fiscal
and Paying Agent in accordance with Settlement Procedure "F."
J. The Agent will deliver to the purchaser a copy of the most recent
Offering Circular applicable to the Note with or prior to any written offer
of Notes and the confirmation and payment by the purchaser of the Note.
The Agent will confirm the purchase of such Note to the purchaser either by
transmitting to the Participants with respect to such Note a confirmation
order or orders through the Depositary's institutional delivery system or
by mailing a written confirmation to such purchaser.
SETTLEMENT PROCEDURES TIMETABLE
For orders of Book-Entry Notes solicited by the Agent, as agent, and accepted
by the Bank for settlement, Settlement Procedures "A" through "J" set forth
above shall be completed as soon as possible but not later than the respective
times (New York City time) set forth below:
======================= ===================================================
SETTLEMENT PROCEDURES
TIME
======================= ===================================================
======================= ===================================================
A-B 11:00 A.M. on the Sale date
======================= ===================================================
C 2:00 P.M. on the Sale date
======================= ===================================================
D 3:00 P.M. on date before Settlement date
======================= ===================================================
E 10:00 A.M. on Settlement date
======================= ===================================================
F-G 2:00 P.M. on Settlement date
======================= ===================================================
H 4:45 P.M. on Settlement date
======================= ===================================================
I-J 5:00 P.M. on Settlement date
======================= ===================================================
If a sale is to be settled more than one Business Day after the sale date,
Settlement Procedures "A," "B" and "C" shall be completed as soon as practicable
but no later than 11:00 A.M. and 2:00 P.M., as the case may be, on the first
Business Day after the sale date. If the initial interest rate for a Floating
Rate Book-Entry Note has not been determined at the time that Settlement
Procedure "A" is completed, Settlement Procedures "B" and "C" shall be completed
as soon as such rate has been determined but no later than 11:00 A.M. and 12:00
Noon, respectively, on the second Business Day before the settlement date.
Settlement Procedure "I" is subject to extension in accordance with any
extension of Fedwire closing deadlines and in the other events specified in the
SDFS operating procedures in effect on the settlement date.
If settlement of a Book-Entry Note is rescheduled or canceled, the Fiscal and
Paying Agent will deliver to the Depositary, through the Depositary's
Participant Terminal System, a cancellation message to such effect by no later
than 2:00 P.M. on the Business Day immediately preceding the scheduled
settlement date.
FAILURE TO SETTLE
If the Fiscal and Paying Agent fails to enter an SDFS deliver order with
respect to a Book-Entry Note pursuant to Settlement Procedure "F," the Fiscal
and Paying Agent may deliver to the Depositary, through the Depositary's
Participant Terminal System, as soon as practicable a withdrawal message
instructing the Depositary to debit such Note to the Fiscal and Paying Agent's
participant account. The Depositary will process the withdrawal message,
provided that the Fiscal and Paying Agent's participant account contains a
principal amount of the Global Security representing such Note that is at least
equal to the principal amount to be debited. If a withdrawal message is
processed with respect to all the Book-Entry Notes represented by a Global
Security, the Fiscal and Paying Agent will mark such Global Security "canceled,"
make appropriate entries in the Fiscal and Paying Agent's records and send such
canceled Global Security to the Bank. The CUSIP number assigned to such Global
Security shall, in accordance with CUSIP Service Bureau procedures, be canceled
and not immediately reassigned. If a withdrawal message is processed with
respect to one or more, but not all, of the Book-Entry Notes represented by a
Global Security, the Fiscal and Paying Agent will exchange such Global Security
for two Global Securities, one of which shall represent such Book-Entry Note or
Notes and shall be canceled immediately after issuance and the other of which
shall represent the other Book-Entry Notes previously represented by the
surrendered Global Security and shall bear the CUSIP number of the surrendered
Global Security.
If the purchase price for any Book-Entry Note is not timely paid to the
Participants with respect to such Note by the beneficial purchaser thereof (or a
person, including an indirect participant in the Depositary, acting on behalf of
such purchaser), such Participants and, in turn, the Agent may enter SDFS
deliver orders through the Depositary's Participant Terminal System reversing
the orders entered pursuant to Settlement Procedures "F" and "G," respectively.
Thereafter, the Fiscal and Paying Agent will deliver the withdrawal message and
take the related actions described in the preceding paragraph.
Notwithstanding the foregoing, upon any failure to settle with respect to a
Book-Entry Note, the Depositary may take any actions in accordance with its SDFS
operating procedures then in effect. In the event of a failure to settle with
respect to one or more, but not all, of the Book-Entry Notes to have been
represented by a Global Security, the Fiscal and Paying Agent will provide, in
accordance with Settlement Procedure "D," for the authentication and issuance of
a Global Security representing the other Book-Entry Notes to have been
represented by such Global Security and will make appropriate entries in its
records.
<PAGE>
SPECIAL PROCEDURES FOR CERTIFICATED NOTES
DENOMINATIONS
Certificated Notes will be issued and payable in U.S. dollars in the
denomination of $250,000 and any larger denomination which is an integral
multiple of $1,000.
MATURITY
Upon presentation of each Note at maturity the Fiscal and Paying Agent will
pay the principal amount thereof, together with accrued interest through the
date of redemption. Such payment shall be made in immediately available funds in
U.S. dollars, provided that the Note is presented to the Fiscal and Paying Agent
in time for the Fiscal and Paying Agent to make payments in such funds in
accordance with its normal procedures. The Bank will provide the Fiscal and
Paying Agent with funds available for immediate use for such purpose. Notes
presented at maturity will be cancelled by the Fiscal and Paying Agent as
provided in the Fiscal and Paying Agency Agreement.
SETTLEMENT PROCEDURES
In the event of a purchase of Certificated Notes by the Agent, as principal,
appropriate Settlement details will be set forth in the applicable Purchase
Agreement to be entered into between the Agent and the Bank pursuant to the
Distribution Agreement.
Settlement procedures with regard to each Certificated Note sold through
the Agent shall be as follows:
<PAGE>
===============================================================================
================================================================================
The Agent will advise the Bank by telephone, telex or facsimile, of
the following Settlement information:
A. Registered Owner.
B. Exact address of the Registered Owner and address
for payment of principal and interest, if any.
C. Taxpayer identification number of the Registered Owner.
D. Principal amount of the Note (and, if multiple Notes
are to be issued, denominations thereof).
E. Settlement date.
F. Stated Maturity and whether the Stated Maturity can be
extended.
G. Issue Price and any OID information.
H. Trade Date/Original Issue Date.
I. Interest rate:
1. Fixed Rate Certificated Notes:
a. interest rate
b. overdue rate, if any
c. interest payment dates
d. date or dates, if any, on which the interest rate
may be reset and the basis or formula, if any, for such
resetting
2. Floating Rate Certificated Notes:
a. interest rate basis
b. initial interest rate
c. spread or spread multiplier, if any
d. interest rate reset periods
e. interest payment dates
f. index maturity
g. maximum and minimum interest rates, if any
h. record dates
i. interest determination dates
j. overdue rate, if any
k. date or dates, if any, on which the spread or spread
multiplier may be reset and the basis or formula for such
resetting
J. The date on or after which the Certificated Notes are
redeemable at the option of the Bank, and
additional redemption or repurchase provisions, if any.
K. Wire transfer information.
L. Agent's commission (to be paid in the form of a discount
from the proceeds remitted to the Bank upon Settlement).
M. That the Note will be a Certificated Note.
N. Whether the Note is a Senior Bank Note or a Subordinated
Bank Note.
II. The Bank, will confirm the above Settlement information to the
Fiscal and Paying Agent by telephone, telex or facsimile, and the Fiscal and
Paying Agent will assign a Note number to the transaction. If the Bank rejects
an offer, the Bank will promptly notify the Agent and the Fiscal and Paying
Agent by telephone.
III. The Fiscal and Paying Agent will complete the first page of the
preprinted 4-ply Note packet the form of which was previously approved by the
Bank, the Agent and the Fiscal and Paying Agent.
IV. The Fiscal and Paying Agent will deliver the Certificated Note
(with the attached white confirmation) and the yellow and blue stubs to the
Agent. The Agent will acknowledge receipt of the Certificated Note by completing
the yellow stub and returning it to the Fiscal and Paying Agent.
V. The Agent will cause to be wire transferred to a bank account
designated by the Bank immediately available funds in U.S. dollars in the
amount of the principal amount of the Certificated Note, less the
applicable commission or discount, if any.
VI. The Agent will deliver the Certificated Note (with the attached
white confirmation) to the purchaser against payment in immediately available
funds in the amount of the principal amount of the Certificated Note. The Agent
will deliver to the purchaser a copy of the most recent Offering Circular
applicable to the Certificated Note with or prior to any written offer of
Certificated Notes, delivery of the Certificated Note and the confirmation and
payment by the purchaser for the Certificated Note.
VII. The Agent will obtain the acknowledgment of receipt for
the Certificated Note and Offering Circular by the purchaser through
the purchaser's completion of the blue stub.
VIII. The Fiscal and Paying Agent will mail the pink stub to the
Bank.
<PAGE>
SETTLEMENT PROCEDURES TIMETABLE
For offers to purchase certificated Notes, accepted by the Bank,
Settlement procedures "A" through "H" set forth above shall be completed on or
before the respective times set forth below:
======================= ===================================================
SETTLEMENT
PROCEDURE TIME (NEW YORK)
======================= ===================================================
======================= ===================================================
A 5 P.M. on date of order
======================= ===================================================
B 3 P.M. on the Business Day prior to Settlement
Date
======================= ===================================================
C-D 12 Noon on the Settlement Date
======================= ===================================================
E 2:15 P.M. on the Settlement Date
======================= ===================================================
F-G 3 P.M. on the Settlement Date
======================= ===================================================
H 5 P.M. on Business Day after the Settlement Date
======================= ===================================================
FAILURE TO SETTLE
In the event that a purchaser of a Certificated Note shall either fail to
accept delivery of or make payment for such Certificated Note on the date fixed
by the Bank, the Agent will immediately notify the Fiscal and Paying Agent and
the Bank by telephone, confirmed in writing, of such failure and return the
Certificated Note to the Fiscal and Paying Agent. Upon the Fiscal and Paying
Agent's receipt of the Certificated Note from the Agent, the Bank will promptly
return to the Agent an amount of immediately available funds in U.S. dollars
equal to any amount previously transferred to the Bank in respect of the
Certificated Note pursuant to advances made by the Agent. Such returns will be
made on the Settlement date, if possible, and in any event not later than 12
noon (New York City time) on the Business Day following the Settlement date. The
Bank will reimburse the Agent on an equitable basis for its loss of the use of
the funds during the period when the funds were credited to the account of the
Bank. Upon receipt of the Certificated Note in respect of which the default
occurred, the Fiscal and Paying Agent will mark the Certificated Note
"cancelled," make appropriate entries in its records and deliver the
Certificated Note to the Bank with an appropriate debit advice. The Agent will
not be entitled to any commission with respect to any Certificated Note which
the purchaser does not accept or make payment for.
<PAGE>
[TYPE]EX-10
Exhibit 10(b).
FISCAL AND PAYING AGENCY AGREEMENT
Between
TRANS FINANCIAL BANK, NATIONAL ASSOCIATION
and
FIRST FIDELITY BANK, N.A.,
as Fiscal and Paying Agent
Dated as of September 28, 1995
<PAGE>
This Fiscal and Paying Agency Agreement dated as of September
28, 1995 between Trans Financial Bank, National Association (the "Bank") and
First Fidelity Bank, N.A., as fiscal and paying agent (in such capacity, the
"Fiscal and Paying Agent"). Capitalized terms not otherwise defined below have
the meaning set forth in the Bank Notes.
<PAGE>
.
WHEREAS the Bank proposes to issue and sell from time to time
its bank notes (the "Bank Notes") in an aggregate principal amount of up to
$250,000,000;
WHEREAS the Bank Notes may be issued by the Bank as "Senior
Bank Notes", which will rank equally with all other unsecured and unsubordinated
indebtedness of the Bank (other than deposits, to the extent provided by federal
law and any applicable state law), or as "Subordinated Bank Notes", which will
be subordinated to all present and future claims of depositors and general
creditors of the Bank;
WHEREAS the Bank Notes will be offered for sale by the Bank
through Donaldson, Lufkin & Jenrette Securities Corporation, as agent for the
Bank (the "Agent"), and may also be sold by the Bank to the Agent as principal
for resale to investors or by the Bank directly to investors;
WHEREAS the Bank desires to appoint the Fiscal and Paying
Agent as fiscal and paying agent of the Bank with respect to the preparation,
authentication, delivery, registration and payment of the Bank Notes;
NOW, THEREFORE, the parties hereto hereby agree as follows:
APPOINTMENT
Appointment of Fiscal and Paying Agent. The Fiscal and Paying Agent is hereby
appointed as fiscal and paying agent for the Bank Notes on the terms and
conditions specified in this Agreement, and the Fiscal and Paying Agent hereby
accepts such appointment.
THE BANK NOTES
Form of Bank Notes. All Fixed Rate Notes issued by the Bank having the same
Original Issue Date, Interest Rate, Interest Payment Dates, Initial Redemption
Date (if any), Redemption Terms, and Stated Maturity will be represented by a
single note certificate and all Floating Rate Notes issued by the Bank having
the same Original Issue Date, Initial Interest Rate, Interest Rate Basis, Index
Maturity, Spread (if any), Spread Multiplier (if any), Minimum Interest Rate (if
any), Maximum Interest Rate (if any), Interest Reset Dates, Interest Rate Reset
Period, Initial Redemption Date (if any), Redemption Terms (if any), Interest
Payment Dates, Interest Payment Period and Stated Maturity and which are Senior
Bank Notes or Subordinated Bank Notes, as the case may be, will be represented
by a single note certificate, each such note certificate hereinafter called a
"Global Bank Note." All Global Bank Notes shall be registered in the name of The
Depository Trust Company ("DTC") or a nominee of DTC, as depositary (the
"Depositary"). All Global Bank Notes representing Fixed Rate Notes shall be in
the form attached hereto as Exhibit A-1 (for Global Bank Notes with maturities
from 30 days to 1 year ("Short-Term Notes")) or A-2 (for Global Bank Notes with
maturities from 1 year to 30 years ("Medium-Term Notes")), and all Global Bank
Notes representing Floating Rate Notes shall be in the form attached hereto as
Exhibit B-1 (for Short-Term Notes) or B-2 (for Medium-Term Notes). Beneficial
interests in Global Bank Notes will be shown on, and transfers thereof will be
effected only through, records maintained by DTC and its participants.
Certificates of Authorized Representatives of the Bank. From time to time, the
Bank shall furnish the Fiscal and Paying Agent with a certificate of the Bank in
the form attached hereto as Exhibit C certifying the incumbency and specimen
signatures of representatives of the Bank authorized to instruct the Fiscal and
Paying Agent regarding the completion and delivery of the Bank's Bank Notes
(each an "Authorized Representative"). Until five Business Days after the Fiscal
and Paying Agent receives a subsequent incumbency certificate of the Bank, the
Fiscal and Paying Agent shall be entitled to rely on the last such certificate
delivered to it for purposes of determining the Authorized Representatives. The
Fiscal and Paying Agent shall have no responsibility to the Bank to determine
whether a signature of an Authorized Representative is genuine or if such
signature resembles the specimen signature of such Authorized Representative on
such certificate.
Completion, Authentication and Delivery., Authentication and Delivery
All Global Bank Notes shall be issued and delivered in accordance with this
Agreement, the Global Bank Notes, the Letters of Representations from the Bank
and the Fiscal and Paying Agent to DTC and the Medium Term Note Certificate
Agreement between the Fiscal and Paying Agent and DTC dated as of December 27,
1989 (the "Additional Agreements"), and to the extent not inconsistent therewith
or herewith, the administrative procedures attached hereto as Exhibit D.
However, in the event of a conflict, the terms of the Global Bank Notes shall
govern. All instructions regarding the completion and delivery of Global Bank
Notes shall be given by an Authorized Representative by telex, telecopy,
electronic means or other means acceptable to the Fiscal and Paying Agent. Upon
receipt of instructions as described in the preceding sentence, the Fiscal and
Paying Agent shall:
complete a Global Bank Note or Notes representing
one or more Bank Notes in
accordance with such instructions;
manually countersign and authenticate such Global
Bank Note or Notes by any one of the officers or employees of
the Fiscal and Paying Agent duly authorized and designated by
it for such purpose; and
deliver such Global Bank Note to DTC or pursuant to DTC's
instructions.
If any Global Bank Note has been countersigned by one of the Fiscal and Paying
Agent's officers who was duly authorized for such purpose but who is not so
designated at the time said Global Bank Note is to be paid, the Fiscal and
Paying Agent is authorized and will pay the Global Bank Note notwithstanding
that the authority of said officer has been terminated between the time of
execution and the time of payment.
In the event a discrepancy exists between the instructions as originally
received by the Fiscal and Paying Agent and any subsequent written confirmation
thereof, such original instructions will be deemed controlling, provided that
the Fiscal and Paying Agent gives notice to the Bank of such discrepancy
promptly upon the receipt of such written confirmation.
Should the Fiscal and Paying Agent at any time request or receive an opinion
of itscounsel (which includes in-house counsel) concerning its duties
hereunder, it shall be free to act upon the advice contained in such
opinion and shall be relieved of any liability under this Agreement
in so acting.
All instructions must be received by the Fiscal and Paying Agent by 11 a.m.,
New York time, on the second Business Day preceding the Original Issue Date.
For purposes hereof, the term "Business Day" shall mean any day that is
not a Saturday or Sunday and that, in the City of New York and the City of
Bowling Green, Kentucky is not a day on which banking institutions or trust
companies are generally authorized or obligated by law or executive order to
close.
The Fiscal and Paying Agent shall incur no liability to the Bank in acting
hereunder upon instructions contemplated hereby which the recipient thereof
believed in good faith to have been given by an Authorized Representative.
Each instruction given to the Fiscal and Paying Agent in accordance with this
Section 2.3 shall constitute a representation and warranty to the Fiscal and
Paying Agent by the Bank that the issuance and delivery of the Bank Note or Bank
Notes to which the instruction relates have been duly and validly authorized by
the Bank that such Bank Note or Bank Notes when completed, countersigned,
authenticated and delivered pursuant hereto, will constitute valid and legally
binding obligations of the Bank, and that the Fiscal and Paying Agent's
appointment to act for the Bank hereunder has been duly authorized by all
necessary corporate action of the Bank.
Denominations. Except as provided in Section 2.5(b), the Bank Notes shall be
issuable only in book-entry form, without coupons. Bank Notes will be issuable
in denominations of $250,000 and integral multiples of $1,000 in excess thereof.
Proceeds of Sale of the Bank Notes; Resignation by DTC.ank Notes; Resignation
by DTC
Funds received in payment for Bank Notes shall be credited to an account of the
Bank, as instructed by the Bank.
If at any time (i) DTC notifies the Bank that it is unwilling or unable t
continue as Depositary for the Bank Notes or if DTC ceases to be a
clearing agency registered under the Securities Exchange Act of 1934,
as amended, and a successor depositary is not appointed by the Bank within
ninety days after the effective date of DTC's ceasing to act as depositary
for the Bank's Bank Notes, (ii) the Bank, at its option, notifies the Fiscal
and Paying Agent in writing that it elects to cause the issuance of Bank Notes
in definitive form or (iii) any event shall have happened and be continuing
which, after notice or lapse of time, or both, would constitute an event
of default with respect to the Bank Notes, the Fiscal and Paying Agent will,
upon the execution of the then standard form of the Fiscal and Paying Agent's
agreement for certificated securities and upon receipt of instructions in
writing from the Bank, authenticate and deliver Bank Notes of like tenor and
terms in definitive form in an aggregate principal
amount equal to the principal amount of the Global Bank Notes then outstanding
in exchange for such Global Bank Notes. Any such certificated Bank Notes will be
issued in fully registered form to the persons designated by DTC as the
beneficial owners thereof, without coupons, in denominations of $250,000 or any
amount in excess thereof which is an integral multiple of $1,000.
Registration, Registration of Transfer and Exchange. The Fiscal and Paying Agent
shall, so long as any of the Bank Notes remain outstanding, maintain all records
as may be customary, including all forms of transfer for the Global Bank Notes
and shall:
Keep at its corporate trust office in Philadelphia, Pennsylvania (the "Debt
Securities Administration Office"), registers (the "Bank Note Registers") in
such form as the Fiscal and Paying Agent may determine, in which, subject to
such reasonable regulations as it may prescribe, it shall provide for the
registration of each Bank's Bank Notes and of transfers thereof;
Maintain records showing for each outstanding Bank Note the principal amount,
maturity date, interest rate or interest rate basis and other terms thereof; the
date of original issue and all subsequent transfers and consolidations or
exchanges; provided that the Fiscal and Paying Agent shall have no
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Bank Note
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests, and it shall be fully protected in acting or
refraining from acting on any such information provided by DTC.
Require that all Bank Notes presented for transfer shall be duly endorsed or
be accompanied by a written instrument of transfer.
Require that each Bank Note shall bear an Original
Issue Date which shall remainthe same for all Bank Notes subsequently
issued upon transfer, exchange or substitution of such original
Bank Note regardless of the date of issuance of
any such subsequently issued Bank Note; provided that the Interest Accrual Date
for a Bank Note issued subsequently upon exchange of a Bank Note or in lieu of a
destroyed, lost or stolen Bank Note shall be the most recent Interest Payment
Date to which interest has been paid or duly provided for on the predecessor
Bank Note. The Fiscal and Paying Agent shall not be required to register the
transfer of or exchange any Bank Note during the period of 15 days preceding any
Interest Payment Date, date of redemption, date of repayment or Stated Maturity.
In addition, the Fiscal and Paying Agent shall not be required (i) to register
the transfer of or to exchange any Bank Notes for a period of 15 days
immediately preceding any date fixed for selection of Bank Notes to be redeemed
and (ii) to register the transfer of or to exchange any Bank Notes selected for
redemption, except the unredeemed portion of any Bank Note redeemed in part.
Persons Deemed Owners. Prior to due presentment of a Bank Note for registration
or transfer, the Bank, the Fiscal and Paying Agent and any other agent of the
Bank or the Fiscal and Paying Agent may treat the person in whose name such Bank
Note is registered as the owner of the Bank Note for the purpose of receiving
payments of principal and interest, if any, and for all other purposes
whatsoever, whether or not such Bank Note be overdue, and none of the Bank or
the Fiscal and Paying Agent or any agents thereof shall be affected by notice to
the contrary.
Cancellation of Unissued Bank Notes. Promptly upon the written request of the
Bank, the Fiscal and Paying Agent shall cancel and return to the Bank all
unissued Bank Notes so requested in its possession.
Mutilated, Lost, Stolen or Destroyed Bank Notes. The Fiscal and Paying Agent
shall obtain the replacement of mutilated, lost, stolen or destroyed Bank Notes
in accordance with the custom and usage of the financial industry.
<PAGE>
THE FISCAL AND PAYING AGENTF THE
Payment of Bank Notes. Payment of principal, premium (if any) and interest on
the Bank Notes shall be made by the Fiscal and Paying Agent to the registered
holder of the Bank Notes in the manner and on the dates specified in the Bank
Notes from immediately available funds deposited by the Bank with the Fiscal and
Paying Agent for such payments as provided in Section 3.3. The Fiscal and Paying
Agent shall have no obligation to use its own funds for any such payment or for
any other purpose pursuant to this Agreement.
Information Regarding Amounts Payable. The Fiscal and Paying Agent shall, as
soon as practicable after each Record Date for the payment of interest (other
than interest payable at maturity) on any Bank Note, but not later than five
days preceding the related Interest Payment Date, notify the Bank of the
interest to be paid on such Bank Note on the related Interest Payment Date. In
addition, the Fiscal and Paying Agent shall (i) on or about the first Business
Day of each month furnish to the Bank a list showing for each Bank Note issued
by the Bank which matures in the next succeeding month the principal and
interest payable at maturity of such Bank Note (other than the interest on any
Floating Rate Note with an interest rate which resets after such date of
delivery) and (ii) notify the Bank of the interest payable at maturity of any
such Floating Rate Note as soon as practicable after the final Interest
Determination Date (as defined in such Bank Note) for such Floating Rate Note.
Deposit of Funds. The Bank shall deposit or cause to be deposited by 9:30 a.m.,
New York time, with the Fiscal and Paying Agent (i) on each Interest Payment
Date of a Bank Note an amount in immediately available funds sufficient to pay
the interest due on such date and (ii) on the Maturity Date or Redemption Date
(if any) of each such Bank Note (as such terms are defined in such Bank Note) an
amount in immediately available funds sufficient to pay the principal of such
Bank Note, the premium due thereon (if any) and the interest accrued thereon to
such Maturity Date or Redemption Date (if any). The Bank will make such payment
on such Bank Notes by instructing the Fiscal and Paying Agent to withdraw funds
from an account maintained by the Bank at the Fiscal and Paying Agent.
Money for Bank Note Payments to Be Held in Trust. Payments to Be Held in Trust
Subject to the provisions of subsection (b) of this Section 3.4, all money
deposited with the Fiscal and Paying Agent pursuant to Section 3.3 shall be held
by it in trust for the benefit of the person or persons entitled thereto until
such money is paid to such person or persons in accordance with the provisions
of the Bank Notes and this Agreement or otherwise disposed of as provided herein
but such money need not be segregated from other funds except to the extent
required by law.
Any money deposited with the Fiscal and Paying Agent for the payment of the
principal of, premium (if any) or interest on any Bank Note that remains
unclaimed for two years after such principal, premium (if any) or interest has
become due and payable shall be paid to the Bank and the Holder shall
thereafter, as an unsecured general creditor, look only to the Bank for payment
thereof, and all liability of the Fiscal and Paying Agent with respect to such
money shall thereupon cease. The provisions of this Section 3.4(b) shall be set
forth on the Bank Notes.
Additional Responsibilities. If the Bank shall ask the Fiscal and Paying Agent
to perform any duties not specifically set forth in this Agreement or in the
Additional Agreements as duties of the Fiscal and Paying Agent (the "Additional
Responsibilities") and the Fiscal and Paying Agent chooses to perform such
Additional Responsibilities, the Fiscal and Paying Agent shall be held to the
same standard of care and shall be entitled to all the protective provisions
(including, but not limited to, indemnification) set forth herein.
Miscellaneous. Notwithstanding anything to the contrary herein or in the
Additional Agreements,
in paying Bank Notes hereunder, the Fiscal and Paying Agent shall be acting as a
conduit and shall not be paying Bank Notes for its own account, and in the
absence of written notice from the Bank, the Fiscal and Paying Agent shall be
entitled to assume that any such Bank Note presented to it, or deemed presented
to it, for payment, is entitled to be so paid;
the Fiscal and Paying Agent may become a purchaser, holder, transferor or may
otherwise own, hold or transfer any beneficial interest in any Bank Notes and
may commence or join in any action which a beneficial owner of a Bank Note is
entitled to take without any conflict with its responsibilities pursuant to this
Agreement;
the Fiscal and Paying Agent shall not be required to invest any moneys
delivered to it pursuant to this Agreement;
the Fiscal and Paying Agent shall have no liability for interest on any moneys
received or held by it hereunder;
the Fiscal and Paying Agent shall not be responsible for the correctness of any
recital herein or in the Bank Notes or in any offering materials and makes no
representations as to the validity of the Bank Notes and shall incur no
responsibility in respect thereto;
the Fiscal and Paying Agent shall be protected in acting upon any notice, order,
requisition, request, consent, certificate, order, opinion (including an opinion
of counsel), affidavit, letter, telegram or other paper or document in good
faith deemed by it to be genuine and correct and to have been signed or sent by
the proper person or persons; and
any action taken by the Fiscal and Paying Agent pursuant to this Agreement or
the Additional Agreements upon the request or authority or consent of any
person who at the time of making such request or giving such authority
or consent is the holder of any Bank Note shall be conclusive and binding upon
all future holders of the same Bank Note and all Bank Notes issued in exchange
therefor or in place thereof.
CALCULATION OF INTEREST
Calculation of Floating Interest. The Fiscal and Paying Agent is hereby
designated as calculation agent (in such capacity, the "Calculation Agent") for
the purpose of calculating the Commercial Paper Rate, the Fed Funds Rate, the
Prime Rate, LIBOR, the Treasury Rate, the J.J. Kenny Rate, the 11th District
Cost of Funds Rate and the CMT Rate all in accordance with the terms of the
Floating Rate Notes. Such duties shall be "Additional Responsibilities" as
defined in Section 3.5 hereof.
Notice of Floating Rate Calculations. As promptly as practicable after each
Interest Determination Date for a Floating Rate Note, the Calculation Agent will
notify the Bank of the interest rate which will become effective on the next
Interest Reset Date. Upon the request of the Holder of a Floating Rate Note, the
Calculation Agent will provide to such Holder the interest rate then in effect
and, if determined, the interest rate which will become effective on the next
Interest Reset Date with respect to such Floating Rate Note.
LIABILITY AND INDEMNIFICATION
Liability. The Fiscal and Paying Agent's duties are ministerial in nature and
the Fiscal and Paying Agent shall not have any liability hereunder or under the
Additional Agreements except in the case of its negligence or willful
misconduct. IN NO EVENT SHALL THE FISCAL AND PAYING AGENT BE LIABLE FOR ANY
SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, EVEN IF THE
FISCAL AND PAYING AGENT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
THIS LIMITATION OF LIABILITY WILL APPLY REGARDLESS OF THE FORM OF ACTION,
INCLUDING WITHOUT LIMITATION, BREACH OF THIS CONTRACT OR TORT (INCLUDING
NEGLIGENCE). The duties and obligations of the Fiscal and Paying Agent shall be
determined by the express provisions of this Agreement and it shall not be
liable except for the performance of such duties and obligations as are
specifically set forth herein and no implied covenants shall be read into this
Agreement against it. The Fiscal and Paying Agent shall have no responsibility
in the case of any default by the Bank in the performance of the covenants
contained in the Bank Notes. The Fiscal and Paying Agent may refuse to perform
any duty or exercise any right or power hereunder unless it receives indemnity
satisfactory to it against any related loss, liability or expense. The Fiscal
and Paying Agent shall not be required to ascertain whether any issuance or sale
of Bank Notes (or any amendment or termination of this Agreement) has been duly
authorized or is in compliance with any other agreement to which the Bank is a
party (whether or not the Fiscal and Paying Agent is also a party to such other
agreements). Notwithstanding anything to the contrary herein, the Fiscal and
Paying Agent shall not be responsible for any misconduct or negligence on the
part of any agent, correspondent, attorney or receiver appointed with due care
by it hereunder. The Fiscal and Paying Agent shall have no liability whatsoever
to any person or entity if any agent fails to pay the Bank for any Bank Note in
whole or in part.
Indemnification. The Bank agrees to indemnify and hold harmless the Fiscal and
Paying Agent, its officers, directors, employees and agents from and against all
losses, liabilities, obligations, claims, damages, costs and expenses of any
kind or nature whatsoever (including, without limitation, reasonable legal fees
and expenses) relating to or arising out of its performance of the Fiscal and
Paying Agent's duties under this Agreement, except to the extent they are caused
by the negligence or willful misconduct of the Fiscal and Paying Agent. In the
event of the resignation or removal of the Fiscal and Paying Agent, any
successor to the performance of the obligations of the Fiscal and Paying Agent
as specified in this Agreement shall be entitled to rely upon this indemnity and
neither said successor nor the Bank or DTC shall be entitled to a separate
indemnity from the Fiscal and Paying Agent. These indemnification obligations
shall survive the termination of this Agreement and shall survive the
resignation or removal of the Fiscal and Paying Agent while remaining applicable
to any action taken or omitted by the Fiscal and Paying Agent while acting
pursuant to this Agreement and/or the Additional Agreements.
RESIGNATION OR REMOVAL OF FISCAL AND
PAYING AGENT
Resignation or Removal. The Fiscal and Paying Agent may at any time resign from
its duties hereunder by giving written notice of resignation to the Bank
specifying the date on which such resignation shall become effective; provided,
however, that such date shall not be less than ten Business Days after such
notice is given to the Bank. The Bank may at any time terminate this Agreement
by giving written notice of such termination to the Fiscal and Paying Agent
specifying the date on which such termination shall be effective; provided,
however, that such date shall be not less than ten Business Days after such
notice is given to the Fiscal and Paying Agent. Any termination or resignation
hereunder shall not affect the Fiscal and Paying Agent's right to the payment of
fees earned or charges incurred through the effective date of such termination
or resignation, as the case may be.
Successor Fiscal and Paying Agent. Upon the effective date of such resignation
or termination, the Fiscal and Paying Agent shall deliver any money then held by
it pursuant to Section 3.4(a) to the successor appointed by the Bank to serve as
Fiscal and Paying Agent for the Bank Notes and all liability of the predecessor
Fiscal and Paying Agent with respect to such money shall thereupon cease. The
Fiscal and Paying Agent shall also provide such successor with a copy of its
records relating to the Bank Notes as such successor shall reasonably request.
However, the Fiscal and Paying Agent shall not be required to deliver such
materials to any location outside the United States of America and may retain
copies of any records turned over for archival purposes. If such successor has
not been appointed by the effective date of such resignation or termination, the
Fiscal and Paying Agent shall pay such money and deliver such records to the
Bank with the same effect as though such payment were made pursuant to Section
3.4(b). The delivery, transfer and assignment of such moneys and records by the
Fiscal and Paying Agent to its successor or the Bank, as the case may be, shall
be sufficient, without the requirement of any additional act or the requirement
of any indemnity to be given by the Fiscal and Paying Agent, to relieve the
Fiscal and Paying Agent of all further responsibility for the exercise of the
rights or the performance of the obligations vested in the Fiscal and Paying
Agent pursuant to this Agreement.
Successor by Merger, etc. Any corporation or association into which the Fiscal
and Paying Agent may be converted or merged, or with which it may be
consolidated, or to which it may sell or transfer its debt securities
administration business as a whole, or any corporation or association resulting
from any such conversion, sale, merger, consolidation or transfer to which it is
a party, shall be and become successor Fiscal and Paying Agent hereunder and
shall be invested with all of the rights, powers, trusts, duties and obligations
of the Fiscal and Paying Agent hereunder, without the execution or filing of any
instrument or any further act. The Fiscal and Paying Agent shall provide notice
to the Bank of any such conversion, merger, consolidation, sale or transfer as
soon as practicable after the Fiscal and Paying Agent obtains knowledge that
such event will occur or has occurred.
MISCELLANEOUS
Compensation of the Fiscal and Paying Agent. The Bank agrees to pay the Fiscal
and Paying Agent compensation for all services rendered by the Fiscal and Paying
Agent hereunder to the Bank in such amounts and payable at such times as the
Bank and the Fiscal and Paying Agent may agree to and to promptly reimburse the
Fiscal and Paying Agent for all reasonable out-of-pocket expenses (including
counsel fees), disbursements and advances incurred or made by the Fiscal and
Paying Agent in the performance of its duties hereunder and under the Additional
Agreements. The obligation of the Bank pursuant to this Section 7.1 shall
survive the termination of this Agreement, including any termination pursuant to
any federal or state bankruptcy law, to the extent enforceable under applicable
law.
Reliance on Opinions of Counsel. The Fiscal and Paying Agent shall have no
liability to the Bank in respect of an action taken or omitted by the Fiscal and
Paying Agent in good faith in reliance on an opinion of its counsel, including
in-house counsel.
Notes Held by Fiscal and Paying Agent. The Fiscal and Paying Agent, in its
individual or other capacity, may become the owner or pledgee of Bank Notes with
the same rights it would have if it were not acting as fiscal and paying agent
hereunder.
Notices. Notices and other communications hereunder shall (except to the extent
otherwise expressly provided) be in writing or given via electronic media and
shall be addressed as follows, or to such other addresses as the parties hereto
shall specify from time to time.
If to the Bank: 500 East Main Street
Bowling Green, Kentucky 42101
Attention: Dean P. Jordan
Telephone: (502)793-7712
Telecopy: (502)793-7754
If to the Fiscal
and Paying Agent: First Fidelity Bank, N.A.
123 South Street
Corporate Trust Administration
Philadelphia, Pennsylvania 19109
Attention: John Clapham
Telephone: (215)985-7202
Telecopy: (215)985-7290
All notices shall be deemed given when received.
Provision of Amendments to Documentation. The Bank agrees to
provide the Fiscal and Paying Agent with any amendments to the Offering Circular
or Administrative Procedures.
Parties. Except for rights arising under Section 3.4(a), this Agreement is
solely for the benefit of the parties hereto and their successors and assigns
and nothing herein, express or implied, shall give to any other person
including, without limitation, any direct or beneficial owner of Bank Notes, any
benefits or any legal or equitable right, remedy or claim under this Agreement.
Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS CONFLICT OF LAW PRINCIPLES.
Separability. In case any provision in this Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Effect of Headings. The table of contents and the article and section headings
herein are for convenience of reference only and shall not affect the
construction hereof.
Defined Terms. Terms defined in the administrative procedures attached hereto as
Exhibit D and used herein are as therein defined unless otherwise defined
herein.
Amendments, Modifications. No amendment or modification of any provision of this
Agreement or any Additional Agreement shall be effective unless the same shall
be in writing and signed by all the parties hereto or thereto as applicable. Any
such amendment or modification shall be effective only in the specific instance
and for the purpose for which given.
Laws of Other Jurisdictions. The Fiscal and Paying Agent shall be under no
obligation to keep itself apprised of or comply with any laws other than the
laws of the State of New York and the federal laws of the United States. To the
extent that the Bank requires that the laws of any other jurisdiction be
complied with, the Fiscal and Paying Agent shall rely on, and in so relying
shall be held harmless by, the Bank as to the requirements of such laws and
shall not be required to make any independent investigation of such laws or
their requirements.
Actions Due on Saturdays, Sundays and Holidays. If any date on which a payment,
notice or other action required by this Agreement or any Additional Agreement
falls on other than a Business Day, then that action or payment need not be
taken or made on such date, but may be taken or made on the next succeeding
Business Day on which the Fiscal and Paying Agent is open for business with the
same force and effect as if made on such date.
Agreement to Pay Attorneys' Fees and Other Expenses. In the event the Bank shall
default under any of the provisions of this Agreement and/or any Additional
Agreement affecting the rights or duties of the Fiscal and Paying Agent and the
Fiscal and Paying Agent shall employ attorneys or incur other expenses for the
enforcement of performance or observance of any such obligation or agreement,
the Bank agrees that it will on demand therefor pay to the Fiscal and Paying
Agent the reasonable fees of such attorneys and such other expenses incurred by
the Fiscal and Paying Agent.
Survival. The Fiscal and Paying Agent's rights to compensation, reimbursement
and indemnification shall survive the termination of this Agreement
and any Additional Agreements.
Force Majeure. The Fiscal and Paying Agent shall not be liable for any failure
or delays arising out of conditions beyond its reasonable control including, but
not limited to, work stoppages, fires, civil disobedience, riots, rebellions,
storms, electrical, mechanical, computer or communications facilities failures,
acts of God and similar occurrences.
Remedies. Unless otherwise specified herein, in the event that either party
breaches or violates any of the obligations contained in this Agreement, the
other party shall be entitled to exercise any right and seek any remedy
available to it either at law or in equity, including without limitation,
damages and injunctive relief; the exercise of any right or the seeking of any
remedy shall not preclude the concurrent or subsequent exercise of any other
right or the seeking of any other remedy, and all rights and remedies shall be
cumulative.
And/Or. The term "or" shall include the conjugate form so that each use of the
term "or" should be interpreted as "and/or".
No Implied Waivers. The right of any party under any provision of this Agreement
shall not be affected by its prior failure to require the performance by any
other party under such provision or any other provision of this Agreement, nor
shall the waiver by any party of a breach of any provision hereof constitute a
waiver of any succeeding breach of the same or any other provision or constitute
a waiver of the provision itself or any other provision.
Counterparts. This Agreement may be executed in counterparts, each of which
shall constitute an original but both or all of which, when taken together,
shall constitute but one instrument, and shall become effective when copies
hereof which, when taken together, bear the signatures of each of the parties
hereto, shall be delivered to each of the parties hereto.
Term. This Agreement shall remain in full force and effect until the earlier to
occur of (i) such time as the principal of and premium, if any, and interest on
all the Bank Notes shall have been paid, (ii) the effective date of the
resignation or termination of the Fiscal and Paying Agent, and (iii) the
effective date of DTC's resignation if the Bank appoints no successor
depository.
Times. All times referred to herein shall be the time in effect in New York,
New York.
Funds Transfer
Should the Fiscal and Paying Agent be required in the
performance of the Agreement to make any funds transfer (as that term is defined
in Article 4A of the Uniform Commercial Code as in effect in New York ("Article
4A")) for or at the request of the Bank, the following shall apply:
Other than to verify an instruction to transfer funds (a
"payment order") received by the Bank pursuant to the Fiscal and Paying Agent's
security procedures, the Fiscal and Paying Agent shall not be responsible to
investigate any errors or inconsistencies in any payment order.
If by reason of the use of an identifying number provided to the Fiscal
and Paying Agent by the Bank, a party other than the beneficiary of the
Bank's payment order is paid or funds are transferred to a bank other than
the one intended by the Bank to receive such payment order, either as the
beneficiary's bank or an intermediary bank to be used in connection with
such transfer, the Bank shall remain liable to pay such payment
order so long as the Fiscal and Paying Agent
shall have properly transmitted the identifying number provided.
The Bank shall promptly notify the Fiscal and
Paying Agent of any discrepancies, unauthorized or erroneous transactions or
other errors relating to any payment orders issued by the Bank once such
payment orders have been confirmed to the Bank by the Fiscal and Paying Agent.
The Bank may issue instructions to the Fiscal and Paying Agent to cancel
or amend any payment order issued pursuant to this Agreement. The Fiscal and
Paying Agent agrees to act upon such instructions so long as
(i) the Fiscal and Paying Agent has received such instructions
prior to the execution of such payment order and
in sufficient time to permit it to take the action called for and (ii) the
authenticity of such instructions to amend or cancel is verified pursuant to the
security procedures. The Fiscal and Paying Agent reserves the right at any time,
and from time to time, when requested to amend a payment order, to cancel such
payment order and to require the Bank to submit a new payment order to the
Fiscal and Paying Agent. Should any cancellation or amendment of a payment order
be received by the Fiscal and Paying Agent after the execution of such order,
the Fiscal and Paying Agent shall take such reasonable steps as are available to
it to amend, recall, reverse or revoke such payment order, but it shall not be
liable for any failure to achieve the amendment, recall, reversal or revocation
thereof. Should the Fiscal and Paying Agent elect to cancel or amend a payment
order, it may require an indemnity and bond or security acceptable to it.
If any payment order is transmitted through any funds transfer system,
including, but not limited to, the Clearing House Interbank payment System
("CHIPS") or the Automated Clearing House System (the "ACH system"),
the Bank shall be subject to the rules of such funds transfer system in
effect at the time such transfer is made. If the Bank receives any credit
entries through the ACH system, such credit may be reversed by the Fiscal
and Paying Agent if final settlement does not occur.
Should the Fiscal and Paying Agent be negligent or engage in willful misconduct
and be required to pay the Bank interest in connection with a payment order
(whether the Bank is the originator or the beneficiary of such order),
such interest shall be computed based on the Rules on Interbank Compensation
of The New York Clearing House Association (the "Compensation Rules") as in
effect from time to time for all circumstances to which such Compensation
Rules apply. In any circumstance not subject to such Compensation Rules,
the rate shall be as provided in Article 4A.
In executing any payment order, the Fiscal and Paying Agent may use the
services of correspondent or intermediary banks, funds-transfer systems,
telecommunication companies and other entities of similar purpose.
While the Fiscal and Paying Agent shall use due care in the selection of all
such entities, they are not the Fiscal and Paying Agent's agents and the
Fiscal and Paying Agent will not be
responsible for their acts or omissions with regard to any payment orders.
The Bank agrees to be bound by any forthcoming reasonable standard terms and
conditions of the Fiscal and Paying Agent concerning funds transfers. The Fiscal
and Paying Agent will send these terms and conditions to the Bank as soon as
they become finalized. These terms and conditions will be applicable to this
Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on their behalf by representatives duly authorized thereunto, all as of
the day and year first above written.
FIRST FIDELITY BANK, N.A.,
as Fiscal and Paying Agent
By:
Title:
TRANS FINANCIAL BANK, NATIONAL ASSOCIATION
By:
Title:
<PAGE>
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TABLE OF CONTENTS
Page
ARTICLE I
APPOINTMENT
Section 1.1 Appointment of Fiscal and Paying Agent.................... 1
ARTICLE II
THE BANK NOTES
Section 2.1 Form of Bank Notes..........................................1
Section 2.2 Certificates of Authorized Representatives of the Bank......2
Section 2.3 Completion, Authentication and Delivery.....................2
Section 2.4 Denominations.............................................. 4
Section 2.5 Proceeds of Sale of the Bank Notes; Resignation by DTC..... 4
Section 2.6 Registration, Registration of Transfer and Exchange........ 4
Section 2.7 Persons Deemed Owners...................................... 5
Section 2.8 Cancellation of Unissued Bank Notes........................ 5
Section 2.9 Mutilated, Lost, Stolen or Destroyed Bank Notes............ 5
ARTICLE III
THE FISCAL AND PAYING AGENT
Section 3.1 Payment of Bank Notes...................................... 6
Section 3.2 Information Regarding Amounts Payable...................... 6
Section 3.3 Deposit of Funds........................................... 6
Section 3.4 Money for Bank Note Payments to Be Held in Trust........... 6
Section 3.5 Additional Responsibilities................................ 7
Section 3.6 Miscellaneous.............................................. 7
ARTICLE IV
CALCULATION OF INTEREST
Section 4.1 Calculation of Floating Interest........................... 8
Section 4.2 Notice of Floating Rate Calculations....................... 8
ARTICLE V
LIABILITY AND INDEMNIFICATION
Section 5.1 Liability.................................................. 8
Section 5.2 Indemnification............................................ 9
ARTICLE VI
ESIGNATION OR REMOVAL OF FISCAL AND PAYING AGENT
Section 6.1 Resignation or Removal..................................... 9
Section 6.2 Successor Fiscal and Paying Agent..........................10
Section 6.3 Successor by Merger, etc...................................10
ARTICLE VII
MISCELLANEOUS
Section 7.1 Compensation of the Fiscal and Paying Agent............... 10
Section 7.2 Reliance on Opinions of Counsel............................11
Section 7.3 Notes Held by Fiscal and Paying Agent......................11
Section 7.4 Notices....................................................11
Section 7.5 Parties....................................................11
Section 7.6 Governing Law..............................................12
Section 7.7 Separability...............................................12
Section 7.8 Effect of Headings.........................................12
Section 7.9 Defined Terms..............................................12
Section 7.10 Amendments, Modifications................................ 12
Section 7.11 Laws of Other Jurisdictions................................12
Section 7.12 Actions Due on Saturdays, Sundays and Holidays.............12
Section 7.13 Agreement to Agent Attorneys' Fees and Other Expenses......12
Section 7.14 Survival...................................................13
Section 7.15 Force Majeure..............................................13
Section 7.16 Remedies...................................................13
Section 7.17 And/Or.....................................................13
Section 7.18 No Implied Waivers.........................................13
Section 7.19 Counterparts...............................................13
Section 7.20 Term.......................................................13
Section 7.21 Times......................................................13
Section 7.22 Funds Transfer.............................................14
<PAGE>
================================================================================
================================================================================
81
EXHIBITS
Exhibit A-1 Form of Global Bank Note representing Short-Term Fixed Rate Notes
Exhibit A-2 Form of Global Bank Note representing Medium-Term Fixed Rate Notes
Exhibit B-1 Form of Global Bank Note representing Short-Term Floating Rate
Notes
Exhibit B-2 Form of Global Bank Note representing Medium-Term Floating Rate
Notes
Exhibit C Bank Certificate of Authorized Representatives
Exhibit D Administrative Procedures
<PAGE>
EXHIBIT A-1 TO
FISCAL AND PAYING
AGENCY AGREEMENT
(Short-Term Fixed)
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 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 SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE 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 OR EXCHANGE AND ANY CERTIFICATE 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 HOLDER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
THIS BANK NOTE IS A DIRECT, UNCONDITIONAL, UNSECURED AND UNSUBORDINATED GENERAL
OBLIGATION OF THE BANK. THE OBLIGATION EVIDENCED BY THIS BANK NOTE RANKS PARI
PASSU WITH ALL OTHER UNSECURED AND UNSUBORDINATED OBLIGATIONS OF THE BANK,
EXCEPT OBLIGATIONS THAT ARE SUBJECT TO ANY PRIORITIES OR PREFERENCES UNDER
APPLICABLE LAW, INCLUDING DEPOSIT OBLIGATIONS.
THIS BANK NOTE DOES NOT EVIDENCE A DEPOSIT AND IS NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY OR OTHER INSURER.
REGISTERED REGISTERED
NO. FX _______________
CUSIP ________________
FIXED RATE NOTE
TRANS FINANCIAL BANK, NATIONAL ASSOCIATION
ORIGINAL ISSUE DATE: INTEREST RATE:
STATED MATURITY: NUMBER OF DAYS:
REPAYMENT DATE(S): REDEMPTION DATES:
REPAYMENT PRICE: REDEMPTION PRICE:
OTHER REPAYMENT TERMS: OTHER REDEMPTION TERMS:
ORIGINAL ISSUE DISCOUNT NOTE: TOTAL AMOUNT OF OID:
ISSUE PRICE (expressed as a percentage of
aggregate principal amount):
- - ----
- - ----
- - ----
Yes No
- - -------------------------------------
- - -----------------
- - -----------------
- - -----------------
2
YIELD TO MATURITY: SHORT ACCRUAL PERIOD OID: METHOD USED TO DETERMINE YIELD
FOR SHORT
ACCRUAL PERIOD:
--
--
--
Approximate Exact
----------------------------
------------------------
------------------------
------------------------
- - --------------------------------------
- - -------------------------------------------------------------------------------
Trans Financial Bank, National Association (the "Bank", which term includes any
successor thereof) for value received, hereby promises to pay the sum of
_______________ U.S. dollars ($_______) to CEDE & CO. (the "Registered Holder")
as the nominee of The Depository Trust Company ("DTC") as custodian for
participants each acting for themselves and as nominee or custodian for others,
including trusts, pension and retirement plans and accounts, fiduciaries,
custodians and nominees (the "Participants") on the Stated Maturity and to pay
interest on the Stated Maturity.
Interest on this Note shall accrue from and including the Original Issue Date
specified herein, to but excluding the Stated Maturity specified herein, at the
per annum rate shown herein calculated on the basis of the actual number of days
elapsed divided by a 360-day year. Interest shall be payable in arrears on the
Stated Maturity. If the Stated Maturity does not fall on a Business Day, payment
of interest and principal due on the Stated Maturity will be made on the next
succeeding Business Day with the same force and effect as if made on the Stated
Maturity, and no interest shall be payable on the amount so payable for the
period from and after such Stated Maturity. Interest and principal on this Note
shall be paid by the Bank at Maturity to the person in whose name this Note is
registered at the opening of business on the Stated Maturity.
For purposes of this Note, "Business Day" means any day that is not a Saturday
or Sunday and that is not a day on which banking institutions are authorized or
obligated by law or executive order to close in the City of New York, New York
and the City of Bowling Green, Kentucky. Principal and interest on Notes will be
made in immediately available funds to the Registered Holder.
The Registered Holder may declare the principal amount of, and accrued interest
on, this Note to be due and payable immediately if an Event of Default with
respect to this Note shall have occurred and be continuing at the time of such
declaration. Any Event of Default with respect to this Note may be waived by the
Registered Holder.
For purposes of this Note, an "Event of Default" shall mean any one of the
following events:
default in the payment of any interest upon the Note when it
becomes due and payable, and continuance of such default for a
period of 30 days; or
default in the payment of the principal of (or
premium, if any, on) the Note when due; or
default in the performance of any covenant or
agreement of the Bank contained in the Note which continues
for 60 days after receipt of written notice given by the
Registered Holder hereof; or
the Bank shall consent to the appointment of a
conservator or receiver or liquidator or trustee or other
similar official in any insolvency, receivership, liquidation,
readjustment of debt, marshaling of assets and liabilities or
similar proceedings of or relating to the Bank or of or
relating to all or substantially all of its property; or a
decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a
conservator or receiver or liquidator or trustee or other
similar official in any insolvency, receivership, liquidation,
readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of
its affairs, shall have been entered against the Bank and such
decree or order shall have remained in force undischarged or
unstayed for a period of 60 consecutive days; or the Bank
shall file a petition to take advantage of any applicable
insolvency or reorganization statute.
All notices to the Bank under this Note shall be in writing or addressed to the
Fiscal and Paying Agent at [insert name and address] ; Attention:
______________________, or to such other address as the Bank may notify the
Registered Holder.
This Note shall be governed by and construed in accordance with the laws of the
State of New York.
No interest will accrue on this Note after its maturity.
The Notes of this Series are issuable only in registered form without interest
coupons in denominations of $250,000 and integral multiples of $1,000 in excess
thereof.
This Note may be subject to repayment at the option of the Registered Holder
hereof on the Repayment Date(s) indicated on the face hereof. If no such date is
set forth on the face hereof, this Note may not be so repaid at the option of
the Registered Holder hereof prior to maturity. On each Repayment Date, if any,
this Note shall be repayable in whole or in part in increments of $1,000
(provided that any remaining principal hereof shall be at least $500,000) at the
option of the Registered Holder hereof at a repayment price equal to 100% of the
principal amount to be repaid, or if this Note is an Original Issue Discount
Note (as specified on the face hereof), the applicable Repayment Price specified
on the face hereof together in the case of any such repayment with interest
thereon payable to the Repayment Date, but interest installments due prior to
the Repayment Date will be payable to the Registered Holder on the relevant
special record date. For this Note to be repaid in whole or in part at the
option of the Registered Holder hereof, _____________________________________,
as Fiscal and Paying Agent, at [insert address]; Attention: _______________ , or
at such other address of which the Bank shall from time to time notify the
Registered Holder of the Notes, must receive not more than 45, nor less than 30,
days prior to a Repayment Date, if any, either (i) this Note accompanied by the
form entitled "Option to Elect Repayment" below duly completed, or (ii) a
telegram, telex, facsimile transmission or letter from a member of a national
securities exchange or the National Association of Securities Dealers, Inc. or a
commercial bank or trust company in the United States of America setting forth
the name of the Registered Holder, the principal amount of this Note, the
principal amount of this Note to be repaid, the certificate number or a
description of the tenor and terms of the Note, a statement that the option to
elect repayment is being exercised thereby and a guarantee that the Note to be
repaid with the form entitled "Option to Elect Repayment" on the Note duly
completed will be received by the Fiscal and Paying Agent not later than five
Business Days after the date of such telegram, telex, facsimile transmission or
letter and such Note and form duly completed are received by the Fiscal and
Paying Agent by such fifth Business Day. Exercise of such repayment option by
the Registered Holder hereof shall be irrevocable, except a Registered Holder
tendering after receipt of a notice of an extension of maturity.
If so provided on the face of this Note, this Note may be redeemed by the Bank
on any Redemption Date (or range of Redemption Dates) so indicated on the face
hereof. If no Redemption Date (or range of Redemption Dates) is set forth on the
face hereof, this Note may not be redeemed prior to its Stated Maturity. If one
or more Redemption Dates (or ranges of Redemption Dates) are so specified, this
Note is subject to redemption at the option of the Bank, upon notice by
first-class mail, not less than 30 nor more than 45 days prior to the Redemption
Date specified in such notice, at the applicable redemption price specified on
the face hereof (expressed as a percentage of the principal amount of this Note)
together in the case of any such redemption with accrued interest to the
Redemption Date. The Bank may elect to redeem less than the entire principal
amount hereof; provided, that the principal amount, if any, of this Note that
remains outstanding after such redemption is an Authorized Denomination. In the
event of any redemption in part, the Bank will not be required to (i) issue,
register the transfer of, or exchange any Note during a period beginning at the
opening of business 15 days before the day of the mailing of the notice of
redemption of Notes selected for redemption and ending at the close of business
on the date of mailing of the relevant notice of redemption or (ii) register the
transfer or exchange of any Note, or any portion thereof, called for redemption,
except the unredeemed portion of any Note being redeemed in part.
Any money deposited with the Fiscal and Paying Agent for the payment of the
principal of, premium (if any) or interest on this Note that remains unclaimed
for two years after such principal, premium (if any) or interest has become due
and payable shall be paid to the Bank and the Holder shall thereafter, as an
unsecured general creditor, look only to the Bank for payment thereof, and all
liability of the Fiscal and Paying Agent with respect to such money shall
thereupon cease. IN WITNESS WHEREOF, the Bank has caused this Note to be duly
executed and countersigned as of the date set forth herein.
This Note is not valid for any purpose until countersigned by the Fiscal and
Paying Agent or such other institution as may be appointed by the Bank and the
certificate of authentication affixed hereon.
Countersigned for By Trans Financial Bank,
National Association
authentication only
as Fiscal and Paying Agent
By______________________________ __________________________
Authorized Signature Authorized Signature
Attest:
-----------------
Secretary
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request (s) and instruct (s) the Bank to
repay the within Note (or portion thereof specified below) pursuant to its terms
at a price equal to the principal amount thereof, 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 Fiscal and Paying Agent must receive at [insert
name and address]; Attention: _______________, or at such other place or places
of which the Company shall from time to time notify the Holder of the within
Note, not more than 45, nor less than 30, days prior to a Repayment Date, if
any, shown on the face of the within Note, either (i) this Note with this
"Option to Elect Repayment" form duly completed, or (ii) a telegram, telex,
facsimile transmission or letter from a member of a national securities exchange
or the National Association of Securities Dealers, Inc. or a commercial bank or
trust company in the United States of America setting forth the name of the
Registered Holder of the Note, the principal amount of the Note, the principal
amount of the Note to be repaid, the certificate number or a description of the
tenor and terms of the Note, a statement that the option to elect repayment is
being exercised thereby and a guarantee that the Note to be repaid with the form
entitled "Option to Elect Repayment" duly completed will be received by the
Fiscal and Paying Agent not later than five Business Days after the date of such
telegram, telex, facsimile transmission or letter and such Note and form duly
completed are received by the Fiscal and Paying Agent by such fifth Business
Day.
If less than the entire principal amount of the within Note is to be repaid,
specify the portion thereof (which shall be increments of $1,000) which the
Holder elects to have repaid: $________; and specify the denomination or
denominations (which shall be $500,000 or an integral multiple of $1,000 in
excess of $500,000) of the Notes to be issued to the Holder for the portion of
the within Note not being repaid (in the absence of any such specification, one
such Note will be issued for the portion not being repaid): $________.
Date:_______________ ____________________________________
Note: 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.
<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
TEN ENT -- as tenants by the entireties
JT ENT -- as joint tenants and not as tenants in common
Custodian
UNIF GIFT MIN ACT --
................................................................................
(Cust) (Minor)
under Uniform Gift to Minors Act
.............................................................................
(State)
Additional abbreviations may be used though not in the above list.
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
(Name and address of assignee, including zip code, must be printed or
typewritten)
the within Note, and all rights thereunder, hereby irrevocably constituting
and appointing
to transfer said Note on the books of the within 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 the within Note in every particular, without alteration
or enlargement or any change whatever and must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Fiscal and Paying Agent,
which requirements include membership or participation in STAMP or such other
"signature guaranty program" as may be determined by the Fiscal and Paying Agent
in addition to or in substitution for STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
EXHIBIT A-2 TO
FISCAL AND PAYING
AGENCY AGREEMENT
(Medium-Term Fixed)
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 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 SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE 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 OR EXCHANGE AND ANY CERTIFICATE 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 HOLDER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
[Senior Bank Note: THIS BANK NOTE IS A DIRECT, UNCONDITIONAL, UNSECURED AND
UNSUBORDINATED GENERAL OBLIGATION OF
THE BANK. THE OBLIGATION EVIDENCED BY THIS BANK NOTE RANKS PARI PASSU WITH
ALL OTHER UNSECURED AND
UNSUBORDINATED OBLIGATIONS OF THE BANK, EXCEPT OBLIGATIONS THAT ARE SUBJECT TO
ANY PRIORITIES OR PREFERENCES
UNDER APPLICABLE LAW, INCLUDING DEPOSIT OBLIGATIONS.]
[Subordinated Bank Note: "THE OBLIGATION EVIDENCED BY THIS BANK NOTE IS
UNSECURED AND IS SUBORDINATED AND JUNIOR
IN RIGHT OF PAYMENT TO THE BANK'S OBLIGATIONS TO ITS DEPOSITORS AND TO THE
BANK'S OTHER OBLIGATIONS TO ITS
GENERAL AND SECURED CREDITORS AND IS INELIGIBLE AS COLLATERAL TO SECURE A
LOAN FROM THE BANK.]
THIS BANK NOTE DOES NOT EVIDENCE A DEPOSIT AND IS NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER INSURER.
REGISTERED REGISTERED
NO. FX _______________
CUSIP ________________
FIXED RATE NOTE
TRANS FINANCIAL BANK, NATIONAL ASSOCIATION
ORIGINAL ISSUE DATE: INTEREST RATE:
STATED MATURITY: REGULAR RECORD DATES:
REDEMPTION DATES: INTEREST PAYMENT DATES:
REDEMPTION PRICE: INTEREST ACCRUAL DATE:
OTHER REDEMPTION TERMS: REPAYMENT DATE(S):
OTHER TERMS: REPAYMENT PRICE:
OTHER REPAYMENT TERMS:
If this Note was issued with "original issue discount" for purposes of Section
1273 of the Internal Revenue Code of 1986, as amended, the following shall be
completed:
ORIGINAL ISSUE DISCOUNT NOTE: TOTAL AMOUNT OF OID: ISSUE PRICE
(expressed as a percentage
of
aggregate principal amount):
- - ----
- - ----
- - ----
Yes No
- - -------------------------------------
- - --------------------
- - --------------------
- - --------------------
6
YIELD TO MATURITY: SHORT ACCRUAL PERIOD OID: METHOD USED TO DETERMINE
YIELD FOR SHORT
ACCRUAL PERIOD:
--
--
--
Approximate Exact
-------------------------
-------------------------
-------------------------
-------------------------
- - --------------------------------------
- - --------------------------------------------------------------------------------
Trans Financial Bank, National Association (the "Bank", which term includes any
successor thereof) for value received, hereby promises to pay the sum of
_________ U.S. dollars ($_______________) to CEDE & CO. (the "Registered
Holder") as the nominee of The Depository Trust Company ("DTC") as custodian for
participants each acting for themselves and as nominee or custodian for others,
including trusts, pension and retirement plans and accounts, fiduciaries,
custodians and nominees (the "Participants") on the Stated Maturity and to pay
interest on a regular periodic basis as specified herein.
Interest on this Note shall accrue from and including the most recent Interest
Payment Date specified herein to which interest has been paid or, if no interest
has been paid on this Note, from and including, the Original Issue Date
specified herein, to but excluding the next Interest Payment Date, the last such
Interest Payment Date being the Stated Maturity specified herein, at the per
annum rate shown herein calculated on the basis of a 360-day year consisting of
twelve 30-day months and shall be payable in arrears on Interest Payment Dates
and on the Stated Maturity. If payment of interest and principal due on any
Interest Payment Date, including the Stated Maturity, does not fall on a
Business Day, such payment will be made on the next succeeding Business Day with
the same force and effect as if made on the Interest Payment Date or the Stated
Maturity, as the case may be, and no interest shall be payable on the amount so
payable for the period from and after such Interest Payment Date or the Stated
Maturity, as the case may be. Interest, other than interest payable on the
Stated Maturity, shall be paid by the Bank on each Interest Payment Date to the
person in whose name this Note is registered at the close of business on the
Regular Record Date; provided, however, that if the Original Issue Date of this
Note is between a Record Date and the applicable Interest Payment Date, the
initial payment of interest with respect to this Note will be payable on the
Interest Payment Date following the next succeeding Regular Record Date to the
Registered Holder of this Note on such next succeeding Record Date. For purposes
of this Note, "Business Day" means any day, that is not a Saturday or Sunday,
and that is not a day on which banking institutions are authorized or obligated
by law or executive order to close in the City of New York, New York or the City
of Bowling Green, Kentucky.
Principal, premium, if any and interest payments on Notes will be made in
immediately available funds to the Registered Holder.
The Registered Holder may declare the principal amount of, and accrued interest
on, this Note to be due and payable immediately if an Event of Default with
respect to the Note shall have occurred and be continuing at the time of such
declaration. Any Event of Default with respect to this Note may be waived by the
Registered Holder.
[Senior Bank Notes: For purposes of this Note, an "Event of Default" shall
mean any one of the following events:
<PAGE>
- - -------------------------------------------------------------------------------
default in the payment of any interest upon the Note when it
becomes due and payable, and continuance of such default for a
period of 30 days; or
- - ------------------------------------------------------------------------------
default in the payment of the principal of (or
premium, if any, on) the Note when
due; or
default in the performance of any covenant or
agreement of the Bank contained in the Note which continues
for 60 days after receipt of written notice given by the
Registered Holder; or
the Bank shall consent to the appointment of a
conservator or receiver or liquidator or trustee or other
similar official in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of
or relating to the Bank or of or relating to all or
substantially all of its property; or a decree or order of a
court or agency or supervisory authority having jurisdiction
in the premises for the appointment of a conservator or
receiver or liquidator or trustee or other similar official in
any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against
the Bank and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 consecutive days;
or the Bank shall file a petition to take advantage of any
applicable insolvency or reorganization statute.]
[Subordinated Bank Notes: "For purposes of this Note, an "Event of Default"
shall occur if the Bank shall consent to the appointment of a conservator or
receiver or liquidator or trustee or other similar official in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Bank or of or relating to all or substantially
all of its property; or a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator or receiver or liquidator or trustee or other similar official in
any insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Bank and such decree or order shall have remained
in force undischarged or unstayed for a period of 60 consecutive days; or the
Bank shall file a petition to take advantage of any applicable insolvency or
reorganization statute.
The holder of this Note, by its acceptance hereof, agrees that the indebtedness
of the Bank evidenced by this Note, including the principal and interest, is
unsecured and subordinate and junior in right of payment to the Bank's
obligations to its depositors, its obligations under banker's acceptances and
letters of credit, and its obligations to its other creditors (including any
obligations to any Federal Reserve Bank and the FDIC), whether outstanding at
the time this Note is issued or thereafter incurred (except any obligations
which by their express terms rank on a parity with or junior to this Note), in
that in the case of any insolvency proceedings, receivership, conservatorship,
reorganization, readjustment of debt, marshalling of assets and liabilities or
similar proceedings or any liquidation or winding up of or relating to the Bank,
whether voluntary or involuntary, all such obligations (except obligations which
rank on a parity with or junior to this Note) shall be entitled to be paid in
full before any payment shall be made on account of the principal of or interest
on this Note. In the event of any such proceeding, after payment in full of all
sums owing with respect to such prior obligations, the holder of this Note,
together with the holders of any obligations of the Bank ranking on a parity
with this Note, shall be entitled to be paid pro rata from the remaining assets
of the Bank the unpaid principal of, and the unpaid interest on, this Note or
such other obligations before any payment or other distribution, whether in
cash, property, or otherwise, shall be made on account of any capital stock or
any obligations of the Bank ranking junior to this Note.
This Note contains no limitation on the amount of senior debt, deposits or other
obligations that rank senior to this Note that may be hereafter incurred or
assumed by the Bank.]
[Senior Bank Notes: This Note may be subject to repayment at the option of the
Registered Holder hereof on the Repayment Date(s) indicated on the face hereof.
If no such date is set forth on the face hereof, this Note may not be so repaid
at the option of the Registered Holder hereof prior to maturity. On each
Repayment Date, if any, this Note shall be repayable in whole or in part in
increments of $1,000 (provided that any remaining principal hereof shall be at
least $500,000) at the option of the Registered Holder hereof at a repayment
price equal to 100% of the principal amount to be repaid, or if this Note is an
Original Issue Discount Note (as specified on the face hereof), the applicable
Repayment Price specified on the face hereof together in the case of any such
repayment with interest thereon payable to the Repayment Date, but interest
installments due prior to the Repayment Date will be payable to the Registered
Holder on the relevant Regular Record Date or special record date. For this Note
to be repaid in whole or in part at the option of the Registered Holder hereof,
_____________________________________, as Fiscal and Paying Agent, at [insert
address]; Attention: _______________ , or at such other address of which the
Bank shall from time to time notify the Registered Holder of the Notes, must
receive not more than 45, nor less than 30, days prior to a Repayment Date, if
any, either (i) this Note accompanied by the form entitled "Option to Elect
Repayment" below duly completed, or (ii) a telegram, telex, facsimile
transmission or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company in the United States of America setting forth the name of the Registered
Holder, the principal amount of this Note, the principal amount of this Note to
be repaid, the certificate number or a description of the tenor and terms of the
Note, a statement that the option to elect repayment is being exercised thereby
and a guarantee that the Note to be repaid with the form entitled "Option to
Elect Repayment" on the Note duly completed will be received by the Fiscal and
Paying Agent not later than five Business Days after the date of such telegram,
telex, facsimile transmission or letter and such Note and form duly completed
are received by the Fiscal and Paying Agent by such fifth Business Day. Exercise
of such repayment option by the Registered Holder hereof shall be irrevocable,
except a Registered Holder tendering after receipt of a notice of an extension
of maturity.]
If so provided on the face of this Note, this Note may be redeemed by the Bank
on any Redemption Date (or range of Redemption Dates) so indicated on the face
hereof. If no Redemption Date (or range of Redemption Dates) is set forth on the
face hereof, this Note may not be redeemed prior to its Stated Maturity. If one
or more Redemption Dates (or ranges of Redemption Dates) are so specified, this
Note is subject to redemption at the option of the Bank, upon notice by
first-class mail, not less than 30 nor more than 45 days prior to the Redemption
Date specified in such notice, at the applicable redemption price specified on
the face hereof (expressed as a percentage of the principal amount of this Note)
together in the case of any such redemption with accrued interest to the
Redemption Date, but interest installments due will be payable to the Registered
Holder on the relevant Regular Record Date if the Redemption Date is an Interest
Payment Date. The Bank may elect to redeem less than the entire principal amount
hereof; provided, that the principal amount, if any, of this Note that remains
outstanding after such redemption is an Authorized Denomination. In the event of
any redemption in part, the Bank will not be required to (i) issue, register the
transfer of, or exchange any Note during a period beginning at the opening of
business 15 days before the day of the mailing of the notice of redemption of
Notes selected for redemption and ending at the close of business on the date of
mailing of the relevant notice of redemption or (ii) register the transfer or
exchange of any Note, or any portion thereof, called for redemption, except the
unredeemed portion of any Note being redeemed in part. [Subordinated Bank Notes:
Notwithstanding the foregoing, this Note may not be redeemed without the prior
written consent of the Federal Deposit Insurance Corporation.]
All notices to the Bank under this Note shall be in writing or addressed to the
Fiscal and Paying Agent at [insert name and address]; Attention:
_______________, or to such other address as the Bank may notify the Registered
Holder.
This Note shall be governed by and construed in accordance with the laws of the
State of New York.
No interest will accrue on this Note after its maturity.
The Notes of this series are issuable only in registered form without interest
coupons in denominations of $250,000 and integral multiples of $1,000 in excess
thereof (each an "Authorized Denomination").
Any money deposited with the Fiscal and Paying Agent for the payment of the
principal of, premium (if any) or interest on this Note that remains unclaimed
for two years after such principal, premium (if any) or interest has become due
and payable shall be paid to the Bank and the Holder shall thereafter, as an
unsecured general creditor, look only to the Bank for payment thereof, and all
liability of the Fiscal and Paying Agent with respect to such money shall
thereupon cease.
IN WITNESS WHEREOF, the Bank has caused this Note to be duly executed and
countersigned as of the date set forth herein.
This Note is not valid for any purpose until countersigned by the Fiscal and
Paying Agent or such other institution as may be appointed by the Bank and the
certificate of authentication affixed hereon.
Countersigned for By Trans Financial Bank,
National Association
n
authentication only
as Fiscal and Paying Agent
By__________________________ ___________________________
Authorized Signature Authorized Signature
Attest:
-----------------
Secretary
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request (s) and instruct (s) the Bank to
repay the within Note (or portion thereof specified below) pursuant to its terms
at a price equal to the principal amount thereof, 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 Fiscal and Paying Agent must receive at [insert
name and address]; Attention: _______________, or at such other place or places
of which the Company shall from time to time notify the Holder of the within
Note, not more than 45, nor less than 30, days prior to a Repayment Date, if
any, shown on the face of the within Note, either (i) this Note with this
"Option to Elect Repayment" form duly completed, or (ii) a telegram, telex,
facsimile transmission or letter from a member of a national securities exchange
or the National Association of Securities Dealers, Inc. or a commercial bank or
trust company in the United States of America setting forth the name of the
Registered Holder of the Note, the principal amount of the Note, the principal
amount of the Note to be repaid, the certificate number or a description of the
tenor and terms of the Note, a statement that the option to elect repayment is
being exercised thereby and a guarantee that the Note to be repaid with the form
entitled "Option to Elect Repayment" duly completed will be received by the
Fiscal and Paying Agent not later than five Business Days after the date of such
telegram, telex, facsimile transmission or letter and such Note and form duly
completed are received by the Fiscal and Paying Agent by such fifth Business
Day.
If less than the entire principal amount of the within Note is to be repaid,
specify the portion thereof (which shall be increments of $1,000) which the
Holder elects to have repaid: $________; and specify the denomination or
denominations (which shall be $500,000 or an integral multiple of $1,000 in
excess of $500,000) of the Notes to be issued to the Holder for the portion of
the within Note not being repaid (in the absence of any such specification, one
such Note will be issued for the portion not being repaid): $________.
Date:_______________ ____________________________________
Note: 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.
<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
TEN ENT -- as tenants by the entireties
JT ENT -- as joint tenants and not as tenants in common
Custodian
UNIF GIFT MIN ACT --
................................................................................
(Cust) (Minor)
under Uniform Gift to Minors Act
..............................................................................
(State)
Additional abbreviations may be used though not in the above list.
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
(Name and address of assignee, including zip code, must be printed or
typewritten)
the within Note, and all rights thereunder, hereby irrevocably constituting
and appointing
to transfer said Note on the books of the within 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 the within Note in every particular, without alteration
or enlargement or any change whatever and must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Fiscal and Paying Agent,
which requirements include membership or participation in STAMP or such other
"signature guaranty program" as may be determined by the Fiscal and Paying Agent
in addition to or in substitution for STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
<PAGE>
- - -------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
EXHIBIT B-1 TO
FISCAL AND PAYING
AGENCY AGREEMENT
(Short-Term Floating)
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 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 SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE 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 OR EXCHANGE AND ANY CERTIFICATE 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.
THIS BANK NOTE IS A DIRECT, UNCONDITIONAL, UNSECURED AND UNSUBORDINATED GENERAL
OBLIGATION OF THE BANK. THE OBLIGATION EVIDENCED BY THIS BANK NOTE RANKS PARI
PASSU WITH ALL OTHER UNSECURED AND UNSUBORDINATED OBLIGATIONS OF THE BANK,
EXCEPT OBLIGATIONS THAT ARE SUBJECT TO ANY PRIORITIES OR PREFERENCES UNDER
APPLICABLE LAW, INCLUDING DEPOSIT OBLIGATIONS.
THIS BANK NOTE DOES NOT EVIDENCE A DEPOSIT AND IS NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENT AGENCY OR OTHER INSURER.
REGISTERED REGISTERED
No. FLR. _______________
CUSIP __________________
FLOATING RATE NOTE
TRANS FINANCIAL BANK, NATIONAL ASSOCIATION
ORIGINAL ISSUE DATE: STATED MATURITY:
REGULAR RECORD DATES: INTEREST PAYMENT DATES:
INITIAL INTEREST RATE: SPREAD:
INDEX MATURITY: SPREAD MULTIPLIER:
INTEREST RATE BASIS: INTEREST ACCRUAL DATE:
MAXIMUM INTEREST RATE: INTEREST DETERMINATION DATES:
MINIMUM INTEREST RATE: CALCULATION DATE:
INTEREST RESET DATES: REDEMPTION DATES:
REPAYMENT DATE(S): REDEMPTION PRICE:
REPAYMENT PRICE: OTHER REDEMPTION TERMS:
OTHER REPAYMENT TERMS: OTHER TERMS:
ORIGINAL ISSUE DISCOUNT NOTE: TOTAL AMOUNT OF OID: ISSUE PRICE (expressed
as a percentage of
aggregate principal
amount):
- - ----
- - ----
- - ----
Yes No
- - -------------------------------------
- - --------------------
- - --------------------
- - --------------------
10
YIELD TO MATURITY: SHORT ACCRUAL PERIOD OID: METHOD USED TO DETERMINE
YIELD FOR SHORT
ACCRUAL PERIOD:
--
--
--
Approximate Exact
-------------------------
-------------------------
------------------------
----------------------
- - --------------------------------------
- - --------------------------------------------------------------------------------
Trans Financial Bank, National Association (the "Bank", which term includes any
successor thereof) for value received, hereby promises to pay the sum of
____________________ U.S. dollars ($________) to CEDE & CO. (the "Registered
Holder") as nominee of The Depository Trust Company ("DTC") as custodian for
participants each acting for themselves and as nominee or custodian for others,
including trusts, pension and retirement plans and accounts, fiduciaries,
custodians and nominees (the "Participants") on the Stated Maturity and to pay
interest on a regular periodic basis as specified herein.
Interest on this Note shall be payable monthly, quarterly, semiannually, or
annually on each Interest Payment Date specified herein and on the Stated
Maturity specified herein at a rate per annum equal to the Initial Interest Rate
specified herein until the first Interest Reset Date specified herein following
the Original Issue Date specified herein and thereafter at a rate determined in
accordance with the provisions herein under the heading(s) "Determination of
Commercial Paper Rate", "Determination of Fed Funds Rate", "Determination of
LIBOR", "Determination of Treasury Rate", "Determination of Prime Rate",
Determination of J.J. Kenny Rate", "Determination of 11th District Cost of Funds
Rate" or "Determination of CMT Rate" depending upon whether the Interest Rate
Basis is Commercial Paper Rate, Fed Funds Rate, LIBOR, Treasury Rate, Prime
Rate, J.J. Kenny Rate, 11th District Cost of Funds Rate or CMT Rate to the
person in whose name this Note is registered at the close of business on the
Regular Record Date whether or not a Business Day (as defined herein; provided,
however, that if the Original Issue Date is between a Regular Record Date and an
Interest Payment Date, interest payments will commence on the Interest Payment
Date following the next succeeding Regular Record Date; and provided, further,
that if an Interest Payment Date or Interest Reset Date would fall on a day that
is not a Business Day, such Interest Payment Date or Interest Reset Date shall
be the following day that is a Business Day, except that if the Interest Rate
Basis is LIBOR, where such following Business Day falls in the next calendar
month, such Interest Payment Date or Interest Reset Date shall be the next
preceding day that is a Business Day. "Business Day" means any day that is not a
Saturday or Sunday and that is not a day on which banking institutions are
authorized or obligated by law or executive order to close in the City of New
York, New York and the City of Bowling Green, Kentucky; or with respect to LIBOR
Notes, is also a London Business Day. "London Business Day" means any day on
which dealings in deposits in U.S. dollars are transacted in the London
interbank market.
Principal, premium, if any, and interest payments on Notes will be made in
immediately available funds to the Registered Holder.
The Registered Holder may declare the principal amount of, and accrued interest
on, this Note to be due and payable immediately if an Event of Default with
respect to this Note shall have occurred and be continuing at the time of such
declaration. Any Event of Default with respect to this Note may be waived by the
Registered Holder.
For purposes of this Note, an "Event of Default" shall mean any one of the
following events:
(1) default in the payment of any interest upon the Note when it
becomes due and payable, and
continuance of such default for a period of 30 days; or
(2) default in the payment of the principal of (or premium, if
any, on) the Note when due; or
(3) default in the performance of any covenant or agreement of the
Bank contained in the Note which continues for 60 days after
receipt of written notice given by the Registered Holder
hereof; or
(4) the Bank shall consent to the appointment of a conservator or
receiver or liquidator or trustee or other similar official in
any insolvency, receivership, liquidation, readjustment of
debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Bank or of or relating to
all or substantially all of its property; or a decree or order
of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a
conservator or receiver or liquidator or trustee or other
similar official in any insolvency, receivership, liquidation,
readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of
its affairs, shall have been entered against the Bank and such
decree or order shall have remained in force undischarged or
unstayed for a period of 60 consecutive days; or the Bank
shall file a petition to take advantage of any applicable
insolvency or reorganization statute.
All notices to the Bank under this Note shall be in writing or addressed to the
Fiscal and Paying Agent at [insert name and address]; Attention:
_________________, or to such other address as the Bank may notify the
Registered Holder.
This Note shall be governed by and construed in accordance with the laws of the
State of New York.
No interest will accrue on this Note after its maturity.
Interest:
Interest payable with respect to each interest payment period shall accrue to
but not include the applicable Interest Payment Date or the Stated Maturity, as
the case may be. Accrued interest hereon from the Issue Date or from the last
date to which interest shall have been paid, as the case may be, 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
factors calculated for each day from the Original Issue Date or from the last
date to 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 if the Interest Rate Basis is Commercial Paper Rate, Fed Funds Rate, LIBOR,
Prime Rate, J.J. Kenny Rate or 11th District Cost of Funds Rate, as indicated
herein, or by the actual number of days in the year if the Interest Rate Basis
is the Treasury Rate or the CMT Rate, as indicated herein.
The rate of interest borne by this Note will be reset daily, weekly, monthly,
quarterly, semiannually or annually, as specified above. The "Interest Reset
Date" will be the date specified above; provided, however, that (i) the interest
rate in effect from the Original Issue Date to the first Interest Reset Date
will be the "Initial Interest Rate" (as specified herein) and (ii) the interest
rate in effect for the ten days immediately prior to the Stated Maturity, will
be that in effect on the tenth day preceding such Stated Maturity. Each such
adjusted rate shall be applicable on and after the Interest Reset Date to which
it relates, to, but not including, the next succeeding Interest Reset Date, or
until the Stated Maturity, as the case may be. 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 succeeding day that is a Business Day, except that in the
case of a LIBOR Note, where such following Business Day is in the next
succeeding calendar month, such Interest Reset Date shall be the immediately
preceding Business Day.
Determination of Commercial Paper Rate:
If the Interest Rate Basis specified on the face hereof is the Commercial Paper
Rate, the interest rate with respect to this Note for any Interest Reset Date
shall be the Commercial Paper Rate plus or minus the Spread, if any, and/or
multiplied by the Spread Multiplier, if any, as specified on the face hereof, as
determined on the applicable Interest Determination Date (as defined below).
"Commercial Paper Rate" means, with respect to any Interest Determination Date,
the Money Market Yield (calculated as described below) of the rate quoted on a
discount basis on that date for commercial paper having the Index Maturity
specified on the face hereof as made available and subsequently published by the
Board of Governors of the Federal Reserve System (the "Federal Reserve") in
"Statistical Release H.15(519), Selected Interest Rates" or any successor
publication ("H.15(519)") under the heading "Commercial Paper". If by 3:00 p.m.,
New York City time, on the Calculation Date (as defined below) such rate is not
yet made available by the Federal Reserve nor made available by the Federal
Reserve Bank of New York (the "New York Fed"), then the Commercial Paper Rate
shall be the Money Market Yield on such Interest Determination Date of the rate
of commercial paper of the Index Maturity specified on the face hereof as
published by the New York Fed in its daily statistical release, "Composite 3:30
P.M. Quotations for U.S. Government Securities" ("Composite Quotations") under
the heading "Commercial Paper" prior to 3:00 P.M., New York City Time. If such
rate is neither published in H.15(519) nor in Composite Quotations by 3:00 P.M.
New York City time, on the Calculation Date, the Commercial Paper Rate for that
Interest Determination Date shall be calculated by the Calculation Agent (as
defined below) and shall be the Money Market Yield of the arithmetic mean (each
as rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point) of the offered rates of three leading dealers of commercial
paper in the City of New York selected by the Calculation Agent as of 11:00
a.m., New York City time, on that Interest Determination Date, for commercial
paper having such Index Maturity placed for an industrial issuer whose senior
unsecured bond rating is "AA" or the equivalent from a nationally recognized
securities 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 Interest Determination
Date will be the Commercial Paper Rate in effect on such Interest Determination
Date.
"Money Market Yield" shall be a yield (expressed as a percentage rounded
upwards, if necessary, to the next higher one hundred-thousandth of a percentage
point) 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 the 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 Fed Funds Rate:
If the Interest Rate Basis specified on the face hereof is the Fed Funds Rate,
the interest rate with respect to this Note for any Interest Reset Date shall be
the Fed Funds Rate plus or minus the Spread, if any, or multiplied by the Spread
Multiplier, if any, as specified on the face hereof, as determined on the
applicable Interest Determination Date.
"Fed Funds Rate" means, with respect to any Interest Determination Date, the
rate on that day for Federal Funds having the Index Maturity specified on the
face hereof as made available and subsequently published in H.15(519) under the
heading "Federal Funds (Effective)." In the event that such rate is not so made
available by 3:00 p.m., New York City time, on the Calculation Date pertaining
to such Interest Determination Date, the Fed Funds Rate will be the rate on such
Interest Determination Date for Federal Funds having the Index Maturity
specified on the face hereof as is made available and subsequently published in
Composite Quotations under the heading "Federal Funds/Effective Rate." If such
rate is neither made available by the Federal Reserve nor made available by the
New York Fed by 3:00 p.m., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the Fed Funds Rate for such
Interest Determination Date will be calculated by the Calculation Agent and will
be the arithmetic mean (rounded upwards, if necessary, to the next higher one
hundred-thousandth of a percentage point) 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 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 Fed Funds Rate will be the Fed
Funds Rate in effect on such Interest Determination Date.
Determination of LIBOR:
If the Interest Rate Basis specified on the face hereof is LIBOR, the interest
rate with respect to this Note for any Interest Reset Date shall be LIBOR plus
or minus the Spread, if any, or multiplied by the Spread Multiplier, if any, as
specified on the face hereof, as determined on the applicable Interest
Determination Date.
"LIBOR" will be determined by the Calculation Agent in accordance with the
following provisions:
LIBOR will be, either (i) the arithmetic mean of the offered
rates for deposits in U.S. dollars having the Index Maturity designated
on the face hereof commencing on the second London Business Day
immediately following that LIBOR Interest Determination Date, that
appear on the Reuters Screen LIBO Page as of 11:00 A.M., London time,
on that LIBOR Interest Determination Date, if at least two such offered
rates appear on the Reuters Screen LIBO Page ("LIBOR Reuters"), or (ii)
the rate for deposits in U.S. dollars having the Index Maturity
designated on the face hereof commencing on the second London Business
Day immediately following that LIBOR Interest Determination Date, that
appears on the Telerate Page 3750, as of 11:00 A.M., London time, on
that 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
the LIBO page 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 Book-Entry Bank Note representing such
LIBOR Note, LIBOR will be determined as if LIBOR Telerate has been
specified. If fewer than two offered rates appear on the Reuters Screen
LIBO Page, or if no rate appears on the Telerate Page 3750, as
applicable, LIBOR in respect of that LIBOR Interest Determination Date
will be determined as if the parties had specified the rate described
in (b) below.
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 (a)(i)
above, or on which no rate appears on Telerate Page 3750, as specified
in (a)(ii) 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 on the face hereof are offered at approximately
11:00 A.M., London time, on that LIBOR Interest Determination Date by
four major banks in the London interbank market selected by the
Calculation Agent ("LIBOR Reference Banks") to prime banks in the
London interbank market commencing on the second London Business Day
immediately following that LIBOR Interest Determination Date and in a
principal amount equal to an amount of not less than $1,000,000 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 LIBOR Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, LIBOR in respect of that LIBOR
Interest Determination Date will be the arithmetic mean of such
quotations. If fewer than two quotations are provided, LIBOR in respect
of that LIBOR Interest Determination Date will be the arithmetic mean
of the rates quoted at approximately 11:00 A.M., New York City time, on
that 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 designated on the
face hereof commencing on the second London Business Day immediately
following that LIBOR Interest Determination Date and in a principal
amount equal to an amount of not less than $1,000,000 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
with respect to such LIBOR Interest Determination Date will be the rate
of LIBOR in effect on such date.
Determination of Treasury Rate:
If the Interest Rate Basis specified on the face hereof is the Treasury Rate,
the interest rate with respect to this Note for any Interest Reset Date shall be
the Treasury Rate plus or minus the Spread, if any, and/or multiplied by the
Spread Multiplier, if any, as specified on the face hereof, as determined on the
applicable Interest Determination Date.
"Treasury Rate" means, with respect to any Interest Determination Date, the rate
for the most recent auction of direct obligations of the United States
("Treasury Bills") having the Index Maturity specified on the face hereof as
published in H.15(519) under the heading "U.S. Government Securities/Treasury
Bills/Auction Average (Investment)" or, if not so made available by 3:00 p.m.,
New York City time, on the Calculation Date pertaining to such 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) for such auction or as otherwise announced by the United States
Department of the Treasury by 3:00 p.m., New York City time, on such Calculation
Date. In the event that the results of the auction of Treasury Bills having the
Index Maturity specified on the face hereof are neither made available by the
Federal Reserve nor otherwise published or reported as provided above by 3:00
p.m., New York City time, on such Calculation Date or no such auction is held in
a particular week, then the Treasury Rate shall be calculated by the Calculation
Agent and shall be a yield to maturity (expressed as a bond equivalent, rounded
upwards, if necessary, to the next higher one hundred-thousandth of a percentage
point, 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
3:30 p.m., New York City time, on such 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, the Treasury Rate with respect to such
Interest Determination Date will be the Treasury Rate in effect on such Interest
Determination Date.
Determination of Prime Rate:
If the Interest Rate Basis specified on the face hereof is the Prime Rate, the
interest rate with respect to this Note for any Interest Reset Date shall be the
Prime Rate plus or minus the Spread, if any, or multiplied by the Spread
multiplier, if any, as specified on the face hereof, as determined on the
applicable Interest Determination Date.
"Prime Rate" for each such Interest Reset Date will be determined as of the
Prime Rate Interest Determination Date and will be the rate as such rate is
published in H.15(519) under the heading "Bank Prime Loan." If such rate is not
published prior to 3:00 P.M., New York City time, on the related Calculation
Date, then the Prime Rate shall be the arithmetic mean of the rates of interest
publicly announced by each bank that appears on the Reuters Screen NYMF Page (as
defined below) as such bank's prime rate or base lending rate as in effect for
such Prime Rate Interest Determination Date. If fewer than four such rates but
more than one such rate appear on the Reuters Screen NYMF Page for such Prime
Rate Interest Determination Date, the Prime 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 a 360-day year as of the close of business on such Prime Rate
Interest Determination Date by three, or two if only two such rates are quoted,
major money center banks in The City of New York (which may include affiliates
of certain of the Agents) selected by the Calculation Agent. If fewer than two
such rates appear on the Reuters Screen NYMF Page, the Prime Rate will be
determined by the Calculation Agent on the basis of the rates furnished in The
City of New York by three, or two if only two such rates are quoted, substitute
banks or trust companies organized and doing business under the laws of the
United States, or any state thereof, having total equity capital of at least
$500 million and being subject to supervision or examination or state authority,
selected by the Calculation Agent to provide such rate or rates; provided,
however, that if fewer than two such substitute banks or trust companies
selected as aforesaid are quoting as mentioned in this sentence, the Prime Rate
determined as of such Prime Rate Interest Determination Date shall be the Prime
Rate 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 the NYMF
page on that service for the purpose of displaying prime rates or base lending
rates of major United States banks).
Determination of J.J. Kenny Rate:
If the Interest Rate Basis specified on the face hereof is the J.J. Kenny Rate,
the interest rate with respect to this Note for any Interest Reset Date shall be
the J.J. Kenny Rate plus or minus the Spread, if any, and/or multiplied by the
Spread Multiplier, if any, as specified on the face hereof, as determined on the
applicable Interest Determination Date.
"J.J. Kenny Rate" means the rate in the high grade weekly index (the "Weekly
Index") on such date made available by Kenny Information Systems ("Kenny") to
the Calculation Agent. The Weekly Index is, and shall be, based upon 30-day
yield evaluations at par of bonds, the interest of which is exempt from Federal
income taxation under the Internal Revenue Code of 1986, as amended, of not less
than five high grade component issuers selected by Kenny which shall include,
without limitation, issuers of general obligation bonds. The specific issuers
included among the component issuers may be changed from time to time by Kenny
in its discretion. The bonds on which the Weekly Index is based shall not
include any bonds on which the interest is subject to a minimum tax or similar
tax under the Internal Revenue Code of 1986, as amended, unless all tax-exempt
bonds are subject to such tax. In the event Kenny ceases to make available such
Weekly Index, a successor indexing agent will be selected by the Calculation
Agent, such index to reflect the prevailing rate for bonds rated in the highest
short-term rating category by Moody's Investors Service, Inc. and Standard &
Poor's Corporation in respect of issuers most closely resembling the high grade
component issuers selected by Kenny for its Weekly Index, the interest on which
is (A) variable on a weekly basis, (B) exempt from Federal income taxation under
the Internal Revenue Code of 1986, as amended, and (C) not subject to a minimum
tax or similar tax under the Internal Revenue of Code of 1986, as amended,
unless all tax-exempt bonds are subject to such tax. If such successor indexing
agent is not available, the rate for any J.J. Kenney Interest Determination Date
shall be 67% of the rate determined if the Treasury Rate option had been
originally selected. The Calculation Agent shall calculate the J.J. Kenny Rate
in accordance with the foregoing.
Determination of 11th District Cost of Funds Rate:
If the Interest Rate Basis specified on the face hereof is the 11th District
Cost of Funds Rate, the interest rate with respect to this Note for any Interest
Reset Date shall be the 11th District Cost of Funds Rate plus or minus the
Spread, if any, and/or multiplied by the Spread Multiplier, if any, as specified
on the face hereof, as determined on the applicable Interest Determination Date.
Unless otherwise indicated in an applicable supplement to the Offering Circular
or on the Book-Entry Bank Note representing an 11th District Cost of Funds Rate
Note, "11th District Cost of Funds Rate" means, with respect to any 11th
District Cost of Funds Interest Determination Date, the monthly 11th District
Cost of Funds Index (the "11th District Cost of Funds Index") normally made
available and subsequently published by the Federal Home Loan Bank of San
Francisco (the "FHLB of San Francisco") during the month immediately preceding
the Interest Reset Date to which such 11th District Cost of Funds Interest
Determination Date applies.
The 11th District Cost of Funds Index is normally made available by the FHLB of
San Francisco on the last day on which the FHLB of San Francisco is open for
business in each month and represents the monthly weighted average cost of funds
for savings institutions in the 11th District of the Federal Home Loan Bank
system for the month preceding the month in which the 11th District Cost of
Funds Index is made available. Currently, the 11th District Cost of Funds Index
is computed by the FHLB of San Francisco for each month by dividing the cost of
funds (interest paid during the month by 11th District savings institutions on
savings, advances and other borrowing) by the average of the total amount of
those funds outstanding at the end of that month and the prior month and
annualizing and adjusting the result to reflect the actual number of days in the
particular month. If necessary, before these calculations are made, the
component figures are adjusted by the FHLB of San Francisco to neutralize the
effect of events such as member institutions leaving the 11th District or
acquiring institutions outside the 11th District.
If the FHLB of San Francisco shall fail in any month to make available the 11th
District Cost of Funds Index (each such failure being referred to herein as an
"Alternate Rate Event"), then the 11th District Cost of Funds Rate for the
Interest Determination Date after the Alternate Rate Event shall be calculated
on the basis of the 11th District Cost of Funds Index most recently made
available prior to such 11th District Costs of Funds Interest Determination
Date. If an Alternate Rate Event occurs in the month immediately following a
month in which a prior Alternate Rate Event occurred, then the 11th District
Cost of Funds Rate for the Interest Determination Date immediately following the
second Alternate Rate Event shall be calculated on the basis of the 11th
District Cost of Funds Index most recently made available prior to such Interest
Determination Date and, thereafter, the 11th District Cost of Funds Rate for
each succeeding Interest Determination Date shall be LIBOR, determined as though
the Interest Rate Basis were LIBOR and the Spread shall be plus or minus the
number of basis points specified in the applicable 11th District Cost of Funds
Rate Note as the "Alternate Rate Event Spread", if any.
In determining that the FHLB of San Francisco has failed in any month to make
available the 11th District Cost of Funds Index, the Calculation Agent may rely
conclusively on any written advice from the FHLB of San Francisco to such
effect.
Determination of CMT Rate:
If the Interest Rate Basis specified on the face hereof is the CMT Rate, the
interest rate with respect to this Note for any Interest Reset Date shall be the
CMT Rate plus or minus the Spread, if any, and/or multiplied by the Spread
Multiplier, if any, as specified on the face hereof, as determined on the
applicable Interest Determination Date.
"CMT Rate" means, with respect to any CMT Interest Determination Date, the rate
displayed on the Designated CMT
Telerate Page (as defined below) 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
(as defined below) for (i) if the Designated CMT Telerate Page is 7055, the
rate on such CMT 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 applicable CMT 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
Calculation Date pertaining to such CMT Interest Determination Date, then th
CMT Rate for such CMT 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 Calculation Date pertaining to such CMT Interest
Determination Date, then the CMT Rate for
such CMT 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 Interest
Determination Date with respect to such Interest Reset Date as may then be
published by either the Federal
Reserve Board 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 Calculation Date
pertaining to such CMT Interest Determination Date, then the CMT Rate for the
CMT 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 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
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 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
$100,000,000. 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 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 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 specified in the applicable supplement to the Offering
Circular or herein, (or any other page as may replace such page on that service
for the purpose of displaying Treasury Constant Maturities as published in
H.15(519)), for the purpose of displaying Treasury Constant Maturities as
published in H.15(519). If no such page is specified in the applicable
supplement to the Offering Circular or herein, 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
Treasury Notes (either one, two, three, five, seven, ten, twenty or thirty
years) specified in the applicable supplement to the Offering Circular or
herein, with respect to which the CMT Rate will be calculated. If no such
maturity is specified in the applicable supplement to the Offering Circular or
herein, the Designated CMT Maturity Index shall be two years.
General
Notwithstanding the determination of the interest rate as provided above, the
interest rate on this Note for any interest period shall not be greater than the
Maximum Interest Rate, if any, and/or less than the Minimum Interest Rate, if
any, specified on the face hereof. The interest rate on this Note will in no
event be higher than the maximum rate permitted under applicable state law as
the same may be modified by United States law of general application.
The Calculation Agent will, upon the request of the beneficial owner of this
Note, provide the interest rate then in effect and, if determined, the interest
rate which will become effective as a result of a determination made with
respect to the most recent Interest Determination Date with respect to this
Note. Unless changed by the Bank, in its sole discretion, the Fiscal and Paying
Agent will act as Calculation Agent for this Note and thereafter the Calculation
Agent shall be such agent as selected by the Bank. The Bank shall notify the
Registered Holder and the Depository Trust Company of any change in Calculation
Agent.
The Interest Determination Date pertaining to an Interest Reset Date will be the
second Business Day preceding such Interest Reset Date for all Notes other than
Notes with an Interest Reset Basis of LIBOR or the Treasury Rate. If the
Interest Rate Basis specified on the face hereof is LIBOR, the Interest
Determination Date pertaining to an Interest Reset Date will be the second
London Business Day next preceding such Interest Reset Date. If the Interest
Rate Basis specified on the face hereof is the Treasury Rate, the Interest
Determination Date pertaining to an Interest Reset Date will be the day of the
week in which such Interest Reset Date falls on which Treasury Bills would
normally be auctioned (generally, Monday). If as the result of a legal holiday,
an auction is held on the preceding Friday, such Friday will be the Interest
Determination Date pertaining to the Interest Reset Date occurring in the next
succeeding week. If an auction date shall fall on any Interest Reset Date for a
Treasury Rate Note, then such Interest Reset Date shall instead be the first
Business Day immediately following such auction.
All dollar amounts used in or resulting from any calculation will be rounded to
the nearest cent with one-half cent being rounded upward. Unless otherwise
specified herein, all percentages resulting from any calculation will be
rounded, if necessary, to the nearest one-hundred thousandth of a percent, with
five one-millionths of a percent rounded upwards, e.g., 9.876545% (or .09876545)
being rounded to 9.87655% (or .0987655) and 9.876544% (or .09876544) being
rounded to 9.87654% or .0987654).
The "Calculation Date", where applicable, pertaining to an Interest
Determination Date is 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 immediately preceding the
applicable Interest Payment Date or Stated Maturity, as the case may be.
The Notes of this series are issuable only in registered form without coupon in
denominations of $250,000 and integral multiples of $1,000 in excess thereof.
This Note may be subject to repayment at the option of the Registered Holder
hereof on the Repayment Date(s) indicated on the face hereof. If no such date is
set forth on the face hereof, this Note may not be so repaid at the option of
the Registered Holder hereof prior to maturity. On each Repayment Date, if any,
this Note shall be repayable in whole or in part in increments of $1,000
(provided that any remaining principal hereof shall be at least $500,000) at the
option of the Registered Holder hereof at a repayment price equal to 100% of the
principal amount to be repaid, or if this Note is an Original Issue Discount
Note (as specified on the face hereof), the applicable Repayment Price specified
on the face hereof together in the case of any such repayment with interest
thereon payable to the Repayment Date, but interest installments due prior to
the Repayment Date will be payable to the Registered Holder on the relevant
Regular Record Date or special record date. For this Note to be repaid in whole
or in part at the option of the Registered Holder hereof,
_____________________________________, as Fiscal and Paying Agent, at [insert
address]; Attention: _______________ , or at such other address of which the
Bank shall from time to time notify the Registered Holder of the Notes, must
receive not more than 45, nor less than 30, days prior to a Repayment Date, if
any, either (i) this Note accompanied by the form entitled "Option to Elect
Repayment" below duly completed, or (ii) a telegram, telex, facsimile
transmission or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company in the United States of America setting forth the name of the Registered
Holder, the principal amount of this Note, the principal amount of this Note to
be repaid, the certificate number or a description of the tenor and terms of the
Note, a statement that the option to elect repayment is being exercised thereby
and a guarantee that the Note to be repaid with the form entitled "Option to
Elect Repayment" on the Note duly completed will be received by the Fiscal and
Paying Agent not later than five Business Days after the date of such telegram,
telex, facsimile transmission or letter and such Note and form duly completed
are received by the Fiscal and Paying Agent by such fifth Business Day. Exercise
of such repayment option by the Registered Holder hereof shall be irrevocable,
except a Registered Holder tendering after receipt of a notice of an extension
of maturity.
If so provided on the face of this Note, this Note may be redeemed by the Bank
on any Redemption Date (or range of Redemption Dates) so indicated on the face
hereof. If no Redemption Date (or range of Redemption Dates) is set forth on the
face hereof, this Note may not be redeemed prior to its Stated Maturity. If one
or more Redemption Dates (or ranges of Redemption Dates) are so specified, this
Note is subject to redemption at the option of the Bank, upon notice by
first-class mail, not less than 30 nor more than 45 days prior to the Redemption
Date specified in such notice, at the applicable redemption price specified on
the face hereof (expressed as a percentage of the principal amount of this Note)
together in the case of any such redemption with accrued interest to the
Redemption Date, but interest installments due will be payable to the Registered
Holder on the relevant Regular Record Date if the Redemption Date is an Interest
Payment Date. The Bank may elect to redeem less than the entire principal amount
hereof; provided, that the principal amount, if any, of this Note that remains
outstanding after such redemption is an Authorized Denomination. In the event of
any redemption in part, the Bank will not be required to (i) issue, register the
transfer of, or exchange any Note during a period beginning at the opening of
business 15 days before the day of the mailing of the notice of redemption of
Notes selected for redemption and ending at the close of business on the date of
mailing of the relevant notice of redemption or (ii) register the transfer or
exchange of any Note, or any portion thereof, called for redemption, except the
unredeemed portion of any Note being redeemed in part.
Any money deposited with the Fiscal and Paying Agent for the payment of the
principal of, premium (if any) or interest on this Note that remains unclaimed
for two years after such principal, premium (if any) or interest has become due
and payable shall be paid to the Bank and the Holder shall thereafter, as an
unsecured general creditor, look only to the Bank for payment thereof, and all
liability of the Fiscal and Paying Agent with respect to such money shall
thereupon cease.
<PAGE>
IN WITNESS WHEREOF, the Bank has caused this Note to be duly executed and
countersigned as of the date set forth herein.
This Note is not valid for any purpose until countersigned by the Fiscal and
Paying Agent or such other institution as may be appointed by the Bank and the
certificate of authentication affixed hereon.
Countersigned for Trans Financial Bank,
National Association
authentication only
as Fiscal and Paying Agent
By__________________________ By__________________________
Authorized Signature Authorized Signature
Attest:
------------------
Secretary
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request (s) and instruct (s) the Bank to
repay the within Note (or portion thereof specified below) pursuant to its terms
at a price equal to the principal amount thereof, 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 Fiscal and Paying Agent must receive at [insert
name and address]; Attention: _______________, or at such other place or places
of which the Company shall from time to time notify the Holder of the within
Note, not more than 45, nor less than 30, days prior to a Repayment Date, if
any, shown on the face of the within Note, either (i) this Note with this
"Option to Elect Repayment" form duly completed, or (ii) a telegram, telex,
facsimile transmission or letter from a member of a national securities exchange
or the National Association of Securities Dealers, Inc. or a commercial bank or
trust company in the United States of America setting forth the name of the
Registered Holder of the Note, the principal amount of the Note, the principal
amount of the Note to be repaid, the certificate number or a description of the
tenor and terms of the Note, a statement that the option to elect repayment is
being exercised thereby and a guarantee that the Note to be repaid with the form
entitled "Option to Elect Repayment" duly completed will be received by the
Fiscal and Paying Agent not later than five Business Days after the date of such
telegram, telex, facsimile transmission or letter and such Note and form duly
completed are received by the Fiscal and Paying Agent by such fifth Business
Day.
If less than the entire principal amount of the within Note is to be repaid,
specify the portion thereof (which shall be increments of $1,000) which the
Holder elects to have repaid: $________; and specify the denomination or
denominations (which shall be $500,000 or an integral multiple of $1,000 in
excess of $500,000) of the Notes to be issued to the Holder for the portion of
the within Note not being repaid (in the absence of any such specification, one
such Note will be issued for the portion not being repaid): $________.
Date:_______________ ____________________________________
Note: 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.
<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
TEN ENT -- as tenants by the entireties
JT ENT -- as joint tenants and not as tenants in common
Custodian
UNIF GIFT MIN ACT --
................................................................................
(Cust) (Minor)
under Uniform Gift to Minors Act
..............................................................................
(State)
Additional abbreviations may be used though not in the above list.
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
(Name and address of assignee, including zip code, must be printed or
typewritten)
the within Note, and all rights thereunder, hereby irrevocably constituting and
appointing
to transfer said Note on the books of the within 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 the within Note in every particular, without alteration
or enlargement or any change whatever and must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Fiscal and Paying Agent,
which requirements include membership or participation in STAMP or such other
"signature guaranty program" as may be determined by the Fiscal and Paying Agent
in addition to or in substitution for STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
EXHIBIT B-2 TO
FISCAL AND PAYING
AGENCY AGREEMENT
(Medium-Term Floating)
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 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 SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE 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 OR EXCHANGE AND ANY CERTIFICATE 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.
[Senior Bank Note: THIS BANK NOTE IS A DIRECT, UNCONDITIONAL, UNSECURED AND
UNSUBORDINATED GENERAL OBLIGATION OF
THE BANK. THE OBLIGATION EVIDENCED BY THIS BANK NOTE RANKS PARI PASSU WITH ALL
OTHER UNSECURED AND
UNSUBORDINATED OBLIGATIONS OF THE BANK, EXCEPT OBLIGATIONS THAT ARE SUBJECT TO
ANY PRIORITIES OR PREFERENCES
UNDER APPLICABLE LAW, INCLUDING DEPOSIT OBLIGATIONS.]
[Subordinated Bank Note: "THE OBLIGATION EVIDENCED BY THIS BANK NOTE IS
UNSECURED AND IS SUBORDINATED AND JUNIOR
IN RIGHT OF PAYMENT TO THE BANK'S OBLIGATIONS TO ITS DEPOSITORS AND TO THE
BANK'S OTHER OBLIGATIONS TO ITS
GENERAL AND SECURED CREDITORS AND IS INELIGIBLE AS COLLATERAL TO SECURE A LOAN
FROM THE BANK.]
THIS BANK NOTE DOES NOT EVIDENCE A DEPOSIT AND IS NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY OR OTHER INSURER.
REGISTERED REGISTERED
No. FLR. _______________
CUSIP __________________
FLOATING RATE NOTE
TRANS FINANCIAL BANK, NATIONAL ASSOCIATION
ORIGINAL ISSUE DATE: STATED MATURITY:
INITIAL INTEREST RATE: SPREAD:
INDEX MATURITY: SPREAD MULTIPLIER:
INTEREST RATE BASIS: INTEREST ACCRUAL DATE:
MAXIMUM INTEREST RATE: INTEREST DETERMINATION DATES:
MINIMUM INTEREST RATE: CALCULATION DATE:
INTEREST RESET DATES: REDEMPTION DATES:
REPAYMENT DATE(S): REDEMPTION PRICE:
REPAYMENT PRICE: OTHER REDEMPTION TERMS:
OTHER REPAYMENT TERMS: OTHER TERMS:
If this Note was issued with "original issue discount" for purposes of Section
1273 of the Internal Revenue Code of 1986, as amended, the following shall be
completed:
ORIGINAL ISSUE DISCOUNT NOTE: TOTAL AMOUNT OF OID: ISSUE PRICE (expressed
as a percentage of
aggregate principal amount):
- - ----
- - ----
- - ----
Yes No
- - -------------------------------------
- - --------------------
- - --------------------
- - --------------------
14
YIELD TO MATURITY: SHORT ACCRUAL PERIOD OID: METHOD USED TO DETERMINE
YIELD FOR SHORT
ACCRUAL PERIOD:
--
--
--
Approximate Exact
--------------------------
------------------------
-------------------------
-------------------------
- - --------------------------------------
- - -------------------------------------------------------------------------------
Trans Financial Bank, National Association (the "Bank", which term includes any
successor thereof) for value received, hereby promises to pay the sum of
____________________ U.S. dollars ($________) to CEDE & CO. (the "Registered
Holder") as nominee of The Depository Trust Company ("DTC") as custodian for
participants each acting for themselves and as nominee or custodian for others,
including trusts, pension and retirement plans and accounts, fiduciaries,
custodians and nominees (the "Participants") on the Stated Maturity and to pay
interest on a regular periodic basis as specified herein.
Interest on this Note shall be payable monthly, quarterly, semiannually, or
annually on each Interest Payment Date specified herein and on the Stated
Maturity specified herein at a rate per annum equal to the Initial Interest Rate
specified herein until the first Interest Reset Date specified herein following
the Original Issue Date specified herein and thereafter at a rate determined in
accordance with the provisions herein under the heading(s) "Determination of
Commercial Paper Rate", "Determination of Fed Funds Rate", "Determination of
LIBOR", "Determination of Treasury Rate", "Determination of Prime Rate",
"Determination of J.J. Kenny Rate", "Determination of 11th District Cost of
Funds Rate" or "Determination of CMT Rate", depending upon whether the Interest
Rate Basis is Commercial Paper Rate, Fed Funds Rate, LIBOR, Treasury Rate, Prime
Rate, J.J. Kenny Rate, 11th District Cost of Funds Rate or CMT Rate to the
person in whose name this Note is registered at the close of business on the
Regular Record Date whether or not a Business Day (as defined herein); provided,
however, that if the Original Issue Date is between a Regular Record Date and an
Interest Payment Date, interest payments will commence on the Interest Payment
Date following the next succeeding Regular Record Date; and provided, further,
that if an Interest Payment Date or Interest Reset Date would fall on a day that
is not a Business Day, such Interest Payment Date or Interest Reset Date shall
be the following day that is a Business Day, except that if the Interest Rate
Basis is LIBOR, where such following Business Day falls in the next calendar
month, such Interest Payment Date or Interest Reset Date shall be the next
preceding day that is a Business Day. "Business Day" means any day that is not a
Saturday or Sunday and that is not a day on which banking institutions are
authorized or obligated by law or executive order to close in the City of New
York or the City of Bowling Green, Kentucky; or with respect to LIBOR Notes, is
also a London Business Day. "London Business Day" means any day on which
dealings in deposits in U.S. dollars are transacted in the London interbank
market.
Principal, premium, if any, and interest payments on Notes will be made in
immediately available funds to the Registered Holder.
The Registered Holders may declare the principal amount of, and accrued interest
on, this Note to be due and payable immediately if an Event of Default with
respect to the Note shall have occurred and be continuing at the time of such
declaration. Any Event of Default with respect to this Note may be waived by the
Registered Holder.
[Senior Bank Notes: For purposes of this Note, an "Event of Default" shall
mean any one of the following events:
<PAGE>
- - -------------------------------------------------------------------------------
default in the payment of any interest upon the Note when it
becomes due and payable, and continuance of such default for a
period of 30 days; or
- - -------------------------------------------------------------------------------
default in the payment of the principal of (or
premium, if any, on) the Note when
due; or
default in the performance of any covenant or
agreement of the Bank contained in the Note which continues
for 60 days after receipt of written notice given by the
Registered Holder; or
the Bank shall consent to the appointment of a
conservator or receiver or liquidator or trustee or other
similar official in any insolvency, receivership, liquidation,
readjustment of debt, marshaling of assets and liabilities or
similar proceedings of or relating to the Bank or of or
relating to all or substantially all of its property; or a
decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a
conservator or receiver or liquidator or trustee or other
similar official in any insolvency, receivership, liquidation
readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of
its affairs, shall have been entered against the Bank and such
decree or order shall have remained in force undischarged or
unstayed for a period of 60 consecutive days; or the Bank
shall file a petition to take advantage of any applicable
insolvency or reorganization statute.]
[Subordinated Bank Notes: "For purposes of this Note, an "Event of Default"
shall occur if the Bank shall consent to the appointment of a conservator or
receiver or liquidator or trustee or other similar official in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Bank or of or relating to all or substantially
all of its property; or a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator or receiver or liquidator or trustee or other similar official in
any insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Bank and such decree or order shall have remained
in force undischarged or unstayed for a period of 60 consecutive days; or the
Bank shall file a petition to take advantage of any applicable insolvency or
reorganization statute.]
The holder of this Note, by its acceptance hereof, agrees that the indebtedness
of the Bank evidenced by this Note, including the principal and interest, is
unsecured and subordinate and junior in right of payment to the Bank's
obligations to its depositors, its obligations under banker's acceptances and
letters of credit, and its obligations to its other creditors (including any
obligations to any Federal Reserve Bank and the FDIC), whether outstanding at
the time this Note is issued or thereafter incurred (except any obligations
which by their express terms rank on a parity with or junior to this Note), in
that in the case of any insolvency proceedings, receivership, conservatorship,
reorganization, readjustment of debt, marshalling of assets and liabilities or
similar proceedings or any liquidation or winding up of or relating to the Bank,
whether voluntary or involuntary, all such obligations (except obligations which
rank on a parity with or junior to this Note) shall be entitled to be paid in
full before any payment shall be made on account of the principal of or interest
on this Note. In the event of any such proceeding, after payment in full of all
sums owing with respect to such prior obligations, the holder of this Note,
together with the holders of any obligations of the Bank ranking on a parity
with this Note, shall be entitled to be paid pro rata from the remaining assets
of the Bank the unpaid principal of, and the unpaid interest on, this Note or
such other obligations before any payment or other distribution, whether in
cash, property, or otherwise, shall be made on account of any capital stock or
any obligations of the Bank ranking junior to this Note.
This Note contains no limitation on the amount of senior debt, deposits or other
obligations that rank senior to this Note that may be hereafter incurred or
assumed by the Bank.]
All notices to the Bank under this Note shall be in writing or addressed to the
Fiscal and Paying Agent at [insert name and address]; Attention:
__________________, or to such other address as the Bank may notify the
Registered Holder.
This Note shall be governed by and construed in accordance with the laws of the
State of New York.
No interest will accrue on this Note after its maturity.
Interest:
Interest payable with respect to each interest payment period shall accrue to
but not include the applicable Interest Payment Date or the Stated Maturity, as
the case may be. Accrued interest hereon from the Issue Date or from the last
date to which interest shall have been paid, as the case may be, 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
factors calculated for each day from the Original Issue Date or from the last
date to 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 if the Interest Rate Basis is Commercial Paper Rate, Fed Funds Rate, LIBOR,
Prime Rate, J.J. Kenny Rate or 11th District Cost of Funds Rate, as indicated
herein, or by the actual number of days in the year if the Interest Rate Basis
is the Treasury Rate or CMT Rate, as indicated herein.
The rate of interest borne by this Note will be reset daily, weekly, monthly,
quarterly, semiannually or annually, as specified above. The "Interest Reset
Date" will be the date specified above; provided, however, that (i) the interest
rate in effect from the Original Issue Date to the first Interest Reset Date
will be the "Initial Interest Rate" (as specified herein) and (ii) the interest
rate in effect for the ten days immediately prior to the Stated Maturity, will
be that in effect on the tenth day preceding such date. Each such adjusted rate
shall be applicable on and after the Interest Reset Date to which it relates,
to, but not including, the next succeeding Interest Reset Date, or until the
Stated Maturity, as the case may be. 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 succeeding day that is a Business Day, except that in the case of a
LIBOR Note, where such following Business Day is in the next succeeding calendar
month, such Interest Reset Date shall be the immediately preceding Business Day.
Determination of Commercial Paper Rate:
If the Interest Rate Basis specified on the face hereof is the Commercial Paper
Rate, the interest rate with respect to this Note for any Interest Reset Date
shall be the Commercial Paper Rate plus or minus the Spread, if any, and/or
multiplied by the Spread Multiplier, if any, as specified on the face hereof, as
determined on the applicable Interest Determination Date.
"Commercial Paper Rate" means, with respect to any Interest Determination Date,
the Money Market Yield (calculated as described below) of the rate quoted on a
discount basis on that date for commercial paper having the Index Maturity
specified on the face hereof as made available and subsequently published by the
Board of Governors of the Federal Reserve System (the "Federal Reserve") in
"Statistical Release H.15(519), Selected Interest Rates" or any successor
publication ("H.15(519)") under the heading "Commercial Paper". If by 3:00 p.m.,
New York City time, on the Calculation Date (as defined below) such rate is not
yet made available by the Federal Reserve nor made available by the Federal
Reserve Bank of New York (the "New York Fed"), then the Commercial Paper Rate
shall be the Money Market Yield on such Interest Determination Date of the rate
of commercial paper of the Index Maturity specified on the face hereof as
published by the New York Fed in its daily statistical release, "Composite 3:30
P.M. Quotations for U.S. Government Securities" ("Composite Quotations") under
the heading "Commercial Paper" prior to 3:00 P.M., New York City Time. If such
rate is neither published in H.15(519) nor in Composite Quotations by 3:00 P.M.
New York City time, on the Calculation Date, the Commercial Paper Rate for that
Interest Determination Date shall be calculated by the Calculation Agent (as
defined below) and shall be the Money Market Yield of the arithmetic mean (each
as rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point) of the offered rates of three leading dealers of commercial
paper in the City of New York selected by the Calculation Agent as of 11:00
a.m., New York City time, on that Interest Determination Date, for commercial
paper having such Index Maturity placed for an industrial issuer whose senior
unsecured bond rating is "AA" or the equivalent from a nationally recognized
securities 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 Interest Determination
Date will be the Commercial Paper Rate in effect on such Interest Determination
Date.
"Money Market Yield" shall be a yield (expressed as a percentage rounded
upwards, if necessary, to the next higher one hundred-thousandth of a percentage
point) 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 the 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 Fed Funds Rate:
If the Interest Rate Basis specified on the face hereof is the Fed Funds Rate,
the interest rate with respect to this Note for any Interest Reset Date shall be
the Fed Funds Rate plus or minus the Spread, if any, and/or multiplied by the
Spread Multiplier, if any, as specified on the face hereof, as determined on the
applicable Interest Determination Date.
"Fed Funds Rate" means, with respect to any Interest Determination Date, the
rate on that day for Federal Funds having the Index Maturity specified on the
face hereof as made available and subsequently published in H.15(519) under the
heading "Federal Funds (Effective)." In the event that such rate is not so made
available by 3:00 p.m., New York City time, on the Calculation Date pertaining
to such Interest Determination Date, the Fed Funds Rate will be the rate on such
Interest Determination Date for Federal Funds having the Index Maturity
specified on the face hereof as is made available and subsequently published in
Composite Quotations under the heading "Federal Funds/Effective Rate." If such
rate is neither made available by the Federal Reserve nor made available by the
New York Fed by 3:00 p.m., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the Fed Funds Rate for such
Interest Determination Date will be calculated by the Calculation Agent and will
be the arithmetic mean (rounded upwards, if necessary, to the next higher one
hundred-thousandth of a percentage point) 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 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 Fed Funds Rate will be the Fed
Funds Rate in effect on such Interest Determination Date.
Determination of LIBOR:
If the Interest Rate Basis specified on the face hereof is LIBOR, the interest
rate with respect to this Note for any Interest Reset Date shall be LIBOR plus
or minus the Spread, if any, or multiplied by the Spread Multiplier, if any, as
specified on the face hereof, as determined on the applicable Interest
Determination Date.
"LIBOR" will be determined by the Calculation Agent in accordance with the
following provisions:
LIBOR will be, as specified on the face hereof, either (i)
the arithmetic mean of the offered rates for deposits in U.S. dollars
having the Index Maturity designated on the face hereof commencing on
the second London Business Day immediately following that LIBOR
Interest Determination Date, that appear on the Reuters Screen LIBO
Page as of 11:00 A.M., London time, on that LIBOR Interest
Determination Date, if at least two such offered rates appear on the
Reuters Screen LIBO Page ("LIBOR Reuters"), or (ii) the rate for
deposits in U.S. dollars having the Index Maturity designated on the
face hereof commencing on the second London Business Day immediately
following that LIBOR Interest Determination Date, that appears on the
Telerate Page 3750, as of 11:00 A.M., London time, on that 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 the LIBO
page 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 Book-Entry Bank Note representing such LIBOR Note,
LIBOR will be determined as if LIBOR Telerate has been specified. If
fewer than two offered rates appear on the Reuters Screen LIBO Page, or
if no rate appears on the Telerate Page 3750, as applicable, LIBOR in
respect of that LIBOR Interest Determination Date will be determined as
if the parties had specified the rate described in (b) below.
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 (a)(i)
above, or on which no rate appears on Telerate Page 3750, as specified
in (a)(ii) 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 on the face hereof are offered at approximately
11:00 A.M., London time, on that LIBOR Interest Determination Date by
four major banks in the London interbank market selected by the
Calculation Agent ("LIBOR Reference Banks") to prime banks in the
London interbank market commencing on the second London Business Day
immediately following that LIBOR Interest Determination Date and in a
principal amount equal to an amount of not less than $1,000,000 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 LIBOR Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, LIBOR in respect of that LIBOR
Interest Determination Date will be the arithmetic mean of such
quotations. If fewer than two quotations are provided, LIBOR in respect
of that LIBOR Interest Determination Date will be the arithmetic mean
of the rates quoted at approximately 11:00 A.M., New York City time, on
that 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 designated on the
face hereof commencing on the second London Business Day immediately
following that LIBOR Interest Determination Date and in a principal
amount equal to an amount of not less than $1,000,000 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
with respect to such LIBOR Interest Determination Date will be the rate
of LIBOR in effect on such date.
Determination of Treasury Rate:
If the Interest Rate Basis specified on the face hereof is the Treasury Rate,
the interest rate with respect to this Note for any Interest Reset Date shall be
the Treasury Rate plus or minus the Spread, if any, and/or multiplied by the
Spread Multiplier, if any, as specified on the face hereof, as determined on the
applicable Interest Determination Date.
"Treasury Rate" means, with respect to any Interest Determination Date, the rate
for the most recent auction of direct obligations of the United States
("Treasury Bills") having the Index Maturity specified on the face hereof as
published in H.15(519) under the heading "U.S. Government Securities/Treasury
Bills/Auction Average (Investment)" or, if not so made available by 3:00 p.m.,
New York City time, on the Calculation Date pertaining to such 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) for such auction or as otherwise announced by the United States
Department of the Treasury by 3:00 p.m., New York City time, on such Calculation
Date. In the event that the results of the auction of Treasury Bills having the
Index Maturity specified on the face hereof are neither made available by the
Federal Reserve nor otherwise published or reported as provided above by 3:00
p.m., New York City time, on such Calculation Date or no such auction is held in
a particular week, then the Treasury Rate shall be calculated by the Calculation
Agent and shall be a yield to maturity (expressed as a bond equivalent, rounded
upwards, if necessary, to the next higher one hundred-thousandth of a percentage
point, 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
3:30 p.m., New York City time, on such 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, the Treasury Rate with respect to such
Interest Determination Date will be the Treasury Rate in effect on such Interest
Determination Date.
Determination of Prime Rate:
If the Interest Rate Basis specified on the face hereof is the Prime Rate, the
interest rate with respect to this Note for any Interest Reset Date shall be the
Prime Rate plus or minus the Spread, if any, and/or multiplied by the Spread
multiplier, if any, as specified on the face hereof, as determined on the
applicable Interest Determination Date.
"Prime Rate" for each such Interest Reset Date will be determined as of the
Prime Rate Interest Determination Date and will be the rate as such rate is
published in H.15(519) under the heading "Bank Prime Loan." If such rate is not
published prior to 3:00 P.M., New York City time, on the related Calculation
Date, then the Prime Rate shall be the arithmetic mean of the rates of interest
publicly announced by each bank that appears on the Reuters Screen NYMF Page (as
defined below) as such bank's prime rate or base lending rate as in effect for
such Prime Rate Interest Determination Date. If fewer than four such rates but
more than one such rate appear on the Reuters Screen NYMF Page for such Prime
Rate Interest Determination Date, the Prime 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 a 360-day year as of the close of business on such Prime Rate
Interest Determination Date by three, or two if only two such rates are quoted,
major money center banks in The City of New York (which may include affiliates
of certain of the Agents) selected by the Calculation Agent. If fewer than two
such rates appear on the Reuters Screen NYMF Page, the Prime Rate will be
determined by the Calculation Agent on the basis of the rates furnished in The
City of New York by three, or two if only two such rates are quoted, substitute
banks or trust companies organized and doing business under the laws of the
United States, or any state thereof, having total equity capital of at least
$500 million and being subject to supervision or examination or state authority,
selected by the Calculation Agent to provide such rate or rates; provided,
however, that if fewer than two such substitute banks or trust companies
selected as aforesaid are quoting as mentioned in this sentence, the Prime Rate
determined as of such Prime Rate Interest Determination Date shall be the Prime
Rate 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 the NYMF
page on that service for the purpose of displaying prime rates or base lending
rates of major United States banks).
Determination of J.J. Kenny Rate:
If the Interest Rate Basis specified on the face hereof is the J.J. Kenny Rate,
the interest rate with respect to this Note for any Interest Reset Date shall be
the J.J. Kenny Rate plus or minus the Spread, if any, and/or multiplied by the
Spread Multiplier, if any, as specified on the face hereof, as determined on the
applicable Interest Determination Date.
"J.J. Kenny Rate" means the rate in the high grade weekly index (the "Weekly
Index") on such date made available by Kenny Information Systems ("Kenny") to
the Calculation Agent. The Weekly Index is, and shall be, based upon 30-day
yield evaluations at par of bonds, the interest of which is exempt from Federal
income taxation under the Internal Revenue Code of 1986, as amended, of not less
than five high grade component issuers selected by Kenny which shall include,
without limitation, issuers of general obligation bonds. The specific issuers
included among the component issuers may be changed from time to time by Kenny
in its discretion. The bonds on which the Weekly Index is based shall not
include any bonds on which the interest is subject to a minimum tax or similar
tax under the Internal Revenue Code of 1986, as amended, unless all tax-exempt
bonds are subject to such tax. In the event Kenny ceases to make available such
Weekly Index, a successor indexing agent will be selected by the Calculation
Agent, such index to reflect the prevailing rate for bonds rated in the highest
short-term rating category by Moody's Investors Service, Inc. and Standard &
Poor's Corporation in respect of issuers most closely resembling the high grade
component issuers selected by Kenny for its Weekly Index, the interest on which
is (A) variable on a weekly basis, (B) exempt from Federal income taxation under
the Internal Revenue Code of 1986, as amended, and (C) not subject to a minimum
tax or similar tax under the Internal Revenue of Code of 1986, as amended,
unless all tax-exempt bonds are subject to such tax. If such successor indexing
agent is not available, the rate for any J.J. Kenney Interest Determination Date
shall be 67% of the rate determined if the Treasury Rate option had been
originally selected. The Calculation Agent shall calculate the J.J. Kenny Rate
in accordance with the foregoing.
Determination of 11th District Cost of Funds Rate:
If the Interest Rate Basis specified on the face hereof is the 11th District
Cost of Funds Rate, the interest rate with respect to this Note for any Interest
Reset Date shall be the 11th District Cost of Funds Rate plus or minus the
Spread, if any, and/or multiplied by the Spread Multiplier, if any, as specified
on the face hereof, as determined on the applicable Interest Determination Date.
Unless otherwise indicated in an applicable supplement to the Offering Circular
or on the Book-Entry Bank Note representing an 11th District Cost of Funds Rate
Note, "11th District Cost of Funds Rate" means, with respect to any 11th
District Cost of Funds Interest Determination Date, the monthly 11th District
Cost of Funds Index (the "11th District Cost of Funds Index") normally made
available and subsequently published by the Federal Home Loan Bank of San
Francisco (the "FHLB of San Francisco") during the month immediately preceding
the Interest Reset Date to which such 11th District Cost of Funds Interest
Determination Date applies.
The 11th District Cost of Funds Index is normally made available by the FHLB of
San Francisco on the last day on which the FHLB of San Francisco is open for
business in each month and represents the monthly weighted average cost of funds
for savings institutions in the 11th District of the Federal Home Loan Bank
system for the month preceding the month in which the 11th District Cost of
Funds Index is made available. Currently, the 11th District Cost of Funds Index
is computed by the FHLB of San Francisco for each month by dividing the cost of
funds (interest paid during the month by 11th District savings institutions on
savings, advances and other borrowing) by the average of the total amount of
those funds outstanding at the end of that month and the prior month and
annualizing and adjusting the result to reflect the actual number of days in the
particular month. If necessary, before these calculations are made, the
component figures are adjusted by the FHLB of San Francisco to neutralize the
effect of events such as member institutions leaving the 11th District or
acquiring institutions outside the 11th District.
If the FHLB of San Francisco shall fail in any month to make available the 11th
District Cost of Funds Index (each such failure being referred to herein as an
"Alternate Rate Event"), then the 11th District Cost of Funds Rate for the
Interest Determination Date after the Alternate Rate Event shall be calculated
on the basis of the 11th District Cost of Funds Index most recently made
available prior to such Interest Determination Date. If an Alternate Rate Event
occurs in the month immediately following a month in which a prior Alternate
Rate Event occurred, then the 11th District Cost of Funds Rate for the Interest
Determination Date immediately following the second Alternate Rate Event shall
be calculated on the basis of the 11th District Cost of Funds Index most
recently made available prior to such 11th District Cost of Funds Interest
Determination Date and, thereafter, the 11th District Cost of Funds Rate for
each succeeding Interest Determination Date shall be LIBOR, determined as though
the Interest Rate Basis were LIBOR and the Spread shall be plus or minus the
number of basis points specified in the applicable 11th District Cost of Funds
Rate Note as the "Alternate Rate Event Spread", if any.
In determining that the FHLB of San Francisco has failed in any month to make
available the 11th District Cost of Funds Index, the Calculation Agent may rely
conclusively on any written advice from the FHLB of San Francisco to such
effect.
Determination of CMT Rate:
If the Interest Rate Basis specified on the face hereof is the CMT Rate, the
interest rate with respect to this Note for any Interest Reset Date shall be the
CMT Rate plus or minus the Spread, if any, and/or multiplied by the Spread
Multiplier, if any, as specified on the face hereof, as determined on the
applicable Interest Determination Date.
"CMT Rate" means, with respect to any CMT Interest Determination Date, the
rate displayed on the Designated CMT
Telerate Page (as defined below) 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
as defined below) for (i) if the Designated CMT Telerate Page is 7055, the
rate on such CMT 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 applicable CMT 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
Calculation Date pertaining to such CMT Interest Determination Date, then the
CMT Rate for such CMT 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 Calculation Date pertaining to such CMT Interest
Determination Date, then the CMT Rate for
such CMT 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 Interest
Determination Date with respect to such Interest Reset Date as may then
be published by either the Federal
Reserve Board 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 Calculation Date
pertaining to such CMT Interest Determination Date, then the CMT Rate for the
CMT 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 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 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 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
$100,000,000. 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 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 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 specified in the applicable supplement to the Offering
Circular or herein, (or any other page as may replace such page on that service
for the purpose of displaying Treasury Constant Maturities as published in
H.15(519)), for the purpose of displaying Treasury Constant Maturities as
published in H.15(519). If no such page is specified in the applicable
supplement to the Offering Circular or herein, 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
Treasury Notes (either one, two, three, five, seven, ten, twenty or thirty
years) specified in the applicable supplement to the Offering Circular or
herein, with respect to which the CMT Rate will be calculated. If no such
maturity is specified in the applicable supplement to the Offering Circular or
herein, the Designated CMT Maturity Index shall be two years.
General
Notwithstanding the determination of the interest rate as provided above, the
interest rate on this Note for any interest period shall not be greater than the
Maximum Interest Rate, if any, and/or less than the Minimum Interest Rate, if
any, specified on the face hereof. The interest rate on this Note will in no
event be higher than the maximum rate permitted under applicable state law as
the same may be modified by United States law of general application.
The Calculation Agent will, upon the request of the beneficial owner of this
Note, provide the interest rate then in effect and, if determined, the interest
rate which will become effective as a result of a determination made with
respect to the most recent Interest Determination Date with respect to this
Note. Unless changed by the Bank, in its sole discretion, the Fiscal and Paying
Agent will act as Calculation Agent for this Note and thereafter the Calculation
Agent shall be such agent as selected by the Bank. The Bank shall notify the
Registered Holder and the Depository Trust Company of any change in Calculation
Agent.
The Interest Determination Date pertaining to an Interest Reset Date will be the
second Business Day preceding such Interest Reset Date for all Notes other than
Notes with an Interest Reset Basis of LIBOR or the Treasury Rate. If the
Interest Rate Basis specified on the face hereof is LIBOR, the Interest
Determination Date pertaining to an Interest Reset Date will be the second
London Business Day next preceding such Interest Reset Date. If the Interest
Rate Basis specified on the face hereof is the Treasury Rate, the Interest
Determination Date pertaining to an Interest Reset Date will be the day of the
week in which such Interest Reset Date falls on which Treasury Bills would
normally be auctioned (generally, Monday). If as the result of a legal holiday,
an auction is held on the preceding Friday, such Friday will be the Interest
Determination Date pertaining to the Interest Reset Date occurring in the next
succeeding week. If an auction date shall fall on any Interest Reset Date for a
Treasury Rate Note, then such Interest Reset Date shall instead be the first
Business Day immediately following such auction.
All dollar amounts used in or resulting from any calculation will be rounded to
the nearest cent with one-half cent being rounded upward. Unless otherwise
specified herein, all percentages resulting from any calculation will be
rounded, if necessary, to the nearest one-hundred thousandth of a percent, with
five one-millionths of a percent rounded upwards, e.g., 9.876545% (or .09876545)
being rounded to 9.87655% (or .0987655) and 9.876544% (or .09876544) being
rounded to 9.87654% or .0987654).
The "Calculation Date", where applicable, pertaining to an Interest
Determination Date is 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 immediately preceding the
applicable Interest Payment Date, Stated Maturity, Redemption Date or Repayment
Date as the case may be.
The Notes of this series are issuable only in registered form without coupons in
denominations of $250,000 and integral multiples of $1,000 in excess thereof.
[THIS NOTE IS NOT SUBJECT TO REDEMPTION OR PREPAYMENT PRIOR TO MATURITY.]
[Senior Bank Notes: This Note may be subject to repayment at the option of the
Registered Holder hereof on the Repayment Date(s) indicated on the face hereof.
If no such date is set forth on the face hereof, this Note may not be so repaid
at the option of the Registered Holder hereof prior to Stated Maturity. On each
Repayment Date, if any, this Note shall be repayable in whole or in part in
increments of $1,000 (provided that any remaining principal hereof shall be at
least $500,000) at the option of the Registered Holder hereof at a repayment
price equal to 100% of the principal amount to be repaid, or if this Note is an
Original Issue Discount Note (as specified on the face hereof), the applicable
Repayment Price specified on the face hereof together in the case of any such
repayment with interest thereon payable to the Repayment Date, but interest
installments due prior to the Repayment Date will be payable to the Registered
Holder on the relevant Regular Record Date or special record date. For this Note
to be repaid in whole or in part at the option of the Registered Holder hereof,
_______________, as Fiscal and Paying Agent at [insert name and address];
Attention: ______________, or at such other address of which the Bank shall from
time to time notify the Registered Holder, must receive not more than 45, nor
less than 30, days prior to an Repayment Date, if any, either (i) this Note
accompanied by the form entitled "Option to Elect Repayment" below duly
completed, or (ii) a telegram, telex, facsimile transmission or letter from a
member of a national securities exchange or the National Association of
Securities Dealers, Inc. or a commercial bank or trust company in the United
States of America setting forth the name of the Registered Holder, the principal
amount of the Note, the principal amount of the Note to be repaid, the
certificate number or a description of the tenor and terms of the Note, a
statement that the option to elect repayment is being exercised thereby and a
guarantee that the Note to be repaid with the form entitled "Option to Elect
Repayment" on the Note duly completed will be received by the Fiscal and Paying
Agent not later than five Business Days after the date of such telegram, telex,
facsimile transmission or letter and such Note and form duly completed are
received by the Fiscal and Paying Agent by such fifth Business Day. Exercise of
such repayment option by the Registered Holder hereof shall be irrevocable,
except a Registered Holder tendering after receipt of a notice of an extension
of maturity.]
If so provided on the face of this Note, this Note may be redeemed by the Bank
on any Redemption Date (or range of Redemption Dates) so indicated on the face
hereof. If no Redemption Date (or range of Redemption Dates) is set forth on the
face hereof, this Note may not be redeemed prior to its Stated Maturity. If one
or more Redemption Dates (or ranges of Redemption Dates) are so specified, this
Note is subject to redemption at the option of the Bank, upon notice by
first-class mail, not less than 30 nor more than 45 days prior to the Redemption
Date specified in such notice, at the applicable redemption price specified on
the face hereof (expressed as a percentage of the principal amount of this Note)
together in the case of any such redemption with accrued interest to the
Redemption Date, but interest installments due will be payable to the Registered
Holder on the relevant Regular Record Date if the Redemption Date is an Interest
Payment Date. The Bank may elect to redeem less than the entire principal amount
hereof; provided, that the principal amount, if any, of this Note that remains
outstanding after such redemption is an Authorized Denomination. In the event of
any redemption in part, the Bank will not be required to (i) issue, register the
transfer of, or exchange any Note during a period beginning at the opening of
business 15 days before the day of the mailing of the notice of redemption of
Notes selected for redemption and ending at the close of business on the date of
mailing of the relevant notice of redemption or (ii) register the transfer or
exchange of any Note, or any portion thereof, called for redemption, except the
unredeemed portion of any Note being redeemed in part. [Subordinated Bank Notes:
Notwithstanding the foregoing, this Note may not be redeemed without the prior
written consent of the Federal Deposit Insurance Corporation.]
Any money deposited with the Fiscal and Paying Agent for the payment of the
principal of, premium (if any) or interest on this Note that remains unclaimed
for two years after such principal, premium (if any) or interest has become due
and payable shall be paid to the Bank and the Holder shall thereafter, as an
unsecured general creditor, look only to the Bank for payment thereof, and all
liability of the Fiscal and Paying Agent with respect to such money shall
thereupon cease.
<PAGE>
IN WITNESS WHEREOF, the Bank has caused this Note to be duly executed and
countersigned by the Fiscal and Paying Agent or such other institution as may be
appointed by the Bank.
Countersigned for Trans Financial Bank,
National Association
authentication only
as Fiscal and Paying Agent
By__________________________ By__________________________
Authorized Signature Authorized Signature
Attest:
------------------
Secretary
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the Bank to repay
the within Note (or portion thereof specified below) pursuant to its terms at a
price equal to the principal amount thereof, 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 Fiscal and Paying Agent must receive at [insert
name and address]; Attention: __________________, or at such other place or
places of which the Company shall from time to time notify the Holder of the
within Note, not more than 45, nor less than 30, days prior to an Optional
Repayment Date, if any, shown on the face of the within Note, either (i) this
Note with this "Option to Elect Repayment" form duly completed, or (ii) a
telegram, telex, facsimile transmission or letter from a member of a national
securities exchange or the National Association of Securities Dealers, Inc. or a
commercial bank or trust company in the United States of America setting forth
the name of the Registered Holder of the Note, the principal amount of the Note,
the principal amount of the Note to be repaid, the certificate number or a
description of the tenor and terms of the Note, a statement that the option to
elect repayment is being exercised thereby and a guarantee that the Note to be
repaid with this form entitled Option to Elect Repayment" duly completed will be
received by the Fiscal and Paying Agent not later than five Business Days after
the date of such telegram, telex, facsimile transmission or letter and such Note
and form duly completed are received by the Fiscal and Paying Agent by such
fifth Business Day.
If less than the entire principal amount of the within Note is to be repaid,
specify the portion thereof (which shall be increments of $1,000) which the
Holder elects to have repaid: $________; and specify the denomination or
denominations (which shall be $500,000 or an integral multiple of $1,000 in
excess of $500,000) of the Notes to be issued to the Holder for the portion of
the within Note not being repaid (in the absence of any such specification, one
such Note will be issued for the portion not being repaid): $________.
Date:_______________ ____________________________________
Note: 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.
<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
TEN ENT -- as tenants by the entireties
JT ENT -- as joint tenants and not as tenants in common
Custodian
UNIF GIFT MIN ACT --
................................................................................
(Cust) (Minor)
under Uniform Gift to Minors Act
..............................................................................
(State)
Additional abbreviations may be used though not in the above list.
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
(Name and address of assignee, including zip code, must be printed or
typewritten)
the within Note, and all rights thereunder, hereby irrevocably constituting
and appointing
to transfer said Note on the books of the within 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 the within Note in every particular, without alteration
or enlargement or any change whatever and must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Fiscal and Paying Agent,
which requirements include membership or participation in STAMP or such other
"signature guaranty program" as may be determined by the Fiscal and Paying Agent
in addition to or in substitution for STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
EXHIBIT C TO
FISCAL AND PAYING
AGENCY AGREEMENT
Certificate of Authorized Representatives
The undersigned certifies that pursuant to resolutions adopted
by the Board of Directors of Trans Financial Bank, National Association (the
"Bank"), dated _________ __, 1995, and with respect to the Bank Notes (the "Bank
Notes") of the Bank, set forth below is a list of persons who have been duly
elected or appointed and have been duly qualified as, and on this day are,
"Authorized Representatives" pursuant to Section 2.2 of the Fiscal and Paying
Agency Agreement, dated as of _______ __, 1995 (the "Fiscal and Paying Agency
Agreement"), between the Bank and ________________________, as Fiscal and Paying
Agent (in such capacity, the "Fiscal and Paying Agent"), and such Authorized
Representatives are the persons authorized to provide the Fiscal and Paying
Agent with instructions in accordance with Section 2.2 of the Fiscal and Paying
Agency Agreement and to execute Bank Notes on behalf of the Bank by manual or
facsimile signature authorization, and that each signature appearing below is
the person's genuine signature.
Name Title Signature
IN WITNESS WHEREOF, I have hereunto signed my name.
Date: __________, 1995
------------------
Secretary
<PAGE>
- - --------------------------------------------------------------------------------
EXHIBIT D TO
- - --------------------------------------------------------------------------------
FISCAL AND PAYING
AGENCY AGREEMENT
Administrative Procedures
SEE EXHIBIT B TO THE DISTRIBUTION AGREEMENT
<PAGE>
EXHIBIT C
PURCHASE AGREEMENT
TRANS FINANCIAL BANK, NATIONAL ASSOCIATION [DATE]
500 East Main Street
Bowling Green, Kentucky 42101
The undersigned agrees to purchase the following principal amount of the
Notes described in the Distribution Agreement dated September 28, 1995 (as it
may be supplemented or amended from time to time, the "Distribution Agreement"):
PRINCIPAL AMOUNT: $ ___________
SENIOR OR SUBORDINATED:
SPECIFIED CURRENCY:
DENOMINATED AND INDEXED CURRENCIES:
INTEREST RATE: ____%
DISCOUNT: ____% of Principal Amount
AGGREGATE PRICE TO BE PAID TO ISSUING BANK (IN IMMEDIATELY AVAILABLE FUNDS):
$ ----------
SETTLEMENT DATE:
OTHER TERMS:
Our obligation to purchase Notes hereunder is subject to the continued
accuracy of your representations and warranties contained in the Distribution
Agreement and to your performance and observance of all applicable covenants and
agreements contained therein, including, without limitation, your obligations
pursuant to Section 7 thereof. Our obligation hereunder is subject to the
further condition that we shall receive (a) the opinions required to be
delivered pursuant to Sections 6(d) and 6(f) of the Distribution Agreement, (b)
the certificate required to be delivered pursuant to Section 6(e) of the
Distribution Agreement [and (c) a letter addressed to the Agent from KPMG Peat
Marwick covering such financial information as the Agent shall request].
[In further consideration of our agreement hereunder, you agree that
between the date hereof and the above Settlement Date, none of the Corporation
or the Bank will offer or sell, or enter into any agreement to sell, any of
their respective debt securities which are substantially similar to the Notes
being purchased hereunder without our prior written consent.]
We may terminate this Agreement, immediately upon notice to you, at any
time prior to the Settlement Date, if prior thereto there shall have occurred:
(i) any adverse change or development involving a prospective adverse change in
the capital stock or long-term debt of the Corporation or the Bank or any of
their subsidiaries or in the condition, financial or otherwise, of the
Corporation or any of its subsidiaries or the Bank or any of its subsidiaries or
the earnings, affairs, or business prospects of the Corporation or any of its
subsidiaries or the Bank or any of its subsidiaries, whether or not arising in
the ordinary course of business, which would, in the opinion of the Agent,
materially impair the investment quality of the Bank's Notes; (ii) any
downgrading, or any notice given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any of the Corporation's or any of the
Bank's securities by any "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; (iii) the Corporation and its subsidiaries shall have no
liability or obligation, direct or contingent, which is material to the
Corporation and its subsidiaries, taken as a whole, other than those reflected
in the Offering Circular; (iv) any outbreak or escalation of hostilities or
other national or international calamity or crisis or change in economic
conditions or in the financial markets of the United States or elsewhere that,
in the judgment of the Agent, is material and adverse and would, in the judgment
of the Agent, make it impracticable to market the Notes on the terms and in the
manner contemplated in the Offering Circular; (v) the suspension or material
limitation of trading in any securities of the Company on any exchange or the
OTC Market or limitation on prices for any securities on any exchange or the OTC
market; (vi) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of any court or other
governmental authority which in the opinion of the Agent materially and
adversely affects, or will materially and adversely affect, the business or
operations of the Corporation or any of its subsidiaries; (vii) the declaration
of a banking moratorium by either federal or New York State authorities or
(viii) the taking of any action by any federal, state or local government or
agency in respect of its monetary or fiscal affairs which in the opinion of the
Agent has a material adverse effect on the financial markets in the United
States. In the event of such termination, no party shall have any liability to
the other party hereto, except as provided in Sections 5, 8 and 9 of the
Distribution Agreement.
This Agreement shall be governed by and construed in accordance with the
laws of New York.
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
By:
[Title]
ACCEPTED: , 19___
TRANS FINANCIAL BANK, NATIONAL ASSOCIATION
By:
[Title]
<PAGE>
[TYPE]EX-11
Exhibit 11.
Statement Regarding Computation of Per Share Earnings
In thousands, except per share amounts
<TABLE>
<CAPTION>
Three Months Nine Months
For the periods ended September 30 1995 1994 1995 1994
Primary earnings per common share:
<S> <C> <C> <C> <C>
Average common shares outstanding .... 11,259 11,180 11,233 11,168
Common stock equivalents ............. 126 89 100 86
-------- -------- --------
Average shares and share equivalents 11,385 11,269 11,333 11,254
Income before cumulative effect
of change in accounting principle .... $- $- $- $ 10,315
Primary earnings per common share
before cumulative effect of change
in accounting principle .............. $- $- $- $ 0.92
Net income ............................. $ 4,544 $ 3,807 $ 12,458 $ 10,369
Less preferred stock dividends ......... -- (14) -- (54)
-------- -------- --------
Income available for common stock ...... $ 4,544 $ 3,793 $ 12,458 $ 10,315
Primary net income per share ........... $ 0.40 $ 0.34 $ 1.10 $ 0.92
Fully-diluted earnings per common share:
Average common shares outstanding .... 11,259 11,180 11,233 11,168
Common stock equivalents ............. 157 91 157 91
-------- -------- --------
Average shares and share equivalents 11,416 11,271 11,390 11,259
Income before cumulative effect
of change in accounting principle .... $- $- $- $ 10,315
Fully-diluted earnings per common share
before cumulative effect of change
in accounting principle .............. $- $- $- $ 0.92
Net income ............................. $ 4,544 $ 3,807 $ 12,458 $ 10,369
Less preferred stock dividends ......... -- (14) -- (54)
-------- -------- --------
Income available for common stock ...... $ 4,544 $ 3,793 $ 12,458 $ 10,315
Fully-diluted net income per share ..... $ 0.40 $ 0.34 $ 1.09 $ 0.92
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-END> SEP-30-1995 SEP-30-1995
<CASH> 68,751 68,751
<INT-BEARING-DEPOSITS> 197 197
<FED-FUNDS-SOLD> 575 575
<TRADING-ASSETS> 0 0
<INVESTMENTS-HELD-FOR-SALE> 209,357 209,357
<INVESTMENTS-CARRYING> 78,478 78,478
<INVESTMENTS-MARKET> 80,116 80,116
<LOANS> 1,267,669 1,267,669
<ALLOWANCE> 13,659 13,659
<TOTAL-ASSETS> 1,715,150 1,715,150
<DEPOSITS> 1,412,209 1,412,209
<SHORT-TERM> 114,448 114,448
<LIABILITIES-OTHER> 24,873 24,873
<LONG-TERM> 36,891 36,891
<COMMON> 21,154 21,154
0 0
0 0
<OTHER-SE> 105,575 105,575
<TOTAL-LIABILITIES-AND-EQUITY> 1,715,150 1,715,150
<INTEREST-LOAN> 84,995 29,724
<INTEREST-INVEST> 13,393 4,317
<INTEREST-OTHER> 743 181
<INTEREST-TOTAL> 99,131 34,222
<INTEREST-DEPOSIT> 41,809 14,839
<INTEREST-EXPENSE> 47,355 16,686
<INTEREST-INCOME-NET> 51,776 17,536
<LOAN-LOSSES> 2,080 780
<SECURITIES-GAINS> (21) (21)
<EXPENSE-OTHER> 48,549 15,801
<INCOME-PRETAX> 18,496 6,719
<INCOME-PRE-EXTRAORDINARY> 12,458 4,544
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 12,458 4,544
<EPS-PRIMARY> 1.10 .40
<EPS-DILUTED> 1.09 .40
<YIELD-ACTUAL> 4.58 4.52
<LOANS-NON> 9,497 9,497
<LOANS-PAST> 3,625 3,625
<LOANS-TROUBLED> 17 17
<LOANS-PROBLEM> 9,457 9,457
<ALLOWANCE-OPEN> 12,529 13,429
<CHARGE-OFFS> 1,313 681
<RECOVERIES> 363 131
<ALLOWANCE-CLOSE> 13,659 13,659
<ALLOWANCE-DOMESTIC> 13,659 13,659
<ALLOWANCE-FOREIGN> 0 0
<ALLOWANCE-UNALLOCATED> 0 0
</TABLE>
