<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 21, 1997
REGISTRATION NO. 333-__________
REGISTRATION NO. 333-_______-01
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------------
<TABLE>
<S> <C>
INTRUST FINANCIAL CORPORATION INTRUST CAPITAL TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) (EXACT NAME OF CO-REGISTRANT AS SPECIFIED IN ITS CHARTER)
KANSAS DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
48-0937376 43-1798058
(I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.)
</TABLE>
105 NORTH MAIN STREET, BOX ONE, WICHITA, KANSAS 67202 (316) 383-1111
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S AND CO-REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)
-----------------------------------------
C. Q. CHANDLER
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
INTRUST FINANCIAL CORPORATION
105 NORTH MAIN STREET, BOX ONE
WICHITA, KANSAS 67202
(316) 383-1111
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
-----------------------------------------
WITH COPIES TO:
<TABLE>
<S> <C>
FREDERICK W. SCHERRER, ESQ. THOMAS C. ERB, ESQ.
BRYAN CAVE LLP LEWIS, RICE & FINGERSH, L.C.
211 NORTH BROADWAY, SUITE 3600 500 NORTH BROADWAY, SUITE 2000
ST. LOUIS, MO 63102-2750 ST. LOUIS, MISSOURI 63102
(314) 259-2000 (314) 444-7600
</TABLE>
--------------------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this Form, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===============================================================================================================
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Preferred Securities of
INTRUST Capital Trust<F1>... 2,300,000<F1> $25.00 $57,500,000<F1> $17,424<F2>
- ---------------------------------------------------------------------------------------------------------------
Subordinated Debentures of
INTRUST Financial
Corporation<F3>............. <F3><F4>
- ---------------------------------------------------------------------------------------------------------------
Guarantee of INTRUST Financial
Corporation, with respect to
Preferred Securities<F4>.... <F4>
===============================================================================================================
<FN>
<F1> Includes 300,000 Preferred Securities which may be sold by INTRUST Capital
Trust to cover over-allotments.
<F2> The registration fee is calculated in accordance with Rule 457(n) under
the Securities Act of 1933, as amended.
<F3> The Subordinated Debentures will be purchased by INTRUST Capital Trust
with the proceeds of the sale of the Preferred Securities. Such securities
may later be distributed for no additional consideration to the holders of
the Preferred Securities of INTRUST Capital Trust upon its dissolution and
the distribution of its assets.
<F4> This Registration Statement is deemed to cover the Subordinated Debentures
of INTRUST Financial Corporation, the rights of holders of Subordinated
Debentures of INTRUST Financial Corporation under the Indenture, and the
rights of holders of the Preferred Securities under the Trust Agreement,
the Guarantee and the Expense Agreement entered into by INTRUST Financial
Corporation. No separate consideration will be received for the Guarantee.
</TABLE>
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
==============================================================================
<PAGE> 2
*******************************************************************************
*INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A *
*REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED *
*WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT *
*BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE *
*REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT *
*CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY *
*NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH *
*SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO *
*REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH *
*STATE. *
*******************************************************************************
SUBJECT TO COMPLETION, DATED NOVEMBER 21, 1997
PROSPECTUS
2,000,000 PREFERRED SECURITIES
INTRUST CAPITAL TRUST
INTRUST BANK
% CUMULATIVE TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
GUARANTEED, AS DESCRIBED HEREIN, BY
INTRUST FINANCIAL CORPORATION
-------------------
$50,000,000 % SUBORDINATED DEBENTURES OF
INTRUST FINANCIAL CORPORATION
-------------------
The % Cumulative Trust Preferred Securities (the "Preferred
Securities") offered hereby represent preferred undivided beneficial interests
in the assets of INTRUST Capital Trust, a statutory business trust created
under the laws of the State of Delaware ("INTRUST Capital"). INTRUST
Financial Corporation, a Kansas corporation (the "Company"), will own all the
common securities (the "Common Securities" and, together with the Preferred
Securities, the "Trust Securities") representing undivided beneficial
interests in the assets of INTRUST Capital.
(continued on next page)
Application has been made to have the Preferred Securities listed for
trading on the American Stock Exchange, Inc. under the symbol " .PR."
--------------------------------
SEE "RISK FACTORS" COMMENCING ON PAGE 8 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
----------------------------
THE SECURITIES OFFERED BY THIS PROSPECTUS ARE NOT SAVINGS OR DEPOSIT ACCOUNTS,
ARE NOT OBLIGATIONS OF OR GUARANTEED BY ANY BANKING OR NON-BANKING
AFFILIATE OF THE COMPANY (EXCEPT TO THE EXTENT THAT PREFERRED
SECURITIES ARE GUARANTEED BY THE COMPANY AS DESCRIBED HEREIN),
ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY AND
INVOLVE INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF PRINCIPAL.
--------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
==================================================================================================================
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC COMMISSION<F1> INTRUST CAPITAL<F2>
<S> <C> <C> <C>
Per Preferred Security.......................... $25.00 <F2> $25.00
- ------------------------------------------------------------------------------------------------------------------
Total<F3>....................................... $50,000,000 <F2> $50,000,000
==================================================================================================================
<FN>
<F1> INTRUST Capital and the Company have each agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
<F2> In view of the fact that the proceeds of the sale of the Preferred
Securities will be invested in the Subordinated Debentures, the Company
has agreed to pay the Underwriters as compensation for its arranging the
investment therein of such proceeds $ per Preferred Security, or $
in the aggregate ($ if the over-allotment option is exercised in full).
See "Underwriting." The Company has also agreed to pay the expenses of
the offering estimated to be $ .
<F3> INTRUST Capital has granted the Underwriters an option exercisable within
30 days from the date of this Prospectus to purchase up to 300,000
additional Preferred Securities on the same terms and conditions set forth
above to cover over-allotments, if any. If all such additional Preferred
Securities are purchased, the total Price to Public and Proceeds to
INTRUST Capital will be $57,500,000.
</TABLE>
-----------------------------------------
The Preferred Securities are offered by the Underwriters subject to receipt
and acceptance by it, prior sale and the Underwriters' right to reject any
order in whole or in part and to withdraw, cancel or modify the offer without
notice. It is expected that delivery of the Preferred Securities will be made
on or about , 1997.
STIFEL, NICOLAUS & COMPANY
INCORPORATED
, 1997
<PAGE> 3
(continued from previous page)
State Street Bank and Trust Company is the Property Trustee (as defined
herein) of INTRUST Capital. INTRUST Capital exists for the purpose of issuing
the Preferred Securities and investing the proceeds thereof in an equivalent
amount of % Subordinated Debentures (the "Subordinated Debentures") of
the Company. The Subordinated Debentures will mature on December 31, 2027,
which date may be (i) shortened to a date not earlier than December 31, 2002,
or (ii) extended to a date not later than December 31, 2036, in each case if
certain conditions are met (including, in the case of shortening the Stated
Maturity (as defined herein), the Company having received prior approval of
the Board of Governors of the Federal Reserve System ("Federal Reserve") to
do so if then required under applicable capital guidelines or policies of the
Federal Reserve). The Preferred Securities will have a preference under
certain circumstances with respect to cash distributions and amounts payable
on liquidation, redemption or otherwise over the Common Securities. See
"Description of the Preferred Securities--Subordination of Common
Securities."
Holders of Preferred Securities are entitled to receive preferential
cumulative cash distributions, at the annual rate of % of the liquidation
amount of $25 per Preferred Security (the "Liquidation Amount"), accruing
from , 1997, the date of original issuance, and payable
quarterly in arrears on the last day of March, June, September and December of
each year, commencing March 31, 1998 (the "Distributions"). The Company has
the right, so long as no Debenture Event of Default (as defined herein) has
occurred and is continuing, to defer payment of interest on the Subordinated
Debentures at any time or from time to time for a period not to exceed 20
consecutive quarters with respect to each deferral period (each, an
"Extension Period"); provided that no Extension Period may extend beyond the
Stated Maturity of the Subordinated Debentures. Upon the termination of any
such Extension Period and the payment of all amounts then due, the Company may
elect to begin a new Extension Period subject to the requirements set forth
herein. If interest payments on the Subordinated Debentures are so deferred,
Distributions on the Preferred Securities will also be deferred, and the
Company will not be permitted, subject to certain exceptions described herein,
to declare or pay any cash distributions with respect to its capital stock or
debt securities that rank pari passu with or junior to the Subordinated
Debentures. WHILE THE COMPANY INTENDS TO TAKE THE POSITION THAT THE
SUBORDINATED DEBENTURES WILL NOT BE DEEMED TO BE ISSUED WITH ORIGINAL ISSUE
DISCOUNT ("OID"), DURING AN EXTENSION PERIOD, INTEREST ON THE SUBORDINATED
DEBENTURES WILL CONTINUE TO ACCRUE (AND THE AMOUNT OF DISTRIBUTIONS TO WHICH
HOLDERS OF THE PREFERRED SECURITIES ARE ENTITLED WILL ACCUMULATE) AT THE RATE
OF % PER ANNUM, COMPOUNDED QUARTERLY, AND HOLDERS OF THE PREFERRED
SECURITIES WILL BE REQUIRED TO INCLUDE INTEREST INCOME AS OID IN THEIR GROSS
INCOME FOR UNITED STATES FEDERAL INCOME TAX PURPOSES IN ADVANCE OF RECEIPT OF
THE CASH DISTRIBUTIONS WITH RESPECT TO SUCH DEFERRED INTEREST PAYMENTS. A
HOLDER OF PREFERRED SECURITIES WHO DISPOSES OF ITS PREFERRED SECURITIES
BETWEEN RECORD DATES FOR PAYMENTS OF DISTRIBUTIONS (AND CONSEQUENTLY DOES NOT
RECEIVE A DISTRIBUTION FROM INTRUST CAPITAL FOR THE PERIOD PRIOR TO SUCH
DISPOSITION) WILL NEVERTHELESS BE REQUIRED TO INCLUDE ACCRUED BUT UNPAID
INTEREST OR OID, IF ANY, ON THE SUBORDINATED DEBENTURES THROUGH THE DATE OF
DISPOSITION IN ORDINARY INCOME AND TO ADD THE AMOUNT OF ANY ACCRUED OID TO ITS
ADJUSTED TAX BASIS IN ITS PRO RATA SHARE OF THE UNDERLYING SUBORDINATED
DEBENTURES DEEMED DISPOSED OF. See "Description of the Subordinated
Debentures--Option to Extend Interest Payment Period," "Certain Federal
Income Tax Consequences--Potential Extension of Interest Payment Period and
Original Issue Discount" and "--Disposition of Preferred Securities."
The Company and INTRUST Capital believe that, taken together, the
obligations of the Company under the Guarantee, the Trust Agreement, the
Subordinated Debentures, the Indenture and the Expense Agreement (each as
defined herein) provide, in the aggregate, a full, irrevocable and
unconditional guarantee, on a subordinated basis, of all of the obligations of
INTRUST Capital under the Preferred Securities. See "Relationship Among the
Preferred Securities, the Subordinated Debentures and the Guarantee--Full and
Unconditional Guarantee." The Guarantee of the Company guarantees the payment
of Distributions and payments on liquidation or redemption of the Preferred
Securities, but only in each case to the extent of funds held by INTRUST
Capital, as described herein. See "Description of the Guarantee--General." If
the Company does not make interest payments on the Subordinated Debentures held
by INTRUST Capital, INTRUST Capital will have insufficient funds to pay
Distributions on the Preferred Securities. The Guarantee does not cover
payments of Distributions when INTRUST Capital does not have sufficient funds
to pay such Distributions. In such event, a holder of Preferred Securities may
institute a legal
(continued on next page)
<PAGE> 4
(continued from previous page)
proceeding directly against the Company pursuant to the terms of the Indenture
to enforce payments of amounts equal to such Distributions to such holder. See
"Description of the Subordinated Debentures--Enforcement of Certain Rights by
Holders of the Preferred Securities." The obligations of the Company under the
Guarantee and the Preferred Securities are subordinate and junior in right of
payment to all Senior Debt, Subordinated Debt and Additional Senior Obligations
(each as defined herein) of the Company. The Subordinated Debentures are
unsecured obligations of the Company and are subordinated to all Senior Debt,
Subordinated Debt and Additional Senior Obligations of the Company.
The Preferred Securities are subject to mandatory redemption, in whole or
in part, upon repayment of the Subordinated Debentures at maturity or their
earlier redemption. Subject to Federal Reserve approval, if then required under
applicable capital guidelines or policies of the Federal Reserve, the
Subordinated Debentures are redeemable prior to maturity at the option of the
Company (i) on or after December 31, 2002, in whole at any time or in part from
time to time, or (ii) at any time, in whole (but not in part), within 180 days
following the occurrence of a Tax Event, a Capital Treatment Event or an
Investment Company Event (each as defined herein), in each case at a redemption
price equal to the accrued and unpaid interest on the Subordinated Debentures
so redeemed to the date fixed for redemption, plus 100% of the principal amount
thereof. See "Description of the Preferred Securities--Redemption."
The Company has the right at any time to dissolve, wind-up or terminate
INTRUST Capital subject to the Company having received prior approval of the
Federal Reserve to do so if then required under applicable capital guidelines
or policies of the Federal Reserve. In the event of the voluntary or
involuntary dissolution, winding up or termination of INTRUST Capital, after
satisfaction of liabilities to creditors of INTRUST Capital as required by
applicable law, the holders of Preferred Securities will be entitled to receive
a Liquidation Amount of $25 per Preferred Security, plus accumulated and unpaid
Distributions thereon to the date of payment, which may be in the form of a
Subordinated Debenture having an aggregate principal amount equal to the
Liquidation Amount of such Preferred Securities (and carrying with it
accumulated interest in an amount equal to the accumulated and unpaid
Distributions then due on such Preferred Securities), subject to certain
exceptions. See "Description of the Preferred Securities--Redemption" and
"--Liquidation Distribution Upon Termination."
--------------------------------
The Company will provide Quarterly Reports containing unaudited financial
statements to the holders of Preferred Securities if such reports are furnished
to the holders of the Company's common stock, and Annual Reports containing
financial statements audited by the Company's independent auditors. The Company
will also furnish Annual Reports on Form 10-K and Quarterly Reports on Form
10-Q free of charge to holders of Preferred Securities who so request in
writing addressed to the Secretary of the Company.
--------------------------------
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE PREFERRED
SECURITIES. SUCH TRANSACTIONS MAY INCLUDE OVERALLOTMENT, STABILIZING
TRANSACTIONS, THE PURCHASE OF PREFERRED SECURITIES TO COVER SHORT POSITIONS AND
THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF SUCH ACTIVITIES, SEE
"UNDERWRITING." SUCH STABILIZING TRANSACTIONS, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
<PAGE> 5
[INSERT MAP]
<PAGE> 6
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere (or incorporated by reference) in this
Prospectus. Unless otherwise indicated, the information in this Prospectus
assumes that the Underwriters' over-allotment option will not be exercised.
Prospective investors should carefully consider the information set forth under
the heading "Risk Factors."
THE COMPANY
GENERAL
INTRUST Financial Corporation (the "Company") is a Kansas corporation and
registered bank holding company headquartered in Wichita, Kansas. At September
30, 1997 the Company had total assets of $1.8 billion and total stockholders'
equity of $129.7 million. The Company's principal subsidiaries, INTRUST Bank,
N.A. and Will Rogers Bank (collectively the "Subsidiary Banks") operate 33
banking locations. INTRUST Bank, N.A. ("IBNA") operates 30 banking locations,
with 26 of these offices located in Wichita and surrounding communities and 4
locations in Johnson County, Kansas and surrounding areas. Will Rogers Bank
("WRB") maintains 3 locations in Oklahoma City, Oklahoma and surrounding
communities. The Subsidiary Banks, through these banking locations, offer a
broad range of consumer and commercial banking services to their customers.
The principal executive office of the Company is located at 105 North Main,
Box One, Wichita, Kansas 67202, and its telephone number is (316) 383-1111.
BUSINESS OBJECTIVES AND STRATEGY
The Company has identified several business objectives designed to enhance
financial performance as measured by earnings and returns on equity and assets.
The principal objectives of the Company are to (i) provide exceptional customer
service, (ii) increase market share in existing markets and identify new
markets, (iii) diversify income sources, and (iv) maintain credit quality
standards while increasing earning asset balances. The Company has employed the
following strategies in furtherance of its business objectives:
* Provide exceptional customer service
The Company employs a business strategy that is generally known in the
industry as community banking. Under this strategy the Company provides a
broad line of financial products and services to small and medium-sized
businesses and consumers through full-service community banking offices. This
business strategy centers around relationship banking and seeks to position the
Company as the primary provider of financial services to its customers. A key
element of this strategy is to develop and maintain efficient and convenient
delivery systems for the Company's products and services. Examples of the
Company's progressive efforts toward this goal include its position as the
first bank located within the leading supermarket chain in the Wichita market
and the introduction of on-line banking products which allow both its commercial
and consumer customers to access products and services via the Internet on an
on-line / real-time basis. Additionally, the Company maintains an extensive ATM
network and comprehensive telephone banking call center.
* Increase market share in each market served and identify new market
opportunities
The current consolidation occurring within the banking industry has created
opportunities for the Subsidiary Banks to increase their market share of both
loans and deposit products, and the Company believes that the uncertainty and
customer dislocation created by this consolidation affords additional
opportunities to further expand its market share within its principal markets.
Within the consumer lending area, the Company has, during 1997, focused its
efforts in those markets where it believes it has both a competitive advantage
and a significant presence in the marketplace. Additionally, the Company seeks
to expand into contiguous markets which meet certain characteristics identified
by management relating to demographics, population, business potential and
proximity to existing markets.
* Diversify income sources
The Company has expanded its fee-based businesses in the past two years, as
it has sought to become less interest-margin dependent. Taking advantage of
certain competitors exiting the market, IBNA invested in the establishment of
a business unit that manages proprietary mutual funds and is engaged in offering
employee benefit plan services to small and mid-sized commercial customers. The
Company also has aggressively marketed its
2
<PAGE> 7
traditional trust services and debt administration capabilities. These efforts
have resulted in a significant increase in assets under management. The Company
believes further expansion opportunities exist in wealth management business
activities and intends to pursue efforts to further develop this line of
business.
* Maintain credit quality standards while increasing earning asset balances
Due to the aforementioned consolidation of banking organizations within the
Company's primary markets, the Company has been opportunistic in expanding its
commercial and consumer loan portfolios. Within this framework, the Company's
primary objective has been to maintain credit quality standards within
defined risk parameters. In furtherance of this objective, the Company
recognized during 1995 that its national credit card portfolio was
underperforming acceptable profitability measures due to higher than anticipated
delinquency rates and charge-off experience. Accordingly, during 1996 and the
second quarter of 1997 the Company made provisions for credit card valuation
write-downs in order to bring the national credit card portfolio balance to its
fair market value. This portfolio was subsequently sold and the Company
anticipates no further effects on income due to the national credit card
portfolio. Additionally, the Company has no plans to market its credit card
product line on a national basis in the future.
OWNERSHIP
As of October 14, 1997, the directors and executive officers of the Company
and their immediate families owned approximately 31.6% of the Company's common
stock.
3
<PAGE> 8
INTRUST CAPITAL
INTRUST Capital is a statutory business trust formed under Delaware law
pursuant to (i) a trust agreement, dated as of November 19, 1997, executed by
the Company, as depositor, and the trustees of INTRUST Capital (together with
the Property Trustee, the "Trustees"), and (ii) a certificate of trust filed
with the Secretary of State of the State of Delaware on November 19, 1997. The
initial trust agreement will be amended and restated in its entirety (as so
amended and restated, the "Trust Agreement") substantially in the form filed as
an exhibit to the Registration Statement of which this Prospectus forms a part.
The Trust Agreement will be qualified as an indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). Upon issuance of the
Preferred Securities, the purchasers thereof will own all of the Preferred
Securities. The Company will acquire all of the Common Securities which will
represent an aggregate liquidation amount equal to at least 3% of the total
capital of INTRUST Capital. The Common Securities will rank pari passu, and
payments will be made thereon pro rata, with the Preferred Securities, except
that upon the occurrence and during the continuance of an Event of Default (as
defined herein) under the Trust Agreement resulting from a Debenture Event of
Default, the rights of the Company as holder of the Common Securities to payment
in respect of Distributions and payments upon liquidation, redemption or
otherwise will be subordinated to the rights of the holders of the Preferred
Securities. See "Description of the Preferred Securities--Subordination of
Common Securities." INTRUST Capital exists for the exclusive purposes of (i)
issuing the Trust Securities representing undivided beneficial interests in
the assets of INTRUST Capital, (ii) investing the gross proceeds of the Trust
Securities in the Subordinated Debentures issued by the Company, and (iii)
engaging in only those other activities necessary, advisable, or incidental
thereto. The Subordinated Debentures and payments thereunder will be the only
assets of INTRUST Capital and payments under the Subordinated Debentures will
be the only revenue of INTRUST Capital. INTRUST Capital has a term of 55
years, but may terminate earlier as provided in the Trust Agreement. The
principal executive office of INTRUST Capital is 105 North Main Street, Box
One, Wichita, Kansas 67202, and its telephone number is (316) 383-1111.
The number of Trustees will, pursuant to the Trust Agreement, initially be
five. Three of the Trustees (the "Administrative Trustees") will be persons
who are employees or officers of, or who are affiliated with, the Company. The
fourth trustee will be a financial institution that is unaffiliated with the
Company, which trustee will serve as institutional trustee under the Trust
Agreement and as indenture trustee for the purposes of compliance with the
provisions of the Trust Indenture Act (the "Property Trustee"). State Street
Bank and Trust Company, a state chartered trust company organized under the
laws of the Commonwealth of Massachusetts, will be the Property Trustee until
removed or replaced by the holder of the Common Securities. For purposes of
compliance with the provisions of the Trust Indenture Act, State Street Bank
and Trust Company will also act as trustee (the "Guarantee Trustee") under
the Guarantee and as Debenture Trustee (as defined herein) under the Indenture.
The fifth trustee will be an entity that maintains its principal place of
business in the State of Delaware (the "Delaware Trustee"). Wilmington Trust
Company, a Delaware chartered trust company, will act as Delaware Trustee.
The Property Trustee will hold title to the Subordinated Debentures for the
benefit of the holders of the Trust Securities and in such capacity will have
the power to exercise all rights, powers and privileges under the Indenture.
The Property Trustee will also maintain exclusive control of a segregated
non-interest-bearing bank account (the "Property Account") to hold all
payments made in respect of the Subordinated Debentures for the benefit of the
holders of the Trust Securities. The Property Trustee will make payments of
Distributions and payments on liquidation, redemption and otherwise to the
holders of the Trust Securities out of funds from the Property Account. The
Guarantee Trustee will hold the Guarantee for the benefit of the holders of the
Preferred Securities. The Company, as the holder of all the Common Securities,
will have the right to appoint, remove or replace any Trustee and to increase
or decrease the number of Trustees. The Company will pay all fees and expenses
related to INTRUST Capital and the offering of the Trust Securities.
The rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are set forth in the Trust
Agreement, the Delaware Business Trust Act (the "Trust Act") and the Trust
Indenture Act. See "Description of the Preferred Securities."
4
<PAGE> 9
THE OFFERING
<TABLE>
<S> <C>
Securities Offered............ 2,000,000 Preferred Securities having a Liquidation Amount of $25 per Preferred Security.
The Preferred Securities represent preferred undivided beneficial interests in the
assets of INTRUST Capital, which will consist solely of the Subordinated Debentures
and payments thereunder. INTRUST Capital has granted the Underwriters an option,
exercisable within 30 days after the date of this Prospectus, to purchase up to
an additional 300,000 Preferred Securities at the initial offering price, solely
to cover over-allotments, if any.
Distributions................. The Distributions payable on each Preferred Security will be fixed at a rate per annum
of % of the Liquidation Amount of $25 per Preferred Security, will be cumulative,
will accrue from , 1997, the date of original issuance of the Preferred
Securities, and will be payable quarterly in arrears, on March 31, June 30, September 30
and December 31 of each year, commencing March 31, 1998. See "Description of the
Preferred Securities--Distributions--Payment of Distributions."
Option to Extend Interest
Payment Period.............. The Company has the right, at any time, so long as no Debenture Event of Default has
occurred and is continuing, to defer payments of interest on the Subordinated Debentures
for a period not exceeding 20 consecutive quarters; provided, that no Extension
Period may extend beyond the Stated Maturity of the Subordinated Debentures. As a
consequence of the extension by the Company of the interest
payment period, quarterly Distributions on the Preferred Securities will be deferred
(though such Distributions would continue to accrue with interest thereon compounded
quarterly, since interest will continue to accrue and compound on the Subordinated
Debentures) during any such Extension Period. During an Extension Period, the Company
will be prohibited, subject to certain exceptions described herein, from declaring or
paying any cash distributions with respect to its capital stock or debt securities that
rank pari passu with or junior to the Subordinated Debentures. Upon the termination of
any Extension Period and the payment of all amounts then due, the Company may commence a
new Extension Period, subject to the foregoing requirements. See "Description of the
Preferred Securities--Distributions--Extension Period" and "Description of the
Subordinated Debentures--Option to Extend Interest Payment Period."
Should an Extension Period occur, holders of Preferred Securities will be required to
include deferred interest income in their gross income for United States federal income
tax purposes in advance of receipt of the cash distributions with respect to such
deferred interest payments. See "Certain Federal Income Tax Consequences--Potential
Extension of Interest Payment Period and Original Issue Discount."
Optional Redemption........... The Preferred Securities are subject to mandatory redemption, in whole or in part, upon
repayment of the Subordinated Debentures at maturity or their earlier redemption. Subject
to Federal Reserve approval, if then required under applicable capital guidelines or
policies of the Federal Reserve, the Subordinated Debentures are redeemable prior to
maturity at the option of the Company (i) on or after December 31, 2002, in whole at any
time or in part from time to time, or (ii) at any time, in whole (but not in part),
within 180 days following the occurrence of a Tax Event, a Capital Treatment Event or an
Investment Company Event, in each case at the redemption price equal to 100% of the
principal amount of the Subordinated Debenture, together with any accrued but unpaid
interest to the date fixed for redemption. See "Description of the Subordinated
Debentures--Redemption."
5
<PAGE> 10
<S> <C>
Distribution of Subordinated
Debentures.................. The Company has the right at any time to terminate INTRUST Capital and cause the
Subordinated Debentures to be distributed to holders of Preferred Securities in
liquidation of INTRUST Capital, subject to the Company having received prior approval of
the Federal Reserve to do so if then required under applicable capital guidelines or
policies of the Federal Reserve. See "Description of the Preferred Securities--
Redemption" and "Description of the Preferred Securities--Liquidation Distribution Upon
Termination."
Guarantee..................... The Company has guaranteed the payment of Distributions and payments on liquidation or
redemption of the Preferred Securities, but only in each case to the extent of funds
held by INTRUST Capital, as described herein. The Company and INTRUST Capital believe
that, taken together, the obligations of the Company under the Guarantee, the Trust
Agreement, the Subordinated Debentures, the Indenture and the Expense Agreement provide,
in the aggregate, a full, irrevocable and unconditional guarantee, on a subordinated
basis, of all of the obligations of INTRUST Capital under the Preferred Securities. The
obligations of the Company under the Guarantee and the Preferred Securities are
subordinate and junior in right of payment to all Senior Debt, Subordinated Debt and
Additional Senior Obligations of the Company. If the Company does not make principal or
interest payments on the Subordinated Debentures, INTRUST Capital will not have
sufficient funds to make distributions on the Preferred Securities; in which event, the
Guarantee will not apply to such Distributions until INTRUST Capital has sufficient funds
available therefor. See "Description of the Guarantee."
Voting Rights................. The holders of the Preferred Securities will have no voting rights except in limited
circumstances. If any Distributions payable on the Preferred Securities are in arrears
for six quarterly periods, then the holders of the Preferred Securities, voting separately
as a class, will be entitled at the next regular or special meeting of shareholders of the
Company to elect two directors to the Board of Directors of the Company (such voting
rights will continue until such time as the Distribution arrearage on the Preferred
Securities has been paid in full). The affirmative consent of the holders of at least
66 2/3% of the outstanding Preferred Securities will be required for amendments to the Trust
Agreement or the Guarantee that would adversely affect the rights or privileges of the
holders of the Preferred Securities. See "Description of the Preferred Securities--Voting
Rights; Amendment of Trust Agreement."
Use of Proceeds............... The proceeds from the sale of the Preferred Securities offered hereby will be used by
INTRUST Capital to purchase the Subordinated Debentures issued by the Company. The
Company intends to use the net proceeds from the sale of the Subordinated Debentures for
general corporate purposes including, without limitation, the repurchase from time to
time of the Company's common stock, the making of investments in or possibly acquiring
businesses which enhance the Company's long-term growth or improve or expand the Company's
products, services or markets and the funding of investments in or extensions of credit to
the Company's subsidiaries and to enhance the Company's capital adequacy. Pending their
application for any or all of such purposes, the net proceeds may be invested in
investment grade financial instruments. See "Use of Proceeds" and "Capitalization."
American Stock Exchange,
Inc........................ Application has been made to have the Preferred Securities listed for trading on the
American Stock Exchange, Inc. under the symbol " .PR."
</TABLE>
6
<PAGE> 11
SUMMARY CONSOLIDATED FINANCIAL DATA
The consolidated financial data below summarizes historical consolidated
financial information of the Company for the periods indicated and should be
read in conjunction with the financial statements and other information
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, which is incorporated by reference in this Prospectus. The
unaudited consolidated financial data below for the interim periods indicated
has been derived from, and should be read in conjunction with, the Company's
Quarterly Report on Form 10-Q for the nine-month period ended September 30,
1997, which is incorporated by reference in this Prospectus. See "Available
Information" and "Incorporation of Certain Documents by Reference." All
adjustments considered necessary for a fair presentation have, in the opinion
of management, been included in the unaudited interim data. Interim results for
the nine months ended September 30, 1997 are not necessarily indicative of
results which may be expected for future periods, including the year ending
December 31, 1997.
<TABLE>
<CAPTION>
SEPTEMBER 30,
UNAUDITED YEAR ENDED DECEMBER 31,
---------------------- ----------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
SELECTED RESULTS OF
OPERATIONS:
Interest income............. $ 97,641 $ 99,466 $ 132,463 $ 127,919 $ 110,383 $ 98,825 $ 96,313
Interest expense............ 44,423 42,132 56,436 53,460 38,267 34,253 38,368
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income......... 53,218 57,334 76,027 74,459 72,116 64,572 57,945
Provision for loan losses... 6,320 15,901 20,151 18,118 2,962 5,596 8,906
Credit card valuation
write-down................ 4,645 -- 17,475 -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income after
provision for loan
losses.................... 42,253 41,433 38,401 56,341 69,154 58,976 49,039
Other noninterest income.... 30,984 24,942 33,768 33,620 26,888 24,224 20,565
Noninterest expense......... 54,971 51,276 70,438 71,195 66,189 57,420 47,224
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before income tax
expense................... 18,266 15,099 1,731 18,766 29,853 25,780 22,380
Income tax expense.......... 6,521 5,406 51 6,379 10,884 8,154 6,546
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before cumulative
effect of accounting
change.................... 11,745 9,693 1,680 12,387 18,969 17,626 15,834
Cumulative effect of
accounting change......... -- -- -- -- -- -- 1,679
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income.................. $ 11,745 $ 9,693 $ 1,680 $ 12,387 $ 18,969 $ 17,626 $ 17,513
========== ========== ========== ========== ========== ========== ==========
PER SHARE DATA:
Net income (primary)........ $ 5.34 $ 4.20 $ 0.74 $ 5.28 $ 8.00 $ 7.40 $ 7.31
Net income (fully
diluted).................. 4.75 3.80 0.74 4.77 7.10 6.59 6.52
Cash dividends declared..... 1.05 0.95 1.55 1.50 2.50 1.50 2.00
Book value.................. 59.64 59.71 55.37 57.81 54.01 48.51 42.62
Dividend payout ratio....... 19.66% 22.62% 210.81% 28.40% 31.25% 20.28% 27.31%
SELECTED BALANCE SHEET DATA:
Assets...................... $1,797,590 $1,662,172 $1,721,402 $1,666,984 $1,519,117 $1,523,868 $1,251,610
Securities<F1>.............. 286,114 324,313 295,638 320,246 276,779 341,561 320,376
Loans and leases............ 1,235,056 1,141,265 1,054,112 1,055,796 1,057,238 973,222 755,487
Allowance for loan and lease
losses.................... 17,901 27,452 15,536 25,892 19,886 21,793 16,099
Deposits.................... 1,436,663 1,357,442 1,428,395 1,367,141 1,276,076 1,283,284 1,066,323
Long term debt, excluding
current portion........... 26,219 26,505 26,379 29,664 32,450 35,080 12,700
Stockholders' equity........ 129,706 132,704 122,094 135,163 127,590 115,529 101,616
PERFORMANCE RATIO:
Return on average equity.... 12.44% 9.93% 1.23% 9.34% 14.91% 16.64% 18.32%
Return on average assets.... 0.90% 0.80% 0.10% 0.79% 1.23% 1.31% 1.51%
Net interest income (fully
taxable equivalent)....... 4.60% 5.09% 5.07% 5.30% 5.25% 5.34% 5.50%
ASSET QUALITY RATIOS:
Allowance for loan losses to
loans..................... 1.45% 2.41% 1.47% 2.45% 1.88% 2.24% 2.13%
Non-performing assets to
total loans............... 0.51% 0.78% 1.03% 0.89% 0.59% 0.53% 0.83%
Net loan losses to average
loans..................... 0.34% 1.31% 1.70% 1.18% 0.50% 0.42% 1.07%
CAPITAL RATIOS:
Average equity to average
assets.................... 7.19% 8.09% 8.14% 8.41% 8.26% 7.85% 8.23%
Tier 1 risk-based capital
ratio..................... 7.90% 7.32% 7.80% 8.80% 9.19% 8.92% 11.14%
Total risk-based capital
ratio..................... 9.46% 8.87% 8.90% 10.60% 11.27% 11.29% 13.78%
Leverage ratio.............. 6.42% 6.32% 6.30% 6.70% 7.10% 6.42% 7.73%
RATIO OF EARNINGS TO FIXED
CHARGES:<F2>
Including interest on
deposits.................. 1.41x 1.36x 1.03x 1.35x 1.78x 1.75x 1.58x
Excluding interest on
deposits.................. 3.33x 3.20x 1.19x 3.27x 6.85x 8.77x 8.90x
<FN>
- ----------
<F1> Includes market value adjustment on available-for-sale securities.
<F2> Earnings consist of income before income tax plus interest expense. Fixed
charges consist of interest expense, amortization of debt issuance costs
and the interest component of rent expense. The Company does not currently
have any preferred stock outstanding.
</TABLE>
7
<PAGE> 12
RISK FACTORS
Prospective investors should carefully consider, together with the other
information contained and incorporated by reference in this Prospectus, the
following risk factors in evaluating the Company and its business and INTRUST
Capital before purchasing the Preferred Securities offered hereby. Prospective
investors should note, in particular, that this Prospectus contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act"), and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and that
actual results could differ materially from those contemplated by such
statements. The considerations listed below represent certain important factors
the Company believes could cause such results to differ. These considerations
are not intended to represent a complete list of the general or specific risks
that may affect the Company and INTRUST Capital. It should be recognized that
other risks may be significant, presently or in the future, and the risks set
forth below may affect the Company and INTRUST Capital to a greater extent than
indicated.
RISK FACTORS RELATING TO THE PREFERRED SECURITIES
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE GUARANTEE AND THE SUBORDINATED
DEBENTURES
The obligations of the Company under the Guarantee issued for the benefit
of the holders of Preferred Securities and under the Subordinated Debentures
are unsecured and rank subordinate and junior in right of payment to all Senior
Debt, Subordinated Debt and Additional Senior Obligations of the Company,
whether now existing or hereinafter incurred. At September 30, 1997, the
aggregate outstanding Senior Debt, Subordinated Debt and Additional Senior
Obligations of the Company was approximately $36.7 million. Because the Company
is a holding company, the right of the Company to participate in any
distribution of assets of any Subsidiary Bank upon such Subsidiary Bank's
liquidation or reorganization or otherwise (and thus the ability of holders of
the Preferred Securities to benefit indirectly from such distribution) is
subject to the prior claims of creditors of that Subsidiary Bank, except to the
extent that the Company may itself be recognized as a creditor of that
Subsidiary Bank. The Subordinated Debentures, therefore, will be effectively
subordinated to all existing and future liabilities of the Subsidiary Banks and
holders of Subordinated Debentures and Preferred Securities should look only to
the assets of the Company for payments on the Subordinated Debentures. Neither
the Indenture, the Guarantee nor the Trust Agreement places any limitation on
the amount of secured or unsecured debt, including Senior Debt, Subordinated
Debt and Additional Senior Obligations, that may be incurred by the Company. See
"Description of the Guarantee--Status of the Guarantee" and "Description of the
Subordinated Debentures--Subordination."
The ability of INTRUST Capital to pay amounts due on the Preferred
Securities is dependent solely upon the Company making payments on the
Subordinated Debentures as and when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD, TAX CONSEQUENCES; MARKET PRICE
CONSEQUENCES
The Company has the right under the Indenture, so long as no Debenture
Event of Default has occurred and is continuing, to defer the payment of
interest on the Subordinated Debentures at any time or from time to time for a
period not exceeding 20 consecutive quarters with respect to each Extension
Period; provided that no Extension Period may extend beyond the Stated Maturity
of the Subordinated Debentures. As a consequence of any such deferral,
quarterly Distributions on the Preferred Securities by INTRUST Capital will be
deferred (and the amount of Distributions to which holders of the Preferred
Securities are entitled will accumulate additional Distributions thereon at the
rate of % per annum, compounded quarterly from the relevant payment date
for such Distributions) during any such Extension Period. During any such
Extension Period, the Company may not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock (other than (a) dividends
or distributions in common stock of the Company, any declaration of a non-cash
dividend in connection with the implementation of a shareholder rights plan, or
the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, and (b) purchases of common
stock of the Company related to the rights under any of the Company's benefit
plans for its directors, officers or employees), (ii) make any payment of
principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Company that rank pari passu with or junior in interest
to the Subordinated Debentures or make any guarantee payments with respect to
any guarantee by the Company of the debt securities of any subsidiary of the
Company if such guarantee ranks pari passu with or junior in interest to the
Subordinated Debentures (other than payments under the Guarantee), or (iii)
redeem, purchase or acquire less than all of the Subordinated Debentures or any
of the Preferred Securities. Prior to the termination of any such Extension
8
<PAGE> 13
Period, the Company may further defer the payment of interest; provided that no
Extension Period may exceed 20 consecutive quarters or extend beyond the Stated
Maturity of the Subordinated Debentures. Upon the termination of any Extension
Period and the payment of all interest then accrued and unpaid (together with
interest thereon at the annual rate of % compounded quarterly, to the
extent permitted by applicable law), the Company may elect to begin a new
Extension Period, subject to the above requirements. Subject to the foregoing,
there is no limitation on the number of times that the Company may elect to
begin an Extension Period. See "Description of the Preferred
Securities--Distributions--Extension Period" and "Description of the
Subordinated Debentures--Option to Extend Interest Payment Period."
Should an Extension Period occur, each holder of Preferred Securities will
be required to accrue and recognize income (in the form of OID) in respect of
its pro rata share of the interest accruing on the Subordinated Debentures held
by INTRUST Capital for United States federal income tax purposes. A holder of
Preferred Securities must, as a result, include such income in gross income for
United States federal income tax purposes in advance of the receipt of cash,
and will not receive the cash related to such income from INTRUST Capital if
the holder disposes of the Preferred Securities prior to the record date for
the payment of the related Distributions. See "Certain Federal Income Tax
Consequences--Potential Extension of Interest Payment Period and Original Issue
Discount."
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Subordinated Debentures. Should the Company elect, however, to exercise such
right in the future, the market price of the Preferred Securities is likely to
be adversely affected. A holder that disposes of its Preferred Securities
during an Extension Period, therefore, might not receive the same return on its
investment as a holder that continues to hold its Preferred Securities. As a
result of the existence of the Company's right to defer interest payments, the
market price of the Preferred Securities may be more volatile than the market
prices of other securities on which OID accrues that are not subject to such
optional deferrals.
TAX EVENT, CAPITAL TREATMENT EVENT OR INVESTMENT COMPANY EVENT; REDEMPTION
The Company has the right to redeem the Subordinated Debentures in whole
(but not in part) within 180 days following the occurrence of a Tax Event, a
Capital Treatment Event or an Investment Company Event (whether occurring
before or after December 31, 2002), and, therefore, cause a mandatory
redemption of the Preferred Securities. The exercise of such right is subject
to the Company having received prior approval of the Federal Reserve to do so
if then required under applicable capital guidelines or policies of the Federal
Reserve.
"Tax Event" means the receipt by INTRUST Capital of an opinion of counsel
experienced in such matters to the effect that, as a result of any amendment
to, or change (including any announced prospective change) in the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or such
pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities under the Trust Agreement, there is more than an
insubstantial risk that (i) INTRUST Capital is, or will be within 90 days of
the date of such opinion, subject to United States federal income tax with
respect to income received or accrued on the Subordinated Debentures, (ii)
interest payable by the Company on the Subordinated Debentures is not, or,
within 90 days of such opinion, will not be, deductible by the Company, in
whole or in part, for United States federal income tax purposes, or (iii)
INTRUST Capital is, or will be within 90 days of the date of the opinion,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges. The Company must request and receive an opinion with
regard to such matters within a reasonable period of time after it becomes
aware of the possible occurrence of any of the events described in clauses (i)
through (iii) above.
"Capital Treatment Event" means the receipt by INTRUST Capital of an
opinion of counsel experienced in such matters to the effect that, as a result
of any amendment to or any change (including any announced prospective change)
in the laws (or any regulations thereunder) of the United States or any
political subdivision thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or such proposed
change, pronouncement or decision is announced on or after the date of issuance
of the Preferred Securities under the Trust Agreement, there is more than an
insubstantial risk of impairment of the Company's ability to treat the
aggregate Liquidation Amount of the Preferred Securities (or any substantial
portion thereof) as "Tier 1 Capital" (or the then equivalent thereof) for
purposes of the capital adequacy guidelines of the Federal Reserve, as then in
effect and applicable to the Company;
9
<PAGE> 14
provided, however, that the inability of the Company to treat all or any
portion of the Liquidation Amount of the Preferred Securities as Tier 1 Capital
shall not constitute the basis for a Capital Treatment Event if such inability
results from the Company having cumulative preferred stock, minority interests
in consolidated subsidiaries, or any other class of security or interest which
the Federal Reserve now or may hereafter afford Tier 1 Capital treatment in
excess of the amount which may qualify for treatment as Tier 1 Capital under
applicable capital adequacy guidelines of the Federal Reserve.
"Investment Company Event" means the receipt by INTRUST Capital of an
opinion of counsel experienced in such matters to the effect that, as a result
of the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, INTRUST Capital is or will
be considered an "investment company" that is required to be registered under
the Investment Company Act of 1940, as amended (the "Investment Company
Act"), which change becomes effective on or after the date of original
issuance of the Preferred Securities.
SHORTENING OR EXTENSION OF STATED MATURITY OF SUBORDINATED DEBENTURES
The Company has the right, at any time, to shorten the maturity of the
Subordinated Debentures to a date not earlier than December 31, 2002. The
exercise of such right is subject to the Company having received prior approval
of the Federal Reserve if then required under applicable capital guidelines or
policies of the Federal Reserve. The Company also has the right to extend the
maturity of the Subordinated Debentures (whether or not INTRUST Capital is
terminated and the Subordinated Debentures are distributed to holders of the
Preferred Securities) to a date no later than December 31, 2036, a date
approximately 39 years after the initial issuance of the Preferred
Securities. Such right may only be exercised, however, if at the time such
election is made and at the time of such extension (i) the Company is not in
bankruptcy, otherwise insolvent or in liquidation, (ii) the Company is not in
default in the payment of any interest or principal on the Subordinated
Debentures, and (iii) INTRUST Capital is not in arrears on payments of
Distributions on the Preferred Securities and no deferred Distributions are
accumulated. See "Description of the Subordinated Debentures--General."
RIGHTS UNDER THE GUARANTEE
The Guarantee guarantees to the holders of the Preferred Securities, to the
extent not paid by INTRUST Capital, (i) any accrued and unpaid Distributions
required to be paid on the Preferred Securities, to the extent that INTRUST
Capital has funds available therefor at such time, (ii) the Redemption Price
(as defined herein) with respect to any Preferred Securities called for
redemption, to the extent that INTRUST Capital has funds available therefor at
such time, and (iii) upon a voluntary or involuntary dissolution, winding-up or
liquidation of INTRUST Capital (other than in connection with the distribution
of Subordinated Debentures to the holders of Preferred Securities or a
redemption of all of the Preferred Securities), the lesser of (a) the amount of
the Liquidation Distribution (as defined herein), to the extent INTRUST Capital
has funds available therefor at such time, and (b) the amount of assets of
INTRUST Capital remaining available for distribution to holders of the
Preferred Securities in liquidation of INTRUST Capital. The holders of not less
than a majority in Liquidation Amount of the Preferred Securities have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee in respect of the Guarantee or to
direct the exercise of any trust power conferred upon the Guarantee Trustee
under the Guarantee. Any holder of the Preferred Securities may institute a
legal proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against INTRUST Capital,
the Guarantee Trustee or any other Person (as defined in the Guarantee). If the
Company were to default on its obligation to pay amounts payable under the
Subordinated Debentures, INTRUST Capital would lack funds for the payment of
Distributions or amounts payable on redemption of the Preferred Securities or
otherwise, and, in such event, holders of Preferred Securities would not be
able to rely upon the Guarantee for such amounts. In the event, however, that a
Debenture Event of Default has occurred and is continuing and such event is
attributable to the failure of the Company to pay interest on or principal of
the Subordinated Debentures on the payment date on which such payment is due
and payable, then a holder of Preferred Securities may institute a legal
proceeding directly against the Company for enforcement of payment to such
holder of the principal of or interest on such Subordinated Debentures having a
principal amount equal to the aggregate Liquidation Amount of the Preferred
Securities of such holder (a "Direct Action"). The exercise by the Company of
its right, as described herein, to defer the payment of interest on the
Subordinated Debentures does not constitute a Debenture Event of Default.
10
<PAGE> 15
In connection with such Direct Action, the Company will have a right of set-off
under the Indenture to the extent of any payment made by the Company to such
holder of Preferred Securities in the Direct Action. Except as described herein,
holders of Preferred Securities will not be able to exercise directly any other
remedy available to the holders of the Subordinated Debentures or assert
directly any other rights in respect of the Subordinated Debentures. See
"Description of the Subordinated Debentures--Enforcement of Certain Rights by
the Holders of Preferred Securities," "Description of the Subordinated
Debentures--Debenture Events of Default" and "Description of the Guarantee." The
Trust Agreement provides that each holder of Preferred Securities by acceptance
thereof agrees to the provisions of the Guarantee and the Indenture.
NO VOTING RIGHTS EXCEPT IN LIMITED CIRCUMSTANCES
Holders of Preferred Securities will have no voting rights except in
limited circumstances relating only to the modification of the Preferred
Securities and the exercise of the rights of INTRUST Capital as holder of the
Subordinated Debentures and the Guarantee. If any Distributions payable on the
Preferred Securities are in arrears for six quarterly periods, then the holders
of the Preferred Securities, voting separately as a class, will be entitled at
the next regular or special meeting of shareholders of the Company to elect two
directors to the Board of Directors of the Company (such voting rights will
continue until such time as the Distribution arrearage on the Preferred
Securities has been paid in full). The affirmative consent of the holders of at
least 66-2/3% of the outstanding Preferred Securities will be required for
amendments to the Trust Agreement or the Guarantee that would adversely affect
the rights or privileges of the holders of the Preferred Securities. Holders of
Preferred Securities will not be entitled to vote to appoint, remove or replace
the Property Trustee or the Delaware Trustee, as such voting rights are vested
exclusively in the holder of the Common Securities (except upon the occurrence
of certain events described herein). The Property Trustee, the Administrative
Trustees and the Company may amend the Trust Agreement without the consent of
holders of Preferred Securities to ensure that INTRUST Capital will be
classified for United States federal income tax purposes as a grantor trust even
if such action adversely affects the interests of such holders. See "Description
of the Preferred Securities--Voting Rights; Amendment of Trust Agreement" and
"Description of the Preferred Securities--Removal of INTRUST Capital Trustees."
RECENT TAX LEGISLATION
Certain legislative proposals were made in 1996 and 1997 which, if enacted,
could have adversely affected the ability of the Company to deduct interest
paid on the Subordinated Debentures. These proposals were not, however,
incorporated into the legislation enacted on August 5, 1997 as the Taxpayer
Relief Act of 1997. Nevertheless, there can be no assurance that other
legislation enacted after the date hereof will not otherwise adversely affect
the ability of the Company to deduct the interest payable on the Subordinated
Debentures. Consequently, there can be no assurance that a Tax Event will not
occur. A Tax Event would permit the Company, upon approval of the Federal
Reserve if then required under applicable capital guidelines or policies of the
Federal Reserve, to cause a redemption of the Preferred Securities before, as
well as after, December 31, 2002. See "Description of the Subordinated
Debentures--Redemption" and "Description of the Preferred
Securities--Redemption--Tax Event Redemption, Capital Treatment Event
Redemption or Investment Company Event Redemption" and "Certain Federal
Income Tax Consequences--Effect of Recent Changes in Tax Laws."
REDEMPTION; EXCHANGE OF PREFERRED SECURITIES FOR SUBORDINATED DEBENTURES
The Company has the right at any time to dissolve, wind-up or terminate
INTRUST Capital and cause the Subordinated Debentures to be distributed to the
holders of the Preferred Securities in exchange therefor in liquidation of
INTRUST Capital. The exercise of such right is subject to the Company having
received prior approval of the Federal Reserve if then required under
applicable capital guidelines or policies of the Federal Reserve. The Company
will have the right, in certain circumstances, to redeem the Subordinated
Debentures in whole or in part, in lieu of a distribution of the Subordinated
Debentures by INTRUST Capital, in which event INTRUST Capital will redeem the
Trust Securities on a pro rata basis to the same extent as the Subordinated
Debentures are redeemed by the Company. Any such distribution or redemption
prior to the Stated Maturity will be subject to prior approval of the Federal
Reserve if then required under applicable capital guidelines or policies of the
Federal Reserve. See "Description of the Preferred Securities--Redemption--Tax
Event Redemption, Capital Treatment Event Redemption or Investment Company Event
Redemption."
11
<PAGE> 16
Under current United States federal income tax law, a distribution of
Subordinated Debentures upon the dissolution of INTRUST Capital would not be a
taxable event to holders of the Preferred Securities. If, however, INTRUST
Capital were to be recharacterized as an association taxable as a corporation
at the time of the dissolution of INTRUST Capital, the distribution of the
Subordinated Debentures may constitute a taxable event to holders of Preferred
Securities. Moreover, upon occurrence of a Tax Event, a dissolution of INTRUST
Capital in which holders of the Preferred Securities receive cash may be a
taxable event to such holders. See "Certain Federal Income Tax
Consequences--Receipt of Subordinated Debentures or Cash Upon Liquidation of
INTRUST Capital."
There can be no assurance as to the market prices for the Preferred
Securities or the Subordinated Debentures that may be distributed in exchange
for Preferred Securities upon a dissolution or liquidation of INTRUST Capital.
The Preferred Securities or the Subordinated Debentures, may trade at a
discount to the price that the investor paid to purchase the Preferred
Securities offered hereby. Because holders of Preferred Securities may receive
Subordinated Debentures, prospective purchasers of Preferred Securities are
also making an investment decision with regard to the Subordinated Debentures
and should carefully review all the information regarding the Subordinated
Debentures contained herein.
If the Subordinated Debentures are distributed to the holders of Preferred
Securities upon the liquidation of INTRUST Capital, the Company will use its
best efforts to list the Subordinated Debentures on the American Stock
Exchange, Inc. or such stock exchanges, if any, on which the Preferred
Securities are then listed.
TRADING PRICE; ABSENCE OF PRIOR PUBLIC MARKET FOR THE PREFERRED SECURITIES
The Preferred Securities may trade at prices that do not fully reflect the
value of accrued but unpaid interest with respect to the underlying
Subordinated Debentures. A holder of Preferred Securities that disposes of its
Preferred Securities between record dates for payments of Distributions (and
consequently does not receive a Distribution from INTRUST Capital for the
period prior to such disposition) will nevertheless be required to include
accrued but unpaid interest on the Subordinated Debentures through the date of
disposition in income as ordinary income and to add such amount to its adjusted
tax basis in its pro rata share of the underlying Subordinated Debentures
deemed disposed of. Such holder will recognize a capital loss to the extent the
selling price (which may not fully reflect the value of accrued but unpaid
interest) is less than its adjusted tax basis (which will include all accrued
but unpaid interest). Subject to certain limited exceptions, capital losses
cannot be applied to offset ordinary income for United States federal income
tax purposes. See "Certain Federal Income Tax Consequences--Disposition of
Preferred Securities."
There is no current public market for the Preferred Securities. Although
application has been made to list the Preferred Securities for trading on the
American Stock Exchange, Inc., there can be no assurance that an active public
market will develop for the Preferred Securities or that, if such market
develops, the market price will equal or exceed the public offering price set
forth on the cover page of this Prospectus. The public offering price for the
Preferred Securities has been determined through negotiations between the
Company and the Underwriters. Prices for the Preferred Securities will be
determined in the marketplace and may be influenced by many factors, including
prevailing interest rates, the liquidity of the market for the Preferred
Securities, investor perceptions of the Company and general industry and
economic conditions.
PREFERRED SECURITIES ARE NOT INSURED
The Preferred Securities are not insured by the Bank Insurance Fund or the
Savings Association Insurance Fund of the Federal Deposit Insurance Corporation
or by any other governmental agency.
RISK FACTORS RELATING TO THE COMPANY
ADVERSE CHANGES IN THE ECONOMY
The Company's profitability is dependent on the profitability of its
principal subsidiary, IBNA. IBNA's principal service area has been identified
as the Wichita, Kansas MSA. IBNA's profitability is therefore dependent on the
economic vitality of this region. While IBNA's customers within the region are
widely diversified, there can be no assurance that the Company would be able to
withstand adverse changes in the Wichita economy should they occur, or that
adverse developments in the national economy would not adversely affect the
Company's financial condition
12
<PAGE> 17
or results of operations. Accordingly, the Company will remain subject to risks
associated with prolonged declines in either the local or national economy.
ADVERSE CHANGES IN INTEREST RATES
With banking as its principal business, the Company has exposure to changes
in interest rates, as its assets and liabilities will not necessarily reprice
at the same time in a changing interest rate environment. In addition, changes
in interest rates may impact the Company with respect to its ability to attract
deposits. The Company believes its existing balance sheet structure is
appropriate and will allow the Company to maintain acceptable interest margins
in various interest rate environments. There can be no assurance, however, that
competitive factors will not result in a change in the composition of the
balance sheet, or that interest rate movements will not negatively impact the
financial condition or results of operations of the Company. Further, should
its ability to attract deposits be diminished because of movements in interest
rates, the Company would be required to access secondary funding sources, which
would likely negatively impact the Company's net interest margin.
USE OF PROCEEDS
INTRUST Capital will use the gross proceeds received from the sale of the
Preferred Securities to purchase Subordinated Debentures from the Company. The
Company intends to use the net proceeds from the sale of the Subordinated
Debentures for general corporate purposes including, without limitation, the
repurchase from time to time of the Company's common stock, the making of
investments in or possibly acquiring businesses which enhance the Company's
long-term growth or improve or expand the Company's products, services or
markets, the funding of investments in or extensions of credit to the
Company's subsidiaries and to enhance the Company's capital adequacy.
Although the Company evaluates possible acquisitions from time to time,
as of the date of this Prospectus the Company is not engaged in negotiating
any acquisitions. Pending their application for any or all of such
purposes, the net proceeds may be invested in investment grade financial
instruments. See "Capitalization."
MARKET FOR THE PREFERRED SECURITIES
Application has been made to have the Preferred Securities listed for
trading on the American Stock Exchange, Inc. under the symbol " .PR."
There can be no assurance, however, that an active and liquid trading market
will develop or, if developed, that such a market will continue. The offering
price and distribution rate have been determined by negotiations among
representatives of the Company and the Underwriters, and the offering price of
the Preferred Securities may not be indicative of the market price following
the offering. See "Underwriting."
ACCOUNTING TREATMENT
INTRUST Capital will be treated, for financial reporting purposes, as a
subsidiary of the Company and, accordingly, the accounts of INTRUST Capital
will be included in the consolidated financial statements of the Company. The
Preferred Securities will be presented as a separate category of long-term debt
in the consolidated balance sheet of the Company under the caption "Guaranteed
preferred beneficial interests in the Company's Subordinated Debentures," and
appropriate disclosures about the Preferred Securities, the Guarantee and the
Subordinated Debentures will be included in the notes to consolidated financial
statements. The Company will record Distributions payable on the Preferred
Securities as an expense in its consolidated statements of operations for
financial reporting purposes.
All future reports of the Company filed under the Exchange Act while the
Preferred Securities are outstanding will (a) present the Trust Securities
issued by INTRUST Capital on the balance sheet as a separate category of long-
term debt item entitled "Guaranteed preferred beneficial interests in the
Company's subordinated debentures," (b) include in a footnote to the financial
statements disclosure that the sole assets of INTRUST Capital are the
Subordinated Debentures (including the outstanding principal amount, interest
rate and maturity date of such Subordinated Debentures), and (c) include in an
audited footnote to the financial statements disclosure that the Company owns
all of the Common Securities of INTRUST Capital, the sole assets of INTRUST
Capital are the Subordinated Debentures, and the back-up obligations, in the
aggregate, constitute a full and unconditional guarantee by the Company of the
obligations of INTRUST Capital under the Preferred Securities.
13
<PAGE> 18
CAPITALIZATION
The following table sets forth (i) the unaudited consolidated
capitalization of the Company at September 30, 1997, and (ii) the unaudited
consolidated capitalization of the Company giving effect to the issuance of the
Preferred Securities hereby offered by INTRUST Capital and the receipt by the
Company of the net proceeds from the corresponding sale of the Subordinated
Debentures to INTRUST Capital (the "Offering"), as if the Offering had been
consummated on September 30, 1997, and assuming the Underwriters'
over-allotment option was not exercised.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997
----------------------------
AS ADJUSTED
ACTUAL FOR OFFERING
------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
LONG-TERM DEBT:
Notes payable.................... $ 15,000 $ 15,000
Convertible capital notes........ 11,219 11,219
Guaranteed preferred beneficial
interests in the Company's
Subordinated Debentures........ -- 50,000
-------- --------
Total long-term debt, excluding
current portion.............. 26,219 76,219
STOCKHOLDERS' EQUITY:
Common stock, $5 par value;
10,000,000 shares authorized,
2,415,071 shares issued........ 12,075 12,075
Capital surplus.................. 12,377 12,377
Retained earnings................ 121,807 121,807
Cost of common stock in treasury,
240,277 shares................. (17,047) (17,047)
Unrealized securities gains, net
of tax......................... 494 494
-------- --------
Total stockholders' equity..... 129,706 129,706
-------- --------
Total capitalization........... $155,925 $205,925
======== ========
CAPITAL RATIOS:
Stockholders' equity to total
assets......................... 7.22% 7.02%
Leverage ratio<F1><F2>........... 6.42% 8.56%
Risk-based capital ratios<F2><F3>
Tier 1 capital to risk-weighted
assets....................... 7.90% 10.53%
Total risk-based capital to
risk-weighted assets......... 9.46% 12.51%
<FN>
- --------
<F1> The leverage ratio is Tier 1 capital divided by average quarterly assets,
after deducting intangible assets and net deferred tax assets in excess of
regulatory limits.
<F2> The capital ratios are computed including the total estimated net proceeds
from the sale of the Preferred Securities, in a manner consistent with
Federal Reserve calculation guidelines.
<F3> Federal Reserve guidelines for calculation of Tier 1 capital to
risk-weighted assets limit the amount of cumulative preferred stock which
can be included in Tier 1 capital to 25% of total Tier 1 capital. Approxi-
mately $37.8 million of the aggregate amount of the Preferred Securities
offered hereby will be included as Tier 1 capital for the Company.
</TABLE>
14
<PAGE> 19
DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the Trust
Agreement. The Trust Agreement will be qualified as an indenture under the
Trust Indenture Act. The Property Trustee, State Street Bank and Trust Company,
will act as indenture trustee for the Preferred Securities under the Trust
Agreement for purposes of complying with the provisions of the Trust Indenture
Act. The terms of the Preferred Securities will include those stated in the
Trust Agreement and those made part of the Trust Agreement by the Trust
Indenture Act. The following summary of the material terms and provisions of
the Preferred Securities and the Trust Agreement does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
the Trust Agreement, the Trust Act, and the Trust Indenture Act. Wherever
particular defined terms of the Trust Agreement are referred to, but not
defined herein, such defined terms are incorporated herein by reference. The
form of the Trust Agreement has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part.
GENERAL
Pursuant to the terms of the Trust Agreement, the Trustees, on behalf of
INTRUST Capital, will issue the Trust Securities. All of the Common Securities
will be owned by the Company. The Preferred Securities will represent preferred
undivided beneficial interests in the assets of INTRUST Capital and the holders
thereof will be entitled to a preference in certain circumstances with respect
to Distributions and amounts payable on redemption or liquidation over the
Common Securities, as well as other benefits as described in the Trust
Agreement. The Trust Agreement does not permit the issuance by INTRUST Capital
of any securities other than the Trust Securities or the incurrence of any
indebtedness by INTRUST Capital.
The Preferred Securities will rank pari passu, and payments will be made
thereon pro rata, with the Common Securities, except as described under
"--Subordination of Common Securities." Legal title to the Subordinated
Debentures will be held by the Property Trustee in trust for the benefit of the
holders of the Trust Securities. The Guarantee executed by the Company for the
benefit of the holders of the Preferred Securities will be a guarantee on a
subordinated basis with respect to the Preferred Securities, but will not
guarantee payment of Distributions or amounts payable on redemption or
liquidation of such Preferred Securities when INTRUST Capital does not have
funds on hand available to make such payments. State Street Bank and Trust
Company, as Guarantee Trustee, will hold the Guarantee for the benefit of the
holders of the Preferred Securities. See "Description of the Guarantee."
DISTRIBUTIONS
PAYMENT OF DISTRIBUTIONS. Distributions on each Preferred Security will be
payable at the annual rate of % of the stated Liquidation Amount of $25,
payable quarterly in arrears on March 31, June 30, September 30 and December
31 of each year, to the holders of the Preferred Securities on the relevant
record dates (each date on which Distributions are payable in accordance with
the foregoing, a "Distribution Date"). The record date will be the 15th day of
the month in which the relevant Distribution Date occurs. Distributions will
accumulate from , 1997, the date of original issuance. The
first Distribution Date for the Preferred Securities will be March 31, 1998.
The amount of Distributions payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. In the event that any date on
which Distributions are payable on the Preferred Securities is not a Business
Day, then payment of the Distributions payable on such date will be made on
the next succeeding day that is a Business Day (and without any additional
Distributions, interest or other payment in respect of any such delay) with
the same force and effect as if made on the date such payment was originally
due and payable. "Business Day" means any day other than a Saturday or a
Sunday, a day on which banking institutions in the City of New York are
authorized or required by law or executive order to remain closed or a day on
which the corporate trust office of the Property Trustee or the Debenture
Trustee is closed for business.
EXTENSION PERIOD. The Company has the right under the Indenture, so long as
no Debenture Event of Default has occurred and is continuing, to defer the
payment of interest on the Subordinated Debentures at any time, or from time to
time (each, an "Extension Period"), which, if exercised, would defer
quarterly Distributions on the Preferred Securities during any such Extension
Period. Distributions to which holders of the Preferred Securities are entitled
will accumulate additional Distributions thereon at the rate per annum of
% thereof, compounded quarterly from the relevant Distribution Date.
"Distributions," as used herein, includes any such additional Distributions.
The right to defer the payment of interest on the Subordinated Debentures is
limited, however, to a period, in each
15
<PAGE> 20
instance, not exceeding 20 consecutive quarters and no Extension Period may
extend beyond the Stated Maturity of the Subordinated Debentures. During any
such Extension Period, the Company may not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's capital stock (other than (a) dividends
or distributions in common stock of the Company, any declaration of a non-cash
dividend in connection with the implementation of a shareholder rights plan, or
the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, and (b) purchases of common
stock of the Company related to the rights under any of the Company's benefit
plans for its directors, officers or employees), (ii) make any payment of
principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Company that rank pari passu with or junior in interest
to the Subordinated Debentures or make any guarantee payments with respect to
any guarantee by the Company of the debt securities of any subsidiary of the
Company if such guarantee ranks pari passu with or junior in interest to the
Subordinated Debentures (other than payments under the Guarantee), or (iii)
redeem, purchase or acquire less than all of the Subordinated Debentures or any
of the Preferred Securities. Prior to the termination of any such Extension
Period, the Company may further defer the payment of interest; provided that
such Extension Period may not exceed 20 consecutive quarters or extend beyond
the Stated Maturity of the Subordinated Debentures. Upon the termination of any
such Extension Period and the payment of all amounts then due, the Company may
elect to begin a new Extension Period, subject to the above requirements.
Subject to the foregoing, there is no limitation on the number of times that
the Company may elect to begin an Extension Period.
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Subordinated Debentures.
SOURCE OF DISTRIBUTIONS. The funds of INTRUST Capital available for
distribution to holders of its Preferred Securities will be limited to payments
under the Subordinated Debentures in which INTRUST Capital will invest the
proceeds from the issuance and sale of its Trust Securities. See "Description
of the Subordinated Debentures." Distributions will be paid through the
Property Trustee who will hold amounts received in respect of the Subordinated
Debentures in the Property Account for the benefit of the holders of the Trust
Securities. If the Company does not make interest payments on the Subordinated
Debentures, the Property Trustee will not have funds available to pay
Distributions on the Preferred Securities. The payment of Distributions (if and
to the extent INTRUST Capital has funds legally available for the payment of
such Distributions and cash sufficient to make such payments) is guaranteed by
the Company. See "Description of the Guarantee." Distributions on the
Preferred Securities will be payable to the holders thereof as they appear on
the register of holders of the Preferred Securities on the relevant record
dates, which will be the 15th day of the month in which the relevant
Distribution Date occurs.
REDEMPTION
GENERAL. The Subordinated Debentures will mature on December 31, 2027. The
Company will have the right to redeem the Subordinated Debentures (i) on or
after December 31, 2002, in whole at any time or in part from time to time, or
(ii) at any time, in whole (but not in part), within 180 days following the
occurrence of a Tax Event, a Capital Treatment Event or an Investment Company
Event, in each case subject to receipt of prior approval by the Federal Reserve
if then required under applicable capital guidelines or policies of the Federal
Reserve. The Company will not have the right to purchase the Subordinated
Debentures, in whole or in part, from INTRUST Capital until after December 31,
2002. See "Description of the Subordinated Debentures--General."
MANDATORY REDEMPTION. Upon the repayment or redemption, in whole or in part,
of any Subordinated Debentures, whether at Stated Maturity or upon earlier
redemption as provided in the Indenture, the proceeds from such repayment or
redemption will be applied by the Property Trustee to redeem a Like Amount (as
defined herein) of the Trust Securities, upon not less than 30 nor more than 60
days notice, at a redemption price (the "Redemption Price") equal to the
aggregate Liquidation Amount of such Trust Securities plus accumulated but
unpaid Distributions thereon to the date of redemption (the "Redemption
Date"). See "Description of the Subordinated Debentures--Redemption." If
less than all of the Subordinated Debentures are to be repaid or redeemed on a
Redemption Date, then the proceeds from such repayment or redemption will be
allocated to the redemption of the Trust Securities pro rata.
16
<PAGE> 21
DISTRIBUTION OF SUBORDINATED DEBENTURES. Subject to the Company having
received prior approval of the Federal Reserve if so required under applicable
capital guidelines or policies of the Federal Reserve, the Company will have
the right at any time to dissolve, wind-up or terminate INTRUST Capital and,
after satisfaction of the liabilities of creditors of INTRUST Capital as
provided by applicable law, cause the Subordinated Debentures to be distributed
to the holders of Trust Securities in liquidation of INTRUST Capital. See
"--Liquidation Distribution Upon Termination."
TAX EVENT REDEMPTION, CAPITAL TREATMENT EVENT REDEMPTION OR INVESTMENT
COMPANY EVENT REDEMPTION. If a Tax Event, a Capital Treatment Event or an
Investment Company Event in respect of the Trust Securities occurs and is
continuing, the Company has the right to redeem the Subordinated Debentures in
whole (but not in part) and thereby cause a mandatory redemption of such Trust
Securities in whole (but not in part) at the Redemption Price within 180 days
following the occurrence of such Tax Event, Capital Treatment Event or
Investment Company Event. In the event a Tax Event, a Capital Treatment Event
or an Investment Company Event in respect of the Trust Securities has occurred
and the Company does not elect to redeem the Subordinated Debentures and
thereby cause a mandatory redemption of such Trust Securities or to liquidate
INTRUST Capital and cause the Subordinated Debentures to be distributed to
holders of such Trust Securities in liquidation of INTRUST Capital as described
below under "--Liquidation Distribution Upon Termination," such Preferred
Securities will remain outstanding and Additional Payments (as defined herein)
may be payable on the Subordinated Debentures.
"Additional Payments" means the additional amounts as may be necessary in
order that the amount of Distributions then due and payable by INTRUST Capital
on the outstanding Trust Securities will not be reduced as a result of any
additional taxes, duties and other governmental charges to which INTRUST
Capital has become subject as a result of a Tax Event.
"Like Amount" means (i) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount equal to that portion of the
principal amount of Subordinated Debentures to be contemporaneously redeemed in
accordance with the Indenture, which will be used to pay the Redemption Price
of such Trust Securities, and (ii) with respect to a distribution of
Subordinated Debentures to holders of Trust Securities in connection with a
dissolution or liquidation of INTRUST Capital, Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Trust Securities of the
holder to whom such Subordinated Debentures are distributed. Each Subordinated
Debenture distributed pursuant to clause (ii) above will carry with it
accumulated interest in an amount equal to the accumulated and unpaid interest
then due on such Subordinated Debentures.
"Liquidation Amount" means the stated amount of $25 per Trust Security.
After the liquidation date fixed for any distribution of Subordinated
Debentures for Preferred Securities (i) such Preferred Securities will no
longer be deemed to be outstanding, and (ii) any certificates representing
Preferred Securities will be deemed to represent the Subordinated Debentures
having a principal amount equal to the Liquidation Amount of such Preferred
Securities, and bearing accrued and unpaid interest in an amount equal to the
accrued and unpaid Distributions on the Preferred Securities until such
certificates are presented to the Administrative Trustees or their agent for
transfer or reissuance.
There can be no assurance as to the market prices for the Preferred
Securities or the Subordinated Debentures that may be distributed in exchange
for Preferred Securities if a dissolution and liquidation of INTRUST Capital
were to occur. The Preferred Securities that an investor may purchase, or the
Subordinated Debentures that an investor may receive on dissolution and
liquidation of INTRUST Capital, may, therefore, trade at a discount to the
price that the investor paid to purchase the Preferred Securities offered
hereby.
REDEMPTION PROCEDURES
Preferred Securities redeemed on each Redemption Date will be redeemed at
the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Subordinated Debentures. Redemptions of the Preferred
Securities will be made and the Redemption Price will be payable on each
Redemption Date only to the extent that INTRUST Capital has funds on hand
available for the payment of such Redemption Price. See "--Subordination of
Common Securities."
17
<PAGE> 22
If INTRUST Capital gives a notice of redemption in respect of its Preferred
Securities, then, by 12:00 noon, eastern standard time, on the Redemption Date,
to the extent funds are available, the Property Trustee will irrevocably
deposit with the paying agent for the Preferred Securities funds sufficient to
pay the aggregate Redemption Price and will give the paying agent for the
Preferred Securities irrevocable instructions and authority to pay the
Redemption Price to the holders thereof upon surrender of their certificates
evidencing such Preferred Securities. Notwithstanding the foregoing,
Distributions payable on or prior to the Redemption Date for any Preferred
Securities called for redemption will be payable to the holders of such
Preferred Securities on the relevant record dates for the related Distribution
Dates. If notice of redemption will have been given and funds deposited as
required, then upon the date of such deposit, all rights of the holders of such
Preferred Securities so called for redemption will cease, except the right of
the holders of such Preferred Securities to receive the Redemption Price, but
without interest on such Redemption Price, and such Preferred Securities will
cease to be outstanding. In the event that any date fixed for redemption of
Preferred Securities is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day which is a
Business Day (and without any additional Distribution, interest or other
payment in respect of any such delay) with the same force and effect as if made
on such date. In the event that payment of the Redemption Price in respect of
Preferred Securities called for redemption is improperly withheld or refused
and not paid either by INTRUST Capital, or by the Company pursuant to the
Guarantee, Distributions on such Preferred Securities will continue to accrue
at the then applicable rate, from the Redemption Date originally established by
INTRUST Capital for such Preferred Securities to the date such Redemption Price
is actually paid, in which case the actual payment date will be considered the
date fixed for redemption for purposes of calculating the Redemption Price. See
"Description of the Guarantee."
Subject to applicable law (including, without limitation, United States
federal securities law), and further provided that the Company does not and is
not continuing to exercise its right to defer interest payments on the
Subordinated Debentures, the Company or its subsidiaries may at any time and
from time to time purchase outstanding Preferred Securities by tender, in the
open market or by private agreement.
Payment of the Redemption Price on the Preferred Securities and any
distribution of Subordinated Debentures to holders of Preferred Securities will
be made to the applicable recordholders thereof as they appear on the register
for the Preferred Securities on the relevant record date, which date will be
the date 15 days prior to the Redemption Date or liquidation date, as
applicable.
If less than all of the Trust Securities are to be redeemed on a Redemption
Date, then the aggregate Liquidation Amount of such Trust Securities to be
redeemed will be allocated pro rata to the Trust Securities based upon the
relative Liquidation Amounts of such classes. The particular Preferred
Securities to be redeemed will be selected by the Property Trustee from the
outstanding Preferred Securities not previously called for redemption, by such
method as the Property Trustee deems fair and appropriate and which may provide
for the selection for redemption of portions (equal to $25 or an integral
multiple of $25 in excess thereof) of the Liquidation Amount of Preferred
Securities of a denomination larger than $25. The Property Trustee will
promptly notify the registrar for the Preferred Securities in writing of the
Preferred Securities selected for redemption and, in the case of any Preferred
Securities selected for partial redemption, the Liquidation Amount thereof to
be redeemed. For all purposes of the Trust Agreement, unless the context
otherwise requires, all provisions relating to the redemption of Preferred
Securities will relate to the portion of the aggregate Liquidation Amount of
Preferred Securities which has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each holder of Trust Securities to be
redeemed at its registered address. Unless the Company defaults in payment of
the redemption price on the Subordinated Debentures, on and after the
Redemption Date interest will cease to accrue on such Subordinated Debentures
or portions thereof (and Distributions will cease to accrue on the related
Preferred Securities or portions thereof) called for redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Preferred
Securities and Common Securities, as applicable, will be made pro rata based on
the Liquidation Amount of the Preferred Securities and Common Securities;
provided, however, that if on any Distribution Date or Redemption Date a
Debenture Event of Default has occurred and is continuing, no payment of any
Distribution on, or Redemption Price of, any of the Common
18
<PAGE> 23
Securities, and no other payment on account of the redemption, liquidation or
other acquisition of such Common Securities, will be made unless payment in
full in cash of all accumulated and unpaid Distributions on all of the
outstanding Preferred Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the Redemption Price the full
amount of such Redemption Price on all of the outstanding Preferred Securities
then called for redemption, will have been made or provided for, and all funds
available to the Property Trustee will first be applied to the payment in full
in cash of all Distributions on, or Redemption Price of, the Preferred
Securities then due and payable.
In the case of any Event of Default resulting from a Debenture Event of
Default, the Company as holder of the Common Securities will be deemed to have
waived any right to act with respect to any such Event of Default under the
Trust Agreement until the effect of all such Events of Default with respect to
the Preferred Securities have been cured, waived or otherwise eliminated. Until
any such Events of Default under the Trust Agreement with respect to the
Preferred Securities has been so cured, waived or otherwise eliminated, the
Property Trustee will act solely on behalf of the holders of the Preferred
Securities and not on behalf of the Company, as holder of the Common
Securities, and only the holders of the Preferred Securities will have the
right to direct the Property Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON TERMINATION
The Company will have the right at any time to dissolve, wind-up or
terminate INTRUST Capital and cause the Subordinated Debentures to be
distributed to the holders of the Preferred Securities. Such right is subject,
however, to the Company having received prior approval of the Federal Reserve
if then required under applicable capital guidelines or policies of the Federal
Reserve.
Pursuant to the Trust Agreement, INTRUST Capital will automatically
terminate upon expiration of its term and will terminate earlier on the first
to occur of (i) certain events of bankruptcy, dissolution or liquidation of the
Company, (ii) the distribution of a Like Amount of the Subordinated Debentures
to the holders of its Trust Securities, if the Company, as depositor, has given
written direction to the Property Trustee to terminate INTRUST Capital (which
direction is optional and wholly within the discretion of the Company, as
depositor), (iii) redemption of all of the Preferred Securities as described
under "--Redemption--Mandatory Redemption," or (iv) the entry of an order for
the dissolution of INTRUST Capital by a court of competent jurisdiction.
If an early termination occurs as described in clause (i), (ii) or (iv) of
the preceding paragraph, INTRUST Capital will be liquidated by the Trustees as
expeditiously as the Trustees determine to be possible by distributing, after
satisfaction of liabilities to creditors of INTRUST Capital as provided by
applicable law, to the holders of such Trust Securities a Like Amount of the
Subordinated Debentures, unless such distribution is determined by the Property
Trustee not to be practical, in which event such holders will be entitled to
receive out of the assets of INTRUST Capital available for distribution to
holders, after satisfaction of liabilities to creditors of INTRUST Capital as
provided by applicable law, an amount equal to, in the case of holders of
Preferred Securities, the aggregate of the Liquidation Amount plus accrued and
unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If such Liquidation Distribution can be paid
only in part because INTRUST Capital has insufficient assets available to pay
in full the aggregate Liquidation Distribution, then the amounts payable
directly by INTRUST Capital on the Preferred Securities will be paid on a pro
rata basis. The Company, as the holder of the Common Securities, will be
entitled to receive distributions upon any such liquidation pro rata with the
holders of the Preferred Securities, except that, if a Debenture Event of
Default has occurred and is continuing, the Preferred Securities will have a
priority over the Common Securities. See "--Subordination of Common
Securities."
Under current United States federal income tax law and interpretations and
assuming, as expected, that INTRUST Capital is treated as a grantor trust, a
distribution of the Subordinated Debentures should not be a taxable event to
holders of the Preferred Securities. Should there be a change in law, a change
in legal interpretation, a Tax Event or other circumstances, however, the
distribution could be a taxable event to holders of the Preferred Securities.
See "Certain Federal Income Tax Consequences--Receipt of Subordinated
Debentures or Cash Upon Liquidation of INTRUST Capital." If the Company elects
neither to redeem the Subordinated Debentures prior to maturity nor to
liquidate INTRUST Capital and distribute the Subordinated Debentures to holders
of the Preferred Securities, the Preferred Securities will remain outstanding
until the repayment of the Subordinated Debentures.
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If the Company elects to liquidate INTRUST Capital and thereby causes the
Subordinated Debentures to be distributed to holders of the Preferred
Securities in liquidation of INTRUST Capital, the Company will continue to have
the right to shorten or extend the maturity of such Subordinated Debentures,
subject to certain conditions. See "Description of the Subordinated
Debentures--General."
LIQUIDATION VALUE
The amount of the Liquidation Distribution payable on the Preferred
Securities in the event of any liquidation of INTRUST Capital is $25 per
Preferred Security plus accrued and unpaid Distributions thereon to the date of
payment, which may be in the form of a distribution of such amount in
Subordinated Debentures, subject to certain exceptions. See "--Liquidation
Distribution Upon Termination."
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an event of default under the
Trust Agreement (an "Event of Default") with respect to the Preferred
Securities (whatever the reason for such Event of Default and whether voluntary
or involuntary or effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the occurrence of a Debenture Event of Default (see "Description of
the Subordinated Debentures--Debenture Events of Default"); or
(ii) default by INTRUST Capital in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of 30
days; or
(iii) default by INTRUST Capital in the payment of any Redemption Price of
any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect, of any
covenant or warranty of the Trustees in the Trust Agreement (other than a
covenant or warranty a default in the performance of which or the breach of
which is dealt with in clauses (ii) or (iii) above), and continuation of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Trustee(s) by the holders of at least 25%
in aggregate Liquidation Amount of the outstanding Preferred Securities, a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" under the
Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by the Company to appoint a
successor Property Trustee within 60 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee will transmit
notice of such Event of Default to the holders of the Preferred Securities, the
Administrative Trustees and the Company, as depositor, unless such Event of
Default has been cured or waived. The Company, as depositor, and the
Administrative Trustees are required to file annually with the Property Trustee
a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under the Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the
Preferred Securities will have a preference over the Common Securities upon
termination of INTRUST Capital. See "--Liquidation Distribution Upon
Termination." The existence of an Event of Default does not entitle the
holders of Preferred Securities to accelerate the maturity thereof.
REMOVAL OF INTRUST CAPITAL TRUSTEES
Unless a Debenture Event of Default has occurred and is continuing, any
Trustee may be removed at any time by the holder of the Common Securities. If a
Debenture Event of Default has occurred and is continuing, the Property Trustee
and the Delaware Trustee may be removed at such time by the holders of a
majority in Liquidation Amount of the outstanding Preferred Securities. In no
event, however, will the holders of the Preferred Securities have the right to
vote to appoint, remove or replace the Administrative Trustees, which voting
rights are vested exclusively in the Company as the holder of the Common
Securities. No resignation or removal of a Trustee and no appointment of
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a successor trustee will be effective until the acceptance of appointment by
the successor trustee in accordance with the provisions of the Trust Agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default has occurred and is continuing, at any time or
times, for the purpose of meeting the legal requirements of the Trust Indenture
Act or of any jurisdiction in which any part of the Trust Property (as defined
in the Trust Agreement) may at the time be located, the Company, as the holder
of the Common Securities, will have power to appoint one or more Persons (as
defined in the Trust Agreement) either to act as a co-trustee, jointly with the
Property Trustee, of all or any part of such Trust Property, or to act as
separate trustee of any such Trust Property, in either case with such powers as
may be provided in the instrument of appointment, and to vest in such Person or
Persons in such capacity any property, title, right or power deemed necessary
or desirable, subject to the provisions of the Trust Agreement. In case a
Debenture Event of Default has occurred and is continuing, the Property Trustee
alone will have power to make such appointment.
MERGER OR CONSOLIDATION OF TRUSTEES
Any Person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which such Trustee is a party, or any Person
succeeding to all or substantially all the corporate trust business of such
Trustee, will be the successor of such Trustee under the Trust Agreement,
provided such Person is otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF INTRUST CAPITAL
INTRUST Capital may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, except as described below. INTRUST
Capital may, at the request of the Company, with the consent of the
Administrative Trustees and without the consent of the holders of the Preferred
Securities, the Property Trustee or the Delaware Trustee, merge with or into,
consolidate, amalgamate, or be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust organized as such
under the laws of any State; provided, that (i) such successor entity either
(a) expressly assumes all of the obligations of INTRUST Capital with respect to
the Preferred Securities, or (b) substitutes for the Preferred Securities other
securities having substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the same as
the Preferred Securities rank in priority with respect to distributions and
payments upon liquidation, redemption and otherwise, (ii) the Company expressly
appoints a trustee of such successor entity possessing the same powers and
duties as the Property Trustee in its capacity as the holder of the
Subordinated Debentures, (iii) the Successor Securities are listed, or any
Successor Securities will be listed upon notification of issuance, on any
national securities exchange or other organization on which the Preferred
Securities are then listed (including, if applicable, the American Stock
Exchange, Inc.), if any, (iv) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the
rights, preferences and privileges of the holders of the Preferred Securities
(including any Successor Securities) in any material respect, (v) prior to such
merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, the Company has received an opinion from independent counsel to the
effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Preferred Securities (including any
Successor Securities) in any material respect, and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease,
neither INTRUST Capital nor such successor entity will be required to register
as an "investment company" under the Investment Company Act, and (vi) the
Company owns all of the common securities of such successor entity and
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee, the Indenture, the
Subordinated Debentures, the Trust Agreement and the Expense Agreement.
Notwithstanding the foregoing, INTRUST Capital will not, except with the
consent of holders of 100% in Liquidation Amount of the Preferred Securities,
consolidate, amalgamate, merge with or into, or be replaced by or convey,
transfer or lease its properties and assets substantially as an entirety to any
other Person or permit any other Person to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger,
replacement,
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conveyance, transfer or lease would cause INTRUST Capital or the successor
entity to be classified as other than a grantor trust for United States federal
income tax purposes.
VOTING RIGHTS; AMENDMENT OF TRUST AGREEMENT
Except as provided below and under "Description of the Guarantee--Voting
Rights; Amendments and Assignment" and as otherwise required by the Trust Act,
the Trust Agreement and the Guarantee, the holders of the Preferred Securities
will have no voting rights.
The Trust Agreement may be amended from time to time by the Company, the
Property Trustee and the Administrative Trustees, without the consent of the
holders of the Preferred Securities (i) with respect to acceptance of
appointment by a successor trustee, (ii) to cure any ambiguity, correct or
supplement any provisions in such Trust Agreement that may be inconsistent with
any other provision, or to make any other provisions with respect to matters or
questions arising under the Trust Agreement (provided such amendment is not
inconsistent with the other provisions of the Trust Agreement), (iii) to
modify, eliminate or add to any provisions of the Trust Agreement to such
extent as is necessary to ensure that INTRUST Capital will be classified for
United States federal income tax purposes as a grantor trust at all times that
any Trust Securities are outstanding or to ensure that INTRUST Capital will not
be required to register as an "investment company" under the Investment
Company Act, or (iv) to reduce or increase the Liquidation Amount per Trust
Security and simultaneously to increase or reduce the number of Trust
Securities issued and outstanding solely for the purpose of maintaining the
eligibility of the Preferred Securities for listing or quotation on any
national securities exchange or other organization on which the Preferred
Securities are then listed or quoted (including, if applicable, the American
Stock Exchange, Inc.); provided, however, that in the case of clause (ii), such
action may not adversely affect the interests of any holder of Trust Securities
and that, in the case of clause (iv), the aggregate Liquidation Amount of the
Trust Securities outstanding, upon completion of any such reduction or
increase, must be the same as the aggregate Liquidation Amount of the Trust
Securities outstanding immediately prior to any such reduction or increase, and
any amendments of such Trust Agreement will become effective when notice
thereof is given to the holders of Trust Securities (or, in the case of an
amendment pursuant to clause (iv), as of the date specified in the notice). The
Trust Agreement may be amended by the Trustees and the Company with (i) the
consent of holders representing not less than a majority in the aggregate
Liquidation Amount of the outstanding Trust Securities, and (ii) receipt by the
Trustees of an opinion of counsel to the effect that such amendment or the
exercise of any power granted to the Trustees in accordance with such amendment
will not affect INTRUST Capital's status as a grantor trust for United States
federal income tax purposes or INTRUST Capital's exemption from status as an
"investment company" under the Investment Company Act. The affirmative
consent of the holders of at least 66 2/3% of the outstanding Preferred
Securities will be required by INTRUST Capital for amendments to the Trust
Agreement that would adversely affect the rights or privileges of the holders
of the Preferred Securities. Notwithstanding anything in this paragraph to the
contrary, without the consent of each holder of Trust Securities, the Trust
Agreement may not be amended to (a) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount
of any Distribution required to be made in respect of the Trust Securities as
of a specified date, or (b) restrict the right of a holder of Trust Securities
to institute suit for the enforcement of any such payment on or after such
date.
The Trustees will not, so long as any Subordinated Debentures are held by
the Property Trustee, (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on the Property Trustee with respect to the
Subordinated Debentures, (ii) waive any past default that is waivable under the
Indenture, (iii) exercise any right to rescind or annul a declaration that the
principal of all the Subordinated Debentures will be due and payable, or (iv)
consent to any amendment, modification or termination of the Indenture or the
Subordinated Debentures, where such consent is required, without, in each case,
obtaining the prior approval of the holders of a majority in aggregate
Liquidation Amount of all outstanding Preferred Securities; provided, however,
that where a consent under the Indenture requires the consent of each holder of
Subordinated Debentures affected thereby, no such consent will be given by the
Property Trustee without the prior consent of each holder of the Preferred
Securities. The Trustees may not revoke any action previously authorized or
approved by a vote of the holders of the Preferred Securities except by
subsequent vote of the holders of the Preferred Securities. The Property
Trustee will notify each holder of Preferred Securities of any notice of
default with respect to the Subordinated Debentures. In addition to obtaining
the foregoing approvals of the holders of the Preferred Securities, prior to
taking any of the foregoing actions, the Trustees must obtain an opinion of
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counsel experienced in such matters to the effect that INTRUST Capital will not
be classified as an association taxable as a corporation for United States
federal income tax purposes on account of such action.
Any required approval of holders of Preferred Securities may be given at a
meeting of holders of Preferred Securities convened for such purpose or
pursuant to written consent. The Property Trustee will cause a notice of any
meeting at which holders of Preferred Securities are entitled to vote, or of
any matter upon which action by written consent of such holders is to be taken,
to be given to each holder of record of Preferred Securities in the manner set
forth in the Trust Agreement.
No vote or consent of the holders of Preferred Securities will be required
for INTRUST Capital to redeem and cancel its Preferred Securities in accordance
with the Trust Agreement.
Notwithstanding the fact that holders of Preferred Securities are entitled
to vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Company, the Trustees or any
affiliate of the Company or any Trustee will, for purposes of such vote or
consent, be treated as if they were not outstanding.
PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities will be made by check
mailed to the address of the holder entitled thereto as such address will
appear on the register of holders of the Preferred Securities. The paying agent
for the Preferred Securities will initially be the Property Trustee and any
co-paying agent chosen by the Property Trustee and acceptable to the
Administrative Trustees and the Company. The paying agent for the Preferred
Securities may resign as paying agent upon 30 days' written notice to the
Property Trustee and the Company. In the event that the Property Trustee no
longer is the paying agent for the Preferred Securities, the Administrative
Trustees will appoint a successor (which must be a bank or trust company
acceptable to the Administrative Trustees and the Company) to act as paying
agent.
REGISTRAR AND TRANSFER AGENT
The Property Trustee will act as the registrar and the transfer agent for
the Preferred Securities. Registration of transfers of Preferred Securities
will be effected without charge by or on behalf of INTRUST Capital, but upon
payment of any tax or other governmental charges that may be imposed in
connection with any transfer or exchange. INTRUST Capital will not be required
to register or cause to be registered the transfer of Preferred Securities
after such Preferred Securities have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than upon the occurrence and during the
continuance of an Event of Default, undertakes to perform only such duties as
are specifically set forth in the Trust Agreement and, upon the occurrence and
during the continuance of an Event of Default, must exercise the same degree of
care and skill as a prudent person would exercise or use in the conduct of his
or her own affairs. Subject to this provision, the Property Trustee is under no
obligation to exercise any of the powers vested in it by the Trust Agreement at
the request of any holder of Preferred Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby. If no Event of Default has occurred and is continuing and the
Property Trustee is required to decide between alternative causes of action,
construe ambiguous provisions in the Trust Agreement or is unsure of the
application of any provision of the Trust Agreement, and the matter is not one
on which holders of Preferred Securities are entitled under the Trust Agreement
to vote, then the Property Trustee will take such action as is directed by the
Company and if not so directed, will take such action as it deems advisable and
in the best interests of the holders of the Trust Securities and will have no
liability except for its own bad faith, negligence or willful misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate INTRUST Capital in such a way that INTRUST Capital
will not be deemed to be an "investment company" required to be registered
under the Investment Company Act or classified as an association taxable as a
corporation for United
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States federal income tax purposes and so that the Subordinated Debentures will
be treated as indebtedness of the Company for United States federal income tax
purposes. The Company and the Administrative Trustees are authorized, in this
connection, to take any action, not inconsistent with applicable law, the
certificate of trust of INTRUST Capital or the Trust Agreement, that the
Company and the Administrative Trustees determine in their discretion to be
necessary or desirable for such purposes.
Holders of the Preferred Securities have no preemptive or similar rights.
The Trust Agreement and the Preferred Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
DESCRIPTION OF THE SUBORDINATED DEBENTURES
Concurrently with the issuance of the Preferred Securities, INTRUST Capital
will invest the proceeds thereof, together with the consideration paid by the
Company for the Common Securities, in the Subordinated Debentures issued by the
Company. The Subordinated Debentures will be issued as unsecured debt under the
Indenture, to be dated as of , 1997 (the "Indenture"), between
the Company and State Street Bank and Trust Company, as trustee (the "Debenture
Trustee"). The Indenture will be qualified as an indenture under the Trust
Indenture Act. The following summary of the material terms and provisions of the
Subordinated Debentures and the Indenture does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, the Indenture and
to the Trust Indenture Act. Wherever particular defined terms of the Indenture
are referred to, but not defined herein, such defined terms are incorporated
herein by reference. The form of the Indenture has been filed as an exhibit to
the Registration Statement of which this Prospectus forms a part.
GENERAL
The Subordinated Debentures will be limited in aggregate principal amount
to approximately $51,546,400 (or $59,278,375 if the option described under the
heading "Underwriting" is exercised by the Underwriters), such amount being
the sum of the aggregate stated Liquidation Amount of the Trust Securities.
The Subordinated Debentures will bear interest at the annual rate of
% of the principal amount thereof, payable quarterly in arrears on March
31, June 30, September 30, and December 31 of each year (each, an "Interest
Payment Date") beginning March 31, 1998, to the Person (as defined in the
Indenture) in whose name each Subordinated Debenture is registered, subject to
certain exceptions, at the close of business on the fifteenth day of the last
month of the calendar quarter. It is anticipated that, until the liquidation of
INTRUST Capital, the Subordinated Debentures will be held in the name of the
Property Trustee in trust for the benefit of the holders of the Preferred
Securities. The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. In the event that any date
on which interest is payable on the Subordinated Debentures is not a Business
Day, then payment of the interest payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), with the same force and effect as if
made on the date such payment was originally payable. Accrued interest that is
not paid on the applicable Interest Payment Date will bear additional interest
on the amount thereof (to the extent permitted by law) at the rate per annum of
% thereof, compounded quarterly. The term "interest," as used herein,
includes quarterly interest payments, interest on quarterly interest payments
not paid on the applicable Interest Payment Date and Additional Payments, as
applicable.
The Subordinated Debentures will mature on December 31, 2027 (such date, as
it may be shortened or extended as hereinafter described, the "Stated
Maturity"). Such date may be shortened at any time by the Company to any date
not earlier than December 31, 2002, subject to the Company having received
prior approval of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve. Such date may also be extended
at any time at the election of the Company but in no event to a date later than
December 31, 2036, provided that at the time such election is made and at the
time of extension (i) the Company is not in bankruptcy, otherwise insolvent or
in liquidation, (ii) the Company is not in default in the payment of any
interest or principal on the Subordinated Debentures, and (iii) INTRUST Capital
is not in arrears on payments of Distributions on the Preferred Securities and
no deferred Distributions are accumulated. In the event that the Company elects
to shorten or extend the Stated Maturity of the Subordinated Debentures, it will
give notice thereof to the Debenture Trustee, INTRUST Capital and to the holders
of the Subordinated Debentures no more than 180 days and no less than 90 days
prior to the
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effectiveness thereof. The Company will not have the right to purchase the
Subordinated Debentures, in whole or in part, from INTRUST Capital until after
December 31, 2002, except if a Tax Event, a Capital Treatment Event or an
Investment Company Event has occurred and is continuing.
The Subordinated Debentures will be unsecured and will rank junior and be
subordinate in right of payment to all Senior Debt, Subordinated Debt and
Additional Senior Obligations of the Company. Because the Company is a holding
company, the right of the Company to participate in any distribution of assets
of any Subsidiary Bank, upon any such Subsidiary Bank's liquidation or
reorganization or otherwise (and thus the ability of holders of the
Subordinated Debentures to benefit indirectly from such distribution), is
subject to the prior claim of creditors of such Subsidiary Bank, except to the
extent that the Company may itself be recognized as a creditor of such
Subsidiary Bank. The Subordinated Debentures will, therefore, be effectively
subordinated to all existing and future liabilities of the Subsidiary Banks,
and holders of Subordinated Debentures should look only to the assets of the
Company for payments on the Subordinated Debentures. The Indenture does not
limit the incurrence or issuance of other secured or unsecured debt of the
Company, including Senior Debt, Subordinated Debt and Additional Senior
Obligations, whether under the Indenture or any existing indenture or other
indenture that the Company may enter into in the future or otherwise. See
"--Subordination."
The Indenture does not contain provisions that afford holders of the
Subordinated Debentures protection in the event of a highly leveraged
transaction or other similar transaction involving the Company that may
adversely affect such holders.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
The Company has the right under the Indenture at any time during the term
of the Subordinated Debentures, so long as no Debenture Event of Default has
occurred and is continuing, to defer the payment of interest at any time, or
from time to time (each, an "Extension Period"). The right to defer the
payment of interest on the Subordinated Debentures is limited, however, to a
period, in each instance, not exceeding 20 consecutive quarters and no
Extension Period may extend beyond the Stated Maturity of the Subordinated
Debentures. At the end of each Extension Period, the Company must pay all
interest then accrued and unpaid (together with interest thereon at the annual
rate of %, compounded quarterly, to the extent permitted by applicable
law). During an Extension Period, interest will continue to accrue and holders
of Subordinated Debentures (or the holders of Preferred Securities if such
securities are then outstanding) will be required to accrue and recognize
income for United States federal income tax purposes. See "Certain Federal
Income Tax Consequences--Potential Extension of Interest Payment Period and
Original Issue Discount."
During any such Extension Period, the Company may not (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock (other
than (a) dividends or distributions in common stock of the Company, any
declaration of a non-cash dividend in connection with the implementation of a
shareholder rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto,
and (b) purchases of common stock of the Company related to the rights under
any of the Company's benefit plans for its directors, officers or employees),
(ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu
with or junior in interest to the Subordinated Debentures or make any guarantee
payments with respect to any guarantee by the Company of the debt securities of
any subsidiary of the Company if such guarantee ranks pari passu or junior in
interest to the Subordinated Debentures (other than payments under the
Guarantee), or (iii) redeem, purchase or acquire less than all of the
Subordinated Debentures or any of the Preferred Securities. Prior to the
termination of any such Extension Period, the Company may further defer the
payment of interest; provided that no Extension Period may exceed 20
consecutive quarters or extend beyond the Stated Maturity of the Subordinated
Debentures. Upon the termination of any such Extension Period and the payment
of all amounts then due on any Interest Payment Date, the Company may elect to
begin a new Extension Period subject to the above requirements. No interest
will be due and payable during an Extension Period, except at the end thereof.
The Company has no present intention of exercising its rights to defer payments
of interest on the Subordinated Debentures. The Company must give the Property
Trustee, the Administrative Trustees and the Debenture Trustee notice of its
election of such Extension Period at least two Business Days prior to the
earlier of (i) the next succeeding date on which Distributions on the Trust
Securities would have been payable except for the election to begin such
Extension Period, or (ii) the date the Trust is required to give notice of the
record date, or the date such Distributions
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are payable, to the American Stock Exchange, Inc. (or other applicable
self-regulatory organization) or to holders of the Preferred Securities, but in
any event at least one Business Day before such record date. Subject to the
foregoing, there is no limitation on the number of times that the Company may
elect to begin an Extension Period.
ADDITIONAL SUMS
If INTRUST Capital or the Property Trustee is required to pay any
additional taxes, duties or other governmental charges as a result of the
occurrence of a Tax Event, the Company will pay to the recordholders of the
Subordinated Debentures as additional amounts (referred to herein as
"Additional Payments") on the Subordinated Debentures such additional amounts
as may be required so that the net amounts received and retained by INTRUST
Capital after paying any such additional taxes, duties or other governmental
charges will not be less than the amounts INTRUST Capital would have received
had such additional taxes, duties or other governmental charges not been
imposed.
REDEMPTION
The Company will have the right to redeem the Subordinated Debentures prior
to maturity (i) on or after December 31, 2002, in whole at any time or in part
from time to time, or (ii) at any time in whole (but not in part), within 180
days following the occurrence of a Tax Event, a Capital Treatment Event or an
Investment Company Event, in each case at a redemption price equal to the
accrued and unpaid interest on the Subordinated Debentures so redeemed to the
date fixed for redemption, plus 100% of the principal amount thereof. Any such
redemption prior to the Stated Maturity will be subject to prior approval of
the Federal Reserve if then required under applicable capital guidelines or
policies of the Federal Reserve.
"Tax Event" means the receipt by INTRUST Capital of an opinion of counsel
experienced in such matters to the effect that, as a result of any amendment
to, or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities under the Trust Agreement, there is more than an
insubstantial risk that (i) interest payable by the Company on the Subordinated
Debentures is not, or within 90 days of the date of such opinion will not be,
deductible by the Company, in whole or in part, for United States federal
income tax purposes, (ii) INTRUST Capital is, or will be within 90 days after
the date of such opinion of counsel, subject to United States federal income
tax with respect to income received or accrued on the Subordinated Debentures,
or (iii) INTRUST Capital is, or will be within 90 days after the date of such
opinion of counsel, subject to more than a de minimis amount of other taxes,
duties, assessments or other governmental charges. The Company must request and
receive an opinion with regard to such matters within a reasonable period of
time after it becomes aware of the possible occurrence of any of the events
described in clauses (i) through (iii) above.
"Capital Treatment Event" means the receipt by INTRUST Capital of an
opinion of counsel experienced in such matters to the effect that, as a result
of any amendment to or any change (including any announced prospective change)
in the laws (or any regulations thereunder) of the United States or any
political subdivision thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or such proposed
change, pronouncement or decision is announced on or after the date of issuance
of the Preferred Securities under the Trust Agreement, there is more than an
insubstantial risk of impairment of the Company's ability to treat the
aggregate Liquidation Amount of the Preferred Securities (or any substantial
portion thereof) as "Tier 1 Capital" (or the then equivalent thereof) for
purposes of the capital adequacy guidelines of the Federal Reserve, as then in
effect and applicable to the Company; provided, however, that the inability of
the Company to treat all or any portion of the Liquidation Amount of the
Preferred Securities as Tier 1 Capital shall not constitute the basis for a
Capital Treatment Event if such inability results from the Company having
cumulative preferred stock, minority interests in consolidated subsidiaries, or
any other class of security or interest which the Federal Reserve now or may
hereafter afford Tier I Capital Treatment in excess of the amount which may
qualify for treatment as Tier 1 Capital under applicable capital adequacy
guidelines of the Federal Reserve.
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"Investment Company Event" means the receipt by INTRUST Capital of an
opinion of counsel experienced in such matters to the effect that, as a result
of the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, INTRUST Capital is or will
be considered an "investment company" that is required to be registered under
the Investment Company Act, which change becomes effective on or after the date
of original issuance of the Preferred Securities.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Subordinated Debentures to
be redeemed at its registered address. Unless the Company defaults in payment
of the redemption price for the Subordinated Debentures, on and after the
redemption date interest ceases to accrue on such Subordinated Debentures or
portions thereof called for redemption.
The Subordinated Debentures will not be subject to any sinking fund.
DISTRIBUTION UPON LIQUIDATION
As described under "Description of the Preferred Securities--Liquidation
Distribution Upon Termination," under certain circumstances involving the
termination of INTRUST Capital, the Subordinated Debentures may be distributed
to the holders of the Preferred Securities in liquidation of INTRUST Capital
after satisfaction of liabilities to creditors of INTRUST Capital as provided
by applicable law. Any such distribution will be subject to receipt of prior
approval by the Federal Reserve if then required under applicable policies or
guidelines of the Federal Reserve. If the Subordinated Debentures are
distributed to the holders of Preferred Securities upon the liquidation of
INTRUST Capital, the Company will use its best efforts to list the Subordinated
Debentures on the American Stock Exchange, Inc. or such stock exchanges, if
any, on which the Preferred Securities are then listed. There can be no
assurance as to the market price of any Subordinated Debentures that may be
distributed to the holders of Preferred Securities.
RESTRICTIONS ON CERTAIN PAYMENTS
If at any time (i) there has occurred a Debenture Event of Default, (ii)
the Company is in default with respect to its obligations under the Guarantee,
or (iii) the Company has given notice of its election of an Extension Period as
provided in the Indenture with respect to the Subordinated Debentures and has
not rescinded such notice, or such Extension Period, or any extension thereof,
is continuing, the Company will not (1) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock (other than (a) dividends
or distributions in common stock of the Company, any declaration of a non-cash
dividend in connection with the implementation of a shareholder rights plan, or
the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, and (b) purchases of common
stock of the Company related to the rights under any of the Company's benefit
plans for its directors, officers or employees), (2) make any payment of
principal, interest or premium, if any, on or repay or repurchase or redeem any
debt securities of the Company that rank pari passu with or junior in interest
to the Subordinated Debentures or make any guarantee payments with respect to
any guarantee by the Company of the debt securities of any subsidiary of the
Company if such guarantee ranks pari passu or junior in interest to the
Subordinated Debentures (other than payments under the Guarantee), or (3)
redeem, purchase or acquire less than all of the Subordinated Debentures or any
of the Preferred Securities.
SUBORDINATION
The Indenture provides that the Subordinated Debentures are subordinated
and junior in right of payment to all Senior Debt, Subordinated Debt and
Additional Senior Obligations of the Company. Upon any payment or distribution
of assets to creditors upon any liquidation, dissolution, winding up,
reorganization, assignment for the benefit of creditors, marshaling of assets
or any bankruptcy, insolvency, debt restructuring or similar proceedings in
connection with any insolvency or bankruptcy proceedings of the Company, the
holders of Senior Debt, Subordinated Debt and Additional Senior Obligations of
the Company will first be entitled to receive payment in full of principal of
(and premium, if any) and interest, if any, on such Senior Debt, Subordinated
Debt and Additional Senior Obligations of the Company before the holders of
Subordinated Debentures will be entitled to receive or retain any payment in
respect of the principal of or interest on the Subordinated Debentures.
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In the event of the acceleration of the maturity of any Subordinated
Debentures, the holders of all Senior Debt, Subordinated Debt and Additional
Senior Obligations of the Company outstanding at the time of such acceleration
will first be entitled to receive payment in full of all amounts due thereon
(including any amounts due upon acceleration) before the holders of the
Subordinated Debentures will be entitled to receive or retain any payment in
respect of the principal of or interest on the Subordinated Debentures.
No payments on account of principal or interest in respect of the
Subordinated Debentures may be made if there has occurred and is continuing a
default in any payment with respect to Senior Debt, Subordinated Debt or
Additional Senior Obligations of the Company or an event of default with
respect to any Senior Debt, Subordinated Debt or Additional Senior Obligations
of the Company resulting in the acceleration of the maturity thereof, or if any
judicial proceeding is pending with respect to any such default.
"Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such person for money borrowed, (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses, (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person, (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business), (v) every capital lease obligation of such Person, and (vi) and
every obligation of the type referred to in clauses (i) through (v) of another
Person and all dividends of another Person the payment of which, in either
case, such Person has guaranteed or is responsible or liable, directly or
indirectly, as obligor or otherwise.
"Senior Debt" means, with respect to the Company, the principal of (and
premium, if any) and interest, if any (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization relating to the
Company whether or not such claim for post-petition interest is allowed in such
proceeding), on Debt, whether incurred on or prior to the date of the Indenture
or thereafter incurred, unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Subordinated Debentures
or to other Debt which is pari passu with, or subordinated to, the Subordinated
Debentures; provided, however, that Senior Debt will not be deemed to include
(i) any Debt of the Company which when incurred and without respect to any
election under section 1111(b) of the United States Bankruptcy Code of 1978, as
amended, was without recourse to the Company, (ii) any Debt of the Company to
any of its subsidiaries, (iii) any Debt to any employee of the Company, (iv)
any Debt which by its terms is subordinated to trade accounts payable or
accrued liabilities arising in the ordinary course of business to the extent
that payments made to the holders of such Debt by the holders of the
Subordinated Debentures as a result of the subordination provisions of the
Indenture would be greater than they otherwise would have been as a result of
any obligation of such holders to pay amounts over to the obligees on such
trade accounts payable or accrued liabilities arising in the ordinary course of
business as a result of subordination provisions to which such Debt is subject,
and (v) Debt which constitutes Subordinated Debt.
"Subordinated Debt" means, with respect to the Company, the principal of
(and premium, if any) and interest, if any (including interest accruing on or
after the filing of any petition in bankruptcy or for reorganization relating
to the Company whether or not such claim for post-petition interest is allowed
in such proceeding), on Debt, whether incurred on or prior to the date of the
Indenture or thereafter incurred, which is by its terms expressly provided to
be junior and subordinate to other Debt of the Company (other than the
Subordinated Debentures).
"Additional Senior Obligations" means, with respect to the Company, all
indebtedness, whether incurred on or prior to the date of the Indenture or
thereafter incurred, for claims in respect of derivative products such as
interest and foreign exchange rate contracts, commodity contracts and similar
arrangements; provided, however, that Additional Senior Obligations do not
include claims in respect of Senior Debt or Subordinated Debt or obligations
which, by their terms, are expressly stated to be not superior in right of
payment to the Subordinated Debentures or to rank pari passu in right of
payment with the Subordinated Debentures. "Claim," as used herein, has the
meaning assigned thereto in Section 101(4) of the United States Bankruptcy Code
of 1978, as amended.
The Indenture places no limitation on the amount of additional Senior Debt,
Subordinated Debt or Additional Senior Obligations that may be incurred by the
Company. The Company expects from time to time to incur additional indebtedness
constituting Senior Debt, Subordinated Debt and Additional Senior Obligations.
As of September 30,
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1997, the Company had aggregate Senior Debt, Subordinated Debt and Additional
Senior Obligations of approximately $36.7 million. Because the Company is a
holding company, the Subordinated Debentures are effectively subordinated to all
existing and future liabilities of the Company subsidiaries, including
obligations to depositors of the Subsidiary Banks.
PAYMENT AND PAYING AGENTS
Payment of principal of and any interest on the Subordinated Debentures
will be made at the office of the Debenture Trustee in Boston, Massachusetts,
except that, at the option of the Company, payment of any interest may be made
(i) by check mailed to the address of the Person entitled thereto as such
address appears in the register of holders of the Subordinated Debentures, or
(ii) by transfer to an account maintained by the Person entitled thereto as
specified in the register of holders of the Subordinated Debentures, provided
that proper transfer instructions have been received by the regular record
date. Payment of any interest on Subordinated Debentures will be made to the
Person in whose name such Subordinated Debenture is registered at the close of
business on the regular record date for such interest, except in the case of
defaulted interest. The Company may at any time designate additional paying
agents for the Subordinated Debentures or rescind the designation of any paying
agent for the Subordinated Debentures; however, the Company will at all times
be required to maintain a paying agent in each place of payment for the
Subordinated Debentures.
Any moneys deposited with the Debenture Trustee or any paying agent for the
Subordinated Debentures, or then held by the Company in trust, for the payment
of the principal of or interest on the Subordinated Debentures and remaining
unclaimed for two years after such principal or interest has become due and
payable will be repaid to the Company on May 31 of each year or (if then held
in trust by the Company) will be discharged from such trust and the holder of
such Subordinated Debenture will thereafter look, as a general unsecured
creditor, only to the Company for payment thereof.
REGISTRAR AND TRANSFER AGENT
The Debenture Trustee will act as the registrar and the transfer agent for
the Subordinated Debentures. Subordinated Debentures may be presented for
registration of transfer (with the form of transfer endorsed thereon, or a
satisfactory written instrument of transfer, duly executed), at the office of
the registrar in Boston, Massachusetts. The Company may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts. The Company may at any time
designate additional transfer agents with respect to the Subordinated
Debentures. In the event of any redemption, neither the Company nor the
Debenture Trustee will be required to (i) issue, register the transfer of or
exchange Subordinated Debentures during a period beginning at the opening of
business 15 days before the day of selection for redemption of Subordinated
Debentures and ending at the close of business on the day of mailing of the
relevant notice of redemption, or (ii) transfer or exchange any Subordinated
Debentures so selected for redemption, except, in the case of any Subordinated
Debentures being redeemed in part, any portion thereof not to be redeemed.
MODIFICATION OF INDENTURE
The Company and the Debenture Trustee may, from time to time without the
consent of the holders of the Subordinated Debentures, amend, waive or
supplement the Indenture for specified purposes, including, among other things,
curing ambiguities, defects or inconsistencies and qualifying, or maintaining
the qualification of, the Indenture under the Trust Indenture Act. The
Indenture contains provisions permitting the Company and the Debenture Trustee,
with the consent of the holders of not less than a majority in principal amount
of the outstanding Subordinated Debentures, to modify the Indenture; provided,
that no such modification may, without the consent of the holder of each
outstanding Subordinated Debenture affected by such proposed modification, (i)
extend the fixed maturity of the Subordinated Debentures, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or (ii) reduce the percentage of principal amount of
Subordinated Debentures, the holders of which are required to consent to any
such modification of the Indenture; provided that so long as any of the
Preferred Securities remain outstanding, no such modification may be made that
requires the consent of the holders of the Subordinated Debentures, and no
termination of the Indenture may occur, and no waiver of any Debenture Event of
Default may be effective, without the prior consent of the holders of at least
a majority of the aggregate Liquidation Amount of the Preferred Securities and
that if the consent of the holder of each Subordinated
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Debenture is required, such modification will not be effective until each
holder of Trust Securities has consented thereto.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to the Subordinated Debentures that has occurred and is
continuing constitutes an event of default (each, a "Debenture Event of
Default") with respect to the Subordinated Debentures:
(i) failure for 30 days to pay any interest on the Subordinated
Debentures when due (subject to the deferral of any due date in the case of
an Extension Period); or
(ii) failure to pay any principal on the Subordinated Debentures when
due whether at maturity, upon redemption by declaration or otherwise; or
(iii) failure to observe or perform in any material respect certain
other covenants contained in the Indenture for 90 days after written notice
to the Company from the Debenture Trustee or the holders of at least 25% in
aggregate outstanding principal amount of the Subordinated Debentures; or
(iv) certain events of bankruptcy, insolvency or reorganization of the
Company.
The holders of a majority in aggregate outstanding principal amount of the
Subordinated Debentures have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee.
The Debenture Trustee, or the holders of not less than 25% in aggregate
outstanding principal amount of the Subordinated Debentures, may declare the
principal due and payable immediately upon a Debenture Event of Default. The
holders of a majority in aggregate outstanding principal amount of the
Subordinated Debentures may annul such declaration and waive the default if the
default (other than the non-payment of the principal of the Subordinated
Debentures which has become due solely by such acceleration) has been cured and
a sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee.
Should the holders of the Subordinated Debentures fail to annul such
declaration and waive such default, the holders of a majority in aggregate
Liquidation Amount of the Preferred Securities will have such right.
The Company is required to file annually with the Debenture Trustee a
certificate as to whether or not the Company is in compliance with all the
conditions and covenants applicable to it under the Indenture.
If a Debenture Event of Default has occurred and is continuing, the
Property Trustee will have the right to declare the principal of and the
interest on such Subordinated Debentures, and any other amounts payable under
the Indenture, to be forthwith due and payable and to enforce its other rights
as a creditor with respect to such Subordinated Debentures.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF THE PREFERRED SECURITIES
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay interest on or
principal of the Subordinated Debentures on the payment date on which such
payment is due and payable, then a holder of Preferred Securities may institute
a legal proceeding directly against the Company for enforcement of payment to
such holder of the principal of or interest on such Subordinated Debentures
having a principal amount equal to the aggregate Liquidation Amount of the
Preferred Securities of such holder (a "Direct Action"). In connection with
such Direct Action, the Company will have a right of set-off under the
Indenture to the extent of any payment made by the Company to such holder of
Preferred Securities in the Direct Action. The Company may not amend the
Indenture to remove the foregoing right to bring a Direct Action without the
prior written consent of the holders of all of the Preferred Securities. If the
right to bring a Direct Action is removed, INTRUST Capital may become subject
to the reporting obligations under the Exchange Act. The Company has the right
under the Indenture to set-off any payment made to such holder of Preferred
Securities by the Company in connection with a Direct Action.
The holders of the Preferred Securities will not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the Subordinated Debentures unless there has been
an Event of Default under the Trust Agreement. See "Description of the
Preferred Securities--Events of Default; Notice."
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CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Company may not consolidate with or merge into any other Person or
convey or transfer its properties and assets substantially as an entirety to
any Person, and any Person may not consolidate with or merge into the Company
or sell, convey, transfer or otherwise dispose of its properties and assets
substantially as an entirety to the Company, unless (i) in the event the
Company consolidates with or merges into another Person or conveys or transfers
its properties and assets substantially as an entirety to any Person, the
successor Person is organized under the laws of the United States or any State
or the District of Columbia, and such successor Person expressly assumes by
supplemental indenture the Company's obligations on the Subordinated
Debentures, (ii) immediately after giving effect thereto, no Debenture Event of
Default, and no event which, after notice or lapse of time or both, would
become a Debenture Event of Default, has occurred and is continuing, and (iii)
certain other conditions as prescribed in the Indenture are met.
SATISFACTION AND DISCHARGE
The Indenture will cease to be of further effect (except as to the
Company's obligations to pay certain sums due pursuant to the Indenture and to
provide certain officers' certificates and opinions of counsel described
therein) and the Company will be deemed to have satisfied and discharged the
Indenture when, among other things, all Subordinated Debentures not previously
delivered to the Debenture Trustee for cancellation (i) have become due and
payable, or (ii) will become due and payable at their Stated Maturity within
one year or are to be called for redemption within one year, and the Company
deposits or causes to be deposited with the Debenture Trustee funds, in trust,
for the purpose and in an amount sufficient to pay and discharge the entire
indebtedness on the Subordinated Debentures not previously delivered to the
Debenture Trustee for cancellation, for the principal and interest to the date
of the deposit or to the Stated Maturity or redemption date, as the case may
be.
GOVERNING LAW
The Indenture and the Subordinated Debentures will be governed by and
construed in accordance with the laws of the State of Kansas.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee has and is subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of Subordinated Debentures, unless offered reasonable
indemnity by such holder against the costs, expenses and liabilities which
might be incurred thereby. The Debenture Trustee is not required to expend or
risk its own funds or otherwise incur personal financial liability in the
performance of its duties if the Debenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
MISCELLANEOUS
The Company has agreed, pursuant to the Indenture, for so long as Trust
Securities remain outstanding, (i) to maintain directly or indirectly 100%
ownership of the Common Securities of INTRUST Capital (provided that certain
successors which are permitted pursuant to the Indenture may succeed to the
Company's ownership of the Common Securities), (ii) not to voluntarily
terminate, wind up or liquidate INTRUST Capital, except upon prior approval of
the Federal Reserve if then so required under applicable capital guidelines or
policies of the Federal Reserve, and (a) in connection with a distribution of
Subordinated Debentures to the holders of the Preferred Securities in
liquidation of INTRUST Capital, or (b) in connection with certain mergers,
consolidations or amalgamations permitted by the Trust Agreement, and (iii) to
use its reasonable efforts, consistent with the terms and provisions of the
Trust Agreement, to cause INTRUST Capital to remain classified as a grantor
trust and not as an association taxable as a corporation for United States
federal income tax purposes.
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DESCRIPTION OF THE GUARANTEE
The Preferred Securities Guarantee Agreement (the "Guarantee") will be
executed and delivered by the Company concurrently with the issuance of the
Preferred Securities for the benefit of the holders of the Preferred
Securities. The Guarantee will be qualified as an indenture under the Trust
Indenture Act. The Guarantee Trustee will act as indenture trustee under the
Guarantee for purposes of complying with the provisions of the Trust Indenture
Act. The Guarantee Trustee, State Street Bank and Trust Company, will hold the
Guarantee for the benefit of the holders of the Preferred Securities. The
following summary of the material terms and provisions of the Guarantee does
not purport to be complete and is subject to, and qualified in its entirety by
reference to, all of the provisions of the Guarantee and the Trust Indenture
Act. Wherever particular defined terms of the Guarantee are referred to, but
not defined herein, such defined terms are incorporated herein by reference.
The form of the Guarantee has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part.
GENERAL
The Company will, pursuant to the Guarantee, irrevocably agree to pay in
full on a subordinated basis, to the extent set forth therein, the Guarantee
Payments (as defined below) to the holders of the Preferred Securities, as and
when due, regardless of any defense, right of set-off or counterclaim that
INTRUST Capital may have or assert other than the defense of payment. The
following payments with respect to the Preferred Securities, to the extent not
paid by or on behalf of INTRUST Capital (the "Guarantee Payments"), will be
subject to the Guarantee: (i) any accrued and unpaid Distributions required to
be paid on the Preferred Securities, to the extent that INTRUST Capital has
funds available therefor at such time, (ii) the Redemption Price with respect
to any Preferred Securities called for redemption to the extent that INTRUST
Capital has funds available therefor at such time, and (iii) upon a voluntary
or involuntary dissolution, winding up or liquidation of INTRUST Capital (other
than in connection with the distribution of Subordinated Debentures to the
holders of Preferred Securities or a redemption of all of the Preferred
Securities), the lesser of (a) the amount of the Liquidation Distribution, to
the extent INTRUST Capital has funds available therefor at such time, and (b)
the amount of assets of INTRUST Capital remaining available for distribution to
holders of Preferred Securities in liquidation of INTRUST Capital. The
obligation of the Company to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Company to the holders of the
Preferred Securities or by causing INTRUST Capital to pay such amounts to such
holders.
The Guarantee will not apply to any payment of Distributions except to the
extent INTRUST Capital has funds available therefor. If the Company does not
make interest payments on the Subordinated Debentures held by INTRUST Capital,
INTRUST Capital will not pay Distributions on the Preferred Securities and will
not have funds legally available therefor.
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of the Company and
will rank subordinate and junior in right of payment to all Senior Debt,
Subordinated Debt and Additional Senior Obligations of the Company in the same
manner as the Subordinated Debentures. The Guarantee does not place a
limitation on the amount of additional Senior Debt, Subordinated Debt or
Additional Senior Obligations that may be incurred by the Company. The Company
expects from time to time to incur additional indebtedness constituting Senior
Debt, Subordinated Debt and Additional Senior Obligations.
The Guarantee will constitute a guarantee of payment and not of collection
(that is, the guaranteed party may institute a legal proceeding directly
against the Company to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other Person). The Guarantee will
not be discharged except by payment of the Guarantee Payments in full to the
extent not paid by INTRUST Capital or upon distribution of the Subordinated
Debentures to the holders of the Preferred Securities. Because the Company is a
holding company, the right of the Company to participate in any distribution of
assets of any Subsidiary Bank upon such Subsidiary Bank's liquidation or
reorganization or otherwise is subject to the prior claims of creditors of that
Subsidiary Bank, except to the extent the Company may itself be recognized as a
creditor of that Subsidiary Bank. The Company's obligations under the
Guarantee, therefore, will be effectively subordinated to all existing and
future liabilities of the Company subsidiaries, and claimants should look only
to the assets of the Company for payments thereunder.
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VOTING RIGHTS; AMENDMENTS AND ASSIGNMENT
Pursuant to the Guarantee, if any Distributions payable on the Preferred
Securities are in arrears for six quarterly periods, then the holders of the
Preferred Securities, voting separately as a class, will be entitled at the
next regular or special meeting of shareholders of the Company to elect two
directors to the Board of Directors of the Company (such voting rights will
continue until such time as the Distribution arrearage on the Preferred
Securities has been paid in full). The affirmative consent of the holders of at
least 66 2/3% of the outstanding Preferred Securities will be required by
INTRUST Capital for amendments to the Guarantee that would adversely affect the
rights or privileges of the holders of the Preferred Securities. No vote of the
holders of Preferred Securities will be required with respect to any amendments
to the Guarantee which do not adversely affect the rights or privileges of such
holders. See "Description of the Preferred Securities--Voting Rights;
Amendment of Trust Agreement." All guarantees and agreements contained in the
Guarantee will bind the successors, assigns, receivers, trustees and
representatives of the Company and will inure to the benefit of the holders of
the Preferred Securities then outstanding.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder. The
holders of not less than a majority in aggregate Liquidation Amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee.
Any holder of Preferred Securities may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against INTRUST Capital, the Guarantee
Trustee or any other Person.
The Company, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Company is in compliance with
all the conditions and covenants applicable to it under the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Company in performance of the Guarantee, undertakes to perform
only such duties as are specifically set forth in the Guarantee and, after
default with respect to the Guarantee, must exercise the same degree of care
and skill as a prudent person would exercise or use in the conduct of his or
her own affairs. Subject to such provisions, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by the Guarantee at the
request of any holder of any Preferred Securities, unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon (a)
full payment of the Redemption Price of the Preferred Securities, (b) full
payment of the amounts payable upon liquidation of INTRUST Capital, or (c)
distribution of the Subordinated Debentures to the holders of the Preferred
Securities. The Guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any holder of the Preferred Securities must
restore payment of any sums paid under such Preferred Securities or the
Guarantee.
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the laws
of the State of Kansas.
EXPENSE AGREEMENT
The Company will, pursuant to the Agreement as to Expenses and Liabilities
entered into by it under the Trust Agreement (the "Expense Agreement"),
irrevocably and unconditionally guarantee to each person or entity to whom
INTRUST Capital becomes indebted or liable, the full payment of any costs,
expenses or liabilities of INTRUST Capital, other than obligations of INTRUST
Capital to pay to the holders of the Preferred Securities or
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<PAGE> 38
other similar interests in INTRUST Capital of the amounts due such holders
pursuant to the terms of the Preferred Securities or such other similar
interests, as the case may be. Third party creditors of INTRUST Capital may
proceed directly against the Company under the Expense Agreement, regardless of
whether such creditors had notice of the Expense Agreement.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE SUBORDINATED DEBENTURES AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Preferred Securities
(to the extent INTRUST Capital has funds available for the payment of such
Distributions) are irrevocably guaranteed by the Company as and to the extent
set forth under "Description of the Guarantee." The Company and INTRUST
Capital believe that, taken together, the obligations of the Company under the
Subordinated Debentures, the Indenture, the Trust Agreement, the Expense
Agreement, and the Guarantee provide, in the aggregate, a full, irrevocable and
unconditional guarantee, on a subordinated basis, of payment of Distributions
and other amounts due on the Preferred Securities. No single document standing
alone or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these
documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the obligations of INTRUST Capital under the
Preferred Securities. If and to the extent that the Company does not make
payments on the Subordinated Debentures, INTRUST Capital will not pay
Distributions or other amounts due on the Preferred Securities. The Guarantee
does not cover payment of Distributions when INTRUST Capital does not have
sufficient funds to pay such Distributions. In such event, the remedy of a
holder of Preferred Securities is to institute a legal proceeding directly
against the Company for enforcement of payment of such Distributions to such
holder. The obligations of the Company under the Guarantee are subordinate and
junior in right of payment to all Senior Debt, Subordinated Debt and Additional
Senior Obligations of the Company.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on the
Subordinated Debentures, such payments will be sufficient to cover
Distributions and other payments due on the Preferred Securities, primarily
because (i) the aggregate principal amount of the Subordinated Debentures will
be equal to the sum of the aggregate stated Liquidation Amount of the Trust
Securities, (ii) the interest rate and interest and other payment dates on the
Subordinated Debentures will match the Distribution rate and Distribution and
other payment dates for the Preferred Securities, (iii) the Company will pay
for all and any costs, expenses and liabilities of INTRUST Capital (except the
obligations of INTRUST Capital to holders of the Preferred Securities), and
(iv) the Trust Agreement further provides that INTRUST Capital will not engage
in any activity that is not consistent with the limited purposes of INTRUST
Capital.
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
A holder of any Preferred Security may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Guarantee Trustee, INTRUST
Capital or any other Person. A default or event of default under any Senior
Debt, Subordinated Debt or Additional Senior Obligations of the Company would
not constitute a default or Event of Default. In the event, however, of payment
defaults under, or acceleration of, Senior Debt, Subordinated Debt or
Additional Senior Obligations of the Company, the subordination provisions of
the Indenture provide that no payments may be made in respect of the
Subordinated Debentures until such Senior Debt, Subordinated Debt or Additional
Senior Obligations has been paid in full or any payment default thereunder has
been cured or waived. Failure to make required payments on the Subordinated
Debentures would constitute an Event of Default.
LIMITED PURPOSE OF INTRUST CAPITAL
The Preferred Securities evidence a preferred undivided beneficial interest
in the assets of INTRUST Capital. INTRUST Capital exists for the exclusive
purposes of (i) issuing the Trust Securities representing undivided beneficial
interests in the assets of INTRUST Capital, (ii) investing the gross proceeds
of the Trust Securities in the
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<PAGE> 39
Subordinated Debentures issued by the Company, and (iii) engaging in only those
other activities necessary, advisable, or incidental thereto. A principal
difference between the rights of a holder of a Preferred Security and the
rights of a holder of a Subordinated Debenture is that a holder of a
Subordinated Debenture is entitled to receive from the Company the principal
amount of and interest accrued on Subordinated Debentures held, while a holder
of Preferred Securities is entitled to receive Distributions from INTRUST
Capital (or from the Company under the Guarantee) if and to the extent INTRUST
Capital has funds available for the payment of such Distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding-up or liquidation of
INTRUST Capital involving the liquidation of the Subordinated Debentures, the
holders of the Preferred Securities will be entitled to receive, out of assets
held by INTRUST Capital, the Liquidation Distribution in cash. See
"Description of the Preferred Securities--Liquidation Distribution Upon
Termination." Upon any voluntary or involuntary liquidation or bankruptcy of
the Company, the Property Trustee, as holder of the Subordinated Debentures,
would be a subordinated creditor of the Company, subordinated in right of
payment to all Senior Debt, Subordinated Debt and Additional Senior Obligations
of the Company (as set forth in the Indenture), but entitled to receive payment
in full of principal and interest before any shareholders of the Company
receive payments or distributions. Since the Company is the guarantor under the
Guarantee and has agreed to pay for all costs, expenses and liabilities of
INTRUST Capital (other than the obligations of INTRUST Capital to the holders
of its Preferred Securities), the positions of a holder of the Preferred
Securities and a holder of the Subordinated Debentures relative to other
creditors and to shareholders of the Company in the event of liquidation or
bankruptcy of the Company are expected to be substantially the same.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following is a summary of the material United States federal income tax
considerations that may be relevant to the purchasers of the Preferred
Securities which has been passed upon by Bryan Cave LLP, special counsel to the
Company, insofar as it relates to matters of law and legal conclusions. This
summary is based upon current provisions of the Internal Revenue Code of 1986,
as amended (the "Code"), Treasury regulations issued thereunder and current
administrative rulings and court decisions, all of which are subject to change
at any time, with possible retroactive effect. Subsequent changes may cause the
tax consequences to vary substantially from the consequences described below.
Furthermore, the authorities on which the following summary is based are
subject to various interpretations, and it is therefore possible that the
United States federal income tax treatment of the purchase, ownership, and
disposition of the Preferred Securities may differ from the treatment described
below.
No attempt has been made in the following discussion to comment on all
United States federal income tax matters affecting purchasers of the Preferred
Securities. Moreover, this summary generally focuses on holders of the
Preferred Securities who are individual citizens or residents of the United
States and who acquire the Preferred Securities on their original issue at
their offering price and hold the Preferred Securities as capital assets. This
summary has only limited application to dealers in securities, corporations,
estates, trusts or nonresident aliens and does not address all the tax
consequences that may be relevant to holders who may be subject to special tax
treatment, such as, for example, banks, thrifts, real estate investment trusts,
regulated investment companies, insurance companies, dealers in securities or
currencies, tax-exempt investors, or persons that will hold the Preferred
Securities as a position in a "straddle," as part of a "synthetic security"
or "hedge," as part of a "conversion transaction" or other integrated
investment, or as other than a capital asset. This summary also does not
address the tax consequences to persons that have a functional currency other
than the U.S. dollar or the tax consequences to shareholders, partners or
beneficiaries of a holder of the Preferred Securities. Further, it does not
include any description of any alternative minimum tax consequences or the tax
laws of any state or local government or of any foreign government that may be
applicable to the Preferred Securities. Accordingly, each prospective investor
should consult, and should rely exclusively on, such investor's own tax
advisors in analyzing the federal, state, local and foreign tax consequences of
the purchase, ownership or disposition of the Preferred Securities.
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<PAGE> 40
CLASSIFICATION OF THE SUBORDINATED DEBENTURES
The Company intends to take the position that the Subordinated Debentures
will be classified for United States federal income tax purposes as
indebtedness of the Company under current law, and, by acceptance of a
Preferred Security, each holder covenants to treat the Subordinated Debentures
as indebtedness and the Preferred Securities as evidence of an indirect
beneficial ownership interest in the Subordinated Debentures. No assurance can
be given, however, that such position of the Company will not be challenged by
the Internal Revenue Service or, if challenged, that such a challenge will not
be successful. The remainder of this discussion assumes that the Subordinated
Debentures will be classified for United States federal income tax purposes as
indebtedness of the Company.
CLASSIFICATION OF INTRUST CAPITAL
Under current law and assuming full compliance with the terms of the Trust
Agreement and Indenture (and certain other documents described herein), INTRUST
Capital will be classified for United States federal income tax purposes as a
grantor trust and not as an association taxable as a corporation. Accordingly,
for United States federal income tax purposes, each holder of the Preferred
Securities generally will be treated as owning an undivided beneficial interest
in the Subordinated Debentures, and upon the occurrence of an Extension Period
each holder will be required to include in its gross income any OID accrued
with respect to its allocable share of the Subordinated Debentures whether or
not cash is actually distributed to such holder.
POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD AND ORIGINAL ISSUE DISCOUNT
Under recently issued Treasury regulations (the "Regulations"), a debt
instrument will be deemed to be issued with OID if there is more than a
"remote" contingency that periodic stated interest payments due on the
instrument will not be timely paid. Because the exercise by the Company of its
option to defer the payment of stated interest on the Subordinated Debentures
would prevent the Company from declaring dividends on any class of equity, the
Company believes that the likelihood of its exercising the option is "remote"
within the meaning of the Regulations. As a result, the Company intends to take
the position that the Subordinated Debentures will not be deemed to be issued
with OID. Accordingly, based on this position, stated interest payments on the
Subordinated Debentures will be includible in the ordinary income of a holder
at the time that such payments are paid or accrued in accordance with the
holder's regular method of accounting. Because the Regulations have not yet
been addressed in any published rulings or other published interpretations
issued by the Internal Revenue Service, it is possible that the Internal
Revenue Service could take a position contrary to the position taken by the
Company.
If the Company were to exercise its option to defer the payment of stated
interest on the Subordinated Debentures, the Subordinated Debentures would be
treated, solely for purposes of the OID rules, as being "reissued" at such
time with OID. The amount of interest income includible in the taxable income
of a holder of the Subordinated Debentures would be determined on the basis of
a constant yield method over the remaining term of the instrument regardless of
the holder's method of tax accounting and the actual receipt of future payments
of stated interest on the Subordinated Debentures would no longer be separately
reported as taxable income. Consequently, a holder of the Preferred Securities
would be required to include OID in ordinary income, on a current basis, over
the period that the instrument is held even though the Company would not be
making any actual cash payments during the Extension Period. The amount of OID
that would accrue, in the aggregate, during the Extension Period would be
approximately equal to the amount of the cash payment due at the end of such
period. Moreover, under the Regulations, if the option to defer the payment of
interest income with respect to the Subordinated Debentures was determined not
to be "remote," the Subordinated Debentures would be treated as having been
originally issued with OID. In such event, all of a holder's taxable interest
income would be accounted for as OID and any OID included in income would
increase the holder's adjusted tax basis in the Subordinated Debentures and the
holder's actual receipt of interest payments would reduce such basis.
Because income on the Preferred Securities will constitute interest income
for United States federal income tax purposes, corporate holders of the
Preferred Securities will not be entitled to claim a dividends received
deduction in respect of such income.
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<PAGE> 41
MARKET DISCOUNT AND ACQUISITION PREMIUM
Holders of the Preferred Securities other than a holder who purchased the
Preferred Securities upon original issuance may be considered to have acquired
their undivided interests in the Subordinated Debentures with "market
discount" or "acquisition premium" as such phrases are defined for United
States federal income tax purposes. Such holders are advised to consult their
tax advisors as to the income tax consequences of the acquisition, ownership
and disposition of the Preferred Securities.
RECEIPT OF SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF INTRUST CAPITAL
Under certain circumstances, as described under "Description of the
Preferred Securities--Redemption" and "--Liquidation Distribution Upon
Termination," the Subordinated Debentures may be distributed to holders of the
Preferred Securities upon a liquidation of INTRUST Capital. Under current
United States federal income tax law, such a distribution would be treated as a
nontaxable event to each such holder and would result in such holder having an
adjusted tax basis in the Subordinated Debentures received in the liquidation
equal to such holder's adjusted tax basis in the Preferred Securities
immediately before the distribution. A holder's holding period in the
Subordinated Debentures so received in liquidation of INTRUST Capital would
include the period for which such holder held the Preferred Securities.
If, however, a Tax Event were to occur which resulted in INTRUST Capital
being treated as an association taxable as a corporation, the distribution
would likely constitute a taxable event to holders of the Preferred Securities.
Under certain circumstances described herein, the Subordinated Debentures may
be redeemed for cash and the proceeds of such redemption distributed to holders
in redemption of their Preferred Securities. Under current law, such a
redemption would, for United States federal income tax purposes, constitute a
taxable disposition of the redeemed Preferred Securities, and a holder would
recognize gain or loss as if the holder sold such Preferred Securities for
cash. See "Description of the Preferred Securities--Redemption" and
"--Liquidation Distribution Upon Termination."
DISPOSITION OF PREFERRED SECURITIES
Upon the sale of the Preferred Securities, a holder will recognize a gain
or loss in an amount equal to the difference between its adjusted tax basis in
the Preferred Securities and the amount realized in the sale (except to the
extent of any amount received in respect of accrued but unpaid interest not
previously included in income). A holder's adjusted tax basis in the Preferred
Securities generally will be its initial purchase price increased by OID (if
any) previously includible in the holder's gross income to the date of
disposition and decreased by payments (if any) received on the Preferred
Securities in respect of OID to the date of disposition. Such gain or loss
generally will be a capital gain or loss. As a result of the recently enacted
Taxpayer Relief Act of 1997, in the case of non-corporate taxpayers, the tax
rates applicable to capital gains from the disposition of Preferred Securities
generally will vary depending upon whether, at the time of disposition, the
Preferred Securities have been held for more than twelve months or more than
eighteen months.
The Preferred Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest (or OID if the Subordinated
Debentures are treated as having been issued, or reissued, with OID) with
respect to the underlying Subordinated Debentures. A holder who disposes of its
Preferred Securities between record dates for payments of distributions thereon
will be required to include in ordinary income (i) any portion of the amount
realized that is attributable to such accrued but unpaid interest to the extent
not previously included in income, or (ii) any amount of OID, in either case,
that has accrued on its pro rata share of the underlying Subordinated
Debentures during the taxable year of sale through the date of disposition. Any
such income inclusion will increase the holder's adjusted tax basis in its
Preferred Securities disposed of. To the extent that the amount realized in the
sale is less than the holder's adjusted tax basis, a holder will recognize a
capital loss. Subject to certain limited exceptions applicable to non-corporate
taxpayers, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes.
EFFECT OF RECENT CHANGES IN TAX LAWS
Certain legislative proposals were made in 1996 and 1997 which, if enacted,
could have adversely affected the ability of the Company to deduct interest
paid on the Subordinated Debentures. These proposals were not, however,
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incorporated into the legislation enacted on August 5, 1997 as the Taxpayer
Relief Act of 1997. Nevertheless, there can be no assurance that other
legislation enacted after the date hereof will not otherwise adversely affect
the ability of the Company to deduct the interest payable on the Subordinated
Debentures. Consequently, there can be no assurance that a Tax Event will not
occur. A Tax Event would permit the Company, upon approval of the Federal
Reserve if then required under applicable capital guidelines or policies of the
Federal Reserve, to cause a redemption of the Preferred Securities before, as
well as after, December 31, 2002. See "Description of the Subordinated
Debentures--Redemption" and "Description of the Preferred
Securities--Redemption--Tax Event Redemption, Capital Treatment Event
Redemption or Investment Company Event Redemption."
BACKUP WITHHOLDING AND INFORMATION REPORTING
Interest paid on the Subordinated Debentures, or the amount of OID accrued
on the Subordinated Debentures, if applicable, held of record by individual
citizens or residents of the United States, or certain trusts, estates, and
partnerships, will be reported to the Internal Revenue Service on Forms 1099,
which forms should be mailed to such holders of the Preferred Securities by
January 31 following each calendar year. Payments made on, and proceeds from
the sale of, the Preferred Securities may be subject to a "backup"
withholding tax (currently at 31%) unless the holder complies with certain
identification and other requirements. Any amounts withheld under the backup
withholding rules will be allowed as a credit against the holder's United
States federal income tax liability, provided the required information is
provided to the Internal Revenue Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON THE
PARTICULAR SITUATION OF A HOLDER OF THE PREFERRED SECURITIES. HOLDERS OF THE
PREFERRED SECURITIES SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES
FEDERAL OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
Employee benefit plans that are subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Code
("Plans"), generally may purchase Preferred Securities, subject to the
investing fiduciary's determination that the investment in Preferred Securities
satisfies ERISA's fiduciary standards and other requirements applicable to
investments by the Plan.
In any case, the Company and/or any of its affiliates may be considered a
"party in interest" (within the meaning of ERISA) or a "disqualified
person" (within the meaning of Section 4975 of the Code) with respect to
certain plans (generally, Plans maintained or sponsored by, or contributed to
by, any such persons with respect to which the Company or an affiliate is a
fiduciary or Plans for which the Company or an affiliate provides services).
The acquisition and ownership of Preferred Securities by a Plan (or by an
individual retirement arrangement or other Plans described in Section
4975(e)(1) of the Code) with respect to which the Company or any of its
affiliates is considered a party in interest or a disqualified person may
constitute or result in a prohibited transaction under ERISA or Section 4975 of
the Code, unless such Preferred Securities are acquired pursuant to and in
accordance with an applicable exemption.
As a result, Plans with respect to which the Company or any of its
affiliates is a party in interest or a disqualified person should not acquire
Preferred Securities unless such Preferred Securities are acquired pursuant to
and in accordance with an applicable exemption. Any other Plans or other
entities whose assets include Plan assets subject to ERISA or Section 4975 of
the Code proposing to acquire Preferred Securities should consult with their
own counsel.
UNDERWRITING
The Underwriters named below, represented by Stifel, Nicolaus & Company,
Incorporated (the "Representative"), have severally agreed, subject to the
terms and conditions set forth in the Underwriting Agreement, the form of which
is filed as an exhibit to the Registration Statement of which this Prospectus
forms a part, to purchase from INTRUST Capital the number of Preferred
Securities set forth opposite their respective names below. The several
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<PAGE> 43
Underwriters have agreed in the Underwriting Agreement, subject to the terms
and conditions set forth therein, to purchase all the Preferred Securities
offered hereby if any of the Preferred Securities are purchased. In the event
of default by an Underwriter, the Underwriting Agreement provides that, in
certain circumstances, purchase commitments of the nondefaulting Underwriters
may be increased or the Underwriting Agreement may be terminated.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER PREFERRED SECURITIES
----------- --------------------
<S> <C>
Stifel, Nicolaus & Company, Incorporated......................................
---------
Total......................................................................... 2,000,000
=========
</TABLE>
The Representative has advised INTRUST Capital that the Underwriters propose
initially to offer the Preferred Securities to the public at the public offering
price set forth on the cover page of this Prospectus, and to certain dealers at
such price less a concession not in excess of $ per Preferred Security.
The Underwriters may allow, and such dealers may reallow, a discount not in
excess of $ per Preferred Security to certain other dealers. After
the initial public offering, the public offering price, concession and
discount may be changed. Because the National Association of Securities
Dealers, Inc. ("NASD") is expected to view the Preferred Securities as
interests in a direct participation program, the offering of the Preferred
Securities is being made in compliance with the applicable provisions of Rule
2810 of the NASD's Conduct Rules.
In view of the fact that the proceeds of the sale of the Preferred
Securities will be used to purchase the Subordinated Debentures of the Company,
the Underwriting Agreement provides that the Company will pay as compensation
to the Underwriters for arranging the investment therein of such proceeds
$ per Preferred Security (or $ in the aggregate) for the
account of the several Underwriters.
INTRUST Capital has granted the Underwriters an option to purchase up to an
additional 300,000 Preferred Securities at the initial public offering price.
Such option, which expires 30 days from the date of this Prospectus, may be
exercised solely to cover over-allotments. To the extent that the Underwriters
exercise such option, each of the Underwriters will have a firm commitment,
subject to certain conditions, to purchase approximately the same percentage of
the additional Preferred Securities that the number of Preferred Securities to
be purchased initially by the Underwriter is of the 2,000,000 Preferred
Securities initially purchased by the Underwriter. To the extent that the
Underwriters exercise such option to purchase additional Preferred Securities,
INTRUST Capital will issue and sell to the Company additional Common Securities
in an aggregate Liquidation Amount equal to at least 3% of the total capital of
INTRUST Capital and the Company will issue and sell to INTRUST Capital
Subordinated Debentures in an aggregate principal amount equal to the aggregate
Liquidation Amount of the additional Preferred Securities being purchased
pursuant to the option.
Although, application has been made to have the Preferred Securities listed
for trading on the American Stock Exchange, Inc., no assurances can be made as
to the liquidity of such Preferred Securities or that an active and liquid
trading market will develop or, if developed, that it will continue. The
offering price and distribution rate have been determined by negotiations
among representatives of the Company and the Representative, and the offering
price of the Preferred Securities may not be indicative of the market price
following the offering.
INTRUST Capital and the Company have agreed to indemnify the Underwriters
against, or contribute to payments that the Underwriters may be required to
make in respect of, certain liabilities, including liabilities under the
Securities Act.
In connection with the offering of the Preferred Securities, the
Underwriters and any selling group members and their respective affiliates may
engage in transactions effected in accordance with Rule 104 of the Commission's
(as defined herein) Regulation M that are intended to stabilize, maintain or
otherwise affect the market price of the Preferred Securities. Such
transactions may include over-allotment transactions in which an Underwriter
creates a short position for its own account by selling more Preferred
Securities than it is committed to purchase from INTRUST Capital. In such
case, to cover all or part of the short position, the Underwriters may
exercise the over-allotment option described above or may purchase Preferred
Securities in the open market following completion of
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<PAGE> 44
the initial offering of the Preferred Securities. Each Underwriter also may
engage in stabilizing transactions in which it bids for, and purchases,
Preferred Securities at a level above that which might otherwise prevail in
the open market for the purpose of preventing or retarding a decline in the
market price of the Preferred Securities. The Underwriters also may reclaim
any selling concessions allowed to a dealer if the Underwriters repurchase
Preferred Securities distributed by that dealer. Any of the foregoing
transactions may result in the maintenance of a price for the Preferred
Securities at a level above that which might otherwise prevail in the open
market. Neither the Company nor the Underwriters make any representation
or prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the Preferred Securities.
The Underwriters are not required to engage in any of the foregoing
transactions and, if commenced, such transactions may be discontinued at any
time without notice.
VALIDITY OF SECURITIES
Certain matters of Delaware law relating to the validity of the Preferred
Securities, the enforceability of the Trust Agreement and the formation of
INTRUST Capital will be passed upon by Richards, Layton & Finger, special
Delaware counsel to the Company and INTRUST Capital. Certain legal matters for
the Company and INTRUST Capital, including the validity of the Guarantee and
the Subordinated Debentures, will be passed upon for the Company and INTRUST
Capital by Bryan Cave LLP, St. Louis, Missouri, counsel to the Company and
INTRUST Capital. Certain legal matters will be passed upon for the Underwriters
by Lewis, Rice & Fingersh, L.C., St. Louis, Missouri. Counsel for the Company,
INTRUST Capital and the Underwriters will rely on the opinion of Richards,
Layton & Finger as to matters of Delaware law. Certain matters relating to
United States federal income tax considerations will be passed upon for the
Company by Bryan Cave LLP.
EXPERTS
The audited consolidated financial statements of the Company and its
subsidiaries included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1996, and incorporated by reference in this Prospectus and
elsewhere in this Registration Statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with
respect thereto and are incorporated by reference herein in reliance upon the
authority of said firm as experts in giving said reports.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, previously filed by the Company with the
Commission pursuant to Section 15(d) of the Exchange Act, are incorporated
herein by reference:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1996; and
(b) The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997.
All reports filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Preferred
Securities offered hereby shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A
COPY OF ANY OR ALL OF THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE (OTHER
THAN EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED BY
REFERENCE IN SUCH DOCUMENTS). WRITTEN REQUESTS FOR SUCH COPIES SHOULD BE
DIRECTED TO JAY L. SMITH, SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER,
INTRUST FINANCIAL CORPORATION, 105 NORTH MAIN STREET, BOX ONE, WICHITA, KANSAS
67202. TELEPHONE REQUESTS MAY BE DIRECTED TO (316) 383-1111.
40
<PAGE> 45
AVAILABLE INFORMATION
This Prospectus constitutes a part of a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Company and INTRUST Capital with the Securities and
Exchange Commission (the "Commission") under the Securities Act, with respect
to the Preferred Securities, the Subordinated Debentures and the Guarantee.
This Prospectus does not contain all of the information set forth in such
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission, although it does include a summary
of the material terms of the Trust Agreement, the Indenture and the Guarantee.
Reference is made to such Registration Statement and to the exhibits relating
thereto for further information with respect to the Company, INTRUST Capital,
the Preferred Securities, the Subordinated Debentures and the Guarantee. Any
statements contained herein concerning the provisions of any document filed as
an exhibit to the Registration Statement or otherwise filed with the Commission
or incorporated by reference herein are not necessarily complete, and, in each
instance, reference is made to the copy of such document so filed for a more
complete description of the matter involved. Each such statement is qualified
in its entirety by such reference.
The Company is subject to the informational requirements of the Exchange
Act and, in accordance therewith, files reports and other information with the
Commission. INTRUST Capital is not currently subject to the information
reporting requirements of the Exchange Act and, although INTRUST Capital will
become subject to such requirements upon the effectiveness of the Registration
Statement, it is not expected that INTRUST Capital will be filing separate
reports under the Exchange Act. The Company's reports and other information can
be inspected and copied at the following public reference facilities maintained
by the Commission: 450 Fifth Street, N.W., Washington, D.C. 20549; 7 World
Trade Center, Suite 1300, New York, New York 10048; and the Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of
such material may also be obtained by mail from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at
prescribed rates. The Commission maintains an Internet web site that contains
reports, proxy and information statements and other information regarding
issuers who file electronically with the Commission. The address of that site
is http://www.sec.gov.
No separate financial statements of INTRUST Capital have been included
herein. The Company does not consider that such financial statements would be
material to holders of Preferred Securities because (i) all of the voting
securities of INTRUST Capital will be owned by the Company, a reporting company
under the Exchange Act; (ii) INTRUST Capital has no independent operations but
exists solely for the sole purpose of issuing securities representing undivided
beneficial interests in the assets of INTRUST Capital and investing the
proceeds thereof in Subordinated Debentures issued by the Company, and (iii)
the obligations of the Company described herein to provide certain indemnities
in respect of and be responsible for certain costs, expenses, debts and
liabilities of INTRUST Capital under the Indenture and pursuant to the Trust
Agreement, the Guarantee issued by Company with respect to the Preferred
Securities, the Subordinated Debentures purchased by INTRUST Capital and the
related Indenture, taken together, constitute, in the belief of the Company and
INTRUST Capital, a full and unconditional guarantee of payments due on the
Preferred Securities. See "Description of the Subordinated Debentures" and
"Description of the Guarantee."
41
<PAGE> 46
- --------------------------------------------------
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
----
<S> <C>
Prospectus Summary.............................................................. 2
Summary Consolidated Financial Data............................................. 7
Risk Factors.................................................................... 8
Use of Proceeds................................................................. 13
Market for the Preferred Securities............................................. 13
Accounting Treatment............................................................ 13
Capitalization.................................................................. 14
Description of the Preferred Securities......................................... 15
Description of the Subordinated Debentures...................................... 24
Description of the Guarantee.................................................... 32
Relationship Among the Preferred Securities, the Subordinated Debentures and the
Guarantee..................................................................... 34
Certain Federal Income Tax Consequences......................................... 35
ERISA Considerations............................................................ 38
Underwriting.................................................................... 38
Validity of Securities.......................................................... 40
Experts......................................................................... 40
Incorporation of Certain Documents by Reference................................. 40
Available Information........................................................... 41
</TABLE>
------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY INTRUST
FINANCIAL CORPORATION, INTRUST CAPITAL TRUST OR THE UNDERWRITERS. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF INTRUST FINANCIAL CORPORATION SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
THIS PROSPECTUS DOES NOT CONSTITUTES AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL.
- --------------------------------------------------
--------------------------------------------------
2,000,000 PREFERRED SECURITIES
INTRUST
CAPITAL TRUST
% CUMULATIVE TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
GUARANTEED, AS DESCRIBED HEREIN, BY
INTRUST BANK
INTRUST
FINANCIAL
CORPORATION
-------------------
$50,000,000
% SUBORDINATED DEBENTURES
OF
INTRUST
FINANCIAL
CORPORATION
-------------------
Prospectus
, 1997
------------------------
STIFEL, NICOLAUS & COMPANY
INCORPORATED
---------------------------------------------
<PAGE> 47
PART II--INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14--OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
SEC Registration Fee.............................. $17,424
NASD Filing Fee................................... 6,250
American Stock Exchange, Inc. Listing Fee......... 15,000
Blue Sky Qualification Fees and Expenses..........
Accounting Fees and Expenses......................
Legal Fees and Expenses...........................
Trustees' Fees and Expenses.......................
Printing and Engraving Expenses...................
Transfer and Registrar Fees.......................
Miscellaneous.....................................
-------
Total......................................... $
=======
</TABLE>
ITEM 15--INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 17-6305 of the Kansas general corporation code provides for
indemnification by a corporation or its officers and directors and certain
other persons as follows:
(a) A corporation shall have power to indemnify any person who was or
is a party, or is threatened to be made a party, to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, other than an action by or in the right
of the corporation, by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection
with such action, suit or proceeding, including attorney fees, if such
person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the corporation; and,
with respect to any criminal action or proceeding, had no reasonable cause
to believe such person's conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a
manner which such person reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that such person's
conduct was unlawful.
(b) A corporation shall have power to indemnify any person who was or
is a party, or is threatened to be made a party, to any threatened,
pending or completed action or suit by or in the right of the corporation
to procure a judgment in its favor by reason of the fact that such person
is or was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses actually and reasonably
incurred by such person in connection with the defense or settlement of
such action or suit, including attorney fees, if such person acted in good
faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the court in which such
action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnify for such
expenses which the court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in the defense
of any action, suit or proceeding referred to in subsections (a) and (b),
or in defense of any claim, issue or matter therein, such director,
officer, employee or agent shall be indemnified against expenses actually
and reasonably incurred by such person in connection therewith, including
attorney fees.
II-1
<PAGE> 48
(d) Any indemnification under subsections (a) and (b), unless ordered
by a court, shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because such
director, officer, employee or agent has met the applicable standard or
conduct set forth in subsections (a) and (b). Such determination shall be
made (1) by the board of directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suit or
proceeding, or (2) if such a quorum is not obtainable, or even if
obtainable, a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (3) by the stockholders.
(e) Expenses incurred by a director or officer in defending any civil
or criminal action, suit or proceeding may be paid by the corporation in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of the director or officer to
repay such amount if it is ultimately determined that the officer or
director is not entitled to be indemnified by the corporation as
authorized in this section. Such expenses incurred by other employees and
agents may also be paid upon such terms and conditions, if any, as the
board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusively of any other rights to which those seeking
indemnifications or advancement of expense may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in a person's official capacity and as to
action in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain insurance
of behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or any other enterprise
against any liability asserted against such person and incurred by such
person in any such capacity, or arising out of such person's status as
such, whether or not the corporation would have the power to indemnify
such person against such liability under this section.
(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers
and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under
this section with respect to the resulting or surviving corporation as
such person would have with respect to such constituent corporation if its
separate existence had continued.
(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to any employee
benefit plan; and references to "serving at the request of the
corporation" shall include any service as a director, officer, employee
or agent of the corporation which imposes duties on, or involves services
by, such director, officer, employee, or agent with respect to an employee
benefit plan, its participants or beneficiaries; and a person who acted in
good faith and in a manner such person reasonably believed to be in the
interest of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best
interests of the corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
Section 17-6002(b)(8) of the Kansas general corporation code provides that
a corporation's certificate of incorporation may contain:
(8) A provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders, policy holders or members for
monetary damages for breach of fiduciary duty as a director, provided that such
provision shall not eliminate or limit the liability of a director (A) for any
breach of the director's duty of loyalty to the
II-2
<PAGE> 49
corporation or its stockholders, policyholders or members, (B) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (C) under the provisions of K.S.A. 17-6424 [relating
to unlawful dividend payments or stock redemptions or repurchases] and
amendments thereto or (D) for any transaction from which the director derived
an improper personal benefit. No such provision shall eliminate or limit the
liability of a director for any act or omission occurring prior to the date
when such provision becomes effective. All references in this subsection to a
director shall also be deemed to refer to a member of the governing body of a
corporation which is not authorized to issue capital stock.
Article Ninth of the Company's Restated Articles of Incorporation provides:
Any person, or such person's heir, executor or administrator may be
indemnified or reimbursed by the Company for reasonable expenses actually
incurred in connection with any action, suit or proceeding, civil or criminal,
to which such person shall be made a party by reason of being or having been a
director, officer or employee of the Company or of any firm, corporation or
organization which such person served in any such capacity at the request of
the Company; provided, however, that no person shall be so indemnified or
reimbursed in relation to any matter in such action, suit or pending as to
which such person shall finally be adjudged to have been guilty of or liable
for gross negligence, willful misconduct or criminal acts in the performance of
such person's duties to the Company; and, provided further, that no person
shall be so indemnified or reimbursed in relation to any matter in such action,
suit or proceeding which has been made the subject of a compromise settlement,
except with the approval of a court of competent jurisdiction, or the holders
of record of a majority of the outstanding shares of the Company, or the Board
of Directors, acting by vote of Directors not parties to the same or
substantially the same action, suit or proceeding, constituting a majority of
the whole number of Directors. The foregoing right of indemnification or
reimbursement shall specifically include all matters arising from merger and
acquisition decisions made by the director, officer or employee and shall not
be exclusive of other rights to which such person, or such person's heir,
executor or adminitrator may be entitled as a matter of law.
The Company may, upon the affirmative vote of a majority of its Board of
Directors, purchase insurance for the purpose of indemnifying its directors,
officers and other employees to the extent that such indemnification is allowed
in the preceding paragraph. Such insurance may, but need not, be for the
benefit of all directors, officers or employees.
II-3
<PAGE> 50
ITEM 16--EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
1.1 Form of Underwriting Agreement.
1.2 Form of Agreement Among Underwriters
4.1 Form of Indenture.
4.2 Form of Subordinated Debenture (included as an exhibit to Exhibit
4.1).
4.3 Certificate of Trust of INTRUST Capital Trust.
4.4 Trust Agreement of INTRUST Capital Trust.
4.5 Form of Amended and Restated Trust Agreement.
4.6 Form of Preferred Security Certificate (included as an exhibit to
Exhibit 4.5).
4.7 Form of Preferred Securities Guarantee Agreement.
4.8 Form of Agreement as to Expenses and Liabilities (included as an
exhibit to Exhibit 4.5).
5.1 Opinion of Bryan Cave LLP, as to the validity of the issuance of
the Subordinated Debentures.
5.2 Opinion of Richards, Layton & Finger, special Delaware counsel, as
to the legality of the Preferred Securities.
8.1 Opinion of Bryan Cave LLP, as to certain federal income tax
matters.
12.1 Statements Regarding Computation of Ratio of Earnings to Fixed
Charges.
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants.
23.2 Consent of Bryan Cave LLP (included in their opinions field
herewith as Exhibits 5.1 and 8.1).
23.3 Consent of Richards, Layton & Finger (included in their opinions
filed herewith as Exhibit 5.2).
24.1 Power of Attorney (included on the signature page).
25.1 Form T-1 Statement of Eligibility of State Street Bank and Trust
Company to act as trustee under the Indenture.
25.2 Form T-1 Statement of Eligibility of State Street Bank and Trust
Company to act as trustee under the Amended and Restated Trust
Agreement.
25.3 Form T-1 Statement of Eligibility of State Street Bank and Trust
Company to act as trustee under the Preferred Securities Guarantee
Agreement.
(b) Financial Statement Schedules--Not applicable as all required
information is contained in the financial statements and the notes thereto or
in the selected financial data.
ITEM 17--UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, (the "Act") may be permitted to directors, officers and
controlling persons of the Company pursuant to the provisions described under
"Item 15--Indemnification of Directors and Officers" above, or otherwise, the
Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
The Company hereby undertakes that: (1) For purposes of determining any
liability under the Act, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Company pursuant to Rule
424(b)(1) or (4) or 497(h) under the Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective; and (2) For
the purpose of determining any liability under the Act, each post-effective
amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-4
<PAGE> 51
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Wichita, Kansas on November 18, 1997.
INTRUST FINANCIAL CORPORATION
By: /s/ C. Q. CHANDLER
------------------------------------
C. Q. Chandler
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, the undersigned
registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Wichita, Kansas on November 18, 1997.
INTRUST CAPITAL TRUST
By: /s/ C. Q. CHANDLER
------------------------------------
C.Q. Chandler, Trustee
By: /s/ JAY L. SMITH
------------------------------------
Jay L. Smith, Trustee
By: /s/ BRIAN SULLIVAN
------------------------------------
Brian Sullivan, Trustee
II-5
<PAGE> 52
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints C. Q. Chandler IV, Jay L. Smith and Brian
Sullivan and each of them (with full power to each of them to act alone), his or
her true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign any or all amendments (including
post-effective amendments) to this Registration Statement, including any
Registration Statement for the same offering that is to be effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ C. Q. CHANDLER Chairman of the Board and November 18, 1997
- ------------------------------- Chief Executive Officer
C. Q. Chandler (Principal Executive Officer
/s/ JAY L. SMITH Senior Vice President and November 18, 1997
- ------------------------------- Chief Financial Officer
Jay L. Smith (Principal Financial and
Principal Accounting Officer)
/s/ RONALD L. BALDWIN Director November 18, 1997
- -------------------------------
Ronald L. Baldwin
/s/ C. ROBERT BUFORD Director November 18, 1997
- -------------------------------
C. Robert Buford
/s/ FRANK L. CARNEY Director November 18, 1997
- -------------------------------
Frank L. Carney
Director November , 1997
- -------------------------------
Richard G. Chance
/s/ C. Q. CHANDLER IV Director November 18, 1997
- -------------------------------
C. Q. Chandler IV
/s/ GEORGE T. CHANDLER Director November 18, 1997
- -------------------------------
George T. Chandler
/s/ STEPHEN L. CLARK Director November 18, 1997
- -------------------------------
Stephen L. Clark
/s/ ROBERT L. DARMON Director November 18, 1997
- -------------------------------
Robert L. Darmon
II-6
<PAGE> 53
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ CHARLES W. DIEKER Director November 18, 1997
- -------------------------------
Charles W. Dieker
/s/ W. J. EASTON Director November 18, 1997
- -------------------------------
W. J. Easton
/s/ MARTIN K. EBY, JR. Director November 18, 1997
- -------------------------------
Martin K. Eby, Jr.
/s/ RICHARD M. KERSCHEN Director November 18, 1997
- -------------------------------
Richard M. Kerschen
/s/ THOMAS D. KITCH Director November 18, 1997
- -------------------------------
Thomas D. Kitch
/s/ ERIC T. KNORR Director November 18, 1997
- -------------------------------
Eric T. Knorr
Director November , 1997
- -------------------------------
Charles G. Koch
/s/ J. V. LENTELL Director November 18, 1997
- -------------------------------
J. V. Lentell
/s/ WILLIAM B. MOORE Director November 18, 1997
- -------------------------------
William B. Moore
Director November , 1997
- -------------------------------
Paul A. Seymour, Jr.
/s/ DONALD C. SLAWSON Director November 18, 1997
- -------------------------------
Donald C. Slawson
/s/ JOHN T. STEWART III Director November 18, 1997
- -------------------------------
John T. Stewart III
</TABLE>
II-7
<PAGE> 54
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
1.1 Form of Underwriting Agreement.
1.2 Form of Agreement Among Underwriters.
4.1 Form of Indenture.
4.2 Form of Subordinated Debenture (included as an exhibit to Exhibit 4.1).
4.3 Certificate of Trust of INTRUST Capital Trust.
4.4 Trust Agreement of INTRUST Capital Trust.
4.5 Form of Amended and Restated Trust Agreement.
4.6 Form of Preferred Security Certificate (included as an exhibit to Exhibit 4.5).
4.7 Form of Preferred Securities Guarantee Agreement.
4.8 Form of Agreement as to Expenses and Liabilities (included as an exhibit to Exhibit 4.5).
5.1 Opinion of Bryan Cave LLP, as to the validity of the issuance of the Subordinated Debentures.
5.2 Opinion of Richards, Layton & Finger, special Delaware counsel, as to the legality of the Preferred
Securities.
8.1 Opinion of Bryan Cave LLP, as to certain federal income tax matters.
12.1 Statements Regarding Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants.
23.2 Consent of Bryan Cave LLP (included in their opinions field herewith as Exhibits 5.1 and 8.1).
23.3 Consent of Richards, Layton & Finger (included in their opinions filed herewith as Exhibit 5.2).
24.1 Power of Attorney (included on the signature page).
25.1 Form T-1 Statement of Eligibility of State Street Bank and Trust Company to act as trustee under the
Indenture.
25.2 Form T-1 Statement of Eligibility of State Street Bank and Trust Company to act as trustee under the
Amended and Restated Trust Agreement.
25.3 Form T-1 Statement of Eligibility of State Street Bank and Trust Company to act as trustee under the
Preferred Securities Guarantee Agreement.
</TABLE>
II-8
<PAGE> 1
2,000,000 Preferred Securities
INTRUST Capital Trust
----% Cumulative Trust Preferred Securities
(Liquidation Amount of $25 per Preferred Security)
UNDERWRITING AGREEMENT
----------------------
--------------- --, 1997
STIFEL, NICOLAUS & COMPANY, INCORPORATED
As Representative of the Several Underwriters
named in Schedule I hereto
500 North Broadway
St. Louis, Missouri 63102
Dear Ladies and Gentlemen:
INTRUST Financial Corporation, a Kansas corporation (the
"Company"), and its financing subsidiary, INTRUST Capital Trust, a Delaware
business trust (the "Trust," and hereinafter together with the Company, the
"Offerors"), propose that the Trust issue and sell to the several
underwriters listed on Schedule I hereto (the "Underwriters"), pursuant to
the terms of this Agreement, 2,000,000 of the Trust's ----% Cumulative Trust
Preferred Securities, with a liquidation amount of $25.00 per preferred
security (the "Preferred Securities"), to be issued under the Trust Agreement
(as hereinafter defined), the terms of which are more fully described in the
Prospectus (as hereinafter defined). The aforementioned 2,000,000 Preferred
Securities to be sold to the Underwriters are herein called the "Firm
Preferred Securities." Solely for the purpose of covering over-allotments in
the sale of the Firm Preferred Securities, the Offerors further propose that
the Trust issue and sell to the Underwriters, at their option (the "Option"),
up to an additional 300,000 Preferred Securities (the "Option Preferred
Securities") upon exercise of the over-allotment option granted in Section 1
hereof. The Firm Preferred Securities and any Option Preferred Securities
are herein collectively referred to as the "Designated Preferred Securities."
You are acting as representative of the Underwriters and in such capacity are
hereinafter referred to as the "Representative."
The Offerors hereby confirm as follows their agreement with each
of the Underwriters in connection with the proposed purchase of the
Designated Preferred Securities.
<PAGE> 2
1. SALE, PURCHASE AND DELIVERY OF DESIGNATED PREFERRED SECURITIES;
---------------------------------------------------------------
DESCRIPTION OF DESIGNATED PREFERRED SECURITIES.
- ----------------------------------------------
(a) On the basis of the representations, warranties and
agreements herein contained, and subject to the terms and conditions herein
set forth, the Offerors hereby agree that the Trust shall issue and sell to
each of the Underwriters and each of the Underwriters agrees, severally and
not jointly, to purchase from the Trust, at a purchase price of $25.00 per
share (the "Purchase Price"), the respective number of Firm Preferred
Securities set forth opposite the name of such Underwriter in Schedule I
hereto. Because the proceeds from the sale of the Firm Preferred Securities
will be used to purchase from the Company its Debentures (as hereinafter
defined and as described in the Prospectus), the Company shall pay to each
Underwriter a commission of $----- per Firm Preferred Security purchased (the
"Firm Preferred Securities Commission"). In accordance with Section 9
hereof, the Representative may by notice to the Company amend Schedule I to
add, eliminate or substitute names set forth therein (other than to eliminate
the name of the Representative) and to amend the number of Preferred
Securities to be purchased by any firm or corporation listed thereon,
provided that the total number of Firm Preferred Securities listed on
Schedule I shall equal 2,000,000.
In addition, on the basis of the representations, warranties and
agreements herein contained and subject to the terms and conditions herein
set forth, the Trust hereby grants to the Underwriters, severally and not
jointly, an option to purchase all or any portion of the 300,000 Option
Preferred Securities, and upon the exercise of such option in accordance with
this Section 1, the Offerors hereby agree that the Trust shall issue and sell
to the Underwriters, severally and not jointly, all or any portion of the
Option Preferred Securities at the same Purchase Price per share paid for the
Firm Preferred Securities. If any Option Preferred Securities are to be
purchased, each Underwriter, severally and not jointly, agrees to purchase
from the Trust that proportion (subject to adjustment as the Representative
may determine to avoid fractional shares) of the number of Option Preferred
Securities to be purchased that the number of Firm Preferred Securities set
forth opposite the name of such Underwriter in Schedule I hereto (or such
number increased as set forth in Section 9 hereto) bears to 2,000,000.
Because the proceeds from the sale of the Option Preferred Securities will be
used to purchase from the Company its Debentures, the Company shall pay to
each Underwriter a commission of $----- per Option Preferred Security for
each Option Preferred Security purchased (the "Option Preferred Securities
Commission"). The option hereby granted (the "Option") shall expire 30 days
after the date upon which the Registration Statement (as hereinafter defined)
becomes effective and may be exercised only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Firm Preferred Securities. The Option may be exercised
in whole or in part at any time (but not more than once) by the
Representative giving notice (confirmed in writing) to the Trust setting
forth the number of Option Preferred Securities as to which the Underwriters
are exercising the Option and the time, date and place for payment and
delivery of certificates for such
<PAGE> 3
Option Preferred Securities. Such time and date of payment and delivery for the
Option Preferred Securities (the "Option Closing Date") shall be determined by
the Representative, but shall not be earlier than two nor later than five
business days after the exercise of such Option, nor in any event prior to the
Closing Date (as hereinafter defined). The Option Closing Date may be the same
as the Closing Date.
Payment of the Purchase Price and the Firm Preferred Securities
Commission and delivery of certificates for the Firm Preferred Securities
shall be made at the offices of Stifel, Nicolaus & Company, Incorporated, 500
North Broadway, St. Louis, Missouri 63102, or such other place as shall be
agreed to by the Representative and the Offerors, at 10:00 a.m., St. Louis
time, on -------- --, 1997, or at such other time not more than five full
business days thereafter as the Offerors and the Representative shall
determine (the "Closing Date"). If the Underwriters exercise the option to
purchase any or all of the Option Preferred Securities, payment of the
Purchase Price and Option Preferred Securities Commission and delivery of
certificates for such Option Preferred Securities shall be made on the Option
Closing Date at the offices of Stifel, Nicolaus & Company, Incorporated, 500
North Broadway, St. Louis, Missouri 63102, or at such other place as the
Offerors and the Representative shall determine. Such payments shall be made
to an account designated by the Trust by wire transfer or certified or bank
cashier's check, in same day funds, in the amount of the Purchase Price
therefor, against delivery by or on behalf of the Trust to the Representative
for the respective accounts of the several Underwriters of certificates for
the Designated Preferred Securities to be purchased by the Underwriters.
The Agreement contained herein with respect to the timing of the
Closing Date and Option Closing Date is intended to, and does, constitute an
express agreement, as described in Rule 15c6-1(c) and (d) promulgated under
the 1934 Act (as defined herein), for a settlement date other than [four]
business days after the date of the contract.
Certificates for Designated Preferred Securities to be purchased
by the Underwriters shall be delivered by the Offerors in fully registered
form in such authorized denominations and registered in such names as the
Representative shall request in writing not later than 12:00 noon, St. Louis
time, two business days prior to the Closing Date and, if applicable, the
Option Closing Date. Certificates for Designated Preferred Securities to be
purchased by the Underwriters shall be made available by the Offerors to the
Representative for inspection, checking and packaging at such office as the
Representative may designate in writing not later than 1:00 p.m., St. Louis
time, on the last business day prior to the Closing Date and, if applicable,
on the last business day prior to the Option Closing Date.
Time shall be of the essence, and delivery of the certificates
for the Designated Preferred Securities at the time and place specified
pursuant to this Agreement is a further condition of the obligations of each
Underwriter hereunder.
<PAGE> 4
(b) The Offerors propose that the Trust issue the Designated
Preferred Securities pursuant to an Amended and Restated Trust Agreement
among State Street Bank and Trust Company, as Property Trustee, Wilmington
Trust Company, as Delaware Trustee, the Administrative Trustees named therein
(collectively, the "Trustees"), and the Company, in substantially the form
heretofore delivered to the Representative, said Agreement being hereinafter
referred to as the "Trust Agreement." In connection with the issuance of the
Designated Preferred Securities, the Company proposes (i) to issue its
Subordinated Debentures ( the "Debentures") pursuant to an Indenture, to be
dated as of -------- --, 1997, between the Company and State Street Bank and
Trust Company, as Trustee (the "Indenture"), and (ii) to guarantee certain
payments on the Designated Preferred Securities pursuant to a Guarantee
Agreement between the Company and State Street Bank and Trust Company, as
guarantee trustee (the "Guarantee"), to the extent described therein.
2. REPRESENTATIONS AND WARRANTIES.
------------------------------
(a) The Offerors jointly and severally represent and warrant
to, and agree with, each of the Underwriters that:
(i) The reports filed with the Securities and Exchange
Commission (the "Commission") by the Company under the Securities
Exchange Act of 1934, as amended (the "1934 Act") and the rules and
regulations thereunder (the "1934 Act Regulations") at the time they
were filed with the Commission, complied as to form in all material
respects with the requirements of the 1934 Act and the 1934 Act
Regulations and did not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
in which they were made, not misleading.
(ii) The Offerors have prepared and filed with the
Commission a registration statement on Form S-3 (File Numbers
333------- and 333--------01) for the registration of the Designated
Preferred Securities, the Guarantee and $57,500,000 aggregate principal
amount of Debentures under the Securities Act of 1933, as amended (the
"1933 Act"), including the related prospectus subject to completion,
and one or more amendments to such registration statement may have been
so filed, in each case in conformity in all material respects with the
requirements of the 1933 Act, the rules and regulations promulgated
thereunder (the "1933 Act Regulations") and the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act") and the rules and
regulations thereunder. Copies of such registration statement,
including any amendments thereto, each Preliminary Prospectus (as
defined herein) contained therein and the exhibits, financial
statements and schedules to such registration statement, as finally
amended and revised, have heretofore been delivered by the Offerors to
the Representative. After the execution of this Agreement, the
Offerors will file with the Commission (A) if such registration
statement, as it may have been amended, has been declared by the
Commission to be effective under the 1933 Act, a prospectus in the form
most recently included in an
<PAGE> 5
amendment to such registration statement (or, if no such amendment shall
have been filed, in such registration statement), with such changes or
insertions as are required by Rule 430A of the 1933 Act Regulations ("Rule
430A") or permitted by Rule 424(b) of the 1933 Act Regulations ("Rule
424(b)") and as have been provided to and not objected to by the
Representative prior to (or as are agreed to by the Representative
subsequent to) the execution of this Agreement, or (B) if such
registration statement, as it may have been amended, has not been declared
by the Commission to be effective under the 1933 Act, an amendment to such
registration statement, including a form of final prospectus, necessary to
permit such registration statement to become effective, a copy of which
amendment has been furnished to and not objected to by the Representative
prior to (or is agreed to by the Representative subsequent to) the
execution of this Agreement. As used in this Agreement, the term
"Registration Statement" means such registration statement, as amended at
the time when it was or is declared effective under the 1933 Act,
including (1) all financial schedules and exhibits thereto, (2) all
documents (or portions thereof) incorporated by reference therein filed
under the 1934 Act, and (3) any information omitted therefrom pursuant to
Rule 430A and included in the Prospectus (as hereinafter defined); the
term "Preliminary Prospectus" means each prospectus subject to completion
filed with such registration statement or any amendment thereto
including all documents (or portions thereof) incorporated by reference
therein under the 1934 Act (including the prospectus subject to
completion, if any, included in the Registration Statement and each
prospectus filed pursuant to Rule 424(a) under the 1933 Act); and the
term "Prospectus" means the prospectus first filed with the Commission
pursuant to Rule 424(b)(1) or (4) or, if no prospectus is required to
be filed pursuant to Rule 424(b)(1) or (4), the prospectus included in
the Registration Statement, in each case including the financial
schedules and all documents (or portions thereof) incorporated by
reference therein under the 1934 Act. The date on which the
Registration Statement becomes effective is hereinafter referred to as
the "Effective Date."
(iii) The documents incorporated by reference in the
Preliminary Prospectus or Prospectus or from which information is so
incorporated by reference, when they became effective or were filed
with the Commission, as the case may be, complied in all material
respects with the requirements of the 1934 Act and the 1934 Act
Regulations, and when read together and with the other information in
the Preliminary Prospectus or Prospectus, as the case may be, at the
time the Registration Statement became or becomes effective and at the
Closing Date and any Option Closing Date, did not or will not, as the
case may be, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
<PAGE> 6
(iv) No order preventing or suspending the use of any
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) has been issued by the Commission, nor has the
Commission, to the knowledge of the Offerors, threatened to issue such
an order or instituted proceedings for that purpose. Each Preliminary
Prospectus, at the time of filing thereof, (A) complied in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations and (B) did not contain an untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
--------
however, that this representation and warranty does not apply to
-------
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Offerors by any of the
Underwriters expressly for inclusion in the Prospectus beneath the
heading "Underwriting" and the last sentence on the cover page of the
Prospectus (such information referred to herein as the "Underwriters'
Information").
(v) At the Effective Date and at all times subsequent
thereto, up to and including the Closing Date and, if applicable, the
Option Closing Date, the Registration Statement and any post-effective
amendment thereto (A) complied and will comply in all material respects
with the requirements of the 1933 Act, the 1933 Act Regulations and the
Trust Indenture Act (and the rules and regulations thereunder) and (B)
did not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. At the
Effective Date and at all times when the Prospectus is required to be
delivered in connection with offers and sales of Designated Preferred
Securities, including, without limitation, the Closing Date and, if
applicable, the Option Closing Date, the Prospectus, as amended or
supplemented, (A) complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
the Trust Indenture Act (and the rules and regulations thereunder) and
(B) did not contain and will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
--------
however, that this representation and warranty does not apply to the
-------
Underwriters' Information.
(vi) (A) The Company is duly organized, validly
existing and in good standing under the laws of the State of Kansas, with
full corporate and other power and authority to own, lease and operate its
properties and conduct its business as described in and contemplated by
the Registration Statement and the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) and as
currently being conducted and is duly registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended (the
"BHC Act").
<PAGE> 7
(B) The Trust has been duly created and is
validly existing as a statutory business trust in good standing under the
Delaware Business Trust Act with the power and authority (trust and
other) to own its property and conduct its business as described in the
Registration Statement and Prospectus, to issue and sell its common
securities (the "Common Securities") to the Company pursuant to the
Trust Agreement, to issue and sell the Designated Preferred Securities,
to enter into and perform its obligations under this Agreement and to
consummate the transactions herein contemplated; the Trust has no
subsidiaries and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
the ownership of its property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Trust; the Trust has
conducted and will conduct no business other than the transactions
contemplated by this Agreement and described in the Prospectus; the
Trust is not a party to or bound by any agreement or instrument other
than this Agreement and the Trust Agreement among the Administrative
Trustees and Wilmington Trust Company dated November ---, 1997 (the
"Original Trust Agreement"); at the Closing Date or any Option Closing
Date, the Trust will not be a party to or be bound by any agreement or
instrument other than the Trust Agreement and the agreements and
instruments contemplated by the Trust Agreement and described in the
Prospectus; the Trust has no liabilities or obligations other than
those arising out of the transactions contemplated by this Agreement
and the Trust Agreement and described in the Prospectus; the Trust is
not a party to or subject to any action, suit or proceeding of any
nature; the Trust is not, and at the Closing Date or any Option Closing
Date will not be, to the knowledge of the Offerors, classified as an
association taxable as a corporation for United States federal income
tax purposes; and the Trust is, and as of the Closing Date or any
Option Closing Date will be, treated as a consolidated subsidiary of
the Company pursuant to generally accepted accounting principles.
(vii) The Company has the direct and indirect
subsidiaries identified on Exhibit A hereto (collectively, the
"Subsidiaries"). Two of the Company's Subsidiaries, INTRUST Bank, N.A.
and Will Rogers Bank are hereinafter collectively referred to as the
"Banks". The Company does not own or control, directly or indirectly,
more than 5% of any class of equity security of any corporation,
association or other entity other than the Subsidiaries. Each
Subsidiary is a bank, corporation or business trust duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation or organization. Each such Subsidiary
has full corporate and other power and authority to own, lease and
operate its properties and to conduct its business as described in and
contemplated by the Registration Statement and the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus) and as currently being conducted. The deposit accounts of
the Banks are insured by the Bank Insurance Fund administered by the
Federal Deposit Insurance Corporation (the "FDIC") Up to the maximum
amount provided by law; and no proceedings for the modification,
termination or revocation of any such insurance are pending or, to the
knowledge of the Offerors, threatened.
<PAGE> 8
(viii) The Company and each of the Subsidiaries is duly
qualified to transact business as a foreign corporation and is in good
standing in each other jurisdiction in which it owns or leases property
or conducts its business so as to require such qualification and in
which the failure to so qualify would, individually or in the
aggregate, have a material adverse effect on the condition (financial
or otherwise), earnings, business, prospects or results of operations
of the Company and the Subsidiaries on a consolidated basis. All of
the issued and outstanding shares of capital stock of the Subsidiaries
(A) have been duly authorized and are validly issued, (B) are fully
paid and nonassessable except to the extent such shares may be deemed
assessable under 12 U.S.C. Section 55 or 12 U.S.C. Section 1831o, and
(C) except as disclosed in the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus), are directly
owned by the Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance, restriction upon voting or transfer,
preemptive rights, claim or equity. Except as disclosed in the
Prospectus, there are no outstanding rights, warrants or options to
acquire or instruments convertible into or exchangeable for any capital
stock or equity securities of the Offerors or the Subsidiaries.
(ix) The capital stock of the Company and the equity
securities of the Trust conform to the description thereof contained in
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus). The outstanding shares of capital stock
and equity securities of each Offeror have been duly authorized and
validly issued and are fully paid and nonassessable, and no such shares
were issued in violation of the preemptive or similar rights of any
security holder of an Offeror; no person has any preemptive or similar
right to purchase any shares of capital stock or equity securities of
the Offerors. Except as disclosed in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus), there are no outstanding rights, options or warrants to
acquire any securities of the Offerors, and there are no outstanding
securities convertible into or exchangeable for any such securities and
no restrictions upon the voting or transfer of any capital stock of the
Company or equity securities of the Trust pursuant to the Company's
articles of incorporation or bylaws, the Trust Agreement or any
agreement or other instrument to which an Offeror is a party or by
which an Offeror is bound.
(x) (A) The Trust has all requisite power and
authority to issue, sell and deliver the Designated Preferred Securities
in accordance with and upon the terms and conditions set forth in this
Agreement, the Trust Agreement, the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus). All corporate and trust action required to be
taken by the Offerors for the authorization, issuance, sale and
delivery of the Designated Preferred Securities in accordance with such
terms and conditions has been validly and sufficiently taken. The
Designated
<PAGE> 9
Preferred Securities, when delivered in accordance with this
Agreement, will be duly and validly issued and outstanding, will be
fully paid and nonassessable undivided beneficial interests in the
assets of the Trust, will be entitled to the benefits of the Trust
Agreement, will not be issued in violation of or subject to any
preemptive or similar rights, and will conform to the description
thereof in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus)
and the Trust Agreement. None of the Designated Preferred Securities,
immediately prior to delivery, will be subject to any security
interest, lien, mortgage, pledge, encumbrance, restriction upon voting
or transfer, preemptive rights, claim, equity or other defect.
(B) The Debentures have been duly and validly
authorized, and, when duly and validly executed, authenticated and
issued as provided in the Indenture and delivered to the Trust pursuant
to the Trust Agreement, will constitute valid and legally binding
obligations of the Company entitled to the benefits of the Indenture
and will conform to the description thereof contained in the
Prospectus.
(C) The Guarantee has been duly and validly
authorized, and, when duly and validly executed and delivered to the
guarantee trustee for the benefit of the Trust, will constitute a valid
and legally binding obligation of the Company and will conform to the
description thereof contained in the Prospectus.
(D) The Agreement as to Expenses and
Liabilities between the Company and the Trust (the "Expense Agreement")
has been duly and validly authorized, and, when duly and validly executed
and delivered by the Company, will constitute a valid and legally binding
obligation of the Company and will conform to the description thereof
contained in the Prospectus.
(xi) The Offerors and the Subsidiaries have complied in
all material respects with all federal, state and local statutes,
regulations, ordinances and rules applicable to the ownership and
operation of their properties or the conduct of their businesses as
described in and contemplated by the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) and as currently being conducted.
(xii) The Offerors and the Subsidiaries have all
material permits, easements, consents, licenses, franchises and other
governmental and regulatory authorizations from all appropriate
federal, state, local or other public authorities ("Permits") as are
necessary to own and lease their properties and conduct their
businesses in the manner described in and contemplated by the
Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus) and as currently
being conducted in all material respects. All such Permits are in full
force and effect
<PAGE> 10
and each of the Offerors and the Subsidiaries are in all material respects
complying therewith, and no event has occurred that allows, or after
notice or lapse of time would allow, revocation or termination thereof or
will result in any other material impairment of the rights of the holder
of any such Permit, subject in each case to such qualification as may be
adequately disclosed in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus). Such Permits contain
no restrictions that would materially impair the ability of the Company or
the Subsidiaries to conduct their businesses in the manner consistent with
their past practices. Neither the Offerors nor any of the Subsidiaries
has received notice or otherwise has knowledge of any proceeding or action
relating to the revocation or modification of any such Permit.
(xiii) Neither of the Offerors nor any of the
Subsidiaries is in breach or violation of its corporate articles of
incorporation or charter, by-laws or other governing documents
(including without limitation, the Original Trust Agreement) in any
material respect. Neither of the Offerors nor any of the Subsidiaries
is, and to the knowledge of the Offerors no other party is, in
violation, breach or default (with or without notice or lapse of time
or both) in the performance or observance of any term, covenant,
agreement, obligation, representation, warranty or condition contained
in (A) any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease, franchise, license, Permit or any other
agreement or instrument to which it is a party or by which it or any of
its properties may be bound, which breach, violation or default could
have material adverse consequences to the Offerors and the Subsidiaries
on a consolidated basis, and to the knowledge of the Offerors, no other
party has asserted that the Offerors or any of the Subsidiaries is in
such violation, breach or default, or (B) except as disclosed in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), any order, decree, judgment, rule or
regulation of any court, arbitrator, government, or governmental agency
or instrumentality, domestic or foreign, having jurisdiction over the
Offerors or the Subsidiaries or any of their respective properties the
breach, violation or default of which could have a material adverse
effect on the condition, financial or otherwise, earnings, affairs,
business, prospects, or results of operations of the Offerors and the
Subsidiaries on a consolidated basis.
(xiv) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated by this
Agreement, the Trust Agreement, the Registration Statement and the
Prospectus (or, if the Prospectus in not in existence, the most recent
Preliminary Prospectus) do not and will not conflict with, result in
the creation or imposition of any material lien, claim, charge,
encumbrance or restriction upon any property or assets of the Offerors
or the Subsidiaries or the Designated Preferred Securities pursuant to,
constitute a breach or violation of, or constitute a default under,
with or without notice or lapse of time or both, any of the terms,
provisions or conditions of the articles of incorporation or by-laws of
the
<PAGE> 11
Company or the Subsidiaries, the Trust Agreement, the Guarantee,
the Indenture, any contract, indenture, mortgage, deed of trust, loan
or credit agreement, note, lease, franchise, license, Permit or any
other agreement or instrument to which the Offerors or the Subsidiaries
is a party or by which any of them or any of their respective
properties may be bound or any order, decree, judgment, rule or
regulation of any court, arbitrator, government, or governmental agency
or instrumentality, domestic or foreign, having jurisdiction over the
Offerors or the Subsidiaries or any of their respective properties
which conflict, creation, imposition, breach, violation or default
would have either singly or in the aggregate a material adverse effect
on the condition, financial or otherwise, earnings, affairs, business,
prospects or results of operations of the Offerors and the Subsidiaries
on a consolidated basis. No authorization, approval, consent or order
of or filing, registration or qualification with, any person
(including, without limitation, any court, governmental body or
authority) is required in connection with the transactions contemplated
by this Agreement, the Trust Agreement, the Indenture, the Guarantee,
the Registration Statement and the Prospectus, except such as have been
obtained under the 1933 Act, the Trust Indenture Act and from the
American Stock Exchange, Inc. relating to the listing of the Designated
Preferred Securities, and such as may be required under state
securities laws or Interpretations or Rules of the National Association
of Securities Dealers, Inc. ("NASD") in connection with the purchase
and distribution of the Designated Preferred Securities by the
Underwriters.
(xv) The Offerors have all requisite corporate power
and authority to enter into this Agreement and this Agreement has been
duly and validly authorized, executed and delivered by the Offerors and
constitutes the legal, valid and binding agreement of the Offerors,
enforceable against the Offerors in accordance with its terms, except
as the enforcement thereof may be limited by general principles of
equity and by bankruptcy or other laws relating to or affecting
creditors' rights generally and except as any indemnification or
contribution provisions thereof may be limited under applicable
securities laws. Each of the Indenture, the Trust Agreement, the
Guarantee and the Expense Agreement has been duly authorized by the
Company, and, when executed and delivered by the Company on the Closing
Date, each of said agreements will constitute a valid and legally
binding obligation of the Company and will be enforceable against the
Company in accordance with its terms, except as the enforcement thereof
may be limited by general principles of equity and by bankruptcy or
other laws relating to or affecting creditors' rights generally and
except as any indemnification or contribution provisions thereof may be
limited under applicable securities laws. Each of the Indenture, the
Trust Agreement and the Guarantee has been duly qualified under the
Trust Indenture Act and will conform to the description thereof
contained in the Prospectus.
<PAGE> 12
(xvi) The Company and the Subsidiaries have good and
marketable title in fee simple to all real property and good title to
all personal property owned by them and material to their business, in
each case free and clear of all security interests, liens, mortgages,
pledges, encumbrances, restrictions, claims, equities and other defects
except such as are referred to in the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) or such as
do not materially affect the value of such property in the aggregate
and do not materially interfere with the use made or proposed to be
made of such property; and all of the leases under which the Company or
the Subsidiaries hold real or personal property are valid, existing and
enforceable leases and in full force and effect with such exceptions as
are not material and do not materially interfere with the use made or
proposed to be made of such real or personal property, and neither the
Company nor any of the Subsidiaries is in default in any material
respect of any of the terms or provisions of any leases.
(xvii) Arthur Andersen, LLP, who have certified certain
of the consolidated financial statements of the Company and the
Subsidiaries, including the notes thereto, included by incorporation by
reference or otherwise in the Registration Statement and Prospectus,
are independent public accountants with respect to the Company and the
Subsidiaries as required by the 1933 Act and the 1933 Act Regulations.
(xviii) The consolidated financial statements, including
the notes thereto, included by incorporation by reference or otherwise
in the Registration Statement and the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) with
respect to the Company and the Subsidiaries, comply in all material
respects with the 1933 Act and the 1933 Act Regulations and present
fairly the consolidated financial position of the Company and the
Subsidiaries as of the dates indicated and the consolidated results of
operations, cash flows and shareholders' equity of the Company and the
Subsidiaries for the periods specified and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis. The selected and summary consolidated financial data
concerning the Offerors and the Subsidiaries included in the
Registration Statement and the Prospectus (or such Preliminary
Prospectus) comply in all material respects with the 1933 Act and the
1933 Act Regulations, present fairly the information set forth therein,
and have been compiled on a basis consistent with that of the
consolidated financial statements of the Offerors and the Subsidiaries
in the Registration Statement and the Prospectus (or such Preliminary
Prospectus). The other financial, statistical and numerical
information included in the Registration Statement and the Prospectus
(or such Preliminary Prospectus) complies in all material respects with
the 1933 Act and the 1933 Act Regulations, presents fairly the
information shown therein, and to the extent applicable has been
compiled on a basis consistent with the consolidated financial
statements of the Company and the Subsidiaries included in the
Registration Statement and the Prospectus (or such Preliminary
Prospectus).
<PAGE> 13
(xix) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus), except as otherwise stated therein:
(A) neither of the Offerors nor any of the
Subsidiaries has sustained any loss or interference with its
business from fire, explosion, flood or other calamity, whether
or not covered by insurance, or from any labor dispute or court
or governmental action, order or decree which is material to the
condition (financial or otherwise), earnings, business, prospects
or results of operations of the Offerors and the Subsidiaries on
a consolidated basis;
(B) there has not been any material adverse
change in, or any development which is reasonably likely to have a
material adverse effect on, the condition (financial or
otherwise), earnings, business, prospects or results of
operations of the Offerors and the Subsidiaries on a consolidated
basis, whether or not arising in the ordinary course of business;
(C) neither of the Offerors nor any of the
Subsidiaries has incurred any liabilities or obligations, direct
or contingent, or entered into any material transactions, other
than in the ordinary course of business which is material to the
condition (financial or otherwise), earnings, business, prospects
or results of operations of the Offerors and the Subsidiaries on
a consolidated basis;
(D) neither of the Offerors has declared or
paid any dividend, and neither of the Offerors nor any of the
Subsidiaries has become delinquent in the payment of principal or
interest on any outstanding borrowings; and
(E) there has not been any change in the
capital stock, equity securities, long-term debt, obligations under
capital leases or, other than in the ordinary course of business,
short-term borrowings of the Offerors or the Subsidiaries.
(xx) Except as set forth in the Registration Statement
and the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), no charge, investigation, action, suit
or proceeding is pending or, to the knowledge of the Offerors,
threatened, against or affecting the Offerors or the Subsidiaries or
any of their respective properties before or by any court or any
regulatory, administrative or governmental official, commission, board,
agency or other authority or body, or any arbitrator, wherein an
unfavorable decision, ruling or finding could have a material adverse
effect on the consummation of this Agreement or the transactions
contemplated herein or the condition
<PAGE> 14
(financial or otherwise), earnings, affairs, business, prospects or
results of operations of the Offerors and the Subsidiaries on a
consolidated basis or which is required to be disclosed in the
Registration Statement or the Prospectus (or such Preliminary Prospectus)
and is not so disclosed.
(xxi) There are no contracts or other documents required
to be filed as exhibits to the Registration Statement by the 1933 Act
or the 1933 Act Regulations or the Trust Indenture Act (or any rules or
regulations thereunder) which have not been filed as exhibits or
incorporated by reference to the Registration Statement, or that are
required to be summarized in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) that are not
so summarized.
(xxii) Neither of the Offerors has taken, directly or
indirectly, any action designed to result in or which has constituted
or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Offerors to facilitate the sale or resale of the Designated Preferred
Securities, and neither of the Offerors is aware of any such action
taken or to be taken by any affiliate of the Offerors.
(xxiii) The Offerors and the Subsidiaries own, or possess
adequate rights to use, all patents, copyrights, trademarks, service
marks, trade names and other rights necessary to conduct the businesses
now conducted by them in all material respects or as described in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) and neither the Offerors nor the Subsidiaries
have received any notice of infringement or conflict with asserted
rights of others with respect to any patents, copyrights, trademarks,
service marks, trade names or other rights which, individually or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the condition
(financial or otherwise), earnings, affairs, business, prospects or
results of operations of the Offerors and the Subsidiaries on a
consolidated basis, and the Offerors do not know of any basis for any
such infringement or conflict.
(xxiv) Except as adequately disclosed in the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), no labor dispute involving the Company or the Subsidiaries
exists or, to the knowledge of the Offerors, is imminent which might be
expected to have a material adverse effect on the condition (financial
or otherwise), earnings, affairs, business, prospects or results of
operations of the Offerors and the Subsidiaries on a consolidated basis
or which is required to be disclosed in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus). Neither the Company nor any of the Subsidiaries have
received notice of any existing or threatened labor dispute by the
employees of any of its principal suppliers, customers or contractors
which might be expected to have a material adverse effect on the
condition (financial or otherwise), earnings, affairs, business,
prospects or results of operations of the Company and the Subsidiaries
on a consolidated basis.
<PAGE> 15
(xxv) The Offerors and the Subsidiaries have timely and
properly prepared and filed all necessary federal, state, local and
foreign tax returns which are required to be filed and have paid all
taxes shown as due thereon and have paid all other taxes and
assessments to the extent that the same shall have become due, except
such as are being contested in good faith or where the failure to so
timely and properly prepare and file would not have a material adverse
effect on the condition (financial or otherwise), earnings, affairs,
business, prospects or results of operations of the Offerors and the
Subsidiaries on a consolidated basis. The Offerors have no knowledge
of any tax deficiency which has been or might be assessed against the
Offerors or the Subsidiaries which, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on
the condition (financial or otherwise), earnings, affairs, business,
prospects or results of operations of the Offerors and the Subsidiaries
on a consolidated basis.
(xxvi) Each of the material contracts, agreements and
instruments described or referred to in the Registration Statement or
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) and each contract, agreement and
instrument filed as an exhibit to the Registration Statement is in full
force and effect and is the legal, valid and binding agreement of the
Offerors or the Subsidiaries, enforceable in accordance with its terms,
except as the enforcement thereof may be limited by general principles
of equity and by bankruptcy or other laws relating to or affecting
creditors' rights generally. Except as disclosed in the Prospectus (or
such Preliminary Prospectus), to the knowledge of the Offerors, no
other party to any such agreement is (with or without notice or lapse
of time or both) in breach or default in any material respect
thereunder.
(xxvii) No relationship, direct or indirect, exists
between or among the Offerors or the Subsidiaries, on the one hand, and
the directors, officers, trustees, shareholders, customers or suppliers of
the Offerors or the Subsidiaries, on the other hand, which is required
to be described in the Registration Statement and the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus) which is not adequately described therein.
(xxviii) No person has the right to request or require the
Offerors or the Subsidiaries to register any securities for offering
and sale under the 1933 Act by reason of the filing of the Registration
Statement with the Commission or the issuance and sale of the
Designated Preferred Securities except as adequately disclosed in the
Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus).
<PAGE> 16
(xxix) The Designated Preferred Securities have been
approved for listing on the American Stock Exchange, Inc. subject to
official notice of issuance.
(xxx) Except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), there are no contractual encumbrances or
restrictions or material legal restrictions required to be described
therein, on the ability of the Subsidiaries (A) to pay dividends or
make any other distributions on its capital stock or to pay any
indebtedness owed to the Offerors, (B) to make any loans or advances
to, or investments in, the Offerors or (C) to transfer any of its
property or assets to the Offerors.
(xxxi) Neither of the Offerors is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended
(the "Investment Company Act").
(xxxii) The Offerors have not distributed and will not
distribute prior to the Closing Date any prospectus in connection with
the Offering, other than a Preliminary Prospectus, the Prospectus, the
Registration Statement and the other materials permitted by the 1933
Act and the 1933 Act Regulations and reviewed by the Representative.
3. OFFERING BY THE UNDERWRITERS. After the Registration
----------------------------
Statement becomes effective or, if the Registration Statement is already
effective, after this Agreement becomes effective, the Underwriters propose
to offer the Firm Preferred Securities for sale to the public upon the terms
and conditions set forth in the Prospectus. The Underwriters may from time
to time thereafter reduce the public offering price and change the other
selling terms, provided the proceeds to the Trust shall not be reduced as a
result of such reduction or change. Because the NASD is expected to view the
Preferred Securities as interests in a direct participation program, the
offering of the Preferred Securities is being made in compliance with the
applicable provisions of Rule 2810 of the NASD's Conduct Rules.
The Underwriters may reserve and sell such of the Designated
Preferred Securities purchased by the Underwriters as the Underwriters may
elect to dealers chosen by it (the "Selected Dealers") at the public offering
price set forth in the Prospectus less the applicable Selected Dealers'
concessions set forth therein, for re-offering by Selected Dealers to the
public at the public offering price. The Underwriters may allow, and
Selected Dealers may re-allow, a concession set forth in the Prospectus to
certain other brokers and dealers.
4. CERTAIN COVENANTS OF THE OFFERORS. The Offerors jointly
---------------------------------
and severally covenant with the Underwriters as follows:
(a) The Offerors shall use their best efforts to cause the
Registration Statement and any amendments thereto, if not effective at the
time of execution of this
<PAGE> 17
Agreement, to become effective as promptly as possible. If the Registration
Statement has become or becomes effective pursuant to Rule 430A and information
has been omitted therefrom in reliance on Rule 430A, then the Offerors will
prepare and file in accordance with Rule 430A and Rule 424(b) copies of the
Prospectus or, if required by Rule 430A, a post-effective amendment to the
Registration Statement (including the Prospectus) containing all information so
omitted and will provide evidence satisfactory to the Representative of such
timely filing.
(b) The Offerors shall notify the Representative immediately,
and confirm such notice in writing:
(i) when the Registration Statement, or any
post-effective amendment to the Registration Statement, has become
effective, or when the Prospectus or any supplement to the Prospectus
or any amended Prospectus has been filed;
(ii) of the receipt of any comments or requests from
the Commission relating to the Registration Statement or the Prospectus;
(iii) of any request of the Commission to amend or
supplement the Registration Statement, any Preliminary Prospectus or
the Prospectus or for additional information; and
(iv) of the issuance by the Commission or any state or
other regulatory body of any stop order or other order suspending the
effectiveness of the Registration Statement, preventing or suspending
the use of any Preliminary Prospectus or the Prospectus, or suspending
the qualification of any of the Designated Preferred Securities for
offering or sale in any jurisdiction or the institution or threat of
institution of any proceedings for any of such purposes. The Offerors
shall use their best efforts to prevent the issuance of any such stop
order or of any other such order and, if any such order is issued, to
cause such order to be withdrawn or lifted as soon as possible.
(c) The Offerors shall furnish to the Underwriters, from time
to time without charge, as soon as available, as many copies as the
Underwriters may reasonably request of (i) the registration statement as
originally filed and of all amendments thereto, in executed form, including
exhibits, whether filed before or after the Registration Statement becomes
effective, (ii) all exhibits and documents incorporated therein or filed
therewith, (iii) all consents and certificates of experts in executed form,
(iv) each Preliminary Prospectus and all amendments and supplements thereto,
and (v) the Prospectus, and all amendments and supplements thereto.
(d) During the time when a prospectus is required to be
delivered under the 1933 Act, the Offerors shall comply to the best of their
ability with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the distribution
of the Designated Preferred Securities as
<PAGE> 18
contemplated herein and in the Trust Agreement and the Prospectus. The Offerors
shall not file any amendment to the registration statement as originally filed
or to the Registration Statement and shall not file any amendment thereto or
make any amendment or supplement to any Preliminary Prospectus or to the
Prospectus of which the Representative shall not previously have been advised in
writing and provided a copy a reasonable time prior to the proposed filings
thereof or to which the Representative or counsel for the Underwriters shall
object. If it is necessary, in the Company's reasonable opinion or in the
reasonable opinion of the Company's counsel, to amend or supplement the
Registration Statement or the Prospectus in connection with the distribution of
the Designated Preferred Securities, the Offerors shall forthwith amend or
supplement the Registration Statement or the Prospectus, as the case may be,
by preparing and filing with the Commission (provided the Underwriters or
counsel for the Underwriters does not reasonably object), and furnishing to
the Representative, such number of copies as the Representative may
reasonably request of an amendment or amendments of, or a supplement or
supplements to, the Registration Statement or the Prospectus, as the case may
be (in form and substance reasonably satisfactory to the Representative and
counsel for the Underwriters). If any event shall occur as a result of which
it is necessary to amend or supplement the Prospectus to correct an untrue
statement of a material fact or to include a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, or if for any reason it is necessary at any time to
amend or supplement the Prospectus to comply with the 1933 Act and the 1933
Act Regulations, the Offerors shall, subject to the second sentence of this
subsection (d), forthwith amend or supplement the Prospectus by preparing and
filing with the Commission, and furnishing to the Representative, such number
of copies as the Representative may reasonably request of an amendment or
amendments of, or a supplement or supplements to, the Prospectus (in form and
substance satisfactory to the Representative and counsel for the
Underwriters) so that, as so amended or supplemented, the Prospectus shall
not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(e) The Offerors shall cooperate with the Representative and
counsel for the Underwriters in order to qualify the Designated Preferred
Securities for offering and sale under the securities or blue sky laws of
such jurisdictions as the Representative may reasonably request and shall
continue such qualifications in effect so long as may be advisable for
distribution of the Designated Preferred Securities; provided, however, that
the Offerors shall not be required to qualify to do business as a foreign
corporation or file a general consent to service of process in any
jurisdiction in connection with the foregoing. The Offerors shall file such
statements and reports as may be required by the laws of each jurisdiction in
which the Designated Preferred Securities have been qualified as above. The
Offerors will notify the Representative immediately of, and confirm in
writing, the suspension of qualification of the Designated Preferred
Securities or threat thereof in any jurisdiction.
<PAGE> 19
(f) The Offerors shall make generally available to their
security holders in the manner contemplated by Rule 158 of the 1933 Act
Regulations and furnish to the Representative as soon as practicable, but in
any event not later than 16 months after the Effective Date, a consolidated
earnings statement of the Offerors conforming with the requirements of
Section 11(a) of the 1933 Act and Rule 158.
(g) The Offerors shall use the proceeds from the sale of the
Designated Preferred Securities to be sold by the Trust hereunder in the
manner specified in the Prospectus under the caption "Use of Proceeds."
(h) For five years from the Effective Date, the Offerors shall
furnish to the Representative copies of all reports and communications
(financial or otherwise) furnished by the Offerors to the holders of the
Designated Preferred Securities as a class, copies of all reports and
financial statements filed with or furnished to the Commission (other than
portions for which confidential treatment has been obtained from the
Commission) or with or any other national securities exchange or
self-regulatory organization, and such other documents, reports and
information concerning the business and financial condition of the Offerors
as the Representative may reasonably request, other than such documents,
reports and information for which the Offerors has the legal obligation not
to reveal to the Representative.
(i) For a period of 30 days from the Effective Date, the
Offerors shall not, directly or indirectly, offer for sale, sell or agree to
sell or otherwise dispose of any Designated Preferred Securities other than
pursuant to this Agreement, any other beneficial interests in the assets of
the Trust or any securities of the Trust or the Company that are
substantially similar to the Designated Preferred Securities or the
Debentures, including any guarantee of such beneficial interests or
substantially similar securities, or securities convertible into or
exchangeable for or that represent the right to receive any such beneficial
interest or substantially similar securities without the Representative's
prior written consent.
(j) The Offerors shall use their best efforts to cause the
Designated Preferred Securities to become listed on the American Stock
Exchange, Inc., or in lieu thereof another national securities exchange or
self-regulatory organization, and to remain so listed for at least five years
from the Effective Date or for such shorter period as may be specified in a
written consent of the Representative, provided this shall not prevent the
Company from redeeming the Designated Preferred Securities pursuant to the
terms of the Trust Agreement. If the Designated Preferred Securities are
exchanged for Debentures, the Company will use its best efforts to have the
Debentures promptly listed on the American Stock Exchange, Inc. or another
organization on which the Designated Preferred Securities are then listed,
and to have the Debentures promptly registered under the 1934 Act.
(k) Subsequent to the date of this Agreement and through the
date which is the later of (i) the day following the date on which the
Underwriters' Option to purchase the Option Preferred Securities shall expire
or (ii) the day following the Option Closing Date with respect to any Option
Preferred Securities that the Underwriters shall elect to purchase, except as
described in or contemplated by the
<PAGE> 20
Prospectus, neither the Offerors nor any of the Subsidiaries shall take any
action (or refrain from taking any action) which will result in the Offerors or
the Subsidiaries incurring any material liability or obligation, direct or
contingent, or enter into any material transaction, except in the ordinary
course of business, and there will not be any material change in the financial
position, capital stock, or any material increase in long-term debt, obligations
under capital leases or short-term borrowings (except for repurchase agreements
in the ordinary course of business consistent with past practice) of the
Offerors and the Subsidiaries on a consolidated basis.
(l) The Offerors shall not take, directly or indirectly, any
action designed to result in or which has constituted or which might
reasonably be expected to (i) cause or result in stabilization or
manipulation of the price of any security of the Offerors to facilitate the
sale or resale of the Designated Preferred Securities or (ii) otherwise
violate the Commission's Regulation M, and the Offerors are not aware of any
such action taken or to be taken by any affiliate of the Offerors.
(m) Prior to the Closing Date (and, if applicable, the Option
Closing Date), the Offerors will not issue any press release or other
communication directly or indirectly or hold any press conference with
respect to the Offerors, the Subsidiaries or the offering of the Designated
Preferred Securities (the "Offering") without the Representative's prior
written consent.
5. PAYMENT OF EXPENSES. Whether or not this Agreement is
-------------------
terminated or the sale of the Designated Preferred Securities to the
Underwriters is consummated, the Company covenants and agrees that it will
pay or cause to be paid (directly or by reimbursement) all costs and expenses
incident to the performance of the obligations of the Offerors under this
Agreement, including:
(a) the preparation, printing, filing, delivery and shipping of
the initial registration statement, the Preliminary Prospectus or
Prospectuses, the Registration Statement and the Prospectus and any
amendments or supplements thereto, and the printing, delivery and shipping of
this Agreement and any other underwriting documents (including, without
limitation, selected dealers agreements), the certificates for the Designated
Preferred Securities and the Preliminary and Final Blue Sky Memoranda and any
legal investment surveys and any supplements thereto;
(b) all fees, expenses and disbursements of the Offerors'
counsel and accountants;
(c) all fees and expenses incurred in connection with the
qualification of the Designated Preferred Securities, Debentures and the
Guarantee under the securities or blue sky laws of such jurisdictions as the
Representative may request, including all filing fees and fees and
disbursements of counsel to the Underwriters in connection therewith,
including, without limitation, in connection with the preparation of the
Preliminary and Final Blue Sky Memoranda and any legal investment surveys and
any supplements thereto;
<PAGE> 21
(d) all fees and expenses incurred in connection with filings
made with the NASD;
(e) any applicable fees and other expenses incurred in
connection with the listing of the Designated Preferred Securities and, if
applicable, the Guarantee and the Debentures on the American Stock Exchange,
Inc.;
(f) the cost of furnishing to the Representative copies of the
initial registration statements, any Preliminary Prospectus, the Registration
Statement and the Prospectus and all amendments or supplements thereto;
(g) the costs and charges of any transfer agent or registrar
and the fees and disbursements of counsel to any transfer agent or registrar;
(h) all costs and expenses (including stock transfer taxes)
incurred in connection with the printing, issuance and delivery of the
Designated Preferred Securities to the Underwriters;
(i) all expenses incident to the preparation, execution and
delivery of the Trust Agreement, the Indenture, the Guarantee and the Expense
Agreement; and
(j) all other costs and expenses incident to the performance of
the obligations of the Company hereunder and under the Trust Agreement that
are not otherwise specifically provided for in this Section 5.
If the sale of Designated Preferred Securities contemplated by
this Agreement is not completed due to the termination of this Agreement
pursuant to the terms hereof (other than pursuant to Section 9 hereof) the
Company will pay the Representative its accountable out-of-pocket expenses in
connection herewith or in contemplation of the performance of the
Representative's obligations hereunder, including without limitation travel
expenses, reasonable fees, expenses and disbursements of counsel or other
out-of-pocket expenses incurred by the Representative in connection with any
discussion of the Offering or the contents of the Registration Statement, any
investigation of the Offerors and the Subsidiaries, or any preparation for
the marketing, purchase, sale or delivery of the Designated Preferred
Securities, in each case following presentation of reasonably detailed
invoices therefor.
If the sale of Designated Preferred Securities contemplated by
this Agreement is completed, the Company shall not be responsible for payment
of fees or disbursements of counsel to the Underwriters other than in
accordance with paragraph (c) above, or for the reimbursement of any expenses
of the Underwriters.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The
-------------------------------------------
obligations of the Underwriters to purchase and pay for the Firm Preferred
Securities and, following exercise of the Option granted by the Offerors in
Section 1 of this Agreement, the
<PAGE> 22
Option Preferred Securities, are subject, in the Representative's reasonable
discretion, to the accuracy of and compliance with the representations and
warranties and agreements of the Offerors herein as of the date hereof and as of
the Closing Date (or in the case of the Option Preferred Securities, if any, as
of the Option Closing Date), to the accuracy of the written statements of the
Offerors made pursuant to the provisions hereof, to the performance by the
Offerors of their covenants and obligations hereunder and to the following
additional conditions:
(a) If the Registration Statement or any amendment thereto
filed prior to the Closing Date has not been declared effective prior to the
time of execution hereof, the Registration Statement shall become effective
not later than 10:00 a.m., St. Louis time, on the first business day
following the time of execution of this Agreement, or at such later time and
date as the Representative may agree to in writing. If required, the
Prospectus and any amendment or supplement thereto shall have been timely
filed in accordance with Rule 424(b) and Rule 430A under the 1933 Act and
Section 4(a) hereof. No stop order suspending the effectiveness of the
Registration Statement or any amendment or supplement thereto shall have been
issued under the 1933 Act or any applicable state securities laws and no
proceedings for that purpose shall have been instituted or shall be pending,
or, to the knowledge of the Offerors or the Representative, shall be
contemplated by the Commission or any state authority. Any request on the
part of the Commission or any state authority for additional information (to
be included in the Registration Statement or Prospectus or otherwise) shall
have been disclosed to the Representative and complied with to the
satisfaction of the Representative and to the satisfaction of counsel for the
Underwriters.
(b) No Underwriter shall have advised the Company at or before
the Closing Date (and, if applicable, the Option Closing Date) that the
Registration Statement or any post-effective amendment thereto, or the
Prospectus or any amendment or supplement thereto, contains an untrue
statement of a fact which, in such Underwriter's opinion, is material or
omits to state a fact which, in such Underwriter's opinion, is material and
is required to be stated therein or is necessary to make statements therein
(in the case of the Prospectus or any amendment or supplement thereto, in
light of the circumstances under which they were made) not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Trust
Agreement, and the Designated Preferred Securities, and the authorization and
form of the Registration Statement and Prospectus, other than financial
statements and other financial data, and all other legal matters relating to
this Agreement and the transactions contemplated hereby or by the Trust
Agreement shall be satisfactory in all material respects to counsel to the
Underwriters, and the Offerors and the Subsidiaries shall have furnished to
such counsel all documents and information relating thereto that they may
reasonably request to enable them to pass upon such matters.
<PAGE> 23
(d) Bryan Cave LLP, counsel to the Offerors, shall have
furnished to the Representative on behalf of the Underwriters its signed
opinion, dated the Closing Date or the Option Closing Date, as the case may
be, in form and substance satisfactory to counsel to the Underwriters, to the
effect that:
(i) The Company has been duly incorporated and is
validly existing and in good standing under the laws of the State of
Kansas, and is duly registered as a bank holding company under the BHC
Act. Each of the Banks is duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation.
Each of the Company and the Subsidiaries has full corporate power and
authority to own or lease its properties and to conduct its business as
such business is described in the Prospectus and is currently conducted
in all material respects. To the best of such counsel's knowledge, all
outstanding shares of capital stock of the Subsidiaries have been duly
authorized and validly issued and are fully paid and nonassessable
except to the extent such shares may be deemed assessable under 12
U.S.C. Section 1831 and, to the best of such counsel's knowledge,
except as disclosed in the Prospectus, there are no outstanding rights,
options or warrants to purchase any such shares or securities
convertible into or exchangeable for any such shares.
(ii) The capital stock, Debentures and Guarantee of the
Company and the equity securities of the Trust conform to the
description thereof contained in the Prospectus in all material
respects. To the best of such counsel's knowledge, the capital stock
of the Company authorized and issued as of September 30, 1997 is as set
forth under the caption "Capitalization" in the Prospectus has been
duly authorized and validly issued, and is fully paid and
nonassessable. To the best of such counsel's knowledge, there are no
outstanding rights, options or warrants to purchase, no other
outstanding securities convertible into or exchangeable for, and no
commitments, plans or arrangements to issue, any shares of capital
stock of the Company or equity securities of the Trust, except as
described in the Prospectus.
(iii) The issuance, sale and delivery of the Designated
Preferred Securities and Debentures in accordance with the terms and
conditions of this Agreement and the Indenture have been duly
authorized by all necessary actions of the Offerors. All of the
Designated Preferred Securities have been duly and validly authorized
and, when delivered in accordance with this Agreement, will be duly and
validly issued, fully paid and nonassessable, and will conform to the
description thereof in the Registration Statement, the Prospectus and
the Trust Agreement. The Designated Preferred Securities have been
approved for listing on the American Stock Exchange, Inc. subject to
official notice of issuance. There are no preemptive or other rights
to subscribe for or to purchase, and other than as disclosed in the
Prospectus no restrictions upon the voting or transfer of, any shares
of capital stock or equity securities of the Offerors or the
Subsidiaries pursuant to the corporate articles of incorporation or
charter, by-laws or other governing documents (including
<PAGE> 24
without limitation, the Trust Agreement) of the Offerors or the
Subsidiaries, or, to the best of such counsel's knowledge, any agreement
or other instrument to which either Offeror or any of the Subsidiaries is
a party or by which either Offeror or any of the Subsidiaries may be
bound.
(iv) The Offerors have all requisite corporate and
trust power to enter into and perform their obligations under this
Agreement, and this Agreement has been duly and validly authorized,
executed and delivered by the Offerors and constitutes the legal, valid
and binding obligations of the Offerors enforceable in accordance with its
terms, except as the enforcement hereof or thereof may be limited by
general principles of equity and by bankruptcy or other laws relating to
or affecting creditors' rights generally, and except as the
indemnification and contribution provisions hereof may be limited under
applicable laws and certain remedies may not be available in the case
of a non-material breach.
(v) Each of the Indenture, the Trust Agreement and the
Guarantee has been duly qualified under the Trust Indenture Act, has
been duly authorized, executed and delivered by the Company, and is a
valid and legally binding obligation of the Company enforceable in
accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, receivership, moratorium and other laws
affecting the rights and remedies of creditors generally and of general
principles of equity.
(vi) The Debentures have been duly authorized,
executed, authenticated and delivered by the Company, are entitled to the
benefits of the Indenture and are legal, valid and binding obligations
of the Company enforceable against the Company in accordance with their
terms, subject to the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws affecting the rights and
remedies of creditors generally and of general principles of equity.
(vii) The Expense Agreement has been duly authorized,
executed and delivered by the Company, and is a valid and legally
binding obligation of the Company enforceable in accordance with its
terms, subject to the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws affecting the rights and
remedies of creditors generally and of general principles of equity.
(viii) To the best of such counsel's knowledge, neither
of the Offerors nor any of the Subsidiaries is in breach or violation of,
or default under, with or without notice or lapse of time or both, its
corporate charter, by-laws or governing document (including without
limitation, the Trust Agreement). The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated by this Agreement and the Trust Agreement do not and will
not conflict with, result in the creation or imposition of any
<PAGE> 25
material lien, claim, charge, encumbrance or restriction upon any property
or assets of the Offerors or the Subsidiaries or the Designated Preferred
Securities pursuant to, or constitute a material breach or violation
of, or constitute a material default under, with or without notice or
lapse of time or both, any of the terms, provisions or conditions of
the articles of incorporation or charter, by-laws or governing document
(including without limitation, the Trust Agreement) of the Offerors or
the Subsidiaries, or to the best of such counsel's knowledge, any
material contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease, franchise, license or any other agreement or
instrument to which either Offeror or the Subsidiaries is a party or by
which any of them or any of their respective properties may be bound or
any order, decree, judgment, franchise, license, Permit, rule or
regulation of any court, arbitrator, government, or governmental agency
or instrumentality, domestic or foreign, known to such counsel having
jurisdiction over the Offerors or the Subsidiaries or any of their
respective properties which, in each case, is material to the Offerors
and the Subsidiaries on a consolidated basis. No authorization,
approval, consent or order of, or filing, registration or qualification
with, any person (including, without limitation, any court,
governmental body or authority) is required under Kansas law in
connection with the transactions contemplated by this Agreement in
connection with the purchase and distribution of the Designated
Preferred Securities by the Underwriters.
(ix) To the best of such counsel's knowledge, holders
of securities of the Offerors either do not have any right that, if
exercised, would require the Offerors to cause such securities to be
included in the Registration Statement or have waived such right. To
the best of such counsel's knowledge, neither the Offerors nor any of
the Subsidiaries is a party to any agreement or other instrument which
grants rights for or relating to the registration of any securities of
the Offerors.
(x) Except as set forth in the Registration Statement
and the Prospectus, to the best of such counsel's knowledge, (i) no
action, suit or proceeding at law or in equity is pending or threatened
in writing to which the Offerors or the Subsidiaries is or may be a
party, and (ii) no action, suit or proceeding is pending or threatened
in writing against or affecting the Offerors or the Subsidiaries or any
of their properties, before or by any court or governmental official,
commission, board or other administrative agency, authority or body, or
any arbitrator, wherein an unfavorable decision, ruling or finding
could reasonably be expected to have a material adverse effect on the
consummation of this Agreement or the issuance and sale of the
Designated Preferred Securities as contemplated herein or the condition
(financial or otherwise), earnings, affairs, business, or results of
operations of the Offerors and the Subsidiaries on a consolidated basis
or which is required to be disclosed in the Registration Statement or
the Prospectus and is not so disclosed.
<PAGE> 26
(xi) No authorization, approval, consent or order of or
filing, registration or qualification with, any person (including,
without limitation, any court, governmental body or authority) is
required in connection with the transactions contemplated by this
Agreement, the Trust Agreement, the Registration Statement and the
Prospectus, except such as have been obtained under the 1933 Act, the
Trust Indenture Act, and except such as may be required under state
securities laws or Interpretations or Rules of the NASD in connection
with the purchase and distribution of the Designated Preferred
Securities by the Underwriters.
(xii) The Registration Statement and the Prospectus and
any amendments or supplements thereto and any documents incorporated
therein by reference (other than the financial statements or other
financial data included therein or omitted therefrom and Underwriters'
Information, as to which such counsel need express no opinion) comply
as to form in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations as of their respective dates of
effectiveness.
(xiii) To the best of such counsel's knowledge, there are
no contracts, agreements, leases or other documents of a character
required to be disclosed in the Registration Statement or Prospectus or
to be filed as exhibits to the Registration Statement that are not so
disclosed or filed.
(xiv) The statements under the captions "Description of
the Preferred Securities," "Description of the Subordinated
Debentures," "Description of the Guarantee," "Relationship Among the
Preferred Securities, the Subordinated Debentures and the Guarantee,"
"Certain Federal Income Tax Consequences," "ERISA Considerations" and
"General - Regulation and Supervision" in the Prospectus or
incorporated therein by reference, insofar as such statements
constitute a summary of legal and regulatory matters, documents or
instruments referred to therein, are accurate descriptions of the
matters summarized therein in all material respects and fairly present
the information called for with respect to such legal matters,
documents and instruments, other than financial and statistical data,
as to which said counsel shall not be required to express any opinion
or belief.
(xv) Such counsel has been advised by the staff of the
Commission that the Registration Statement has become effective under
the 1933 Act; any required filing of the Prospectus pursuant to Rule
424(b) has been made within the time period required by Rule 424(b); to
the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for a stop order are pending or threatened by the
Commission.
(xvi) Except as described in or contemplated by the
Prospectus, to the best of such counsel's knowledge, there are no
contractual encumbrances or restrictions, or material legal
restrictions, required to be described therein on the
<PAGE> 27
ability of the Subsidiaries (A) to pay dividends or make any other
distributions on its capital stock or to pay indebtedness owed to the
Offerors, (B) to make any loans or advances to, or investments in, the
Offerors or (C) to transfer any of its property or assets to the Offerors.
(xvii) To the best of such counsel's knowledge, (A) the
business and operations of the Offerors and the Subsidiaries comply in
all material respects with all statutes, ordinances, laws, rules and
regulations applicable thereto and which are material to the Offerors
and the Subsidiaries on a consolidated basis, except in those instances
where non-compliance would not materially impair the ability of the
Offerors and the Subsidiaries to conduct their business, and (B) the
Offerors and the Subsidiaries possess and are operating in all material
respects in compliance with the terms, provisions and conditions of all
Permits that are required to conduct their businesses as described in
the Prospectus and that are material to the Offerors and the
Subsidiaries on a consolidated basis, except in those instances where
the loss thereof or non-compliance therewith would not have a material
adverse effect on the condition (financial or otherwise), earnings,
affairs, business, prospects or results of operations of the Offerors
and the Subsidiaries on a consolidated basis; to the best of such
counsel's knowledge, all such Permits are valid and in full force and
effect, and, to the best of such counsel's knowledge, no action, suit
or proceeding is pending or threatened which may lead to the
revocation, termination, suspension or non-renewal of any such Permit,
except in those instances where the loss thereof or non-compliance
therewith would not materially impair the ability of the Offerors or
the Subsidiaries to conduct their businesses.
In giving the above opinion, such counsel may state that, insofar
as such opinion involves factual matters, they have relied upon certificates
of officers of the Offerors including, without limitation, certificates as to
the identity of any and all material contracts, indentures, mortgages, deeds
of trust, loans or credit agreements, notes, leases, franchises, licenses or
other agreements or instruments, and all material permits, easements,
consents, licenses, franchises and government regulatory authorizations, for
purposes of paragraphs (viii), (xiii) and (xvii) hereof, and upon
certificates of public officials. In giving such opinion, such counsel may
rely upon (A) the opinion of Richards, Layton and Finger described herein as
to matters of Delaware law and (B) the opinion of -------------------- as to
matters of Kansas law and certain matters regarding the Company and the
Subsidiaries, and such counsel shall state in its opinion the extent to which
it is relying on the opinion of such Company counsel and that such reliance
is, in the view of such counsel, reasonable under the circumstances.
Such counsel shall also confirm that, in connection with the
preparation of the Registration Statement and Prospectus, such counsel has
participated in conferences with officers and representatives of the Offerors
and with their independent public accountants and with the Representative and
counsel for the Underwriters, at which conferences such counsel made
inquiries of such officers,
<PAGE> 28
representatives and accountants and discussed in detail the contents of the
Registration Statement and Prospectus and the documents incorporated therein by
reference (without taking further action to verify independently the statements
made in the Registration Statement and the Prospectus, and without assuming
responsibility for the accuracy or completeness of such statements, except to
the extent expressly provided above) and such counsel has no reason to believe
(A) that the Registration Statement or any amendment thereto (except for the
financial statements and related schedules and statistical data included therein
or omitted therefrom or the Underwriters' Information, as to which such counsel
need express no opinion), at the time the Registration Statement or any such
amendment became effective, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading or (B) that the Prospectus or any amendment or
supplement thereto or the documents incorporated therein by reference (except
for the financial statements and related schedules and statistical data
included therein or omitted therefrom or the Underwriters' Information, as to
which such counsel need express no opinion), at the time the Registration
Statement became effective (or, if the term "Prospectus" refers to the
prospectus first filed pursuant to Rule 424(b) of the 1933 Act Regulations,
at the time the Prospectus was issued), at the time any such amended or
supplemented Prospectus was issued, at the Closing Date and, if applicable,
the Option Closing Date, contained or contains any untrue statement of a
material fact or omitted or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made, or (C) that there is
any amendment to the Registration Statement required to be filed that has not
already been filed.
(e) Richards, Layton and Finger, special Delaware counsel to
the Offerors, shall have furnished to the Representative on behalf of the
Underwriters its signed opinion, dated as of Closing Date or the Option
Closing Date, as the case may be, in form and substance satisfactory to such
counsel, to the effect that:
(i) The Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware
Business Trust Act and, under the Trust Agreement and the Delaware
Business Trust Act, has the trust power and authority to conduct its
business as described in the Prospectus.
(ii) The Trust Agreement is a legal, valid and binding
agreement of the Trust and the Trustees, and is enforceable against the
Company, as depositor, and the Trustees, in accordance with its terms.
(iii) Under the Trust Agreement and the Delaware
Business Trust Act, the execution and delivery of this Agreement by the
Trust, and the performance by the Trust of its obligations thereunder,
have been authorized by all requisite trust action on the part of the
Trust.
<PAGE> 29
(iv) The Designated Preferred Securities have been duly
authorized by the Trust Agreement, and when issued and sold in
accordance with the Trust Agreement, the Designated Preferred
Securities will be, subject to the qualifications set forth in
paragraph (v) below, fully paid and nonassessable beneficial interest
in the assets of the Trust and entitled to the benefits of the Trust
Agreement. The form of certificates to evidence the Designated
Preferred Securities has been approved by the Trust and is in due and
proper form and complies with all applicable requirements of the
Delaware Business Trust Act.
(v) Holders of Designated Preferred Securities, as
beneficial owners of the Trust, will be entitled to the same limitation
on personal liability extended to shareholders of private, for-profit
corporations organized under the General Corporation Law of the State
of Delaware. Such opinion may note that the holders of Designated
Preferred Securities may be obligated to make payments as set forth in
the Trust Agreement.
(vi) Under the Delaware Business Trust Act and the
Trust Agreement, the issuance of the Designated Preferred Securities is
not subject to preemptive rights.
(vii) The issuance and sale by the Trust of the
Designated Preferred Securities and the Common Securities, the
execution, delivery and performance by the Trust of this Agreement, and
the consummation of the transactions contemplated by this Agreement, do
not violate (a) the Trust Agreement, or (b) any applicable Delaware
law, rule or regulation.
Such opinion may state that it is limited to the laws of the
State of Delaware and that the opinion expressed in paragraph (ii) above is
subject to the effect upon the Trust Agreement of (i) bankruptcy, insolvency,
moratorium, receivership, reorganization, liquidation, fraudulent conveyance
and other similar laws relating to or affecting the rights and remedies of
creditors generally, (ii) principles of equity, including applicable law
relating to fiduciary duties (regardless of whether considered and applied in
a proceeding in equity or at law), and (iii) the effect of applicable public
policy on the enforceability of provisions relating to indemnification or
contribution.
(f) Lewis, Rice & Fingersh, L.C., counsel to the Underwriters,
shall have furnished to the Representative on behalf of the Underwriters its
signed opinion, dated the Closing Date or the Option Closing Date, as the
case may be, with respect to the sufficiency of all corporate procedures and
other legal matters relating to this Agreement, the validity of the
Designated Preferred Securities, the Registration Statement, the Prospectus
and such other related matters as the Representative may reasonably request
and there shall have been furnished to such counsel such documents and other
information as they may request to enable them to pass on such matters. In
giving such opinion, Lewis, Rice & Fingersh, L.C. may rely as to matters of
fact upon statements and certifications of officers of the Offerors and of
other appropriate persons and may rely as to matters of law, other than law
of the United States and the State of Missouri, upon the opinions of Bryan
Cave LLP, -------------------- and Richards, Layton and Finger described
herein.
<PAGE> 30
(g) On the date of this Agreement and on the Closing Date (and,
if applicable, any Option Closing Date), the Representative on behalf of the
Underwriters shall have received from Arthur Andersen L.L.P. a letter, dated
the date of this Agreement and the Closing Date (and, if applicable, the
Option Closing Date), respectively, in form and substance satisfactory to the
Representative, confirming that they are independent public accountants with
respect to the Company and the Subsidiaries (for purposes of this Section
6(g) the "Company") within the meaning of the 1933 Act and the 1933 Act
Regulations, and stating in effect that:
(i) In their opinion, the consolidated financial
statements of the Company audited by them and included in the
Registration Statement comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act and the 1933 Act
Regulations.
(ii) On the basis of the procedures specified by the
American Institute of Certified Public Accountants as described in SAS
No. 71, "Interim Financial Information," inquiries of officials of the
Company responsible for financial and accounting matters, and such
other inquiries and procedures as may be specified in such letter,
which procedures do not constitute an audit in accordance with U.S.
generally accepted auditing standards, nothing came to their attention
that caused them to believe that, if applicable, the unaudited interim
consolidated financial statements of the Company included in the
Registration Statement do not comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act
and 1933 Act Regulations or are not in conformity with U.S. generally
accepted accounting principles applied on a basis substantially
consistent, except as noted in the Registration Statement, with the
basis for the audited consolidated financial statements of the Company
included in the Registration Statement.
(iii) On the basis of limited procedures, not
constituting an audit in accordance with U.S. generally accepted
auditing standards, consisting of a reading of the unaudited interim
financial statements and other information referred to below, a reading
of the latest available unaudited condensed consolidated financial
statements of the Company, inspection of the minute books of the
Company since the date of the latest audited financial statements of
the Company included or incorporated by reference in the Registration
Statement, inquiries of officials of the Company responsible for
financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) as of a specified date not more than five
days prior to the date of such letter, there have been any changes
in the consolidated capital stock of the Company, any increase in
the consolidated debt of the
<PAGE> 31
Company, any decreases in consolidated total assets or shareholders
equity of the Company, or any changes, decreases or increases in
other items specified by the Underwriters, in each case as compared
with amounts shown in the latest unaudited interim consolidated
statement of financial condition of the Company included in the
Registration Statement except in each case for changes, increases or
decreases which the Registration Statement specifically discloses,
have occurred or may occur or which are described in such letter;
and
(B) for the period from the date of the
latest unaudited interim consolidated financial statements of the
Company included in the Registration Statement to the specified
date referred to in Clause (iii)(A), there were any decreases in
the consolidated interest income, net interest income, or net
income of the Company or in the per share amount of net income of
the Company, or any changes, decreases or increases in any other
items specified by the Underwriters, in each case as compared
with the comparable period of the preceding year and with any
other period of corresponding length specified by the
Underwriters, except in each case for increases or decreases
which the Registration Statement discloses have occurred or may
occur, or which are described in such letter;
(iv) In addition to the audit referred to in their
report included in the Registration Statement and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (ii) and (iii) above, they have carried out
certain specified procedures, not constituting an audit in accordance
with U.S. generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Underwriters which are derived from the general accounting records and
consolidated financial statements of the Company which appear in the
Registration Statement and have compared such amounts, percentages and
financial information with the accounting records and the material
derived from such records and consolidated financial statements of the
Company and have found them to be in agreement.
In the event that the letters to be delivered referred to above
set forth any such changes, decreases or increases as specified in Clauses
(iii)(A) or (iii)(B), above, or any exceptions from such agreement specified
in Clause (iv) above, it shall be a further condition to the obligations of
the Underwriters that the Representative shall have determined, after
discussions with officers of the Company, responsible for financial and
accounting matters, that such changes, decreases, increases or exceptions as
are set forth in such letters do not (x) reflect a material adverse change in
the items specified in Clause (iii)(A) above as compared with the amounts
shown in the latest unaudited consolidated statement of financial condition
of the Company included in the Registration Statement, (y) reflect a material
adverse change in the items specified in Clause (iii)(B) above as compared
with the corresponding periods of the prior year or
<PAGE> 32
other period specified by the Representative, or (z) reflect a material change
in items specified in Clause (iv) above from the amounts shown in the
Preliminary Prospectus distributed by the Underwriters in connection with the
offering contemplated hereby or from the amounts shown in the Prospectus.
(h) At the Closing Date and, if applicable, the Option Closing
Date, the Representative shall have received certificates of the chief
executive officer and the chief financial and accounting officer of the
Company, which certificates shall be deemed to be made on behalf of the
Company dated as of the Closing Date and, if applicable, the Option Closing
Date, evidencing satisfaction of the conditions of Section 6(a) and stating
that (i) the representations and warranties of the Offerors set forth in
Section 2(a) hereof are accurate as of the Closing Date and, if applicable,
the Option Closing Date, and that the Offerors have complied with all
agreements and satisfied all conditions on their part to be performed or
satisfied at or prior to such Closing Date, (ii) since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, there has not been any material adverse change in the condition
(financial or otherwise), earnings, affairs, business, prospects or results
of operations of the Offerors and the Subsidiaries on a consolidated basis,
(iii) since such dates there has not been any material transaction entered
into by the Offerors or the Subsidiaries other than transactions in the
ordinary course of business, (iv) they have carefully examined the
Registration Statement and the Prospectus as amended or supplemented and
nothing has come to their attention that would lead them to believe that
either the Registration Statement or the Prospectus, or any amendment or
supplement thereto as of their respective effective or issue dates,
contained, and the Prospectus as amended or supplemented at such Closing Date
(and, if applicable, the Option Closing Date), contains any untrue statement
of a material fact, or omits to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; (v) covering
such other matters as the Representative may reasonably request. The
officers' certificate of the Company shall further state that no stop order
affecting the Registration Statement is in effect or, to their knowledge,
threatened.
(i) At the Closing Date and, if applicable, the Option Closing
Date, the Representative shall have received a certificate of an authorized
representative of the Trust to the effect that to the best of his or her
knowledge based upon a reasonable investigation, the representations and
warranties of the Trust in this Agreement are true and correct as though made
on and as of the Closing Date (and, if applicable, the Option Closing Date),
the Trust has complied with all the agreements and satisfied all the
conditions required by this Agreement to be performed or satisfied by the
Trust on or prior to the Closing Date and since the most recent date as of
which information is given in the Prospectus, except as contemplated by the
Prospectus, the Trust has not incurred any material liabilities or
obligations, direct or contingent, or entered into any material transactions
not in the ordinary course of business and there has not been any material
adverse change in the condition (financial or otherwise) of the Trust.
<PAGE> 33
(j) On the Closing Date, the Representative shall have received
duly executed counterparts of the Trust Agreement, the Guarantee, the
Indenture and the Expense Agreement.
(k) The NASD, upon review of the terms of the public offering
of the Designated Preferred Securities, shall not have objected to the
Underwriters' participation in such offering.
(l) Prior to the Closing Date and, if applicable, the Option
Closing Date, the Offerors shall have furnished to the Representative and
counsel for the Underwriters all such other documents, certificates and
opinions as they have reasonably requested.
All opinions, certificates, letters and other documents shall be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Representative. The Offerors shall
furnish the Representative with conformed copies of such opinions,
certificates, letters and other documents as the Representative shall
reasonably request.
If any of the conditions referred to in this Section 6 shall not
have been fulfilled when and as required by this Agreement, this Agreement
and all of the Underwriters' obligations hereunder may be terminated by the
Representative on notice to the Company at, or at any time before, the
Closing Date or the Option Closing Date, as applicable. Any such termination
shall be without liability of the Underwriters to the Offerors.
7. INDEMNIFICATION AND CONTRIBUTION.
--------------------------------
(a) The Offerors agree to jointly and severally indemnify and
hold harmless each Underwriter, each of its directors, officers and agents,
and each person, if any, who controls any Underwriter within the meaning of
the 1933 Act, against any and all losses, claims, damages, liabilities and
expenses (including reasonable costs of investigation and reasonable attorney
fees and expenses), joint or several, arising out of or based (i) upon any
untrue statement or alleged untrue statement of a material fact made by the
Company or the Trust contained in Section 2(a) of this Agreement (or any
certificate delivered by the Company or the Trust pursuant to Sections 6(h),
6(i) or 6(l) hereof) or the registration statement as originally filed or the
Registration Statement, any Preliminary Prospectus or the Prospectus, or in
any amendment or supplement thereto, (ii) upon any blue sky application or
other document executed by the Company or the Trust specifically for that
purpose or based upon written information furnished by the Company or the
Trust filed in any state or other jurisdiction in order to qualify any of the
Designated Preferred Securities under the securities laws thereof (any such
application, document or information being hereinafter referred to as a "Blue
Sky Application"), (iii) any omission or alleged omission to state a material
fact in the registration statement as originally filed or the Registration
Statement, the Preliminary Prospectus or the Prospectus, or in any amendment
or supplement thereto, or in any Blue Sky Application required to be stated
therein or necessary to
<PAGE> 34
make the statements therein not misleading, and against any and all losses,
claims, damages, liabilities and expenses (including reasonable costs of
investigation and attorney fees), joint or several, arising out of or based upon
any untrue statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus or the Prospectus, or in any amendment or supplement
thereto, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading or (iv) the enforcement of this indemnification provision
or the contribution provisions of Section 7(d); and shall reimburse each such
indemnified party for any reasonable legal or other expenses as incurred, but in
no event less frequently than 30 days after each invoice is submitted, incurred
by them in connection with investigating or defending against or appearing as a
third-party witness in connection with any such loss, claim, damage, liability
or action, notwithstanding the possibility that payments for such expenses might
later be held to be improper, in which case such payments shall be promptly
refunded; provided, however, that the Offerors shall not be liable in any such
-----------------
case to the extent, but only to the extent, that any such losses, claims,
damages, liabilities and expenses arise out of or are based upon any untrue
statement or omission or allegation thereof that has been made therein or
omitted therefrom in reliance upon and in conformity with the Underwriters'
Information; provided, that the indemnification contained in this paragraph with
--------
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter (or of any person controlling any Underwriter) to the extent any
such losses, claims, damages, liabilities or expenses directly results from the
fact that such Underwriter sold Designated Preferred Securities to a person to
whom there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the Prospectus (as amended or supplemented if any
amendments or supplements thereto shall have been furnished to the
Representative in sufficient time to distribute same with or prior to the
written confirmation of the sale involved), if required by law, and if such
loss, claim, damage, liability or expense would not have arisen but for the
failure to give or send such person such document. The foregoing indemnity
agreement is in addition to any liability the Company or the Trust may otherwise
have to any such indemnified party.
(b) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless each Offeror, each of its directors, each of its
officers who signed the Registration Statement and each person, if any, who
controls an Offeror within the meaning of the 1933 Act, to the same extent as
required by the foregoing indemnity from the Company to each Underwriter, but
only with respect to the Underwriters' Information or information related to
any Underwriter furnished in writing to an Offeror through such Underwriter
by or on its behalf expressly for use in a Blue Sky Application. The
foregoing indemnity agreement is in addition to any liability which any
Underwriter may otherwise have to any such indemnified party.
(c) If any action or claim shall be brought or asserted against
any indemnified party or any person controlling an indemnified party in
respect of which indemnity may be sought from the indemnifying party, such
indemnified party or
<PAGE> 35
controlling person shall promptly notify the indemnifying party in writing, and
the indemnifying party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the indemnified party and the
payment of all expenses; provided, however, that the failure so to notify the
-----------------
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under such paragraph, and further, shall
only relieve it from liability under such paragraph to the extent prejudiced
thereby. Any indemnified party or any such controlling person shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such indemnified party or such controlling person unless (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing, (ii) the indemnifying party has failed to assume the defense or to
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
such indemnified party or such controlling person and the indemnifying party and
such indemnified party or such controlling person shall have been advised by
such counsel that there may be one or more legal defenses available to it
that are different from or in addition to those available to the indemnifying
party (in which case, if such indemnified party or controlling person
notifies the indemnifying party in writing that it elects to employ separate
counsel at the expense of the indemnifying party, the indemnifying party
shall not have the right to assume the defense of such action on behalf of
such indemnified party or such controlling person) it being understood,
however, that the indemnifying party shall not, in connection with any one
such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys at any time and for all such indemnified
parties and controlling persons, which firm shall be designated in writing by
the indemnified party and shall be reasonably satisfactory to the
indemnifying party. Each indemnified party and each controlling person, as a
condition of such indemnity, shall use reasonable efforts to cooperate with
the indemnifying party in the defense of any such action or claim. The
indemnifying party shall not be liable for any settlement of any such action
effected without its written consent, but if there be a final judgment for
the plaintiff in any such action, the indemnifying party agrees to indemnify
and hold harmless any indemnified party and any such controlling person from
and against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.
An indemnifying party shall not, without the prior written
consent of each indemnified party, settle, compromise or consent to the entry
of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnity may be sought hereunder (whether or
not such indemnified party or any person who controls such indemnified party
within the meaning of the 1933 Act is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes a release
of each such indemnified party reasonably satisfactory to each such
indemnified party and each such controlling person from all liability arising
out of such claim, action, suit or proceeding or unless the indemnifying
party shall confirm in a written agreement with each indemnified party, that
notwithstanding
<PAGE> 36
any federal, state or common law, such settlement, compromise or consent shall
not alter the right of any indemnified party or controlling person to
indemnification or contribution as provided in this Agreement.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
paragraphs (a), (b) or (c) hereof in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the Offerors on the one hand and
the Underwriters on the other from the offering of the Designated Preferred
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Offerors on the one hand and the Underwriters on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The benefits received by the Underwriters
on the one hand and the Offerors on the other shall be deemed to be allocated
pro rata on the basis of the total underwriting discounts, commissions and
compensation received by the Underwriters relative to the total net proceeds
from the offering of the Designated Preferred Securities (before deducting
expenses) received by the Offerors, in each case as set forth in the table on
the cover page of the Prospectus. The relative fault of the Offerors on the
one hand and of the Underwriters on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Offerors or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. Each Offeror and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this paragraph (d) were determined
by pro rata allocation or by any other method of allocation that does not
take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in the first sentence
of this paragraph (d) shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this paragraph (d), no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Designated Preferred Securities
underwritten by such Underwriter and distributed to the public were offered
to the public exceeds the amount of any damages that such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
<PAGE> 37
For purposes of this paragraph (d), each person who controls an
Underwriter within the meaning of the 1933 Act shall have the same rights to
contribution as such Underwriter, and each person who controls an Offeror
within the meaning of the 1933 Act, each officer and trustee of an Offeror
who shall have signed the Registration Statement and each director of an
Offeror shall have the same rights to contribution as the Offerors subject in
each case to the preceding paragraph. The obligations of the Offerors under
this paragraph (d) shall be in addition to any liability which the Offerors
may otherwise have and the obligations of the Underwriters under this
paragraph (d) shall be in addition to any liability that the Underwriters may
otherwise have.
(e) The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Offerors set forth in
this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter
or any person controlling an Underwriter or by or on behalf of the Offerors,
or such directors, trustees or officers (or any person controlling an
Offeror), (ii) acceptance of any Designated Preferred Securities and payment
therefor hereunder and (iii) any termination of this Agreement. A successor
of any Underwriter or of an Offeror, such directors, trustees or officers (or
of any person controlling an Underwriter or an Offeror) shall be entitled to
the benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 7.
(f) The Company agrees to indemnify the Trust against any and
all losses, claims, damages or liabilities that may become due from the Trust
under this Section 7.
8. TERMINATION. The Representative shall have the right to
-----------
terminate this Agreement at any time at or prior to the Closing Date or, with
respect to the Underwriters' obligation to purchase the Option Preferred
Securities, at any time at or prior to the Option Closing Date, without
liability on the part of the Underwriters to the Offerors, if:
(a) Either Offeror shall have failed, refused, or been unable to
perform any agreement on its part to be performed under this Agreement, or
any of the conditions referred to in Section 6 shall not have been fulfilled,
when and as required by this Agreement;
(b) The Offerors or any of the Subsidiaries shall have
sustained any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree which
in the judgment of the Representative materially impairs the investment
quality of the Designated Preferred Securities;
<PAGE> 38
(c) There has been since the respective dates as of which
information is given in the Registration Statement or the Prospectus, any
materially adverse change in, or any development which is reasonably likely
to have a material adverse effect on, the condition (financial or otherwise),
earnings, affairs, business, prospects or results of operations of the
Offerors and the Subsidiaries on a consolidated basis, whether or not arising
in the ordinary course of business;
(d) There has occurred any outbreak of hostilities or other
calamity or crisis or material change in general economic, political or
financial conditions, or internal conditions, the effect of which on the
financial markets of the United States is such as to make it, in the
Representative's reasonable judgment, impracticable to market the Designated
Preferred Securities or enforce contracts for the sale of the Designated
Preferred Securities;
(e) Trading generally on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq Stock Market's National Market shall
have been suspended, or minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been required,
by any of said exchanges or market system or by the Commission or any other
governmental authority;
(f) A banking moratorium shall have been declared by either
federal or Kansas authorities; or
(g) Any action shall have been taken by any government in
respect of its monetary affairs which, in the Representative's reasonable
judgment, has a material adverse effect on the United States securities
markets.
The Offerors shall have the right to terminate this Agreement at
any time at or prior to the Closing Date or, with respect to the sale of the
Option Preferred Securities, at any time at or prior to the Option Closing
Date, if a Tax Event or a Capital Treatment Event, as such terms are defined
in the Registration Statement, shall have occurred.
If this Agreement shall be terminated pursuant to this Section 8,
the Offerors shall not then be under any liability to the Underwriters except
as provided in Sections 5 and 7 hereof.
9. DEFAULT OF UNDERWRITERS. If any Underwriter or Underwriters
-----------------------
shall default in its or their obligations to purchase Designated Preferred
Securities hereunder, the other Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the
Designated Preferred Securities which such defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that the
-----------------
non-defaulting Underwriters shall be under no obligation to purchase such
Designated Preferred Securities if the aggregate number of Designated
Preferred Securities to be purchased by such non-defaulting Underwriters
shall exceed 110% of the aggregate underwriting commitments set forth in
Schedule I hereto, and provided further, that no non-defaulting Underwriter
----------------
shall be obligated to purchase
<PAGE> 39
Designated Preferred Securities to the extent that the number of such Designated
Preferred Securities is more than 110% of such Underwriter's underwriting
commitment set forth in Schedule I hereto.
In the event that the non-defaulting Underwriters are not obligated
under the above paragraph to purchase the Designated Preferred Securities
which the defaulting Underwriter or Underwriters agreed but failed to
purchase, the Representative may in its discretion arrange for one or more of
the Underwriters or for another party or parties to purchase such Designated
Preferred Securities on the terms contained herein. If within one business
day after such default the Representative does not arrange for the purchase
of such Designated Preferred Securities, then the Company shall be entitled
to a further period of one business day within which to procure another party
or parties satisfactory to the Representative to purchase such Designated
Preferred Securities on such terms.
In the event that the Representative or the Company do not arrange for
the purchase of any Designated Preferred Securities to which a default
relates as provided above, this Agreement shall be terminated.
If the remaining Underwriters or substituted underwriters are required
hereby or agree to take up all or a part of the Designated Preferred
Securities of a defaulting Underwriter or Underwriters as provided in this
Section 9, (i) the Representative shall have the right to postpone the
Closing Date for a period of not more than five full business days, in order
to effect any changes that, in the opinion of counsel for the Underwriters or
the Company, may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or agreements, and the Company
agrees promptly to file any amendments to the Registration Statement or
supplements to the Prospectus which, in its opinion, may thereby be made
necessary and (ii) the respective numbers of Designated Preferred Securities
to be purchased by the remaining Underwriters or substituted underwriters
shall be taken as the basis of their underwriting obligation for all purposes
of this Agreement. Nothing herein contained shall relieve any defaulting
Underwriter of any liability it may have for damages occasioned by its
default hereunder. Any termination of this Agreement pursuant to this
Section 9 shall be without liability on the part of any non-defaulting
Underwriter or the Company, except for expenses to be paid or reimbursed
pursuant to Section 5 and except for the provisions of Section 7.
10. EFFECTIVE DATE OF AGREEMENT. If the Registration Statement
---------------------------
is not effective at the time of execution of this Agreement, this Agreement
shall become effective on the Effective Date at the time the Commission
declares the Registration Statement effective. The Company shall immediately
notify the Underwriters when the Registration Statement becomes effective.
If the Registration Statement is effective at the time of
execution of this Agreement, this Agreement shall become effective at the
earlier of 11:00 a.m. St. Louis time, on the first full business day
following the day on which this Agreement is
<PAGE> 40
executed, or at such earlier time as the Representative shall release the
Designated Preferred Securities for initial public offering. The Representative
shall notify the Offerors immediately after it has taken any action which causes
this Agreement to become effective.
Until such time as this Agreement shall have become effective, it
may be terminated by the Offerors, by notifying the Representative, or by the
Representative, by notifying either Offeror, except that the provisions of
Sections 5 and 7 shall at all times be effective.
11. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
-----------------------------------------------------
DELIVERY. The representations, warranties, indemnities, agreements and
- --------
other statements of the Offerors and their officers and trustees set forth in
or made pursuant to this Agreement and the agreements of the Underwriters
contained in Section 7 hereof shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Offerors
or controlling persons of either Offeror, or by or on behalf of the
Underwriters or controlling persons of the Underwriters or any termination or
cancellation of this Agreement and shall survive delivery of and payment for
the Designated Preferred Securities.
12. NOTICES. Except as otherwise provided in this Agreement, all
-------
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered by hand, mailed by registered or
certified mail, return receipt requested, or transmitted by any standard form
of telecommunication and confirmed. Notices to either Offeror shall be sent
to 105 North Main Street, Box One, Wichita, Kansas 67202, Attention: C.Q.
Chandler (with a copy to Bryan Cave LLP, One Metropolitan Square, 211 North
Broadway, Suite 3600, St. Louis, Missouri 63102, Attention: Frederick W.
Scherrer, Esq.); and notices to the Underwriters shall be sent to Stifel,
Nicolaus & Company, Incorporated, 500 North Broadway, Suite 1500, St. Louis,
Missouri 63102, Attention: Rick E. Maples (with a copy to Lewis, Rice &
Fingersh, L.C., 500 North Broadway, Suite 2000, St. Louis, Missouri 63102,
Attention: Thomas C. Erb, Esq.). In all dealings with the Company under this
Agreement, Stifel, Nicolaus & Company, Incorporated shall act as
representative of and on behalf of the several Underwriters, and the Company
shall be entitled to act and rely upon any statement, request, notice or
agreement on behalf of the Underwriters, made or given by Stifel, Nicolaus &
Company, Incorporated on behalf of the Underwriters, as if the same shall
have been made or given in writing by the Underwriters.
13. PARTIES. The Agreement herein set forth is made solely for the
-------
benefit of the Underwriters and the Offerors and, to the extent expressed,
directors, trustees and officers of the Offerors, any person controlling the
Offerors or the Underwriters, and their respective successors and assigns.
No other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include any
purchaser, in its status as such purchaser, from the Underwriters of the
Designated Preferred Securities.
<PAGE> 41
14. GOVERNING LAW. This Agreement shall be governed by the laws of
-------------
the State of Missouri, without giving effect to the choice of law or
conflicts of law principles thereof.
15. COUNTERPARTS. This Agreement may be executed in one or more
------------
counterparts, and when a counterpart has been executed by each party hereto
all such counterparts taken together shall constitute one and the same
Agreement.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
shall become a binding agreement between the Company, the Trust and you in
accordance with its terms.
Very truly yours,
INTRUST FINANCIAL CORPORATION
By:
--------------------------------------
Print Name:
------------------------------
Its:
-------------------------------------
INTRUST CAPITAL TRUST
By:
-------------------------------------
Print Name:
------------------------------
Administrative Trustee
CONFIRMED AND ACCEPTED,
as of -----------------, 1997.
STIFEL, NICOLAUS & COMPANY, INCORPORATED
By: -------------------------
Rick E. Maples
Senior Vice President
For itself and as Representative of the several
Underwriters named in Schedule I hereto
<PAGE> 42
EXHIBIT A - COMPANY SUBSIDIARIES
INTRUST Capital Trust
INTRUST Bank, N.A.
Will Rogers Bank
INTRUST Investments, Inc.
INTRUST Community Development Corporation
Nestegg Consulting, Inc.
KSB Properties, Inc.
INTRUST Financial Services, Inc.
<PAGE> 1
2,000,000 Preferred Securities
INTRUST Capital Trust
----% Cumulative Trust Preferred Securities
(Liquidation Amount $25 per Preferred Security)
AGREEMENT AMONG UNDERWRITERS
--------, 1997
Stifel, Nicolaus & Company, Incorporated
As Representative of the Several Underwriters
500 North Broadway, Suite 1500
St. Louis, Missouri 63102
A. UNDERWRITING AGREEMENT. We understand that INTRUST Financial
Corporation, a Kansas corporation (the "Company") and its financing
subsidiary, INTRUST Capital Trust, a Delaware business trust (the "Trust,"
and hereinafter together with the Company, the "Offerors"), propose to enter
into an underwriting agreement in substantially the form attached (the
"Underwriting Agreement") with you and other prospective underwriters
(including us) (collectively, the "Underwriters") providing for the several
purchase by the Underwriters from the Trust of 2,000,000 of the Trust's ----%
Cumulative Trust Preferred Securities with a liquidation amount of $25.00 per
Preferred Security upon the terms stated in the Underwriting Agreement (such
Preferred Securities are herein referred to as the "Firm Preferred
Securities), in which we will agree in accordance with the terms thereof to
purchase the number of Firm Preferred Securities set forth opposite our name
in Schedule I thereto. In addition, the Trust proposes to grant to the
Underwriters, upon the terms stated in the Underwriting Agreement, the right
to purchase up to an additional 300,000 Preferred Securities (the "Option
Preferred Securities), identical to the Firm Preferred Securities, for the
sole purpose of covering over-allotments in the sale of the Firm Preferred
Securities. The Firm Preferred Securities and the Option Preferred
Securities are collectively referred to herein as the "Designated Preferred
Securities."
B. REGISTRATION STATEMENT AND PROSPECTUS. The Designated
Preferred Securities are more particularly described in a registration
statement on Form S-3 (Registration Nos. and -01) filed with
-------- --------
the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Act"). Amendments to such
registration statement have been or are being filed, or a form of prospectus
is being filed pursuant to Rule 424(b) and Rule
<PAGE> 2
430A under the Act, in which, with our consent hereby confirmed, we have been
named as one of the Underwriters of the Designated Preferred Securities. A copy
of the registration statement as filed and a copy of each amendment as filed
(excluding exhibits) have heretofore been delivered to us. We confirm that we
have examined the registration statement, including amendments thereto, relating
to the Designated Preferred Securities, as filed with the Commission, that we
are willing to accept the responsibilities of an Underwriter under the Act in
respect of the registration statement, and we are willing to proceed with a
public offering of the Designated Preferred Securities in the manner
contemplated. The registration statement and the related prospectus may be
further amended, but no such amendment or change shall release or affect our
obligations hereunder or under the Underwriting Agreement. As used herein, the
terms "Registration Statement" and "Prospectus" shall have the same meanings as
specified in the Underwriting Agreement.
C. AUTHORITY OF REPRESENTATIVE. We hereby authorize you,
acting on our behalf, as our representative (a) to complete, execute, and
deliver the Underwriting Agreement, to determine the public offering price of
the Designated Preferred Securities and the underwriting discount with
respect thereto and to make such variations, if any, as in your judgment are
appropriate and are not material, provided that the respective amount of
Designated Preferred Securities set forth opposite our name in Schedule I
thereto shall not be increased without our consent, except as provided
herein, (b) to waive performance or satisfaction by the Offerors of
obligations or conditions included in the Underwriting Agreement if in your
judgment such waiver will not have a material adverse effect upon the
interests of the Underwriters, and (c) to take such actions as in your
discretion may be necessary or advisable to carry out the Underwriting
Agreement, this Agreement, and the transactions for the accounts of the
several Underwriters contemplated thereby and hereby. We also authorize you
to determine all matters relating to the public advertisement of the
Designated Preferred Securities.
D. PUBLIC OFFERING. We authorize you, with respect to any
Designated Preferred Securities which we so agree to purchase, to reserve for
sale, and on our behalf to sell, to dealers selected by you (including you or
any of the other Underwriters, such dealers so selected being hereinafter
called "Selected Dealers") and to others all or part of our Designated
Preferred Securities as you may determine. Reservations for sales to persons
other than Selected Dealers shall be as nearly as practicable in proportion
to the respective underwriting obligations of the Underwriters, unless you
agree to a smaller proportion at the request of an Underwriter. Reservations
for sales to Selected Dealers need not be in such proportion. All sales of
reserved Designated Preferred Securities shall be as nearly as practicable in
proportion to the respective reservations as calculated from day to day.
In your discretion, from time to time, you may add to the reserved
Designated Preferred Securities any Designated Preferred Securities retained
by us remaining unsold, and you may upon our request release to us any of our
Designated Preferred
<PAGE> 3
Securities reserved but not sold. Any Designated Preferred Securities so
released shall not thereafter be deemed to have been reserved. Upon termination
of this Agreement, or prior thereto at your discretion, you shall deliver to our
account any of our Designated Preferred Securities reserved but not sold and
delivered, except that if the aggregate of all reserved but unsold and
undelivered Designated Preferred Securities is less than Designated Preferred
Securities, you are authorized to sell such Designated Preferred Securities for
the accounts of the several Underwriters at such price or prices as you may
determine.
Sales of reserved Designated Preferred Securities shall be made to
Selected Dealers at the public offering price less the Selected Dealers'
Concession pursuant to the Selected Dealer Agreement in substantially the
form attached hereto, and to others at the public offering price.
Underwriters and Selected Dealers may reallow a concession to other dealers
as set forth in the Selected Dealer Agreement.
After advice from you that the Designated Preferred Securities are
released for sale to the public, we will offer to the public in conformity
with the terms of the offering set forth in the Prospectus such of our
Designated Preferred Securities as you advise us are not reserved. We
authorize you after the Designated Preferred Securities are released for sale
to the public, in your discretion, to change the public offering price of the
Designated Preferred Securities and the concession, and to buy Designated
Preferred Securities for our account from Selected Dealers at the public
offering price less such amount not in excess of the Selected Dealers'
Concession as you may determine.
Sales of Designated Preferred Securities between Underwriters may be
made with your prior consent, or as you deem advisable for blue sky purposes.
We agree that we will not sell to any accounts over which we exercise
discretionary authority any Designated Preferred Securities which we have
agreed to purchase under the Underwriting Agreement.
E. ADDITIONAL PROVISIONS REGARDING SALES. You may, in your
discretion, charge our account with an amount equal to the Selected Dealers'
Concession in respect of each Designated Preferred Security purchased under
the Underwriting Agreement by you and not sold by you for our account (and
each Designated Preferred Security which you believe has been substituted
therefor) which may be delivered against a purchase contract made by you for
our account prior to the later of (a) the termination of all of the
provisions referred to in Section 10 hereof or (b) the covering by you of any
short position created by you for our account, or in lieu of such charge,
require us to repurchase on demand at the total cost thereof (including
commissions), plus transfer taxes, any such Designated Preferred Security so
delivered.
F. PAYMENT AND DELIVERY. At or before 9:00 a.m., New York City
time, on the Closing Date (as defined in the Underwriting Agreement) and on
each Option Closing Date (as defined in the Underwriting Agreement), we will
deliver to you at
<PAGE> 4
your office at 500 North Broadway, Suite 1500, St. Louis, Missouri 63102,
Attention: Syndicate Department, a certified or bank cashiers' check payable to
your order, in clearing house funds, in the amount equal to the initial offering
price set forth in the Prospectus less the Selected Dealers' Concession in
respect of the number of Firm Preferred Securities or Option Preferred
Securities, as the case may be, to be purchased by us pursuant to the
Underwriting Agreement. We authorize you for our account to make payment of the
purchase price for the Designated Preferred Securities to be purchased by us
against delivery to you of such Designated Preferred Securities, and the
difference between such price and the amount of our check delivered to you
therefor shall be credited to our account. Unless we notify you at least three
full business days prior to such Closing Date to make other arrangements, you
may, in your discretion, advise the Offerors to prepare our certificates in our
name. If you have not received our funds as requested, you may in your
discretion make such payment on our behalf, in which event we will reimburse you
promptly. Any such payment by you shall not relieve us from any of our
obligations hereunder or under the Underwriting Agreement.
We authorize you for our account to accept delivery of our Designated
Preferred Securities from the Trust and to hold such of our Designated
Preferred Securities as you have reserved for sale to Selected Dealers and
others and to deliver such Designated Preferred Securities against such
sales. You will deliver to us our unreserved Designated Preferred Securities
as promptly as practicable.
Notwithstanding the foregoing provisions of this Section 6, if you so
notify us, payment for and delivery of our Designated Preferred Securities
may be made through the facilities of The Depository Trust Company, if we are
a member, unless we have otherwise notified you prior to a date to be
specified by you, or, if we are not a member, settlement may be made through
a correspondent who is a member pursuant to instructions we may send to you
prior to such specified date.
As promptly as practicable after you receive payment for reserved
Designated Preferred Securities sold for our account, you will remit to us
the purchase price paid by us for such Designated Preferred Securities and
credit or debit our account with the difference between the sale price and
such purchase price.
G. AUTHORITY TO BORROW. In connection with the transactions
contemplated in the Underwriting Agreement or this Agreement, we authorize
you, in your discretion, to advance your own funds for our account, charging
current interest rates, to arrange loans for our account and in connection
therewith to execute and deliver any notes or other instruments and hold or
pledge as security any of our Designated Preferred Securities or any
Preferred Securities of the Trust purchased for our account. Any lender may
rely upon your instructions in all matters relating to any such loan.
Any of our Designated Preferred Securities and any Preferred Securities
of the Trust purchased for our account held by you may from time to time be
delivered to
<PAGE> 5
us for carrying purposes, and any such securities will be delivered to you upon
demand.
H. STABILIZATION AND OTHER MATTERS. We authorize you in your
discretion to make purchases and sales of the Preferred Securities of the
Trust for our account in the open market or otherwise, for long or short
account, on such terms as you deem advisable and in arranging sales to
overallot. If you have purchased Preferred Securities for stabilizing
purposes prior to the execution of this Agreement, such purchases shall be
treated as having been made pursuant to the foregoing authorization. We also
authorize you, either before or after the termination of the offering
provisions of this Agreement, to cover any short position incurred pursuant
to this Section on such terms as you deem advisable. All such purchases and
sales and over-allotments shall be made for the accounts of the several
Underwriters as nearly as practicable in proportion to their respective
underwriting obligations. Our net commitment under this Section (excluding
any commitment incurred under the Underwriting Agreement upon exercise of the
right to purchase Option Preferred Securities) shall not, at the end of any
business day, exceed 15 percent of our maximum underwriting obligation. We
will on your demand take up and pay for at cost any Preferred Securities so
purchased or sold or over-allotted for our account, and, if any other
Underwriter defaults in its corresponding obligation, we will assume our
proportionate share of such obligation without relieving the defaulting
Underwriter from liability. We will be obligated in respect of purchases and
sales made for our account hereunder whether or not any proposed purchase of
the Designated Preferred Securities from the Trust is consummated. The
existence of this provision is no assurance that the price of the Designated
Preferred Securities will be stabilized or that, if stabilizing is commenced,
it may not be discontinued at any time.
We agree to advise you, from time to time upon your request, during the
term of this Agreement, of the number of Designated Preferred Securities
retained by us remaining unsold, and will, upon your request, sell to you for
the accounts of one or more of the several Underwriters such number of such
Designated Preferred Securities as you may designate at such prices, not less
than the net price to Selected Dealers nor more than the public offering
price, as you may determine.
If you effect any stabilizing purchase pursuant to this Section 8, you
will notify us promptly of the date and time when the first stabilizing
purchase was effected and the date and time when stabilizing was terminated.
You will retain such information as is required to be retained by you as
"Manager" pursuant to Rule 17a-2 under the Securities Exchange Act of 1934,
as amended (the "1934 Act"). We agree that we will not effect any
stabilizing purchases, syndicate covering transactions or penalty bids
without your express authorization, and, if any purchases are effected, we
agree to furnish to you not later than three business days following the date
upon which any of the foregoing was commenced such information as is required
under Rule 17a-2(d).
<PAGE> 6
With respect to the Underwriting Agreement, you are also authorized in
your discretion (a) to exercise the option therein as to all or any part of
the Option Preferred Securities, and to terminate such option in whole or in
part prior to its expiration, (b) to postpone the Closing Date and the Option
Closing Date referred to in the Underwriting Agreement, and any other time or
date specified therein, (c) to exercise any right of cancellation or
termination, (d) to arrange for the purchase by other persons (including
yourselves or any other Underwriter) of any Designated Preferred Securities
not taken up by any defaulting Underwriter and (e) to consent to such other
changes in the Underwriting Agreement as in your judgment do not materially
adversely affect the substance of our rights and obligations thereunder.
We further agree that (a) prior to the termination of this Agreement we
will not, directly or indirectly, bid for or purchase any Designated
Preferred Securities for our own account, except as provided in this
Agreement and in the Underwriting Agreement, and (b) prior to the completion
(as defined in the Commission's Regulation M) of our participation in this
distribution, we will otherwise comply with the Commission's Regulation M.
I. ALLOCATION OF EXPENSES AND SETTLEMENT. We authorize you
to charge our account with (a) all transfer taxes on Designated Preferred
Securities purchased by us pursuant to the Underwriting Agreement and sold by
you for our account, (b) Selected Dealers' Concessions in connection with the
purchase, marketing and sale of the Designated Preferred Securities for our
account, and (c) our proportionate share (based upon our underwriting
obligation) of all other expenses incurred by you under this Agreement and in
connection with the purchase, carrying, sale and distribution of the
Designated Preferred Securities. Your determination of the amount and
allocation of such expenses shall be conclusive. In the event of the default
of any Underwriter in carrying out its obligations hereunder, the expenses
chargeable to such Underwriter pursuant to this Agreement and not paid by it,
as well as any additional losses or expenses arising from such default, may
be proportionately charged by you against the other Underwriters not so
defaulting (including such other persons who purchase Designated Preferred
Securities upon a default by an Underwriter pursuant to Section 11 hereof),
without, however, relieving such defaulting Underwriter from its liability
therefor.
As soon as practicable after termination of this Agreement, the
accounts hereunder will be settled, but you may reserve from distribution
such amount as you deem necessary to cover possible additional expenses. You
may at any time make partial distributions of credit balances or call for
payment of debit balances. Any of our funds in your hands may be held with
your general funds without accountability for interest. Notwithstanding the
termination of this Agreement or any settlement, we will pay (a) our
proportionate share (based on our underwriting obligation) of all expenses
and liabilities which may be incurred by or for the accounts of the
Underwriters, including any liability based on the claim that the
Underwriters constitute an association, unincorporated business or other
separate entity, and of any expenses incurred by you or any other Underwriter
with your
<PAGE> 7
approval in contesting any such claim or liability, and (b) any transfer taxes
paid after such settlement on account of any sale or transfer for our account.
J. TERMINATION. The offering provisions of this Agreement shall
terminate 30 days from the date hereof unless extended by you. You may
extend said provisions for a period or periods not exceeding an additional 30
days in the aggregate, provided that the Selected Dealer Agreements, if any,
are similarly extended. Whether extended or not, said provisions may be
terminated in whole or in part by notice from you.
K. DEFAULT BY UNDERWRITERS. Default by one or more Underwriters
in respect of their obligations hereunder or under the Underwriting Agreement
shall not release us from any of our obligations or in any way affect the
liability of any defaulting Underwriter to the other Underwriters for damages
resulting from such default. In case of such default by one or more
Underwriters, you are authorized to increase, pro rata with other
non-defaulting Underwriters, the number of Designated Preferred Securities
which we shall be obligated to purchase pursuant to the Underwriting
Agreement, provided that the aggregate amount of all such increases for our
account shall not exceed our pro rata share of Designated Preferred
Securities; and you are further authorized to arrange, but shall not be
obligated to arrange, for the purchase by other persons, who may include
yourselves or other Underwriters, of all or a portion of any aggregate amount
not taken up. In the event any such arrangements are made, the respective
numbers of Designated Preferred Securities to be purchased by the
non-defaulting Underwriters and by any such other persons shall be taken as
the basis for the underwriting obligations under this Agreement.
L. POSITION OF REPRESENTATIVE. Except as otherwise
specifically provided in this Agreement, you shall have full authority to
take such action as you may deem advisable in respect of all matters
pertaining to the Underwriting Agreement and this Agreement and in connection
with the purchase, carrying, sale, and distribution of the Designated
Preferred Securities (including authority to terminate the Underwriting
Agreement as provided therein). You shall be under no liability to us for or
in respect of the value of the Designated Preferred Securities or the
validity or the form thereof, the Registration Statement, any preliminary
prospectus, the Prospectus, the Underwriting Agreement, or other instruments
executed by the Offerors, or others; or for or in respect of the issuance,
transfer, or delivery of the Designated Preferred Securities; or for the
performance by the Offerors, or others of any agreement on its or their part;
nor shall you be liable under any of the provisions hereof or for any matters
connected herewith, except for your own want of good faith, for obligations
expressly assumed by you in this Agreement and for any liabilities imposed
upon you by the Act. No obligations on your part shall be implied or
inferred herefrom. Authority with respect to matters to be determined by
you, or by you and the Offerors, pursuant to the Underwriting Agreement,
shall survive the termination of this Agreement.
<PAGE> 8
In taking all actions hereunder, except in the performance of your own
obligations hereunder and under the Underwriting Agreement, you shall act
only as the representative of each of the Underwriters. The commitments and
liabilities of each of the several Underwriters are several in accordance
with their respective purchase obligations and are not joint or joint and
several. Nothing contained herein shall constitute the Underwriters partners
or render any of them liable to make payments otherwise than as herein
provided. If for federal income tax purposes the Underwriters should be
deemed to constitute a partnership, then each Underwriter elects to be
excluded from the application of Subchapter K, Chapter 1, Subtitle A, of the
Internal Revenue Code of 1986, as amended, and agrees not to take any
position inconsistent with such election. Each Underwriter authorizes
Stifel, Nicolaus & Company, Incorporated, in its discretion, on behalf of
such Underwriter, to execute such evidence of such election as may be
required by the Internal Revenue Service.
M. COMPENSATION TO REPRESENTATIVE. As compensation for your
services in connection with the purchase of the Designated Preferred
Securities and the management of the public offering of the Designated
Preferred Securities, we agree to pay you and authorize you to charge our
account with an amount equal to $---- per share of the Designated Preferred
Securities which we have agreed to purchase pursuant to the Underwriting
Agreement.
N. INDEMNIFICATION AND FUTURE CLAIMS. Each Underwriter,
including you, agrees to indemnify, hold harmless and reimburse each other
Underwriter and each person, if any, who controls any other Underwriter
within the meaning of Section 15 of the Act, and any successor of any other
Underwriter, to the extent that, and upon the terms upon which, each
Underwriter will be obligated pursuant to the Underwriting Agreement to
indemnify, hold harmless and reimburse the Offerors, its directors, officers,
and controlling persons, therein specified.
In the event that at any time any person other than an Underwriter
asserts a claim against one or more of the Underwriters or against you as
representative of the Underwriters arising out of an alleged untrue statement
or omission in the Registration Statement (or any amendment thereto) or in
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) or relating to any transaction contemplated by this Agreement, we
authorize you to make such investigation, to retain such counsel for the
Underwriters and to take such action in the defense of such claim as you may
deem necessary or advisable. You may settle such claim with the approval of
a majority in interest of the Underwriters. We will pay our proportionate
share (based upon our underwriting obligation) of all expenses incurred by
you (including the fees and expenses of counsel for the Underwriters) in
investigating and defending against such claim and our proportionate share of
the aggregate liability incurred by all underwriters in respect of such claim
(after deducting any contribution or indemnification obtained pursuant to the
Underwriting Agreement, or otherwise, from persons other than Underwriters),
whether such liability is the result of a judgment against one or
<PAGE> 9
more of the Underwriters or the result of any such settlement. There shall be
credited against any amount paid or payable by us pursuant to this paragraph any
loss, damage, liability or expense which is incurred by us as a result of any
such claim asserted against us, and if such loss, claim, damage, liability, or
expense is incurred by us as a result of any such claim against us, and if
such loss, claim, damage, liability, or expense is incurred by us subsequent
to any payment by us pursuant to this paragraph, appropriate provision shall
be made to effect such credit, by refund or otherwise. Any Underwriter may
retain separate counsel at its own expense. A claim against or liability
incurred by a person who controls an Underwriter shall be deemed to have been
made against or incurred by such Underwriter. In the event of default by any
Underwriter in respect of its obligations under this Section, the
non-defaulting Underwriters shall be obligated to pay the full amount thereof
in the proportions that their respective underwriting obligations bear to the
underwriting obligations of all non-defaulting Underwriters, without
relieving such defaulting Underwriter of its liability hereunder. Our
agreements contained in this Section will remain in full force and effect
regardless of any investigation made by or on behalf of such other
Underwriter or controlling person and will survive the delivery of and
payment for the Designated Preferred Securities and the termination of this
Agreement and the similar agreements entered into with the other
Underwriters.
O. BLUE SKY AND OTHER MATTERS. You will not have any
responsibility with respect to the right of any Underwriter or other person
to sell the Designated Preferred Securities in any jurisdiction
notwithstanding any information you may furnish in that connection. We
authorize you to file a New York Further State Notice, if required, and to
make and carry out on our behalf any agreements which you may deem necessary
in order to procure registration or qualification of any of the Designated
Preferred Securities in any jurisdiction, and we will at your request make
such payments, and furnish to you such information, as you may deem required
by reason of any such agreements.
We authorize you to file on behalf of the several Underwriters with the
National Association of Securities Dealers, Inc. (the "NASD") such documents
and information, if any, which are available or have been furnished to you
for filing pursuant to the applicable rules, statements, and interpretations
of the NASD.
P. TITLE TO DESIGNATED PREFERRED SECURITIES. The Designated
Preferred Securities purchased by the respective Underwriters shall remain
the property of such Underwriters until sold and no title to any such
Designated Preferred Securities shall in any event pass to you by virtue of
any of the provisions of this Agreement.
Q. CAPITAL REQUIREMENTS. We confirm that obligations incurred
by us under this Agreement and under the Underwriting Agreement will not
place us in violation of Rule 15c3-1 under the 1934 Act or of any applicable
rules relating to capital requirements of any securities exchange or
association to which we are subject.
<PAGE> 10
R. LIABILITY FOR FUTURE CLAIMS. Neither any statement by you of any
credit or debit balance in our account nor any reservation from
distribution to cover possible additional expenses relating to the Designated
Preferred Securities will constitute any representation by you as to the
existence or nonexistence of possible unforeseen expenses or liabilities of
or charges against the several Underwriters. Notwithstanding the
distribution of any net credit balance to us, we will be and remain liable
for, and will pay on demand, (a) our proportionate share (based upon our
underwriting obligation) of all expenses and liabilities which may be
incurred by or for the accounts of the Underwriters, including any liability
which may be incurred by the Underwriters or any of them based on the claim
that the Underwriters constitute an association, unincorporated business,
partnership, or any separate entity, and (b) any transfer taxes paid after
such settlement on account of any sale or transfer for our account.
S. ACKNOWLEDGMENT OF REGISTRATION STATEMENT, ETC. We hereby
confirm that we have examined the Registration Statement (including any
amendments or supplements thereto) and Prospectus relating to the Designated
Preferred Securities filed with the Commission, that we are willing to accept
the responsibilities of an underwriter thereunder and that we are willing to
proceed as therein contemplated. We confirm that we have authorized you to
advise the Offerors on our behalf (a) as to the statements to be included in
any preliminary prospectus and in the Prospectus (including any supplement
thereto) relating to the Designated Preferred Securities under the heading
"Underwriting," insofar as they relate to us, and (b) that there is no
information about us required to be stated in said Registration Statement or
said preliminary prospectus or the Prospectus (including any supplement
thereto) other than as set forth in the Underwriters' Questionnaire
previously delivered by us to you and the Offerors. We understand that the
aforementioned documents are subject to further change and that we will be
supplied with copies of any amendment or amendments to the Registration
Statement and of any amended Prospectus promptly, if and when received by
you, but the making of such changes and amendments will not release us or
affect our obligations hereunder or under the Underwriting Agreement.
T. NOTICES AND GOVERNING LAW. Any notice from you to us shall
be mailed, telephoned, or telegraphed to us at our address as set forth in
the Underwriters' Questionnaire. Any notice from us to you shall be deemed
to have been duly given if mailed, telephoned or telegraphed to you at 500
North Broadway, Suite 1500, St. Louis, Missouri 63102, Attention: Syndicate
Department. This Agreement shall be governed by and construed in accordance
with the laws of the State of Missouri.
U. OTHER PROVISIONS. We represent that we are actually engaged
in the investment banking or securities business and that we are a member in
good standing of the NASD or, if we are not such a member, that we are a
foreign dealer
<PAGE> 11
not eligible for membership in the NASD and that we will not offer or sell any
Designated Preferred Securities in, or to persons who are nationals or residents
of, the United States of America. In making sales of Designated Preferred
Securities, if we are such a member, we agree to comply with all applicable
rules of the NASD, including, without limitation, the NASD's Interpretation with
respect to Free-Riding and Withholding and Rule 2740 of the NASD's Conduct
Rules, or if we are a foreign dealer, we agree to comply with such
Interpretation and Rules 2730, 2740 and 2750 as though we were such a member,
and with Rule 2420 as that Rule applies to a non-member broker or dealer in a
foreign country. We confirm that you have heretofore delivered to us such
number of copies of the Prospectus as have been reasonably requested by us, and
we further confirm that we have complied and will comply with Rule 15c2-8 under
the 1934 Act concerning delivery of each preliminary prospectus and the
Prospectus, and that we will furnish to persons who receive a confirmation of
sale a copy of the Prospectus filed pursuant to Rule 424(b) or Rule 424(c) under
the Act. We are aware of our statutory responsibilities under the Act, and you
are authorized on our behalf to so advise the Commission.
COUNTERPARTS. This Agreement may be signed in any number of
counterparts which, taken together, shall constitute one and the same
instrument, and you may confirm the execution of such counterparts by
facsimile signature.
As Attorney-in-Fact for each of the several
Underwriters named in Schedule I to the
Underwriting Agreement
<PAGE> 12
Confirmed as of the date first above written.
STIFEL, NICOLAUS & COMPANY, INCORPORATED
As Representative of the Several Underwriters
By:
Name:
Title:
<PAGE> 1
INTRUST FINANCIAL CORPORATION
AND
STATE STREET BANK AND TRUST COMPANY,
AS TRUSTEE
INDENTURE
----% SUBORDINATED DEBENTURES DUE 2027
DATED AS OF ---------------, 1997.
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
<S> <C>
ARTICLE I. DEFINITIONS
Section 1.1. Definitions of Terms
ARTICLE II. ISSUE, DESCRIPTION, TERMS, CONDITIONS REGISTRATION
AND EXCHANGE OF THE DEBENTURES
Section 2.1 Designation and Principal Amount
Section 2.2. Maturity
Section 2.3. Form and Payment
Section 2.4. [Intentionally Omitted]
Section 2.5. Interest
Section 2.6. Execution and Authentication
Section 2.7. Registration of Transfer and Exchange.
Section 2.8. Temporary Debentures
Section 2.9. Mutilated, Destroyed, Lost or Stolen Debentures
Section 2.10. Cancellation
Section 2.11. Benefit of Indenture
Section 2.12. Authentication Agent
ARTICLE III. REDEMPTION OF DEBENTURES
Section 3.1. Redemption
Section 3.2. Special Event Redemption
Section 3.3. Optional Redemption by the Company
Section 3.4. Notice of Redemption
Section 3.5. Payment upon Redemption
Section 3.6. No Sinking Fund
ARTICLE IV. EXTENSION OF INTEREST PAYMENT PERIOD
Section 4.1. Extension of Interest Payment Period
Section 4.2. Notice of Extension
Section 4.3. Limitation on Transactions
ARTICLE V. PARTICULAR COVENANTS OF THE COMPANY
Section 5.1. Payment of Principal and Interest
Section 5.2. Maintenance of Agency
Section 5.3. Paying Agents
i
<PAGE> 2
Section 5.4. Appointment to Fill Vacancy in Office of the Trustee
Section 5.5. Compliance with Consolidation Provisions
ii
<PAGE> 3
Section 5.6. Limitation on Transactions
Section 5.7. Covenants as to the Trust
Section 5.8. Covenants as to Purchases
ARTICLE VI.THE DEBENTUREHOLDERS' LISTS AND REPORTS.BY THE COMPANY AND THE TRUSTEE
Section 6.1. The Company to Furnish the Trustee Names and Addresses of the Debentureholders
Section 6.2. Preservation of Information Communications with the Debentureholders
Section 6.3. Reports by the Company
Section 6.4. Reports by the Trustee
ARTICLE VII. REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON EVENT OF DEFAULT
Section 7.1. Events of Default
Section 7.2. Collection of Indebtedness and Suits for Enforcement by the Trustee
Section 7.3. Application of Moneys Collected
Section 7.4. Limitation on Suits
Section 7.5. Rights and Remedies Cumulative; Delay or Omission not Waiver
Section 7.6. Control by the Debentureholders
Section 7.7. Undertaking to Pay Costs
ARTICLE VIII.
Section 8.1. Form of Debenture
Section 8.2. Original Issue of the Debentures
ARTICLE IX. CONCERNING THE TRUSTEE
Section 9.1. Certain Duties and Responsibilities of the Trustee
Section 9.2. Notice of Defaults
Section 9.3. Certain Rights of the Trustee
Section 9.4. The Trustee not Responsible for Recitals, Etc
Section 9.5. May Hold the Debentures
Section 9.6. Moneys Held in Trust
Section 9.7. Compensation and Reimbursement
Section 9.8. Reliance on Officers' Certificate
Section 9.9. Disqualification; Conflicting Interests
Section 9.10. Corporate Trustee Required; Eligibility
iii
<PAGE> 4
Section 9.11. Resignation and Removal; Appointment of Successor
Section 9.12. Acceptance of Appointment by Successor
Section 9.13. Merger, Conversion, Consolidation or Succession to Business
Section 9.14. Preferential Collection of Claims against the Company
ARTICLE X. CONCERNING THE DEBENTUREHOLDERS
Section 10.1. Evidence of Action by the Holders
Section 10.2. Proof of Execution by the Debentureholders
Section 10.3. Who May be Deemed Owners
Section 10.4. Certain Debentures Owned by Company Disregarded
Section 10.5. Actions Binding on the Future Debentureholders
ARTICLE XI. SUPPLEMENTAL INDENTURES
Section 11.1. Supplemental Indentures without the Consent of the Debentureholders
Section 11.2. Supplemental Indentures with Consent of the Debentureholders
Section 11.3. Effect of Supplemental Indentures
Section 11.4. The Debentures Affected by Supplemental Indentures
Section 11.5. Execution of Supplemental Indentures
ARTICLE XII. SUCCESSOR CORPORATION
Section 12.1. The Company may Consolidate, Etc.
Section 12.2. Successor Corporation Substituted
Section 12.3. Evidence of Consolidation, Etc. to Trustee
ARTICLE XIII. SATISFACTION AND DISCHARGE
Section 13.1. Satisfaction and Discharge of Indenture
Section 13.2. Discharge of Obligations
Section 13.3. Deposited Moneys to be Held in Trust
Section 13.4. Payment of Monies Held by Paying Agents
Section 13.5. Repayment to the Company
iv
<PAGE> 5
ARTICLE XIV. IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 14.1. No Recourse
ARTICLE XV. MISCELLANEOUS PROVISIONS
Section 15.1. Effect on Successors and Assigns
Section 15.2. Actions by Successor
Section 15.3. Surrender of the Company Powers
Section 15.4. Notices
Section 15.5. Governing Law
Section 15.6. Treatment of the Debentures as Debt
Section 15.7. Compliance Certificates and Opinions
Section 15.8. Payments on Business Days
Section 15.9. Conflict with Trust Indenture Act
Section 15.10. Counterparts
Section 15.11. Separability
Section 15.12. Assignment
Section 15.13. Acknowledgment of Rights; Right of Setoff
ARTICLE XVI. SUBORDINATION OF THE DEBENTURES
Section 16.1. Agreement to Subordinate
Section 16.2. Default on Senior Debt, Subordinated Debt or Additional Senior Obligations
Section 16.3. Liquidation; Dissolution; Bankruptcy
Section 16.4. Subrogation
Section 16.5. The Trustee to Effectuate Subordination
Section 16.6. Notice by the Company
Section 16.7. Rights of the Trustee; Holders of the Senior Indebtedness
Section 16.8. Subordination may not be Impaired
</TABLE>
v
<PAGE> 6
<TABLE>
CROSS-REFERENCE TABLE
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Indenture
---------
<S> <C>
310(a) 9.10
310(b) 9.9, 9.11
310(c) Not Applicable
311(a) 9.14
311(b) 9.14
311(c) Not Applicable
312(a) 6.1, 6.2(a)
312(b) 6.2(c)
312(c) 6.2(c)
313(a) 6.4(a)
313(b) 6.4(b)
313(c). 6.4(a), 6.4(b)
313(d) 6.4(c)
314(a) 6.3(a)
314(b) Not Applicable
314(c) 15.7
314(d) Not Applicable
314(e) 15.7
314(f) Not Applicable
315(a) 9.1(a), 9.3
315(b) 9.2
315(c) 9.1(a)
315(d) 9.1(b)
315(e) 7.7
316(a) 1.1, 7.6
316(b) 7.4(b)
316(c) 10.1(b)
317(a) 7.2
317(b) 5.3
318(a) 15.9
Note: This Cross-Reference Table does not constitute part of this Indenture
and shall not affect the interpretation of any of its terms or provisions.
</TABLE>
vi
<PAGE> 7
INDENTURE
INDENTURE, dated as of ----------, 1997, between INTRUST FINANCIAL
CORPORATION, a Kansas corporation (the "Company") and STATE STREET BANK AND
TRUST COMPANY, a trust company duly organized and existing under the laws of
the Commonwealth of Massachusetts, as trustee (the "Trustee");
RECITALS
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the execution and delivery of this Indenture to provide for the
issuance of securities to be known as its ----% Subordinated Debentures due
2027 (hereinafter referred to as the "Debentures"), the form and substance of
such Debentures and the terms, provisions and conditions thereof to be set
forth as provided in this Indenture;
WHEREAS, INTRUST Capital Trust, a Delaware statutory business trust
(the "Trust"), has offered to the public $50,000,000 aggregate liquidation
amount of its Preferred Securities (as defined herein) and proposes to invest
the proceeds from such offering, together with the proceeds of the issuance
and sale by the Trust to the Company of $1,546,400 aggregate liquidation
amount of its Common Securities (as defined herein), in $51,546,400 aggregate
principal amount of the Debentures; and
WHEREAS, the Company has requested that the Trustee execute and deliver
this Indenture; and
WHEREAS, all requirements necessary to make this Indenture a valid
instrument in accordance with its terms, and to make the Debentures, when
executed by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed, and the execution and
delivery of this Indenture have been duly authorized in all respects; and
WHEREAS, to provide the terms and conditions upon which the Debentures
are to be authenticated, issued and delivered, the Company has duly
authorized the execution of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, in consideration of the premises and the purchase of
the Debentures by the holders thereof, it is mutually covenanted and agreed
as follows for the equal and ratable benefit of the holders of the
Debentures:
1
<PAGE> 8
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions of Terms.
The terms defined in this Section 1.1 (except as in this Indenture
otherwise expressly provided or unless the context otherwise requires) for
all purposes of this Indenture and of any indenture supplemental hereto shall
have the respective meanings specified in this Section 1.1 and shall include
the plural as well as the singular. All other terms used in this Indenture
that are defined in the Trust Indenture Act, or that are by reference in the
Trust Indenture Act defined in the Securities Act (except as herein otherwise
expressly provided or unless the context otherwise requires), shall have the
meanings assigned to such terms in the Trust Indenture Act and in the
Securities Act as in force at the date of the execution of this instrument.
All accounting terms used herein and not expressly defined shall have the
meanings assigned to such terms in accordance with Generally Accepted
Accounting Principles.
"Accelerated Maturity Date" means if the Company elects to accelerate
the Maturity Date in accordance with Section 2.2(c), the date selected by the
Company which is prior to the Scheduled Maturity Date, but is after December
31, 2002.
"Additional Payments" shall have the meaning set forth in Section 2.5.
"Additional Senior Obligations" means all indebtedness of the Company
whether incurred on or prior to the date of this Indenture or thereafter
incurred, for claims in respect of derivative products such as interest and
foreign exchange rate contracts, commodity contracts and similar
arrangements; provided, however, that Additional Senior Obligations does not
-------- -------
include claims in respect of Senior Debt or Subordinated Debt or obligations
which, by their terms, are expressly stated to be not superior in right of
payment to the Debentures or to rank pari passu in right of payment with the
Debentures. For purposes of this definition, "claim" shall have the meaning
assigned thereto in Section 101(4) of the United States Bankruptcy Code of
1978, as amended.
"Administrative Trustees" shall have the meaning set forth in the Trust
Agreement.
2
<PAGE> 9
"Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding with power to vote 10%
or more of the outstanding voting securities or other ownership interests of
the specified Person; (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person; (c) any Person
directly or indirectly controlling, controlled by, or under common control
with the specified Person; (d) a partnership in which the specified Person is
a general partner; (e) any officer or director of the specified Person; and
(f) if the specified Person is an individual, any entity of which the
specified Person is an officer, director or general partner.
"Authenticating Agent" means an authenticating agent with respect to
the Debentures appointed by the Trustee pursuant to Section 2.12.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any
duly authorized committee of such Board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of
such certification.
"Business Day" means, with respect to the Debentures, any day other
than a Saturday or a Sunday or a day on which federal or state banking
institutions in the Borough of Manhattan, the City of New York, are
authorized or required by law, executive order or regulation to close, or a
day on which the Corporate Trust Office of the Trustee or the Property
Trustee is closed for business.
"Capital Treatment Event" means the receipt by the Trust of an Opinion
of Counsel, rendered by a law firm having a recognized banking law practice,
to the effect that, as a result of any amendment to or any change (including
any announced prospective change) in the laws (or any regulations thereunder)
of the United States or any political subdivision thereof or therein, or as a
result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change
is effective or such proposed
3
<PAGE> 10
change, pronouncement or decision is announced on or after the date of
issuance of the Preferred Securities under the Trust Agreement, there is more
than an insubstantial risk of impairment of the Company's ability to treat
the aggregate Liquidation Amount of the Preferred Securities (or any
substantial portion thereof) as "Tier 1 Capital" (or the then equivalent
thereof) for purposes of the capital adequacy guidelines of the Federal
Reserve, as then in effect and applicable to the Company, provided, however,
-------- -------
that the inability of the Company to treat all or any portion of the
Liquidation Amount of the Preferred Securities as Tier 1 Capital shall not
constitute the basis for a Capital Treatment Event if such inability results
from the Company having cumulative preferred stock, minority interests in
consolidated subsidiaries, or any other class of security or interest
which the Federal Reserve now or may hereafter accord Tier 1 Capital
treatment in excess of the amount which may qualify for treatment as Tier 1
Capital under applicable capital adequacy guidelines of the Federal Reserve.
"Certificate" means a certificate signed by the principal executive
officer, the principal financial officer, the principal accounting officer,
the treasurer or any vice president of the Company. The Certificate need not
comply with the provisions of Section 15.7.
"Change in 1940 Act Law" shall have the meaning set forth in the
definition of "Investment Company Event."
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Common Securities" means undivided beneficial interests in the assets
of the Trust which rank pari passu with the Preferred Securities; provided,
--------
however, that upon the occurrence of an Event of Default, the rights of
- -------
holders of Common Securities to payment in respect of (i) distributions, and
(ii) payments upon liquidation, redemption and otherwise, are subordinated to
the rights of holders of Preferred Securities.
"Company" means INTRUST Financial Corporation, a corporation duly
organized and existing under the laws of the State of Kansas, and, subject to
the provisions of Article XII, shall also include its successors and assigns.
"Compounded Interest" shall have the meaning set forth in Section 4.1.
4
<PAGE> 11
"Corporate Trust Office" means the office of the Trustee at which, at
any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at Two International
Place, 4th Floor, Boston, Massachusetts 02110, Attention: Corporate Trust
Department.
"Coupon Rate" shall have the meaning set forth in Section 2.5.
"Custodian" means any receiver, trustee, assignee, liquidator, or
similar official under any Bankruptcy Law.
"Debentures" shall have the meaning set forth in the Recitals hereto.
"Debentureholder," "holder of Debentures," "registered holder," or
other similar term, means the Person or Persons in whose name or names a
particular Debenture shall be registered on the books of the Company or the
Trustee kept for that purpose in accordance with the terms of this Indenture.
"Debenture Register" shall have the meaning set forth in Section
2.7(b).
"Debenture Registrar" shall have the meaning set forth in Section
2.7(b).
"Debt" means with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent, (i)
every obligation of such Person for money borrowed; (ii) every obligation of
such Person evidenced by bonds, debentures, notes or other similar
instruments, including obligations incurred in connection with the
acquisition of property, assets or businesses; (iii) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person; (iv)
every obligation of such Person issued or assumed as the deferred purchase
price of property or services (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business); (v) every
capital lease obligation of such Person; and (vi) and every obligation of the
type referred to in clauses (i) through (v) of another Person and all
dividends of another Person the payment of which, in either case, such Person
has guaranteed or is responsible or liable, directly or indirectly, as
obligor or otherwise.
"Default" means any event, act or condition that with notice or lapse
of
5
<PAGE> 12
time, or both, would constitute an Event of Default.
"Deferred Payments" shall have the meaning set forth in Section 4.1.
"Dissolution Event" means that as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance
with the Trust Agreement and the Debentures held by the Property Trustee are
to be distributed to the holders of the Trust Securities issued by the Trust
pro rata in accordance with the Trust Agreement.
"Distribution" shall have the meaning set forth in the Trust Agreement.
"Event of Default" means, with respect to the Debentures, any event
specified in Section 7.1, which has continued for the period of time, if any,
and after the giving of the notice, if any, therein designated.
"Exchange Act," means the Securities Exchange Act of 1934, as amended,
as in effect at the date of execution of this instrument.
"Extended Maturity Date" means if the Company elects to extend the
Maturity Date in accordance with Section 2.2(b), the date selected by the
Company which is after the Scheduled Maturity Date but before December 31,
2036.
"Extension Period" shall have the meaning set forth in Section 4.1.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
"Generally Accepted Accounting Principles" means such accounting
principles as are generally accepted at the time of any computation required
hereunder.
"Governmental Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged; or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America, the payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America that, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depositary receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act) as custodian with respect to any such
Governmental Obligation or a specific payment of principal of
6
<PAGE> 13
or interest on any such Governmental Obligation held by such custodian for
the account of the holder of such depositary receipt; provided, however, that
-------- -------
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depositary receipt
from any amount received by the custodian in respect of the Governmental
Obligation or the specific payment of principal of or interest on the
Governmental Obligation evidenced by such depositary receipt.
"Herein," "hereof," and "hereunder," and other words of similar import,
refer to this Indenture as a whole and not to any particular Article, Section
or other subdivision.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into in accordance with the terms hereof.
"Interest Payment Date" shall have the meaning set forth in Section
2.5.
"Investment Company Act," means the Investment Company Act of 1940, as
amended, as in effect at the date of execution of this instrument.
"Investment Company Event" means the receipt by the Trust of an Opinion
of Counsel, rendered by a law firm having a recognized tax and securities law
practice, to the effect that, as a result of the occurrence of a change in
law or regulation or a change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), the Trust is or shall be considered
an "investment company" that is required to be registered under the
Investment Company Act, which Change in 1940 Act Law becomes effective on or
after the date of original issuance of the Preferred Securities under the
Trust Agreement.
"Maturity Date" means the date on which the Debentures mature and on
which the principal shall be due and payable together with all accrued and
unpaid interest thereon including Compounded Interest and Additional
Payments, if any.
"Ministerial Action" shall have the meaning set forth in Section 3.2.
"Officers' Certificate" means a certificate signed by the President or
a Vice President and by the Treasurer or an Assistant Treasurer or the
7
<PAGE> 14
Controller or an Assistant Controller or the Secretary or an Assistant
Secretary of the Company that is delivered to the Trustee in accordance with
the terms hereof. Each such certificate shall include the statements provided
for in Section 15.7, if and to the extent required by the provisions thereof.
"Opinion of Counsel" means an opinion in writing of legal counsel, who
may be an employee of or counsel for the Company, that is delivered to the
Trustee in accordance with the terms hereof. Each such opinion shall include
the statements provided for in Section 15.7, if and to the extent required by
the provisions thereof.
"Outstanding," when used with respect to the Debentures, means, as of
the date of determination, all of the Debentures theretofore executed and
delivered by the Trustee under this Indenture, except:
(a) the Debentures theretofore canceled by the Trustee or any Paying
Agent, or delivered to the Trustee or any Paying Agent for cancellation;
(b) the Debentures for whose payment or redemption Governmental
Obligations or money in the necessary amount has been theretofore deposited in
trust with the Trustee or any Paying Agent (other than the Company) or shall
have been set aside and segregated in trust by the Company (if the Company shall
act as its own paying agent) for the holders of such Debentures; provided that,
if such Debentures are to be redeemed, notice of such redemption has been duly
given pursuant to Article III hereof; and
(c) the Debentures which have been paid or in lieu or substitution
of which other Debentures have been executed and delivered pursuant to
Section 2.7; provided, however, that in determining whether the holders of a
-------- -------
majority or specified percentage in aggregate principal amount of the
Debentures have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, the Debentures owned by the Company or any other
obligor on the Debentures or by any Person directly or indirectly controlling
or controlled by or under common control with the Company or any other
obligor on the Debentures shall be disregarded and deemed not to be
Outstanding, except that (i) in determining whether any Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only the Debentures that such Trustee knows to be
so owned shall be so disregarded; and (ii) for purposes hereof, the Trust
shall be deemed not to be controlled by the Company. The Debentures so owned
which have been
8
<PAGE> 15
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Debentures and the pledgee is not a Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any such other obligor.
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.3.
"Person" means any individual, corporation, partnership, joint-venture,
trust, limited liability company, joint-stock company, unincorporated
organization or government or any agency or political subdivision thereof.
"Predecessor Debenture" means every previous Debenture evidencing all
or a portion of the same debt as that evidenced by such particular Debenture;
and, for the purposes of this definition, any Debenture authenticated and
delivered under Section 2.9 in lieu of a lost, destroyed or stolen Debenture
shall be deemed to evidence the same debt as the lost, destroyed or stolen
Debenture.
"Preferred Securities" means undivided beneficial interests in the
assets of the Trust which rank pari passu with Common Securities issued by
the Trust; provided, however, that upon the occurrence of an Event of
-------- -------
Default, the rights of holders of Common Securities to payment in respect of
(i) distributions, and (ii) payments upon liquidation, redemption and
otherwise, are subordinated to the rights of holders of Preferred Securities.
"Preferred Securities Guarantee" means any guarantee that the Company
may enter into with the Trustee or other Persons that operates directly or
indirectly for the benefit of holders of Preferred Securities.
"Property Trustee" has the meaning set forth in the Trust Agreement.
"Responsible Officer" when used with respect to the Trustee means the
Chairman of the Board of Directors, the President, any Vice President, the
Secretary, the Treasurer, any trust officer, any corporate trust officer or
any other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is
referred because of his or her knowledge of and familiarity with the
particular subject.
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<PAGE> 16
"Scheduled Maturity Date" means December 31, 2027.
"Securities Act," means the Securities Act of 1933, as amended, as in
effect at the date of execution of this instrument.
"Senior Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether
or not such claim for post-petition interest is allowed in such proceeding),
on Debt, whether incurred on or prior to the date of this Indenture or
thereafter incurred, unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Debentures or to
other Debt which is pari passu with, or subordinated to, the Debentures;
provided, however, that Senior Debt shall not be deemed to include (i) any
- -------- -------
Debt of the Company which when incurred and without respect to any election
under section 1111(b) of the United States Bankruptcy Code of 1978, as
amended, was without recourse to the Company; (ii) any Debt of the Company to
any of its subsidiaries; (iii) Debt to any employee of the Company; (iv) Debt
which by its terms is subordinated to trade accounts payable or accrued
liabilities arising in the ordinary course of business to the extent that
payments made to the holders of such Debt by the holders of the Debentures as
a result of the subordination provisions of this Indenture would be greater
than they otherwise would have been as a result of any obligation of such
holders to pay amounts over to the obligees on such trade accounts payable or
accrued liabilities arising in the ordinary course of business as a result of
subordination provisions to which such Debt is subject; and (v) Debt which
constitutes Subordinated Debt.
"Senior Indebtedness" shall have the meaning set forth in Section 16.1.
"Special Event" means a Tax Event, a Capital Treatment Event or an
Investment Company Event.
"Subordinated Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether
or not such claim for post-petition interest is allowed in such proceeding),
on Debt (other than the Debentures), whether incurred on or prior to the date
of this Indenture or thereafter incurred, which is by its
10
<PAGE> 17
terms expressly provided to be junior and subordinate to other Debt of the
Company.
"Subsidiary" means, with respect to any Person, (i) any corporation at
least a majority of whose outstanding Voting Stock shall at the time be
owned, directly or indirectly, by such Person or by one or more of its
Subsidiaries or by such Person and one or more of its Subsidiaries; (ii) any
general partnership, joint venture, trust or similar entity, at least a
majority of whose outstanding partnership or similar interests shall at the
time be owned by such Person, or by one or more of its Subsidiaries, or by
such Person and one or more of its Subsidiaries; and (iii) any limited
partnership of which such Person or any of its Subsidiaries is a general
partner.
"Tax Event" means the receipt by the Trust of an Opinion of Counsel,
rendered by a law firm having a recognized tax and securities practice, to
the effect that, as a result of any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein, or as a result of any official administrative pronouncement or
judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or which pronouncement or decision is
announced on or after the date of issuance of the Preferred Securities under
the Trust Agreement, there is more than an insubstantial risk that (i) the
Trust is, or shall be within 90 days after the date of such Opinion of
Counsel, subject to United States federal income tax with respect to income
received or accrued on the Debentures; (ii) interest payable by the Company
on the Debentures is not, or within 90 days after the date of such Opinion of
Counsel, shall not be, deductible by the Company, in whole or in part, for
United States federal income tax purposes; or (iii) the Trust is, or shall be
within 90 days after the date of such Opinion of Counsel, subject to more
than a de minimis amount of other taxes, duties, assessments or other
governmental charges. The Trust or the Company shall request and receive such
Opinion of Counsel with regard to such matters within a reasonable period of
time after the Trust or the Company shall have become aware of the occurrence
or the possible occurrence of any of the events described in clauses (i) through
(iii) above.
"Trust" means INTRUST Capital Trust, a Delaware statutory business
trust.
11
<PAGE> 18
"Trust Agreement" means the Amended and Restated Trust Agreement, dated
- ------------, 1997, of the Trust.
"Trustee" means State Street Bank and Trust Company and, subject to the
provisions of Article IX, shall also include its successors and assigns, and,
if at any time there is more than one Person acting in such capacity
hereunder, "Trustee" shall mean each such Person.
"Trust Indenture Act," means the Trust Indenture Act of 1939, as
amended, subject to the provisions of Sections 11.1, 11.2, and 12.1, as in
effect at the date of execution of this instrument.
"Trust Securities" means the Common Securities and Preferred
Securities, collectively.
"Voting Stock," as applied to stock of any Person, means shares,
interests, participations or other equivalents in the equity interest
(however designated) in such Person having ordinary voting power for the
election of a majority of the directors (or the equivalent) of such Person,
other than shares, interests, participations or other equivalents having such
power only by reason of the occurrence of a contingency.
ARTICLE II.
ISSUE, DESCRIPTION, TERMS, CONDITIONS
REGISTRATION AND EXCHANGE OF THE DEBENTURES
Section 2.1 Designation and Principal Amount.
There is hereby authorized Debentures designated the "---% Subordinated
Debentures due 2027," limited in aggregate principal amount up to
$59,278,375, which amount shall be as set forth in any written order of the
Company for the authentication and delivery of Debentures pursuant to Section
2.6.
Section 2.2. Maturity.
(a) The Maturity Date shall be either:
(i) the Scheduled Maturity Date; or
(ii) if the Company elects to extend the Maturity Date beyond
the Scheduled Maturity Date in accordance with Section 2.2(b), the Extended
Maturity Date; or
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<PAGE> 19
(iii) if the Company elects to accelerate the Maturity Date to
be a date prior to the Scheduled Maturity Date in accordance with Section
2.2(c), the Accelerated Maturity Date.
(b) The Company may at any time before the day which is 90 days
before the Scheduled Maturity Date, elect to extend the Maturity Date to the
Extended Maturity Date, provided that the Company has received the prior
approval of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve and further provided that the
following conditions in this Section 2.2(b) are satisfied both at the date
the Company gives notice in accordance with Section 2.2(d) of its election to
extend the Maturity Date and at the Scheduled Maturity Date:
(i) the Company is not in bankruptcy, otherwise insolvent or
in liquidation;
(ii) the Company is not in default in the payment of interest
or principal on the Debentures; and
(iii) the Trust is not in arrears on payments of Distributions
on the Trust Securities issued by it and no deferred Distributions are
accumulated.
(c) The Company may, on one occasion, at any time before the day
which is 90 days before the Scheduled Maturity Date and after December 31, 2002,
elect to shorten the Maturity Date to the Accelerated Maturity Date provided
that the Company has received the prior approval of the Federal Reserve if
then required under applicable capital guidelines or policies of the Federal
Reserve.
(d) If the Company elects to extend the Maturity Date in accordance
with Section 2.2(b), the Company shall give notice to the registered holders
of the Debentures, the Property Trustee and the Trust of the extension of the
Maturity Date and the Extended Maturity Date at least 90 days and no more
than 180 days before the Scheduled Maturity Date.
(e) If the Company elects to accelerate the Maturity Date in
accordance with Section 2.2(c), the Company shall give notice to the
registered holders of the Debentures, the Property Trustee and the Trust of
the acceleration of the Maturity Date and the Accelerated Maturity Date
13
<PAGE> 20
at least 90 days and no more than 180 days before the Accelerated. Maturity
Date.
Section 2.3. Form and Payment.
The Debentures shall be issued in fully registered certificated form
without interest coupons. Principal and interest on the Debentures issued in
certificated form shall be payable, the transfer of such Debentures shall be
registrable and such Debentures shall be exchangeable for Debentures bearing
identical terms and provisions at the office or agency of the Trustee;
provided, however, that payment of interest may be made at the option of the
- -------- -------
Company by check mailed to the holder at such address as shall appear in the
Debenture Register or by wire transfer to an account maintained by the holder
as specified in the Debenture Register, provided that the holder provides
proper transfer instructions by the regular record date. Notwithstanding the
foregoing, so long as the holder of any Debentures is the Property Trustee,
the payment of the principal of and interest (including Compounded Interest
and Additional Payments, if any) on such Debentures held by the Property
Trustee shall be made at such place and to such account as may be designated
by the Property Trustee.
Section 2.4. [Intentionally Omitted]
Section 2.5. Interest.
(a) Each Debenture shall bear interest at a rate of ---% per annum (the
"Coupon Rate") from the original date of issuance until the principal thereof
becomes due and payable, and on any overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the Coupon Rate, compounded quarterly, payable
(subject to the provisions of Article IV) quarterly in arrears on March 31,
June 30, September 30, and December 31 of each year (each, an "Interest
Payment Date," commencing on March 31, 1998), to the Person in whose name
such Debenture or any Predecessor Debenture is registered, at the close of
business on the regular record date for such interest installment, which
shall be the fifteenth day of the last month of the calendar quarter.
(b) The amount of interest payable for any period shall be computed on
the basis of a 360-day year of twelve 30-day months. The amount of interest
payable for any period shorter than a full quarterly period for which
interest is computed shall be computed on the basis of the number
14
<PAGE> 21
of days elapsed in a 360-day year of twelve 30-day months. In the event that
any date on which interest is payable on the Debentures is not a Business
Day, then payment of interest payable on such date shall be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay) with the same force and effect as if
made on the date such payment was originally payable.
(c) If, at any time while the Property Trustee is the holder of any
Debentures, the Trust or the Property Trustee is required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other taxing
authority, then, in any case, the Company shall pay as additional payments
("Additional Payments") on the Debentures held by the Property Trustee, such
additional amounts as shall be required so that the net amounts received and
retained by the Trust and the Property Trustee after paying such taxes,
duties, assessments or other governmental charges shall be equal to the
amounts the Trust and the Property Trustee would have received had no such
taxes, duties, assessments or other government charges been imposed.
Section 2.6. Execution and Authentication.
(a) The Debentures shall be signed on behalf of the Company by its
Chief Executive Officer, President or one of its Vice Presidents, under its
corporate seal attested by its Secretary or one of its Assistant Secretaries.
Signatures may be in the form of a manual or facsimile signature. The Company
may use the facsimile signature of any Person who shall have been a Chief
Executive Officer, President or Vice President thereof, or of any Person who
shall have been a Secretary or Assistant Secretary thereof, notwithstanding
the fact that at the time the Debentures shall be authenticated and delivered
or disposed of such Person shall have ceased to be the Chief Executive
Officer, President or a Vice President, or the Secretary or an Assistant
Secretary, of the Company. The seal of the Company may be in the form of a
facsimile of such seal and may be impressed, affixed, imprinted or otherwise
reproduced on the Debentures. The Debentures may contain such notations,
legends or endorsements required by law, stock exchange rule or usage. Each
Debenture shall be dated the date of its authentication by the Trustee.
15
<PAGE> 22
(b) A Debenture shall not be valid until manually authenticated by an
authorized signatory of the Trustee, or by an Authenticating Agent. Such
signature shall be conclusive evidence that the Debenture so authenticated
has been duly authenticated and delivered hereunder and that the holder is
entitled to the benefits of this Indenture.
(c) At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Debentures executed by the Company
to the Trustee for authentication, together with a written order of the
Company for the authentication and delivery of such Debentures signed by its
Chief Executive Officer, President or any Vice President and its Treasurer or
any Assistant Treasurer, and the Trustee in accordance with such written
order shall authenticate and deliver such Debentures.
(d) In authenticating such Debentures and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Trustee shall be entitled to receive, and (subject to Section 9.1) shall be
fully protected in relying upon, an Opinion of Counsel stating that the form
and terms thereof have been established in conformity with the provisions of
this Indenture.
(e) The Trustee shall not be required to authenticate such Debentures
if the issue of such Debentures pursuant to this Indenture shall affect the
Trustee's own rights, duties or immunities under the Debentures and this
Indenture or otherwise in a manner that is not reasonably acceptable to the
Trustee.
Section 2.7. Registration of Transfer and Exchange.
(a) Debentures may be exchanged upon presentation thereof at the office
or agency of the Company designated for such purpose or at the office of the
Debenture Registrar, for other Debentures and for a like aggregate principal
amount, upon payment of a sum sufficient to cover any tax or other
governmental charge in relation thereto, all as provided in this Section 2.7.
In respect of any Debentures so surrendered for exchange, the Company shall
execute, the Trustee shall authenticate and such office or agency shall
deliver in exchange therefor the Debenture or Debentures that the
Debentureholder making the exchange shall be entitled to receive, bearing
numbers not contemporaneously outstanding.
(b) The Company shall keep, or cause to be kept, at its office or
agency designated for such purpose or at the office of the Debenture
Registrar, or
16
<PAGE> 23
such other location designated by the Company a register or registers (herein
referred to as the "Debenture Register") in which, the Company shall register
the Debentures and the transfers of Debentures as in this Article II provided
and which at all reasonable times shall be open for inspection by the
Trustee. The registrar for the purpose of registering Debentures and transfer
of Debentures as herein provided shall initially be the Trustee and
thereafter as may be appointed by the Company as authorized by Board
Resolution (the "Debenture Registrar"). Upon surrender for transfer of any
Debenture at the office or agency of the Company designated for such purpose,
the Company shall execute, the Trustee shall authenticate and such office or
agency shall deliver in the name of the transferee or transferees a new
Debenture or Debentures for a like aggregate principal amount. All Debentures
presented or surrendered for exchange or registration of transfer, as
provided in this Section 2.7, shall be accompanied (if so required by the
Company or the Debenture Registrar) by a written instrument or instruments of
transfer, in form satisfactory to the Company or the Debenture Registrar,
duly executed by the registered holder or by such holder's duly authorized
attorney in writing.
(c) No service charge shall be made for any exchange or registration of
transfer of Debentures, or issue of new Debentures in case of partial
redemption, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge in relation thereto, other than
exchanges pursuant to Section 2.8, Section 3.5(b) and Section 11.4 not
involving any transfer.
(d) The Company shall not be required (i) to issue, exchange or
register the transfer of any Debentures during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of less than all the Outstanding Debentures and ending at the
close of business on the day of such mailing; nor (ii) to register the
transfer of or exchange any Debentures or portions thereof called for
redemption.
Section 2.8. Temporary Debentures.
Pending the preparation of definitive Debentures, the Company may
execute, and the Trustee shall authenticate and deliver, temporary Debentures
(printed, lithographed, or typewritten). Such temporary Debentures shall be
substantially in the form of the definitive Debentures in lieu of which they
are issued, but with such omissions, insertions and variations as may be
appropriate for temporary Debentures, all as may be
17
<PAGE> 24
determined by the Company. Every temporary Debenture shall be executed by the
Company and be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with like effect, as the definitive
Debentures. Without unnecessary delay the Company shall execute and shall
furnish definitive Debentures and thereupon any or all temporary Debentures
may be surrendered in exchange therefor (without charge to the holders), at
the office or agency of the Company designated for the purpose and the
Trustee shall authenticate and such office or agency shall deliver in
exchange for such temporary Debentures an equal aggregate principal amount of
definitive Debentures, unless the Company advises the Trustee to the effect
that definitive Debentures need not be executed and furnished until further
notice from the Company. Until so exchanged, the temporary Debentures shall
be entitled to the same benefits under this Indenture as definitive
Debentures authenticated and delivered hereunder.
Section 2.9. Mutilated, Destroyed, Lost or Stolen Debentures.
(a) In case any temporary or definitive Debenture shall become
mutilated or be destroyed, lost or stolen, the Company (subject to the next
succeeding sentence) shall execute, and upon the Company's request the
Trustee (subject as aforesaid) shall authenticate and deliver, a new
Debenture bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated Debenture, or in lieu of and in substitution
for the Debenture so destroyed, lost or stolen. In every case the applicant
for a substituted Debenture shall furnish to the Company and the Trustee such
security or indemnity as may be required by them to save each of them
harmless, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company and the Trustee evidence to their
satisfaction of the destruction, loss or theft of the applicant's Debenture
and of the ownership thereof. The Trustee shall authenticate any such
substituted Debenture and deliver the same upon the written request or
authorization of the Chairman, President or any Vice President and the
Treasurer or any Assistant Treasurer of the Company. Upon the issuance of any
substituted Debenture, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses
of the Trustee) connected therewith. In case any Debenture that has matured
or is about to mature shall become mutilated or be destroyed, lost or stolen,
the Company may, instead of issuing a substitute Debenture, pay or authorize
the payment of the same (without
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surrender thereof except in the case of a mutilated Debenture) if the
applicant for such payment shall furnish to the Company and the Trustee such
security or indemnity as they may require to save them harmless, and, in case
of destruction, loss or theft, evidence to the satisfaction of the Company
and the Trustee of the destruction, loss or theft of such Debenture and of
the ownership thereof.
(b) Every replacement Debenture issued pursuant to the provisions of
this Section 2.9 shall constitute an additional contractual obligation of the
Company whether or not the mutilated, destroyed, lost or stolen Debenture
shall be found at any time, or be enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately
with any and all other Debentures duly issued hereunder. All Debentures shall
be held and owned upon the express condition that the foregoing provisions
are exclusive with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Debentures, and shall preclude (to the extent
lawful) any and all other rights or remedies, notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.
Section 2.10. Cancellation.
All Debentures surrendered for the purpose of payment, redemption,
exchange or registration of transfer shall, if surrendered to the Company or
any Paying Agent, be delivered to the Trustee for cancellation, or, if
surrendered to the Trustee, shall be canceled by it, and no Debentures shall
be issued in lieu thereof except as expressly required or permitted by any of
the provisions of this Indenture. On request of the Company at the time of
such surrender, the Trustee shall deliver to the Company canceled Debentures
held by the Trustee. In the absence of such request the Trustee may dispose
of canceled Debentures in accordance with its standard procedures and deliver
a certificate of disposition to the Company. If the Company shall otherwise
acquire any of the Debentures, however, such acquisition shall not operate as
a redemption or satisfaction of the indebtedness represented by such
Debentures unless and until the same are delivered to the Trustee for
cancellation.
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Section 2.11. Benefit of Indenture.
Nothing in this Indenture or in the Debentures, express or implied,
shall give or be construed to give to any Person, other than the parties
hereto and the holders of the Debentures (and, with respect to the provisions
of Article XVI, the holders of the Senior Indebtedness) any legal or
equitable right, remedy or claim under or in respect of this Indenture, or
under any covenant, condition or provision herein contained; all such
covenants, conditions and provisions being for the sole benefit of the
parties hereto and of the holders of the Debentures (and, with respect to the
provisions of Article XVI, the holders of the Senior Indebtedness).
Section 2.12. Authentication Agent.
(a) So long as any of the Debentures remain Outstanding there may be an
Authenticating Agent for any or all such Debentures, which the Trustee shall
have the right to appoint. Said Authenticating Agent shall be authorized to
act on behalf of the Trustee to authenticate Debentures issued upon exchange,
transfer or partial redemption thereof, and Debentures so authenticated shall
be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder. All
references in this Indenture to the authentication of Debentures by the
Trustee shall be deemed to include authentication by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall be a
corporation that has a combined capital and surplus, as most recently
reported or determined by it, sufficient under the laws of any jurisdiction
under which it is organized or in which it is doing business to conduct a
trust business, and that is otherwise authorized under such laws to conduct
such business and is subject to supervision or examination by federal or
state authorities. If at any time any Authenticating Agent shall cease to be
eligible in accordance with these provisions, it shall resign immediately.
(b) Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at
any time (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint
an eligible successor Authenticating Agent acceptable to the Company. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all the rights, powers and duties of its predecessor
hereunder as if originally named as an Authenticating Agent pursuant hereto.
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ARTICLE III.
REDEMPTION OF DEBENTURES
Section 3.1. Redemption.
Subject to the Company having received prior approval of the Federal
Reserve, if then required under the applicable capital guidelines or policies
of the Federal Reserve, the Company may redeem the Debentures issued
hereunder on and after the dates set forth in and in accordance with the
terms of this Article III.
Section 3.2. Special Event Redemption.
Subject to the Company having received the prior approval of the
Federal Reserve, if then required under the applicable capital guidelines or
policies of the Federal Reserve, if a Special Event has occurred and is
continuing, then, notwithstanding Section 3.3(a) but subject to Section
3.3(b), the Company shall have the right upon not less than 30 days' nor more
than 60 days' notice to the holders of the Debentures to redeem the
Debentures, in whole but not in part, for cash within 180 days following the
occurrence of such Special Event (the "180-Day Period") at a redemption price
equal to 100% of the principal amount to be redeemed plus any accrued and
unpaid interest thereon to the date of such redemption (the "Redemption
Price"), provided that if at the time there is available to the Company the
opportunity to eliminate, within the 180-Day Period, a Tax Event by taking
some ministerial action (a "Ministerial Action"), such as filing a form or
making an election, or pursuing some other similar reasonable measure which
has no adverse effect on the Company, the Trust or the holders of the Trust
Securities issued by the Trust, the Company shall pursue such Ministerial
Action in lieu of redemption, and, provided further, that the Company shall
----------------
have no right to redeem the Debentures while it is pursuing any Ministerial
Action pursuant to its obligations hereunder, and, provided further, that, if
it is determined that the taking of a Ministerial Action would not eliminate
the Tax Event within the 180 Day Period, the Company's right to redeem the
Debentures shall be restored and it shall have no further obligations to
pursue the Ministerial Action. The Redemption Price shall be paid prior to
12:00 noon, New York time, on the date of such redemption or such earlier
time as the Company determines, provided that the Company shall deposit with
the Trustee an amount sufficient to pay the Redemption Price by 10:00 a.m.,
New York time, on the date such Redemption Price is to be paid.
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Section 3.3. Optional Redemption by the Company.
(a) Subject to the provisions of Section 3.3(b), except as otherwise
may be specified in this Indenture, the Company shall have the right to
redeem the Debentures, in whole or in part, from time to time, on or after
December 31, 2002, at a Redemption Price equal to 100% of the principal
amount to be redeemed plus any accrued and unpaid interest thereon to the
date of such redemption, plus Deferred Payments, if any. Any redemption
pursuant to this Section 3.3(a) shall be made upon not less than 30 days' nor
more than 60 days' notice to the holder of the Debentures, at the Redemption
Price. If the Debentures are only partially redeemed pursuant to this Section
3.3, the Debentures shall be redeemed pro rata or by lot or in such other
manner as the Trustee shall deem appropriate and fair in its discretion. The
Redemption Price shall be paid prior to 12:00 noon, New York time, on the
date of such redemption or at such earlier time as the Company determines
provided that the Company shall deposit with the Trustee an amount sufficient
to pay the Redemption Price by 10:00 a.m., New York time, on the date such
Redemption Price is to be paid.
(b) If a partial redemption of the Debentures would result in the
delisting of the Preferred Securities issued by the Trust from the American
Stock Exchange or any national securities exchange or other organization on
which the Preferred Securities are then listed or quoted, the Company shall
not be permitted to effect such partial redemption and may only redeem the
Debentures in whole.
Section 3.4. Notice of Redemption.
(a) In case the Company shall desire to exercise such right to redeem
all or, as the case may be, a portion of the Debentures in accordance with
the right reserved so to do, the Company shall, or shall cause the Trustee to
upon receipt of 45 days' written notice from the Company (which notice shall,
in the event of a partial redemption, include a representation to the effect
that such partial redemption shall not result in the delisting of the
Preferred Securities as described in Section 3.3(b) above), give notice of
such redemption to holders of the Debentures to be redeemed by mailing, first
class postage prepaid, a notice of such redemption not less than 30 days' and
not more than 60 days' before the date fixed for redemption to such holders
at their last addresses as they shall appear upon the
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Debenture Register unless a shorter period is specified in the Debentures to
be redeemed. Any notice that is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the registered
holder receives the notice. In any case, failure duly to give such notice to
the holder of any Debenture designated for redemption in whole or in part, or
any defect in the notice, shall not affect the validity of the proceedings
for the redemption of any other Debentures. In the case of any redemption of
Debentures prior to the expiration of any restriction on such redemption
provided in the terms of such Debentures or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with any such restriction. Each such notice of redemption shall
specify the date fixed for redemption and the Redemption Price and shall
state that payment of the Redemption Price shall be made at the Corporate
Trust Office, upon presentation and surrender of such Debentures, that
interest accrued to the date fixed for redemption shall be paid as specified
in said notice and that from and after said date interest shall cease to
accrue. If less than all the Debentures are to be redeemed, the notice to the
holders of the Debentures shall specify the particular Debentures to be
redeemed. If the Debentures are to be redeemed in part only, the notice shall
state the portion of the principal amount thereof to be redeemed and shall
state that on and after the redemption date, upon surrender of such
Debenture, a new Debenture or Debentures in principal amount equal to the
unredeemed portion thereof shall be issued.
(b) If less than all the Debentures are to be redeemed, the Company
shall give the Trustee at least 45 days' written notice in advance of the
date fixed for redemption as to the aggregate principal amount of Debentures
to be redeemed, and thereupon the Trustee shall select, by lot or in such
other manner as it shall deem appropriate and fair in its discretion, the
portion or portions (equal to $25 or any integral multiple thereof) of the
Debentures to be redeemed and shall thereafter promptly notify the Company in
writing of the numbers of the Debentures to be redeemed, in whole or in part.
The Company may, if and whenever it shall so elect pursuant to the terms
hereof, by delivery of instructions signed on its behalf by its President or
any Vice President, instruct the Trustee or any Paying Agent to call all or
any part of the Debentures for redemption and to give notice of redemption in
the manner set forth in this Section 3.4, such notice to be in the name of
the Company or its own name as the Trustee or such Paying Agent may deem
advisable. In any case
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in which notice of redemption is to be given by the Trustee or any such
Paying Agent, the Company shall deliver or cause to be delivered to, or
permit to remain with, the Trustee or such Paying Agent, as the case may be,
such Debenture Register, transfer books or other records, or suitable copies
or extracts therefrom, sufficient to enable the Trustee or such Paying Agent
to give any notice by mail that may be required under the provisions of this
Section 3.4.
Section 3.5. Payment upon Redemption.
(a) If the giving of notice of redemption shall have been completed as
above provided, the Debentures or portions of Debentures to be redeemed
specified in such notice shall become due and payable on the date and at the
place stated in such notice at the applicable Redemption Price, and interest
on such Debentures or portions of Debentures shall cease to accrue on and
after the date fixed for redemption, unless the Company shall default in the
payment of such Redemption Price with respect to any such Debenture or
portion thereof. On presentation and surrender of such Debentures on or after
the date fixed for redemption at the place of payment specified in the
notice, said Debentures shall be paid and redeemed at the Redemption Price
(but if the date fixed for redemption is an Interest Payment Date, the
interest installment payable on such date shall be payable to the registered
holder at the close of business on the applicable record date pursuant to
Section 3.3).
(b) Upon presentation of any Debenture that is to be redeemed in part
only, the Company shall execute and the Trustee shall authenticate and the
office or agency where the Debenture is presented shall deliver to the holder
thereof, at the expense of the Company, a new Debenture of authorized
denomination in principal amount equal to the unredeemed portion of the
Debenture so presented.
Section 3.6. No Sinking Fund.
The Debentures are not entitled to the benefit of any sinking fund.
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ARTICLE IV.
EXTENSION OF INTEREST PAYMENT PERIOD
Section 4.1. Extension of Interest Payment Period.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right, at any time and from time to time during the
term of the Debentures, to defer payments of interest by extending the
interest payment period of such Debentures for a period not exceeding 20
consecutive quarters (the "Extension Period"), during which Extension Period
no interest shall be due and payable; provided that no Extension Period may
extend beyond the Maturity Date. Interest, the payment of which has been
deferred because of the extension of the interest payment period pursuant to
this Section 4.1, shall bear interest thereon at the Coupon Rate compounded
quarterly for each quarter of the Extension Period ("Compounded Interest").
At the end of the Extension Period, the Company shall calculate (and deliver
such calculation to the Trustee) and pay all interest accrued and unpaid on
the Debentures, including any Additional Payments and Compounded Interest
(together, "Deferred Payments") that shall be payable to the holders of the
Debentures in whose names the Debentures are registered in the Debenture
Register on the first record date after the end of the Extension Period.
Before the termination of any Extension Period, the Company may further
extend such period, provided that such period together with all such further
extensions thereof shall not exceed 20 consecutive quarters, or extend beyond
the Maturity Date of the Debentures. Upon the termination of any Extension
Period and upon the payment of all Deferred Payments then due, the Company
may commence a new Extension Period, subject to the foregoing requirements.
No interest shall be due and payable during an Extension Period, except at
the end thereof, but the Company may prepay at any time all or any portion of
the interest accrued during an Extension Period.
Section 4.2. Notice Of Extension.
(a) If the Property Trustee is the only registered holder of the
Debentures at the time the Company selects an Extension Period, the Company
shall give written notice to the Administrative Trustees, the Property
Trustee and the Trustee of its selection of such Extension Period 2 Business
Days before the earlier of (i) the next succeeding date on which
Distributions on the Trust Securities issued by the Trust are payable; or
(ii) the date the Trust is required to give notice of the record date, or the
date such Distributions are payable, to the American Stock Exchange or other
applicable self-regulatory organization or to holders of the Preferred
Securities issued by the Trust, but in any event at least 1 Business Day
before such record date.
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(b) If the Property Trustee is not the only holder of the Debentures at
the time the Company selects an Extension Period, the Company shall give the
holders of the Debentures and the Trustee written notice of its selection of
such Extension Period at least 2 Business Days before the earlier of (i) the
next succeeding Interest Payment Date; or (ii) the date the Company is
required to give notice of the record or payment date of such interest
payment to the American Stock Exchange or other applicable self-regulatory
organization or to holders of the Debentures.
(c) The quarter in which any notice is given pursuant to paragraphs (a)
or (b) of this Section 4.2 shall be counted as one of the 20 quarters
permitted in the maximum Extension Period permitted under Section 4.1.
Section 4.3. Limitation on Transactions.
If (i) the Company shall exercise its right to defer payment of
interest as provided in Section 4.1; or (ii) there shall have occurred any
Event of Default, then (a) the Company shall not declare or pay any dividend
on, make any distributions with respect to, or redeem, purchase, acquire or
make a liquidation payment with respect to, any of its capital stock (other
than (i) dividends or distributions in common stock of the Company, or any
declaration of a non-cash dividend in connection with the implementation of a
shareholder rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto,
and (ii) purchases of common stock of the Company related to the rights under
any of the Company's benefit plans for its directors, officers or employees);
(b) the Company shall not make any payment of interest, principal or premium,
if any, or repay, repurchase or redeem any debt securities issued by the
Company which rank pari passu with or junior to the Debentures or make any
guarantee payments with respect to any guarantee by the Company of the debt
securities of any subsidiary of the Company if such guarantee ranks pari
passu with or junior in interest to the Debentures; provided, however, that
-------- -------
notwithstanding the foregoing the Company may make payments pursuant to its
obligations under the Preferred Securities Guarantee; and (c) the Company
shall not redeem, purchase or acquire less than all of the Outstanding
Debentures or any of the Preferred Securities.
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ARTICLE V.
PARTICULAR COVENANTS OF THE COMPANY
Section 5.1. Payment of Principal and Interest.
The Company shall duly and punctually pay or cause to be paid the
principal of and interest on the Debentures at the time and place and in the
manner provided herein. Each such payment of the principal of and interest on
the Debentures shall relate only to the Debentures, shall not be combined
with any other payment of the principal of or interest on any other
obligation of the Company, and shall be clearly and unmistakably identified
as pertaining to the Debentures.
Section 5.2. Maintenance of Agency.
So long as any of the Debentures remain Outstanding, the Company shall
maintain an office or agency at such other location or locations as may be
designated as provided in this Section 5.2, where (i) Debentures may be
presented for payment; (ii) Debentures may be presented as hereinabove
authorized for registration of transfer and exchange; and (iii) notices and
demands to or upon the Company in respect of the Debentures and this
Indenture may be given or served, such designation to continue with respect
to such office or agency until the Company shall, by written notice signed by
its President or a Vice President and delivered to the Trustee, designate
some other office or agency for such purposes or any of them. If at any time
the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such
presentations, notices and demands may be made or served at the Corporate
Trust Office of the Trustee, and the Company hereby appoints the Trustee as
its agent to receive all such presentations, notices and demands. The Company
shall give the Trustee prompt written notice of any such designation or
rescission thereof.
Section 5.3. Paying Agents.
(a) The Trustee shall initially act as the Paying Agent. If the Company
shall appoint one or more Paying Agents for the Debentures, other than the
Trustee, the Company shall cause each such Paying Agent to execute and
deliver to the Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provisions of this Section 5.3:
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(i) that it shall hold all sums held by it as such agent for the
payment of the principal of or interest on the Debentures (whether such sums
have been paid to it by the Company or by any other obligor of such
Debentures) in trust for the benefit of the Persons entitled thereto;
(ii) that it shall give the Trustee notice of any failure by the
Company (or by any other obligor of such Debentures) to make any payment of
the principal of or interest on the Debentures when the same shall be due and
payable;
(iii) that it shall, at any time during the continuance of any failure
referred to in the preceding paragraph (a)(ii) above, upon the written
request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(iv) that it shall perform all other duties of Paying Agent as set
forth in this Indenture.
(b) If the Company shall act as its own Paying Agent with respect to
the Debentures, it shall on or before each due date of the principal of or
interest on such Debentures, set aside, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay such
principal or interest so becoming due on Debentures until such sums shall be
paid to such Persons or otherwise disposed of as herein provided and shall
promptly notify the Trustee of such action, or any failure (by it or any
other obligor on such Debentures) to take such action. Whenever the Company
shall have one or more Paying Agents for the Debentures, it shall, prior to
each due date of the principal of or interest on any Debentures, deposit with
the Paying Agent a sum sufficient to pay the principal or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal or interest, and (unless such Paying Agent is the
Trustee) the Company shall promptly notify the Trustee of this action or
failure so to act.
(c) Notwithstanding anything in this Section 5.3 to the contrary, (i)
the agreement to hold sums in trust as provided in this Section 5.3 is
subject to the provisions of Section 13.3 and 13.4; and (ii) the Company may
at any time, for the purpose of obtaining the satisfaction and discharge of
this Indenture or for any other purpose, pay, or direct any Paying Agent to
pay, to the Trustee all sums held in trust by the Company or such Paying
Agent, such sums to be held by the Trustee upon the same terms and conditions
as those upon which such sums were held by the Company or such Paying
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Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such
money.
Section 5.4. Appointment to Fill Vacancy in Office of the Trustee.
The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, shall appoint, in the manner provided in Section 9.11, a
Trustee, so that there shall at all times be a Trustee hereunder.
Section 5.5. Compliance with Consolidation Provisions.
The Company shall not, while any of the Debentures remain Outstanding,
consolidate with, or merge into, or merge into itself, or sell or convey all
or substantially all of its property to any other company unless the
provisions of Article XII hereof are complied with.
Section 5.6. Limitation on Transactions.
If Debentures are issued to the Trust or a trustee of the Trust in
connection with the issuance of Trust Securities by the Trust and (i) there
shall have occurred any event that would constitute an Event of Default; (ii)
the Company shall be in default with respect to its payment of any
obligations under the Preferred Securities Guarantee relating to the Trust;
or (iii) if the Company shall have given notice of its election to defer
payments of interest on such Debentures by extending the interest payment
period as provided in this Indenture and such Extension Period, or any
extension thereof, shall be continuing, then (a) the Company shall not declare
or pay any dividend on, make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock (other than (i) dividends or distributions in common stock of the
Company, or any declaration of a non-cash dividend in connection with the
implementation of a shareholder rights plan, or the issuance of stock under any
such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, and (ii) purchases of common stock of the Company related to
the rights under any of the Company's benefit plans for its directors, officers
or employees); (b) the Company shall not make any payment of principal, interest
or premium, if any, or repay, repurchase or redeem any debt securities issued by
the Company which rank pari passu with or junior in interest to the Debentures;
provided, however, that the Company may make payments pursuant to its
- -------- -------
obligations under the Preferred Securities Guarantee; and (c) the Company shall
not redeem, purchase or acquire less than all of the Outstanding Debentures or
any of the Preferred Securities.
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Section 5.7. Covenants as to the Trust.
For so long as the Trust Securities of the Trust remain outstanding,
the Company shall (i) maintain 100% direct or indirect ownership of the
Common Securities of the Trust; provided, however, that any permitted
-------- -------
successor of the Company under this Indenture may succeed to the Company's
ownership of the Common Securities; (ii) not voluntarily terminate, wind up
or liquidate the Trust, except upon prior approval of the Federal Reserve if
then so required under applicable capital guidelines or policies of the
Federal Reserve; (iii) use its reasonable efforts to cause the Trust (a) to
remain a business trust, except in connection with a distribution of
Debentures, the redemption of all of the Trust Securities of the Trust or
certain mergers, consolidations or amalgamations, each as permitted by the
Trust Agreement; and (b) to otherwise continue not to be treated as an
association taxable as a corporation or partnership for United States federal
income tax purposes; and (iv) use its reasonable efforts to cause each holder
of Trust Securities to be treated as owning an individual beneficial interest
in the Debentures. In connection with the distribution of the Debentures to
the holders of the Preferred Securities issued by the Trust upon a
Dissolution Event, the Company shall use its best efforts to list such
Debentures on the American Stock Exchange or on such other exchange as the
Preferred Securities are then listed.
Section 5.8. Covenants as to Purchases.
Except upon the exercise by the Company of its right to redeem the
Debentures pursuant to Section 3.2 upon the occurrence and continuation of a
Special Event, the Company shall not purchase any Debentures, in whole or in
part, from the Trust prior to December 31, 2002.
ARTICLE VI.
THE DEBENTUREHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
Section 6.1. The Company to Furnish the Trustee Names and Addresses of the
Debentureholders.
The Company shall furnish or cause to be furnished to the Trustee (a)
on a quarterly basis on each regular record date (as described in Section
2.5)
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a list, in such form as the Trustee may reasonably require, of the names and
addresses of the holders of the Debentures as of such regular record date,
provided that the Company shall not be obligated to furnish or cause to
furnish such list at any time that the list shall not differ in any respect
from the most recent list furnished to the Trustee by the Company (in the
event the Company fails to provide such list on a quarterly basis, the Trustee
shall be entitled to rely on the most recent list provided by the Company);
and (b) at such other times as the Trustee may request in writing within 30
days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such
list is furnished; provided, however, that, in either case, no such list need
-------- -------
be furnished if the Trustee shall be the Debenture Registrar.
Section 6.2. Preservation of Information Communications with the
Debentureholders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Debentures contained in the most recent list furnished to it as provided in
Section 6.1 and as to the names and addresses of holders of Debentures
received by the Trustee in its capacity as Debenture Registrar for the
Debentures (if acting in such capacity).
(b) The Trustee may destroy any list furnished to it as provided in
Section 6.1 upon receipt of a new list so furnished.
(c) Debentureholders may communicate as provided in Section 312(b) of
the Trust Indenture Act with other Debentureholders with respect to their
rights under this Indenture or under the Debentures.
Section 6.3. Reports by the Company.
(a) The Company covenants and agrees to file with the Trustee, within
15 days after the Company is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the Commission
may from time to time by rules and regulations prescribe) that the Company
may be required to file with the Commission pursuant to Section 13 or Section
15(d) of the Exchange Act; or, if the Company is not required to file
information, documents or reports pursuant to either of such sections, then
to file with the Trustee
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and the Commission, in accordance with the rules and regulations prescribed
from time to time by the Commission, such of the supplementary and periodic
information, documents and reports that may be required pursuant to Section
13 of the Exchange Act in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time in such
rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from time
to time by the Commission, such additional information, documents and reports
with respect to compliance by the Company with the conditions and covenants
provided for in this Indenture as may be required from time to time by such
rules and regulations.
(c) The Company covenants and agrees to transmit by mail, first class
postage prepaid, or reputable overnight delivery service that provides for
evidence of receipt, to the Debentureholders, as their names and addresses
appear upon the Debenture Register, within 30 days after the filing thereof
with the Trustee, such summaries of any information, documents and reports
required to be filed by the Company pursuant to subsections (a) and (b) of
this Section 6.3 as may be required by rules and regulations prescribed from
time to time by the Commission.
Section 6.4. Reports by the Trustee.
(a) On or before July 15 in each year in which any of the Debentures
are Outstanding, the Trustee shall transmit by mail, first class postage
prepaid, to the Debentureholders, as their names and addresses appear upon
the Debenture Register, a brief report dated as of the preceding May 15, if
and to the extent required under Section 313(a) of the Trust Indenture Act.
(b) The Trustee shall comply with Section 313(b) and 313(c) of the
Trust Indenture Act.
(c) A copy of each such report shall, at the time of such transmission
to Debentureholders, be filed by the Trustee with the Company, with each
stock exchange upon which any Debentures are listed (if so listed) and also
with the Commission. The Company agrees to notify the Trustee when any
Debentures become listed on any stock exchange.
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ARTICLE VII.
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
ON EVENT OF DEFAULT
Section 7.1. Events of Default.
(a) Whenever used herein with respect to the Debentures, "Event of
Default" means any one or more of the following events that has occurred and
is continuing:
(i) the Company defaults in the payment of any installment of
interest upon any of the Debentures, as and when the same shall become due
and payable, and continuance of such default for a period of 30 days;
provided, however, that a valid extension of an interest payment period by
- -------- -------
the Company in accordance with the terms of this Indenture shall not
constitute a default in the payment of interest for this purpose;
(ii) the Company defaults in the payment of the principal on the
Debentures as and when the same shall become due and payable whether at
maturity, upon redemption, by declaration or otherwise; provided, however,
-------- -------
that a valid extension of the maturity of such Debentures in accordance with
the terms of this Indenture shall not constitute a default in the payment of
principal;
(iii) the Company fails to observe or perform any other of its
covenants or agreements with respect to the Debentures for a period of 90
days after the date on which written notice of such failure, requiring the
same to be remedied and stating that such notice is a "Notice of Default"
hereunder, shall have been given to the Company by the Trustee, by registered
or certified mail, or to the Company and the Trustee by the holders of at
least 25% in principal amount of the Debentures at the time Outstanding;
(iv) the Company pursuant to or within the meaning of any
Bankruptcy Law (i) commences a voluntary case; (ii) consents to the entry of
an order for relief against it in an involuntary case; (iii) consents to the
appointment of a Custodian of it or for all or substantially all of its
property; or (iv) makes a general assignment for the benefit of its
creditors;
(v) a court of competent jurisdiction enters an order under any
Bankruptcy Law that (i) is for relief against the Company in an
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<PAGE> 40
involuntary case; (ii) appoints a Custodian of the Company for all or
substantially all of its property; or (iii) orders the liquidation of the
Company, and the order or decree remains unstayed and in effect for 90 days;
or
(vi) the Trust shall have voluntarily or involuntarily dissolved,
wound-up its business or otherwise terminated its existence except in
connection with (i) the distribution of Debentures to holders of Trust
Securities in liquidation of their interests in the Trust; (ii) the
redemption of all of the outstanding Trust Securities of the Trust; or (iii)
certain mergers, consolidations or amalgamations, each as permitted by the
Trust Agreement.
(b) In each and every such case referred to in items (i) through (vi)
of Section 7.1(a), unless the principal of all the Debentures shall have already
become due and payable, either the Trustee or the holders of not less than 25%
in aggregate principal amount of the Debentures then Outstanding hereunder, by
notice in writing to the Company (and to the Trustee if given by such
Debentureholders) may declare the principal of all the Debentures to be due and
payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, notwithstanding anything contained in this
Indenture or in the Debentures.
(c) At any time after the principal of the Debentures shall have been
so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter
provided, the holders of a majority in aggregate principal amount of the
Debentures then Outstanding hereunder, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if:
(i) the Company has paid or deposited with the Trustee a sum sufficient to
pay all matured installments of interest upon all the Debentures and the
principal of any and all Debentures that shall have become due otherwise than
by acceleration (with interest upon such principal, and upon overdue
installments of interest, at the rate per annum expressed in the Debentures
to the date of such payment or deposit) and the amount payable to the Trustee
under Section 9.7; and (ii) any and all Events of Default under this
Indenture, other than the nonpayment of principal on Debentures that shall
not have become due by their terms, shall have been remedied or waived as
provided in Section 7.6. No such rescission and annulment shall extend to or
shall affect any subsequent default or impair any right consequent thereon.
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<PAGE> 41
(d) In case the Trustee shall have proceeded to enforce any right with
respect to Debentures under this Indenture and such proceedings shall have
been discontinued or abandoned because of such rescission or annulment or for
any other reason or shall have been determined adversely to the Trustee, then
and in every such case the Company and the Trustee shall be restored
respectively to their former positions and rights hereunder, and all rights,
remedies and powers of the Company and the Trustee shall continue as though
no such proceedings had been taken.
Section 7.2. Collection of Indebtedness and Suits for Enforcement by the
Trustee.
(a) The Company covenants that (1) in case it shall default in the
payment of any installment of interest on any of the Debentures, and such
default shall have continued for a period of 30 days; or (2) in case
it shall default in the payment of the principal of any of the Debentures
when the same shall have become due and payable, whether upon maturity of the
Debentures or upon redemption or upon declaration or otherwise, then, upon
demand of the Trustee, the Company shall pay to the Trustee, for the benefit
of the holders of the Debentures, the whole amount that then shall have been
become due and payable on all such Debentures for principal or interest, or
both, as the case may be, with interest upon the overdue principal;
and (if the Debentures are held by the Trust or a trustee of the
Trust, without duplication of any other amounts paid by the Trust or trustee
in respect thereof) upon overdue installments of interest at the rate per
annum expressed in the Debentures; and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
and the amount payable to the Trustee under Section 9.7.
(b) If the Company shall fail to pay such amounts set forth in Section
7.2(a) forthwith upon such demand, the Trustee, in its own name and as
trustee of an express trust, shall be entitled and empowered to institute any
action or proceedings at law or in equity for the collection of the sums so
due and unpaid, and may prosecute any such action or proceeding to judgment
or final decree, and may enforce any such judgment or final decree against
the Company or other obligor upon the Debentures and collect the moneys
adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or other obligor upon the Debentures, wherever
situated.
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(c) In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, readjustment, arrangement, composition or judicial
proceedings affecting the Company or the creditors or property thereof, the
Trustee shall have power to intervene in such proceedings and take any action
therein that may be permitted by the court and shall (except as may be
otherwise provided by law) be entitled to file such proofs of claim and other
papers and documents as may be necessary or advisable in order to have the
claims of the Trustee and of the holders of the Debentures allowed for the
entire amount due and payable by the Company under this Indenture at the date
of institution of such proceedings and for any additional amount that may
become due and payable by the Company after such date, and to collect and
receive any moneys or other property payable or deliverable on any such
claim, and to distribute the same after the deduction of the amount payable
to the Trustee under Section 9.7; and any receiver, assignee or trustee in
bankruptcy or reorganization is hereby authorized by each of the holders of
the Debentures to make such payments to the Trustee, and, in the event that
the Trustee shall consent to the making of such payments directly to such
Debentureholders, to pay to the Trustee any amount due it under Section 9.7.
(d) All rights of action and of asserting claims under this Indenture,
or under any of the terms established with respect to the Debentures, may be
enforced by the Trustee without the possession of any of such Debentures, or
the production thereof at any trial or other proceeding relative thereto, and
any such suit or proceeding instituted by the Trustee shall be brought in its
own name as trustee of an express trust, and any recovery of judgment shall,
after provision for payment to the Trustee of any amounts due under Section
9.7, be for the ratable benefit of the holders of the Debentures. In case of
an Event of Default hereunder, the Trustee may in its discretion proceed to
protect and enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of any covenant
or agreement contained in this Indenture or in aid of the exercise of any
power granted in this Indenture, or to enforce any other legal or equitable
right vested in the Trustee by this Indenture or by law. Nothing contained
herein shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Debentureholder any plan of reorganization,
arrangement, adjustment or composition affecting the Debentures or the rights
of any holder thereof or to authorize the Trustee to vote in respect of the
claim of any Debentureholder in any such proceeding.
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Section 7.3. Application of Moneys Collected.
Any moneys collected by the Trustee pursuant to this Article VII with
respect to the Debentures shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
moneys on account of principal or interest, upon presentation of the
Debentures, and notation thereon of the payment, if only partially paid, and
upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses of collection and of all
amounts payable to the Trustee under Section 9.7;
SECOND: To the payment of all Senior Indebtedness if and to the extent
required by Article XVI; and
THIRD: To the payment of the amounts then due and unpaid upon the
Debentures for principal and interest, in respect of which or for the benefit
of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Debentures for principal and interest, respectively.
Section 7.4. Limitation on Suits.
(a) Except as provided in Section 15.13 hereof, no holder of any
Debenture shall have any right by virtue or by availing of any provision of
this Indenture to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Indenture or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless (i) such
holder previously shall have given to the Trustee written notice of an Event
of Default and of the continuance thereof with respect to the Debentures
specifying such Event of Default, as hereinbefore provided; (ii) the holders
of not less than 25% in aggregate principal amount of the Debentures then
Outstanding shall have made written request upon the Trustee to institute
such action, suit or proceeding in its own name as trustee hereunder; (iii)
such holder or holders shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby; and (iv) the Trustee for 60 days after its
receipt of such notice, request and offer of indemnity shall have failed to
institute any such action, suit or proceeding and during such 60 day period, the
holders of a majority in principal amount of the Debentures do not give the
Trustee a direction inconsistent with the request.
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<PAGE> 44
(b) Notwithstanding anything contained herein to the contrary or any
other provisions of this Indenture, the right of any holder of the Debentures
to receive payment of the principal of and interest on the Debentures, as
therein provided, on or after the respective due dates expressed in such
Debenture (or in the case of redemption, on the redemption date), or to
institute suit for the enforcement of any such payment on or after such
respective dates or redemption date, shall not be impaired or affected
without the consent of such holder and by accepting a Debenture hereunder it
is expressly understood, intended and covenanted by the taker and holder of
every Debenture with every other such taker and holder and the Trustee that
no one or more holders of the Debentures shall have any right in any manner
whatsoever by virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of the holders of any other of such
Debentures, or to obtain or seek to obtain priority over or preference to any
other such holder, or to enforce any right under this Indenture, except in
the manner herein provided and for the equal, ratable and common benefit of
all holders of the Debentures. For the protection and enforcement of the
provisions of this Section 7.4, each and every Debentureholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 7.5. Rights and Remedies Cumulative; Delay or Omission not Waiver.
(a) All powers and remedies given by this Article VII to the Trustee or
to the Debentureholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any other powers and remedies available to
the Trustee or the holders of the Debentures, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture or otherwise established with respect
to such Debentures.
(b) No delay or omission of the Trustee or of any holder of any of the
Debentures to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power,
or shall be construed to be a waiver of any such default or an acquiescence
therein; and, subject to the provisions of Section 7.4, every
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<PAGE> 45
power and remedy given by this Article VII or by law to the Trustee or the
Debentureholders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Debentureholders.
Section 7.6. Control by the Debentureholders.
The holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding, determined in accordance with Section
10.4, shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred on the Trustee; provided, however, that such
-------- -------
direction shall not be in conflict with any rule of law or with this
Indenture. Subject to the provisions of Section 9.1, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good
faith shall, by a Responsible Officer or Officers of the Trustee, determine
that the proceeding so directed would involve the Trustee in personal
liability. The holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding affected thereby, determined in accordance
with Section 10.4, may on behalf of the holders of all of the Debentures
waive any past default in the performance of any of the covenants contained
herein and its consequences, except (i) a default in the payment of the
principal of or interest on any of the Debentures as and when the same shall
become due by the terms of such Debentures otherwise than by acceleration
(unless such default has been cured and a sum sufficient to pay all matured
installments of principal and interest has been deposited with the Trustee
(in accordance with Section 7.1(c)); (ii) a default in the covenants
contained in Section 5.6; or (iii) in respect of a covenant or provision
hereof which cannot be modified or amended without the consent of the holder
of each Outstanding Debenture affected; provided, however, that if the
-------- -------
Debentures are held by the Trust or a trustee of the Trust, such waiver or
modification to such waiver shall not be effective until the holders of a
majority in liquidation preference of Trust Securities of the Trust shall
have consented to such waiver or modification to such waiver; provided
--------
further, that if the Debentures are held by the Trust or a trustee of the
- -------
Trust, and if the consent of the holder of each Outstanding Debenture is
required, such waiver shall not be effective until each holder of the Trust
Securities of the Trust shall have consented to such waiver. Upon any such
waiver, the default covered thereby shall be deemed to be cured for all
purposes of this Indenture and the Company, the Trustee and the holders of
the Debentures shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
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Section 7.7. Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any Debentures
by such holder's acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken or omitted by it as the Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section 7.7 shall not apply
to any suit instituted by the Trustee, to any suit instituted by any
Debentureholder, or group of the Debentureholders holding more than 10% in
aggregate principal amount of the Outstanding Debentures, or to any suit
instituted by any Debentureholder for the enforcement of the payment of the
principal of or interest on the Debentures, on or after the respective due
dates expressed in such Debenture or established pursuant to this Indenture.
ARTICLE VIII.
FORM OF THE DEBENTURE AND ORIGINAL ISSUE
Section 8.1. Form of Debenture.
The Debenture and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the forms contained as Exhibit A
attached hereto and incorporated herein by reference.
Section 8.2. Original Issue of the Debentures.
Debentures in the aggregate principal amount of $51,546,400 may, upon
execution of this Indenture, be executed by the Company and delivered to the
Trustee for authentication. If the Underwriters exercise their Option and
there is an Option Closing Date (as such terms are defined in Underwriting
Agreement, dated --------------, 1997, by and among the Company, the Trust
and Stifel, Nicolaus & Company, Incorporated, for itself and as
representative of the Underwriters named therein) then, on such Option
Closing Date, Debentures in the additional aggregate principal
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amount of $7,731,975 may be executed by the Company and delivered to the
Trustee for authentication. In either such event, the Trustee shall thereupon
authenticate and deliver said Debentures to or upon the written order of the
Company, signed by its Chairman, its Vice Chairman, its President, or any
Vice President and its Treasurer or an Assistant Treasurer, without any
further action by the Company.
ARTICLE IX.
CONCERNING THE TRUSTEE
Section 9.1. Certain Duties and Responsibilities of the Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default and
after the curing of all Events of Default that may have occurred, shall
undertake to perform with respect to the Debentures such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants shall be read into this Indenture against the Trustee. In case an
Event of Default has occurred that has not been cured or waived, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture,
and use the same degree of care and skill in its exercise, as a prudent
Person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(b) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(1) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(i) the duties and obligations of the Trustee shall with
respect to the Debentures be determined solely by the express provisions of
this Indenture, and the Trustee shall not be liable with respect to the
Debentures except for the performance of such duties and obligations as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may with respect to the Debentures conclusively rely, as to the
truth of the statements and the correctness of the opinions
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<PAGE> 48
expressed therein, upon any certificates or opinions furnished to the Trustee
and conforming to the requirements of this Indenture; but in the case of any
such certificates or opinions that by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the requirements
of this Indenture;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the holders of not less than a majority in principal amount of
the Debentures at the time Outstanding relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this Indenture
with respect to the Debentures; and
(4) none of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if there is reasonable ground
for believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Indenture or adequate indemnity against
such risk is not reasonably assured to it.
Section 9.2. Notice of Defaults.
Within 90 days after actual knowledge by a Responsible Officer of the
Trustee of the occurrence of any default hereunder with respect to the
Debentures, the Trustee shall transmit by mail to all holders of the
Debentures, as their names and addresses appear in the Debenture Register,
notice of such default, unless such default shall have been cured or waived;
provided, however, that, except in the case of a default in the payment of
- -------- -------
the principal or interest (including any Additional Payments) on any
Debenture, the Trustee shall be protected in withholding such notice if and
so long as the board of directors, the executive committee or a trust
committee of the directors and/or Responsible Officers of the Trustee
determines in good faith that the withholding of such notice is in
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the interests of the holders of such Debentures; and provided, further, that
in the case of any default of the character specified in section 7.1(a)(iii),
no such notice to holders of Debentures need be sent until at least 30 days
after the occurrence thereof. For the purposes of this Section 9.2, the term
"default" means any event which is, or after notice or lapse of time or both,
would become, an Event of Default with respect to the Debentures.
Section 9.3. Certain Rights of the Trustee.
Except as otherwise provided in Section 9.1:
(a) The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond, security or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Board Resolution or an instrument
signed in the name of the Company by the President or any Vice President and
by the Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer thereof (unless other evidence in respect thereof is specifically
prescribed herein);
(c) The Trustee shall not be deemed to have knowledge of a default or
an Event of Default, other than an Event of Default specified in Section
7.1(a)(i) or (ii), unless and until it receives written notification of such
Event of Default from the Company or by holders of at least 25% of the
aggregate principal amount of the Debentures at the time Outstanding;
(d) The Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted
hereunder in good faith and in reliance thereon;
(e) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Debentureholders, pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby; nothing contained
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<PAGE> 50
herein shall, however, relieve the Trustee of the obligation, upon the
occurrence of an Event of Default (that has not been cured or waived) to
exercise with respect to the Debentures such of the rights and powers vested
in it by this Indenture, and to use the same degree of care and skill in its
exercise, as a prudent Person would exercise or use under the circumstances
in the conduct of his or her own affairs;
(f) The Trustee shall not be liable for any action taken or omitted to
be taken by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture;
(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
security, or other papers or documents, unless requested in writing so to do
by the holders of not less than a majority in principal amount of the
Outstanding Debentures (determined as provided in Section 10.4); provided,
--------
however, that if the payment within a reasonable time to the Trustee of the
- -------
costs, expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such costs, expenses or
liabilities as a condition to so proceeding, and the reasonable expense of
every such examination shall be paid by the Company or, if paid by the
Trustee, shall be repaid by the Company upon demand; and
(h) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
Section 9.4. The Trustee not Responsible for Recitals, Etc.
(a) The Recitals contained herein and in the Debentures shall be taken
as the statements of the Company, and the Trustee assumes no responsibility
for the correctness of the same.
(b) The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Debentures.
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<PAGE> 51
(c) The Trustee shall not be accountable for the use or application by
the Company of any of the Debentures or of the proceeds of such Debentures,
or for the use or application of any moneys paid over by the Trustee in
accordance with any provision of this Indenture, or for the use or
application of any moneys received by any Paying Agent other than the
Trustee.
Section 9.5. May Hold the Debentures.
The Trustee or any Paying Agent or Debenture Registrar for the
Debentures, in its individual or any other capacity, may become the owner or
pledgee of the Debentures with the same rights it would have if it were not
Trustee, Paying Agent or Debenture Registrar.
Section 9.6. Moneys Held in Trust.
Subject to the provisions of Section 13.5, all moneys received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from
other funds except to the extent required by law. The Trustee shall be under
no liability for interest on any moneys received by it hereunder except such
as it may agree with the Company to pay thereon.
Section 9.7. Compensation and Reimbursement.
(a) The Company covenants and agrees to pay to the Trustee, and the
Trustee shall be entitled to, such reasonable compensation (which shall not
be limited by any provision of law in regard to the compensation of a trustee
of an express trust), as the Company and the Trustee may from time to time
agree in writing, for all services rendered by it in the execution of the
trusts hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, and, except as otherwise
expressly provided herein, the Company shall pay or reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any of the provisions of
this Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all Persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Company also covenants to indemnify the Trustee
(and its officers, agents, directors and employees) for, and to hold it
harmless against, any loss, liability or expense incurred without negligence
or bad faith on the
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part of the Trustee and arising out of or in connection with the acceptance
or administration of this trust, including the costs and expenses of
defending itself against any claim of liability in the premises.
(b) The obligations of the Company under this Section 9.7 to compensate
and indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness
hereunder. Such additional indebtedness shall be secured by a lien prior to
that of the Debentures upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the holders of
particular Debentures.
Section 9.8. Reliance on Officers' Certificate.
Except as otherwise provided in Section 9.1, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking
or suffering or omitting to take any action hereunder, such matter (unless
other evidence in respect thereof be herein specifically prescribed) may, in
the absence of negligence or bad faith on the part of the Trustee, be deemed
to be conclusively proved and established by an Officers' Certificate
delivered to the Trustee and such certificate, in the absence of negligence
or bad faith on the part of the Trustee, shall be full warrant to the Trustee
for any action taken, suffered or omitted to be taken by it under the
provisions of this Indenture upon the faith thereof.
Section 9.9. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act.
Section 9.10. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee with respect to the Debentures
issued hereunder which shall at all times be a corporation organized and
doing business under the laws of the United States or any state or territory
thereof or of the District of Columbia, or a corporation or other Person
permitted to act as trustee by the Commission, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, and subject to supervision or
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examination by federal, state, territorial, or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then for the purposes of this Section 9.10, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. The Company may not, nor may any Person directly or
indirectly controlling, controlled by, or under common control with the
Company, serve as Trustee. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 9.10, the Trustee
shall resign immediately in the manner and with the effect specified in
Section 9.11.
Section 9.11. Resignation and Removal; Appointment of Successor.
(a) The Trustee or any successor hereafter appointed, may at any time
resign by giving written notice thereof to the Company and by transmitting
notice of resignation by mail, first class postage prepaid, to the
Debentureholders, as their names and addresses appear upon the Debenture
Register. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee with respect to Debentures by written
instrument, in duplicate, executed by order of the Board of Directors, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after the mailing of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee with
respect to Debentures, or any Debentureholder who has been a bona fide holder
of a Debenture or Debentures for at least six months may, subject to the
provisions of Section 9.10, on behalf of himself or herself and all others
similarly situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon after such notice, if any, as it
may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any one of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 9.9 after written request therefor by the Company or by any
Debentureholder who has been a bona fide holder of a Debenture or Debentures
for at least six months; or
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(ii) the Trustee shall cease to be eligible in accordance with
the provisions of Section 9.10 and shall fail to resign after written request
therefor by the Company or by any such Debentureholder; or
(iii) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy
proceeding, or a receiver of the Trustee or of its property shall be
appointed or consented to, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, the Company may remove the Trustee with respect
to all Debentures and appoint a successor trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee, or, subject to the provisions of Section 9.10, unless the
Trustee's duty to resign is stayed as provided herein, any Debentureholder
who has been a bona fide holder of a Debenture or Debentures for at least six
months may, on behalf of that holder and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor trustee. Such court may thereupon after
such notice, if any, as it may deem proper and prescribe, remove the Trustee
and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding may at any time remove the Trustee by so
notifying the Trustee and the Company and may appoint a successor Trustee
with the consent of the Company.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee with respect to the Debentures pursuant to any of the
provisions of this Section 9.11 shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 9.12.
Section 9.12. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor trustee with
respect to the Debentures, every successor trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee
an instrument accepting such appointment, and thereupon the
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resignation or removal of the retiring Trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee; but, on the request of the Company or the successor trustee, such
retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor trustee all the rights, powers, and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to
such successor trustee all property and money held by such retiring Trustee
hereunder.
(b) Upon request of any successor trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and
confirming to such successor trustee all such rights, powers and trusts
referred to in paragraph (a) of this Section 9.12.
(c) No successor trustee shall accept its appointment unless at the
time of such acceptance such successor trustee shall be qualified and
eligible under this Article IX.
(d) Upon acceptance of appointment by a successor trustee as provided
in this Section 9.12, the Company shall transmit notice of the succession of
such trustee hereunder by mail, first class postage prepaid, to the
Debentureholders, as their names and addresses appear upon the Debenture
Register. If the Company fails to transmit such notice within ten days after
acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be transmitted at the expense of the Company.
Section 9.13. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to the corporate trust business of the Trustee,
shall be the successor of the Trustee hereunder, provided that such
corporation shall be qualified under the provisions of Section 9.9 and
eligible under the provisions of Section 9.10, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding. In case any
Debentures shall have been authenticated, but not delivered, by the
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Trustee then in office, any successor by merger, conversion or consolidation
to such authenticating Trustee may adopt such authentication and deliver the
Debentures so authenticated with the same effect as if such successor Trustee
had itself authenticated such Debentures.
Section 9.14. Preferential Collection of Claims against the Company.
The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship described in Section 311(b) of the
Trust Indenture Act. A Trustee who has resigned or been removed shall be
subject to Section 311(a) of the Trust Indenture Act to the extent included
therein.
ARTICLE X.
CONCERNING THE DEBENTUREHOLDERS
Section 10.1. Evidence of Action by the Holders.
(a) Whenever in this Indenture it is provided that the holders of a
majority or specified percentage in aggregate principal amount of the
Debentures may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any
other action), the fact that at the time of taking any such action the
holders of such majority or specified percentage have joined therein may be
evidenced by any instrument or any number of instruments of similar tenor
executed by such holders of Debentures in Person or by agent or proxy
appointed in writing.
(b) If the Company shall solicit from the Debentureholders any request,
demand, authorization, direction, notice, consent, waiver or other action,
the Company may, at its option, as evidenced by an Officers' Certificate, fix
in advance a record date for the determination of Debentureholders entitled
to give such request, demand, authorization, direction, notice, consent,
waiver or other action, but the Company shall have no obligation to do so. If
such a record date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other action may be given before or after the
record date, but only the Debentureholders of record at the close of business
on the record date shall be deemed to be Debentureholders for the purposes of
determining whether
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Debentureholders of the requisite proportion of Outstanding Debentures have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other action, and for that purpose the
Outstanding Debentures shall be computed as of the record date; provided,
--------
however, that no such authorization, agreement or consent by such
- -------
Debentureholders on the record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than
six (6) months after the record date.
Section 10.2. Proof of Execution by the Debentureholders.
Subject to the provisions of Section 9.1, proof of the execution of any
instrument by a Debentureholder (such proof shall not require notarization)
or such Debentureholder's agent or proxy and proof of the holding by any
Person of any of the Debentures shall be sufficient if made in the following
manner:
(a) The fact and date of the execution by any such Person of any
instrument may be proved in any reasonable manner acceptable to the Trustee.
(b) The ownership of Debentures shall be proved by the Debenture
Register of such Debentures or by a certificate of the Debenture Registrar
thereof.
(c) The Trustee may require such additional proof of any matter
referred to in this Section 10.2 as it shall deem necessary.
Section 10.3. Who May be Deemed Owners.
Prior to the due presentment for registration of transfer of any
Debenture, the Company, the Trustee, any Paying Agent, any Authenticating
Agent and any Debenture Registrar may deem and treat the Person in whose name
such Debenture shall be registered upon the books of the Company as the
absolute owner of such Debenture (whether or not such Debenture shall be
overdue and notwithstanding any notice of ownership or writing thereon made
by anyone other than the Debenture Registrar) for the purpose of receiving
payment of or on account of the principal of and interest on such Debenture
(subject to Section 2.3) and for all other purposes; and neither the Company
nor the Trustee nor any Paying Agent nor any Authenticating Agent nor any
Debenture Registrar shall be affected by any notice to the contrary.
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Section 10.4. Certain Debentures Owned by Company Disregarded.
In determining whether the holders of the requisite aggregate principal
amount of the Debentures have concurred in any direction, consent or waiver
under this Indenture, the Debentures that are owned by the Company or any
other obligor on the Debentures or by any Person directly or indirectly
controlling or controlled by or under common control with the Company or any
other obligor on the Debentures shall be disregarded and deemed not to be
Outstanding for the purpose of any such determination, except that (i) for
the purpose of determining whether the Trustee shall be protected in relying
on any such direction, consent or waiver, only Debentures that the Trustee
actually knows are so owned shall be so disregarded; and (ii) for purposes of
this Section 10.4, the Trust shall be deemed not to be controlled by the
Company. The Debentures so owned that have been pledged in good faith may be
regarded as Outstanding for the purposes of this Section 10.4, if the pledgee
shall establish to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Debentures and that the pledgee is not a Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any such other obligor. In case
of a dispute as to such right, any decision by the Trustee taken upon the
advice of counsel shall be full protection to the Trustee.
Section 10.5. Actions Binding on the Future Debentureholders.
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 10.1, of the taking of any action by the holders of the
majority or percentage in aggregate principal amount of the Debentures
specified in this Indenture in connection with such action, any holder of a
Debenture that is shown by the evidence to be included in the Debentures the
holders of which have consented to such action may, by filing written notice
with the Trustee, and upon proof of holding as provided in Section 10.2,
revoke such action so far as concerns such Debenture. Except as aforesaid any
such action taken by the holder of any Debenture shall be conclusive and
binding upon such holder and upon all future holders and owners of such
Debenture, and of any Debenture issued in exchange therefor, on registration
of transfer thereof or in place thereof, irrespective of whether or not any
notation in regard thereto is made upon such Debenture. Any action taken by
the holders of the majority or percentage in aggregate principal amount of
the Debentures specified in this Indenture in connection with such action shall
be conclusively binding upon the Company, the Trustee and the holders of all the
Debentures.
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ARTICLE XI.
SUPPLEMENTAL INDENTURES
Section 11.1. Supplemental Indentures without the Consent of the
Debentureholders.
In addition to any supplemental indenture otherwise authorized by this
Indenture, the Company and the Trustee may from time to time and at any time
enter into an indenture or indentures supplemental hereto (which shall
conform to the provisions of the Trust Indenture Act as then in effect),
without the consent of the Debentureholders, for one or more of the following
purposes:
(a) to cure any ambiguity, defect, or inconsistency herein, or in the
Debentures;
(b) to provide for uncertificated Debentures in addition to or in place
of certificated Debentures;
(c) to add to the covenants of the Company for the benefit of the
holders of all or any of the Debentures or to surrender any right or power
herein conferred upon the Company;
(d) to make any change that does not adversely affect the rights of any
Debentureholder in any material respect;
(e) to qualify or maintain the qualification of this Indenture under
the Trust Indenture Act; or
(f) to evidence a consolidation or merger involving the Company as
permitted under Section 12.1.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations that may be therein contained, but
the Trustee shall not be obligated to enter into any such supplemental
indenture that affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise. Any supplemental indenture authorized by the
provisions of this Section 11.1 may be executed by the Company and
the Trustee without the consent of the holders of any of the Debentures at
the time Outstanding, notwithstanding any of the provisions of Section 11.2.
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Section 11.2. Supplemental Indentures with Consent of the Debentureholders.
With the consent (evidenced as provided in Section 10.1) of the holders
of not less than a majority in aggregate principal amount of the Debentures
at the time Outstanding, the Company, when authorized by Board Resolutions,
and the Trustee may from time to time and at any time enter into an indenture
or indentures supplemental hereto (which shall conform to the provisions of
the Trust Indenture Act as then in effect) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Indenture or of any supplemental indenture or of modifying in any
manner not covered by Section 11.1 the rights of the holders of the
Debentures under this Indenture; provided, however, that no such supplemental
-------- -------
indenture shall without the consent of the holders of each Debenture then
Outstanding and affected thereby, (i) extend the fixed maturity of any
Debentures, reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon; or (ii) reduce the aforesaid
percentage of Debentures, the holders of which are required to consent to any
such supplemental indenture; provided further, that if the Debentures are
----------------
held by the Trust or a trustee of the Trust, such supplemental indenture
shall not be effective until the holders of a majority in liquidation
preference of Trust Securities of the Trust shall have consented to such
supplemental indenture; provided further, that if the Debentures are held by
----------------
the Trust or a trustee of the Trust and if the consent of the holder of each
Outstanding Debenture is required, such supplemental indenture shall not be
effective until each holder of the Trust Securities of the Trust shall have
consented to such supplemental indenture. It shall not be necessary for the
consent of the Debentureholders affected thereby under this Section 11.2 to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such consent shall approve the substance thereof.
Section 11.3. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture pursuant to the
provisions of this Article XI, this Indenture shall be and be deemed to be
modified and amended in accordance therewith and the respective rights,
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limitations of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Company and the holders of Debentures shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and
conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
Section 11.4. The Debentures Affected by Supplemental Indentures.
The Debentures affected by a supplemental indenture, authenticated and
delivered after the execution of such supplemental indenture pursuant to the
provisions of this Article XI, may bear a notation in form approved by the
Company, provided such form meets the requirements of any exchange upon which
the Debentures may be listed, as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Debentures so
modified as to conform, in the opinion of the Board of Directors of the
Company, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Company, authenticated by the
Trustee and delivered in exchange for the Debentures then Outstanding.
Section 11.5. Execution of Supplemental Indentures.
(a) Upon the request of the Company, accompanied by its Board
Resolutions authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of the
Debentureholders required to consent thereto as aforesaid, the Trustee shall
join with the Company in the execution of such supplemental indenture unless
such supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may
in its discretion but shall not be obligated to enter into such supplemental
indenture. The Trustee, subject to the provisions of Sections 9.1, may
receive an Opinion of Counsel as conclusive evidence that any supplemental
indenture executed pursuant to this Article XI is authorized or permitted by,
and conforms to, the terms of this Article XI and that it is proper for the
Trustee under the provisions of this Article XI to join in the execution
thereof.
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(b) Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 11.5, the
Trustee shall transmit by mail, first class postage prepaid, a notice,
setting forth in general terms the substance of such supplemental indenture,
to the Debentureholders as their names and addresses appear upon the
Debenture Register. Any failure of the Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity
of any such supplemental indenture.
ARTICLE XII.
SUCCESSOR CORPORATION
Section 12.1. The Company may Consolidate, Etc.
Nothing contained in this Indenture or in any of the Debentures shall
prevent any consolidation or merger of the Company with or into any other
corporation or corporations (whether or not affiliated with the Company, as
the case may be), or successive consolidations or mergers in which the
Company, as the case may be, or its successor or successors shall be a party
or parties, or shall prevent any sale, conveyance, transfer or other
disposition of the property of the Company, as the case may be, or its
successor or successors as an entirety, or substantially as an entirety, to
any other corporation (whether or not affiliated with the Company, as the
case may be, or its successor or successors) authorized to acquire and
operate the same; provided, however, that the Company hereby covenants and
-------- -------
agrees that (i) upon any such consolidation, merger, sale, conveyance,
transfer or other disposition, the due and punctual payment, in the case of
the Company, of the principal of and interest on all of the Debentures,
according to their tenor and the due and punctual performance and observance
of all the covenants and conditions of this Indenture to be kept or performed
by the Company as the case may be, shall be expressly assumed, by
supplemental indenture (which shall conform to the provisions of the Trust
Indenture Act, as then in effect) satisfactory in form to the Trustee
executed and delivered to the Trustee by the entity formed by such
consolidation, or into which the Company, as the case may be, shall have been
merged, or by the entity which shall have acquired such property; (ii) in
case the Company consolidates with or merges into another Person or conveys
or transfers its properties and assets substantially as an entirety to any
Person, the successor Person is organized under the laws of the United States
or any state or the District of Columbia; and (iii) immediately after giving
effect thereto, an Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have occurred
and be continuing.
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Section 12.2. Successor Corporation Substituted.
(a) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition and upon the assumption by the successor
corporation, by supplemental indenture, executed and delivered to the Trustee
and satisfactory in form to the Trustee, of the due and punctual payment of
the principal of and interest on all of the Debentures Outstanding and the
due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Company, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it
had been named as the Company herein and thereupon the predecessor
corporation shall be relieved of all obligations and covenants under this
Indenture and the Debentures.
(b) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition such changes in phraseology and form (but not
in substance) may be made in the Debentures thereafter to be issued as may be
appropriate.
(c) Nothing contained in this Indenture or in any of the Debentures
shall prevent the Company from merging into itself or acquiring by purchase
or otherwise, all or any part of, the property of any other Person (whether
or not affiliated with the Company).
Section 12.3. Evidence of Consolidation, Etc. to Trustee.
The Trustee, subject to the provisions of Section 9.1, may receive an
Opinion of Counsel as conclusive evidence that any such consolidation,
merger, sale, conveyance, transfer or other disposition, and any such
assumption, comply with the provisions of this Article XII.
ARTICLE XIII.
SATISFACTION AND DISCHARGE
Section 13.1. Satisfaction and Discharge of Indenture.
If at any time: (a) the Company shall have delivered to the Trustee for
cancellation all Debentures theretofore authenticated (other than any
Debentures that shall have been destroyed, lost or stolen and that shall have
been replaced or paid as provided in Section 2.9) and all Debentures
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for whose payment money or Governmental Obligations have theretofore been
deposited in trust or segregated and held in trust by the Company (and
thereupon repaid to the Company or discharged from such trust, as provided in
Section 13.5); or (b) all such Debentures not theretofore delivered to the
Trustee for cancellation shall have become due and payable, or are by their
terms to become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption, and the Company shall deposit or cause to
be deposited with the Trustee as trust funds the entire amount in moneys or
Governmental Obligations sufficient, or a combination thereof sufficient, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay
at maturity or upon redemption all Debentures not theretofore delivered to
the Trustee for cancellation, including principal and interest due or to
become due to such date of maturity or date fixed for redemption, as the case
may be, and if the Company shall also pay or cause to be paid all other sums
payable hereunder by the Company; then this Indenture shall thereupon cease
to be of further effect except for the provisions of Sections 2.3, 2.7, 2.9,
5.1, 5.2, 5.3, 9.7 and 9.10, that shall survive until the date of maturity or
redemption date, as the case may be, and Sections 9.6 and 13.5, that shall
survive to such date and thereafter, and the Trustee, on demand of the
Company and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture.
Section 13.2. Discharge of Obligations.
If at any time all Debentures not heretofore delivered to the Trustee
for cancellation or that have not become due and payable as described in
Section 13.1 shall have been paid by the Company by depositing irrevocably
with the Trustee as trust funds moneys or an amount of Governmental
Obligations sufficient in the opinion of a nationally recognized certified
public accounting firm to pay at maturity or upon redemption all Debentures
not theretofore delivered to the Trustee for cancellation, including
principal and interest due or to become due to such date of maturity or date
fixed for redemption, as the case may be, and if the Company shall also pay
or cause to be paid all other sums payable hereunder by the Company, then
after the date such moneys or Governmental Obligations, as the case may be,
are deposited with the Trustee, the obligations of the Company under this
Indenture shall cease to be of further effect except for the provisions of
Sections 2.3, 2.7, 2.9,
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5.1, 5.2, 5.3, 9.6, 9.7, 9.10 and 13.5 hereof that shall survive until such
Debentures shall mature and be paid. Thereafter, Sections 9.6 and 13.5 shall
survive.
Section 13.3. Deposited Moneys to be Held in Trust.
All monies or Governmental Obligations deposited with the Trustee
pursuant to Sections 13.1 or 13.2 shall be held in trust and shall be
available for payment as due, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent), to the holders of the
Debentures for the payment or redemption of which such moneys or Governmental
Obligations have been deposited with the Trustee.
Section 13.4. Payment Of Monies Held by Paying Agents.
In connection with the satisfaction and discharge of this Indenture,
all moneys or Governmental Obligations then held by any Paying Agent under
the provisions of this Indenture shall, upon demand of the Company, be paid
to the Trustee and thereupon such Paying Agent shall be released from all
further liability with respect to such moneys or Governmental Obligations.
Section 13.5. Repayment to the Company.
Any monies or Governmental Obligations deposited with any Paying Agent
or the Trustee, or then held by the Company in trust, for payment of
principal of or interest on the Debentures that are not applied but remain
unclaimed by the holders of such Debentures for at least two years after the
date upon which the principal of or interest on such Debentures shall have
respectively become due and payable, shall be repaid to the Company, as the
case may be, on May 31 of each year or (if then held by the Company) shall be
discharged from such trust; and thereupon the Paying Agent and the Trustee
shall be released from all further liability with respect to such moneys or
Governmental Obligations, and the holder of any of the Debentures entitled to
receive such payment shall thereafter, as an unsecured general creditor, look
only to the Company for the payment thereof.
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ARTICLE XIV.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
Section 14.1. No Recourse
No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of the Debentures, or for any claim based thereon or otherwise
in respect thereof, shall be had against any incorporator, stockholder,
officer or director, past, present or future, as such, of the Company or of
any predecessor or successor corporation, either directly or through the
Company or any such predecessor or successor corporation, whether by virtue
of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that this
Indenture and the obligations issued hereunder are solely corporate
obligations, and that no such personal liability whatever, shall attach to,
or is or shall be incurred by, the incorporators, stockholders, officers or
directors as such, of the Company or of any predecessor or successor
corporation, or any of them, because of the creation of the indebtedness
hereby authorized, or under or by reason of the obligations, covenants or
agreements contained in this Indenture or in any of the Debentures or implied
therefrom; and that any and all such personal liability of every name and
nature, either at common law or in equity or by constitution or statute, and
any and all such rights and claims against, every such incorporator,
stockholder, officer or director as such, because of the creation of the
indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any of the
Debentures or implied therefrom, are hereby expressly waived and released as
a condition of, and as a consideration for, the execution of this Indenture
and the issuance of such Debentures.
ARTICLE XV.
MISCELLANEOUS PROVISIONS
Section 15.1. Effect on Successors and Assigns.
All the covenants, stipulations, promises and agreements in this
Indenture contained by or on behalf of the Company shall bind its respective
successors and assigns, whether so expressed or not.
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Section 15.2. Actions by Successor.
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
corresponding board, committee or officer of any corporation that shall at
the time be the lawful sole successor of the Company.
Section 15.3. Surrender of the Company Powers.
The Company by instrument in writing executed by appropriate authority
of its Board of Directors and delivered to the Trustee may surrender any of
the powers reserved to the Company, and thereupon such power so surrendered
shall terminate both as to the Company, as the case may be, and as to any
successor corporation.
Section 15.4. Notices.
Except as otherwise expressly provided herein any notice or demand that
by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Debentures to or on the Company
may be given or served by being deposited first class postage prepaid in a
post-office letterbox addressed (until another address is filed in writing by
the Company with the Trustee), as follows: c/o INTRUST Financial Corporation,
105 North Main Street, Box One, Wichita, Kansas 67202, Attention: Chief
Executive Officer. Any notice, election, request or demand by the Company or
any Debentureholder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or made in writing at
the Corporate Trust Office of the Trustee.
Section 15.5. Governing Law.
This Indenture and each Debenture shall be deemed to be a contract made
under the internal laws of the State of Kansas and for all purposes shall
be construed in accordance with the laws of said State.
Section 15.6. Treatment of the Debentures as Debt.
It is intended that the Debentures shall be treated as indebtedness and
not as equity for federal income tax purposes. The provisions of this
Indenture shall be interpreted to further this intention.
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Section 15.7. Compliance Certificates and Opinions.
(a) Upon any application or demand by the Company to the Trustee to
take any action under any of the provisions of this Indenture, the Company
shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent have been complied
with, except that in the case of any such application or demand as to which
the furnishing of such documents is specifically required by any provision of
this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
(b) Each certificate or opinion of the Company provided for in this
Indenture and delivered to the Trustee with respect to compliance with a
condition or covenant in this Indenture shall include (1) a statement that
the Person making such certificate or opinion has read such covenant or
condition; (2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained
in such certificate or opinion are based; (3) a statement that, in the
opinion of such Person, he or she has made such examination or investigation
as, in the opinion of such Person, is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and (4) a statement as to whether or not, in the
opinion of such Person, such condition or covenant has been complied with.
Section 15.8. Payments on Business Days.
In any case where the date of maturity of interest or principal of any
Debenture or the date of redemption of any Debenture shall not be a Business
Day, then payment of interest or principal may be made on the next succeeding
Business Day with the same force and effect as if made on the nominal date of
maturity or redemption, and no interest shall accrue for the period after such
nominal date.
Section 15.9. Conflict with Trust Indenture Act.
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
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Section 15.10. Counterparts.
This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute
but one and the same instrument.
Section 15.11. Separability.
In case any one or more of the provisions contained in this Indenture
or in the Debentures shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of the Debentures,
but this Indenture and the Debentures shall be construed as if such invalid
or illegal or unenforceable provision had never been contained herein or
therein.
Section 15.12. Assignment.
The Company shall have the right at all times to assign any of its
respective rights or obligations under this Indenture to a direct or
indirect wholly owned Subsidiary of the Company, provided that, in the
event of any such assignment, the Company shall remain liable for all
such obligations. Subject to the foregoing, this Indenture is binding upon and
inures to the benefit of the parties thereto and their respective successors and
assigns. This Indenture may not otherwise be assigned by the parties thereto.
Section 15.13. Acknowledgment of Rights; Right of Setoff.
(a) The Company acknowledges that, with respect to any Debentures held
by the Trust or a trustee of the Trust, if the Property Trustee fails to
enforce its rights under this Indenture as the holder of the Debentures held
as the assets of the Trust, any holder of Preferred Securities may institute
legal proceedings directly against the Company to enforce such Property
Trustee's rights under this Indenture without first instituting any legal
proceedings against such Property Trustee or any other person or entity.
Notwithstanding the foregoing, and notwithstanding the provisions of Section
7.4(a) hereof, if an Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay principal or
interest on the Debentures on the date such principal or interest is
otherwise payable (or in the case of redemption, on the redemption date), the
Company acknowledges that a holder of Preferred Securities may directly
institute a proceeding for enforcement of payment to such holder of the
principal of or interest on the Debentures having a principal amount equal to
the aggregate liquidation amount of the Preferred Securities of such holder
on or after the respective due date specified in the Debentures.
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(b) Notwithstanding anything to the contrary contained in this
Indenture, the Company shall have the right to setoff any payment it is
otherwise required to make hereunder in respect of any Trust Securities to
the extent that the Company has previously made, or is concurrently making, a
payment to the holder of such Trust Securities under the Preferred Securities
Guarantee or in connection with a proceeding for enforcement of payment of
the principal of or interest on the Debentures directly brought by holders of
any Trust Securities.
(c) For so long as any of the Preferred Securities remain Outstanding,
if, upon an Event of Default, the Property Trustee fails or the holders of
not less than 25% in principal amount of the Outstanding Debentures fail to
declare the principal of all of the Debentures to be immediately due and
payable, the holders of at least 25% in liquidation amount of the Preferred
Securities then Outstanding shall have the right to make such declaration by
a notice in writing to the Depositor and the Property Trustee; and upon any
such declaration such principal amount of and the accrued interest on all of
the Debentures shall become immediately due and payable, provided that the
payment of principal and interest on such Debentures shall remain
subordinated to the extent provided in this Indenture.
ARTICLE XVI.
SUBORDINATION OF THE DEBENTURES
Section 16.1. Agreement to Subordinate.
The Company covenants and agrees, and each holder of the Debentures
issued hereunder by such holder's acceptance thereof likewise covenants and
agrees, that all the Debentures shall be issued subject to the provisions of
this Article XVI; and each holder of a Debenture, whether upon original issue
or upon transfer or assignment thereof, accepts and agrees to be bound by
such provisions. The payment by the Company of the principal of and interest
on all the Debentures issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and junior in right of payment to the
prior payment in full of all Senior Debt, Subordinated Debt and Additional
Senior Obligations of the Company (collectively, "Senior Indebtedness") to
the extent provided herein, whether outstanding at the date of this Indenture
or thereafter incurred. No provision of this Article XVI shall prevent the
occurrence of any default or Event of Default hereunder.
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Section 16.2. Default on Senior Debt, Subordinated Debt or Additional Senior
Obligations.
In the event and during the continuation of any default by the Company
in the payment of principal, premium, interest or any other payment due on
any Senior Indebtedness, or in the event that the maturity of any Senior
Indebtedness has been accelerated because of a default, then, in either case,
no payment shall be made by the Company with respect to the principal
(including redemption payments) of or interest on the Debentures. In the
event that, notwithstanding the foregoing, any payment shall be received by
the Trustee when such payment is prohibited by the preceding sentence of this
Section 16.2, such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Senior Indebtedness or
their respective representatives, or to the trustee or trustees under any
indenture pursuant to which any of such Senior Indebtedness may have been
issued, as their respective interests may appear, but only to the extent that
the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing within 90 days of
such payment of the amounts then due and owing on the Senior Indebtedness and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of the Senior Indebtedness.
Section 16.3. Liquidation; Dissolution; Bankruptcy.
(a) Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization
of the Company, whether voluntary or involuntary or in bankruptcy,
insolvency, receivership or other proceedings, all amounts due upon all
Senior Indebtedness shall first be paid in full, or payment thereof provided
for in money in accordance with its terms, before any payment is made by the
Company on account of the principal or interest on the Debentures; and upon
any such dissolution or winding-up or liquidation or reorganization, any
payment by the Company, or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to which the holders
of the Debentures or the Trustee would be entitled to receive from the
Company, except for the provisions of this Article XVI, shall be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, or by the holders of the
Debentures or by the
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Trustee under this Indenture if received by them or it, directly to the
holders of Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders, as calculated
by the Company) or their representative or representatives, or to the trustee
or trustees under any indenture pursuant to which any instruments evidencing
such Senior Indebtedness may have been issued, as their respective interests
may appear, to the extent necessary to pay such Senior Indebtedness in full,
in money or money's worth, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the holders of the Debentures or to the
Trustee.
(b) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received
by the Trustee before all Senior Indebtedness is paid in full, or provision
is made for such payment in money in accordance with its terms, such payment
or distribution shall be held in trust for the benefit of and shall be paid
over or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior
Indebtedness may have been issued, as their respective interests may appear,
as calculated by the Company, for application to the payment of all Senior
Indebtedness, as the case may be, remaining unpaid to the extent necessary to
pay such Senior Indebtedness in full in money in accordance with its terms,
after giving effect to any concurrent payment or distribution to or for the
benefit of the holders of such Senior Indebtedness.
(c) For purposes of this Article XVI, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article XVI with respect to the Debentures to the payment of all Senior
Indebtedness, as the case may be, that may at the time be outstanding,
provided that (i) such Senior Indebtedness is assumed by the new corporation,
if any, resulting from any such reorganization or readjustment; and (ii) the
rights of the holders of such Senior Indebtedness are not, without the
consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or
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the merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its
property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided for in Article XII shall
not be deemed a dissolution, winding-up, liquidation or reorganization for
the purposes of this Section 16.3 if such other corporation shall, as a part
of such consolidation, merger, conveyance or transfer, comply with the
conditions stated in Article XII. Nothing in Section 16.2 or in this Section
16.3 shall apply to claims of, or payments to, the Trustee under or pursuant
to Section 9.7.
Section 16.4. Subrogation.
(a) Subject to the payment in full of all Senior Indebtedness, the
rights of the holders of the Debentures shall be subrogated to the rights of
the holders of such Senior Indebtedness to receive payments or distributions
of cash, property or securities of the Company, as the case may be,
applicable to such Senior Indebtedness until the principal of and interest on
the Debentures shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of such Senior
Indebtedness of any cash, property or securities to which the holders of the
Debentures or the Trustee would be entitled except for the provisions of this
Article XVI, and no payment over pursuant to the provisions of this Article
XVI to or for the benefit of the holders of such Senior Indebtedness by
holders of the Debentures or the Trustee, shall, as between the Company, its
creditors other than holders of Senior Indebtedness of the Company, and the
holders of the Debentures, be deemed to be a payment by the Company to or on
account of such Senior Indebtedness. It is understood that the provisions of
this Article XVI are and are intended solely for the purposes of defining the
relative rights of the holders of the Debentures, on the one hand, and the
holders of such Senior Indebtedness on the other hand.
(b) Nothing contained in this Article XVI or elsewhere in this
Indenture or in the Debentures is intended to or shall impair, as between the
Company, its creditors (other than the holders of Senior Indebtedness), and
the holders of the Debentures, the obligation of the Company, which is
absolute and unconditional, to pay to the holders of the Debentures the
principal of and interest on the Debentures as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the holders of the Debentures and
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creditors of the Company, as the case may be, other than the holders of
Senior Indebtedness, as the case may be, nor shall anything herein or therein
prevent the Trustee or the holder of any Debenture from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XVI of the
holders of such Senior Indebtedness in respect of cash, property or
securities of the Company, as the case may be, received upon the exercise of
any such remedy.
(c) Upon any payment or distribution of assets of the Company referred
to in this Article XVI, the Trustee, subject to the provisions of Article IX,
and the holders of the Debentures shall be entitled to conclusively rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are
pending, or a certificate of the receiver, trustee in bankruptcy, liquidation
trustee, agent or other Person making such payment or distribution, delivered
to the Trustee or to the holders of the Debentures, for the purposes of
ascertaining the Persons entitled to participate in such distribution, the
holders of Senior Indebtedness and other indebtedness of the Company, as the
case may be, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article XVI.
Section 16.5. The Trustee to Effectuate Subordination.
Each holder of Debentures by such holder's acceptance thereof
authorizes and directs the Trustee on such holder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article XVI and appoints the Trustee such holder's
attorney-in-fact for any and all such purposes.
Section 16.6. Notice by the Company.
(a) The Company shall give prompt written notice to a Responsible
Officer of the Trustee of any fact known to the Company that would prohibit
the making of any payment of monies to or by the Trustee in respect of the
Debentures pursuant to the provisions of this Article XVI. Notwithstanding
the provisions of this Article XVI or any other provision of this Indenture,
the Trustee shall not be charged with knowledge of the existence of any facts
that would prohibit the making of any payment of monies to or by the Trustee
in respect of the Debentures pursuant to the
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provisions of this Article XVI, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof from the Company or a
holder or holders of Senior Indebtedness or from any trustee therefor; and
before the receipt of any such written notice, the Trustee, subject to the
provisions of Section 9.1, shall be entitled in all respects to assume that
no such facts exist; provided, however, that if the Trustee shall not have
-------- -------
received the notice provided for in this Section 16.6 at least 2 Business
Days prior to the date upon which by the terms hereof any money may become
payable for any purpose (including, without limitation, the payment of the
principal of or interest on any Debenture), then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such money and to apply the same to the purposes for
which they were received, and shall not be affected by any notice to the
contrary that may be received by it within 2 Business Days prior to such
date.
(b) The Trustee, subject to the provisions of Section 9.1, shall be
entitled to conclusively rely on the delivery to it of a written notice by a
Person representing himself or herself to be a holder of Senior Indebtedness
(or a trustee on behalf of such holder) to establish that such notice has
been given by a holder of such Senior Indebtedness or a trustee on behalf of
any such holder or holders. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any
Person as a holder of such Senior Indebtedness to participate in any payment
or distribution pursuant to this Article XVI, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of such Senior Indebtedness held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person under this Article
XVI, and, if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment.
Section 16.7. Rights of the Trustee; Holders of the Senior Indebtedness.
(a) The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XVI in respect of any Senior Indebtedness at
any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of
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any of its rights as such holder. The Trustee's right to compensation and
reimbursement of expenses as set forth in Section 9.7 shall not be subject to
the subordination provisions of the Article XVI.
(b) With respect to the holders of the Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article XVI, and no implied
covenants or obligations with respect to the holders of such Senior
Indebtedness shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of such
Senior Indebtedness and, subject to the provisions of Section 9.1, the
Trustee shall not be liable to any holder of such Senior Indebtedness if it
shall pay over or deliver to holders of Debentures, the Company or any other
Person money or assets to which any holder of such Senior Indebtedness shall
be entitled by virtue of this Article XVI or otherwise.
Section 16.8. Subordination may not be Impaired.
(a) No right of any present or future holder of any Senior Indebtedness
to enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the
Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof that any
such holder may have or otherwise be charged with.
(b) Without in any way limiting the generality of Section 16.8(a), the
holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the holders of the
Debentures, without incurring responsibility to the holders of the Debentures
and without impairing or releasing the subordination provided in this Article
XVI or the obligations hereunder of the holders of the Debentures to the
holders of such Senior Indebtedness, do any one or more of the following: (i)
change the manner, place or terms of payment or extend the time of payment
of, or renew or alter, such Senior Indebtedness, or otherwise amend or
supplement in any manner such Senior Indebtedness or any instrument
evidencing the same or any agreement under which such Senior Indebtedness is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Senior Indebtedness; (iii)
release any Person liable in any manner for the collection of such Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Company and any other Person.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
INTRUST FINANCIAL CORPORATION
By:
-----------------------------------
Name:
Title:
Attest:
--------------------------------
STATE STREET BANK AND TRUST
COMPANY, as trustee
By:
-----------------------------------
Name:
Title:
Attest:
--------------------------------
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STATE OF KANSAS )
) ss
COUNTY OF ---------- )
On this ------ day of ------------, 1997, before me appeared
- ---------------------, to me personally known, who, being by me duly sworn,
did say that he is the ---------------- of INTRUST FINANCIAL CORPORATION, and
that the seal affixed to said instrument is the corporate seal of said
corporation, and that said instrument was signed and sealed in behalf of said
corporation by authority of its board of directors and said ----------------
acknowledged said instrument to be the free act and deed of said corporation.
In testimony whereof I have hereunto set my hand and affixed my
official seal at my office in said county and state the day and year last
above written.
--------------------------------
Notary Public
My term expires: ---------------
[seal]
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
On this ------ day of ----------------------, 1997, before me appeared
- -------------------, to me personally known, who, being by me duly sworn, did
say that he is the --------------------- of STATE STREET BANK AND TRUST
COMPANY, and that the seal affixed to said instrument is the corporate seal of
said corporation, and that said instrument was signed and sealed in behalf of
said corporation by authority of its board of directors and said
- -----------------------------, acknowledged said instrument to be the free
act and deed of said corporation.
In testimony whereof I have hereunto set my hand and affixed my
official seal at my office in said county and commonwealth the day and year
last above written.
--------------------------------
Notary Public
My term expires: ---------------
[seal]
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EXHIBIT A
(FORM OF FACE OF DEBENTURE)
No. ----------------------------- $-----------
CUSIP No. -----------------------
INTRUST FINANCIAL CORPORATION
----% SUBORDINATED DEBENTURE
DUE ---------------, 2027
INTRUST Financial Corporation, a Kansas corporation (the "Company,"
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to State Street Bank
and Trust Company as Property Trustee for INTRUST Capital Trust, or
registered assigns, the principal sum of ---------------------------------------
- ------------------- Dollars ($----------) on -----------, 2027 (the "Stated
Maturity"), and to pay interest on said principal sum from ------------, 1997,
or from the most recent interest payment date (each such date, an "Interest
Payment Date") to which interest has been paid or duly provided for, quarterly
(subject to deferral as set forth herein) in arrears on March 31, June 30,
and December 31 of each year commencing ------------, 1997, at the rate of
- ----% per annum until the principal hereof shall have become due and payable,
and on any overdue principal and (without duplication) on any overdue
installment of interest at the same rate per annum compounded quarterly. The
amount of interest payable on any Interest Payment Date shall be computed on
the basis of a 360-day year of twelve 30-day months. The amount of interest
for any partial period shall be computed on the basis of the number of days
elapsed in a 360-day year of twelve 30-day months. In the event that any
date on which interest is payable on this Debenture is not a business day,
then payment of interest payable on such date shall be made on the next
succeeding day that is a Business Day (as defined in the Indenture) (and
without any interest or other payment in respect of any such delay) with the
same force and effect as if made on such date. The interest
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installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date shall, as provided in the Indenture, be paid to the
person in whose name this Debenture (or one or more Predecessor Debentures,
as defined in said Indenture) is registered at the close of business on the
regular record date for such interest installment, which shall be the close
of business on the fifteenth day of the last month of the calendar quarter in
which the Interest Payment Date occurs unless otherwise provided in the
Indenture. The principal of and the interest on this Debenture shall be
payable at the office or agency of the Trustee maintained for that purpose in
any coin or currency of the United States of America that at the time of
payment is legal tender for payment of public and private debts; provided,
--------
however, that payment of interest may be made at the option of the Company by
- -------
check mailed to the registered holder at such address as shall appear in the
Debenture Register. Notwithstanding the foregoing, so long as the holder of
this Debenture is the Property Trustee, the payment of the principal of and
interest on this Debenture shall be made at such place and to such account as
may be designated by the Trustee.
This Debenture may be redeemed at any time by the Company on any date
not earlier than ------------, 2002, subject to the Company having received
prior approval of the Federal Reserve if then required under applicable
capital guidelines or policies of the Federal Reserve. Such date may also be
extended at any time at the election of the Company for one or more periods,
but in no event to a date later than -------------, 2036, subject to certain
limitations described in the Indenture.
The indebtedness evidenced by this Debenture is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Indebtedness (as defined in the Indenture).
This Debenture is issued subject to the provisions of the Indenture with
respect thereto. Each holder of this Debenture, by accepting the same, (a)
agrees to and shall be bound by such provisions; (b) authorizes and directs
the Trustee on his or her behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination so provided; and
(c) appoints the Trustee his or her attorney-in-fact for any and all such
purposes. Each holder hereof, by his or her acceptance hereof, hereby waives
all notice of the acceptance of the subordination provisions contained herein
and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder
upon said provisions.
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This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until
the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated: --------------, 1997
INTRUST FINANCIAL CORPORATION
By:
--------------------------------
Name:
Title:
Attest:
By: -----------------------------
Name:
Title:
A-3
<PAGE> 82
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the within-mentioned
Indenture.
Dated:
STATE STREET BANK AND TRUST COMPANY, -----------------------------
as Trustee or Authenticating Agent
By: --------------------------
By: --------------------------
Authorized Signatory
A-4
<PAGE> 83
[FORM OF REVERSE OF DEBENTURE]
----% SUBORDINATED DEBENTURE
(CONTINUED)
This Debenture is one of the subordinated debentures of the Company
(herein sometimes referred to as the "Debentures"), all issued or to be
issued under and pursuant to an Indenture dated as of -----------, 1997 (the
"Indenture") duly executed and delivered between the Company and State Street
Bank and Trust Company, as Trustee (the "Trustee"), to which Indenture
reference is hereby made for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the holders of the Debentures. The Debentures are limited in
aggregate principal amount as specified in the Indenture.
The Company shall have the right as set forth in the Indenture, to redeem
this Debenture at the option of the Company, without premium or penalty, in
whole or in part at any time on or after December 31, 2002 (an "Optional
Redemption"), or at any time in certain circumstances upon the occurrence of a
Special Event (as defined in the Indenture), at a redemption price (the
"Redemption Price") equal to 100% of the principal amount hereof plus any
accrued but unpaid interest hereon, to the date of such redemption, plus
Additional Payments, if any. Any redemption pursuant to this paragraph shall be
made upon not less than 30 days nor more than 60 days notice, at the Redemption
Price. The Redemption Price shall be paid at the time and in the manner provided
therefor in the Indenture. If the Debentures are only partially redeemed by the
Company pursuant to an Optional Redemption, the Debentures shall be redeemed pro
rata or by lot or by any other method utilized by the Trustee as described in
the Indenture. In the event of an Optional Redemption of this Debenture in part
only, a new Debenture or Debentures for the unredeemed portion hereof shall
be issued in the name of the holder hereof upon the cancellation hereof.
In case an Event of Default (as defined in the Indenture) shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.
A-5
<PAGE> 84
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Debentures at the time Outstanding (as
defined in the Indenture), to execute supplemental indentures for the purpose
of adding any provisions to or changing in any manner or eliminating any of
the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the holders of the Debentures;
provided, however, that no such supplemental indenture shall without the
- -------- -------
consent of the holders of each Debenture then Outstanding and affected
thereby, (i) extend the fixed maturity of the Debentures, reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon; or (ii) reduce the aforesaid percentage of the Debentures,
the holders of which are required to consent to any such supplemental
indenture. The Indenture also contains provisions permitting the holders of a
majority in aggregate principal amount of the Debentures at the time
Outstanding, on behalf of all of the holders of the Debentures, to waive any
past default in the performance of any of the covenants contained in the
Indenture, or established pursuant to the Indenture, and its consequences,
except a default in the payment of the principal of or interest on any of the
Debentures. Any such consent or waiver by the registered holder of this
Debenture (unless revoked as provided in the Indenture) shall be conclusive
and binding upon such holder and upon all future holders and owners of this
Debenture and of any Debenture issued in exchange herefor or in place hereof
(whether by registration of transfer or otherwise), irrespective of whether
or not any notation of such consent or waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal and interest on
this Debenture at the time and place and at the rate and in the money herein
prescribed.
The Company, as further described in the Indenture, shall have the
right at any time during the term of the Debentures and from time to time to
defer payments of interest by extending the interest payment period of such
Debentures for up to 20 consecutive quarters (each, an "Extension Period"),
at the end of which period the Company shall calculate (and deliver such
calculation to the Trustee) and pay all interest then accrued and unpaid on
the Debentures, including any Additional Payments and Compounded Interest (as
defined in the Indenture and together, the "Deferred Payments") that shall be
payable to the holders of the Debentures in whose names the Debentures are
registered in the
A-6
<PAGE> 85
Debenture Register on the first record date after the end of the Extension
Period. Before the termination of any such Extension Period, the Company may
further extend such Extension Period, provided that such Extension Period
together with all such further extensions thereof shall not exceed 20
consecutive quarters. At the termination of any such Extension Period and
upon the payment of all Deferred Payments then due, the Company may commence
a new Extension Period.
As provided in the Indenture and subject to certain limitations therein
set forth, this Debenture is transferable by the registered holder hereof on
the Debenture Register (as defined in the Indenture) of the Company, upon
surrender of this Debenture for registration of transfer at the office or
agency of the Trustee accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company or the Trustee duly executed by
the registered holder hereof or his or her attorney duly authorized in
writing, and thereupon one or more new Debentures of authorized denominations
and for the same aggregate principal amount shall be issued to the designated
transferee or transferees. No service charge shall be made for any such
transfer, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any Paying Agent (as defined in the
Indenture) and the Debenture Registrar may deem and treat the registered
holder hereof as the absolute owner hereof (whether or not this Debenture
shall be overdue and notwithstanding any notice of ownership or writing
hereon made by anyone other than the Debenture Registrar) for the purpose of
receiving payment of or on account of the principal hereof and interest due
hereon and for all other purposes, and neither the Company nor the Trustee
nor any Paying Agent nor any Debenture Registrar shall be affected by any
notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether
by virtue of any constitution, statute or rule of law, or by the enforcement
of any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.
A-7
<PAGE> 86
The Debentures are issuable only in registered form without coupons in
denominations of $25 and any integral multiple thereof (or such other
denominations and any integral multiple thereof as may be deemed necessary by
the Company for the purpose of maintaining the eligibility of the Debentures
for listing on the American Stock Exchange or any successor thereto).
All terms used in this Debenture that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
A-8
<PAGE> 1
CERTIFICATE OF TRUST
OF
INTRUST CAPITAL TRUST
THIS CERTIFICATE OF TRUST OF INTRUST CAPITAL TRUST (the "Trust"), dated
as of ________________, 1997, is being duly executed and filed by WILMINGTON
TRUST COMPANY, a Delaware banking corporation, C. Q. Chandler IV, Jay L. Smith
and Brian Sullivan, each an individual, as trustees, to form a business trust
under the Delaware Business Trust Act (12 Del. C. Section 3801 et seq.).
1. NAME. The name of the business trust formed hereby is INTRUST
----
CAPITAL TRUST.
2. DELAWARE TRUSTEE. The name and business address of the trustee of
----------------
the Trust in the State of Delaware is Wilmington Trust Company,
Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890-0001, Attention: Corporate Trust Administration.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective
--------------
on ___________, 1997.
IN WITNESS WHEREOF, each of the undersigned, being a trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.
WILMINGTON TRUST COMPANY, as trustee
By:
--------------------------------------------------
Name:
Title:
-----------------------------------------------------
C. Q. Chandler IV, as Trustee
-----------------------------------------------------
Jay L. Smith, as Trustee
-----------------------------------------------------
Brian Sullivan, as Trustee
<PAGE> 1
TRUST AGREEMENT
This TRUST AGREEMENT, dated as of ---------------, 1997 (this
"Trust Agreement"), among (i) INTRUST FINANCIAL CORPORATION, a Kansas
corporation (the "Depositor"), (ii) Wilmington Trust Company, a Delaware banking
corporation, as trustee, and (iii) C. Q. Chandler IV, Jay L. Smith and Brian
Sullivan, each an individual, as trustees (each of such trustees in (ii) and
(iii) a "Trustee" and collectively, the "Trustees"). The Depositor and the
Trustees hereby agree as follows:
1. The trust created hereby (the "Trust") shall be known as
"INTRUST Capital Trust" in which name the Trustees, or the Depositor to the
extent provided herein, may engage in the transactions contemplated hereby,
make and execute contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets
over the Trustees the sum of $25.00. The Trustees hereby acknowledge receipt
of such amount in trust from the Depositor, which amount shall constitute the
initial trust estate. The Trustees hereby declare that they will hold the
trust estate in trust for the Depositor. It is the intention of the parties
hereto that the Trust created hereby constitute a business trust under
Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. Section 3801, et seq.
(the "Business Trust Act"), and that this document constitutes the governing
instrument of the Trust. The Trustees are hereby authorized and directed to
execute and file a certificate of trust with the Delaware Secretary of State
in accordance with the provisions of the Business Trust Act.
3. The Depositor and the Trustees will enter into an amended
and restated Trust Agreement, satisfactory to each such party and
substantially in the form included as an exhibit to the 1933 Act Registration
Statement (as defined below), to provide for the contemplated operation of
the Trust created hereby and the issuance of the Preferred Securities and
Common Securities referred to therein. Prior to the execution and delivery of
such amended and restated Trust Agreement, the Trustees shall not have any
duty or obligation hereunder or with respect to the trust estate, except as
otherwise required by applicable law or as may be necessary to obtain prior
to such execution and delivery of any licenses, consents or approvals
required by applicable law or otherwise.
4. The Depositor and the Trustees hereby authorize and direct
the Depositor, as the sponsor of the Trust, (i) to file with the Securities
and Exchange Commission (the "Commission") and execute, in each case on
behalf of the Trust, (a) the Registration Statement on Form S-3 (the "1933
Act Registration Statement"), including any pre-effective or post-effective
amendments to the 1933 Act Registration Statement, relating to the
registration under the Securities Act of 1933, as amended, of the Preferred
Securities of the Trust and possibly certain other securities and (b) a
Registration Statement on Form 8-A (the "1934 Act Registration Statement")
(including all pre-effective and post-effective amendments thereto) relating
to the registration of the Preferred Securities of the Trust under the
Securities Exchange Act of 1934, as amended; (ii) to file with the American
Stock Exchange or a national stock exchange (each, an "Exchange") and execute
on behalf of the Trust one or more listing applications and all other
applications, statements, certificates, agreements and other instruments as
shall be necessary or desirable to cause the Preferred Securities to be
listed on any of the Exchanges; (iii) to file and execute on behalf of the
Trust such applications, reports, surety bonds, irrevocable consents,
appointments of attorney for service of process and other papers and
documents as shall be necessary or desirable to register the Preferred
Securities under the securities or blue sky laws of such jurisdictions as the
Depositor, on behalf of the Trust, may deem necessary or desirable; and (iv)
to execute on behalf of the Trust that certain Underwriting Agreement
relating to the Preferred Securities, among the Trust, the Depositor and the
several Underwriters named therein, substantially in the form included as an
<PAGE> 2
exhibit to the 1933 Act Registration Statement. In the event that any filing
referred to in clauses (i), (ii) and (iii) above is required by the rules and
regulations of the Commission, an Exchange or state securities or blue sky
laws, to be executed on behalf of the Trust by one or more of the Trustees,
each of the Trustees, in its, his capacity as a Trustee of the Trust, is
hereby authorized and, to the extent so required, directed to join in any
such filing and to execute on behalf of the Trust any and all of the
foregoing, it being understood that Wilmington Trust Company in its capacity
as a Trustee of the Trust shall not be required to join in any such filing or
execute on behalf of the Trust any such document unless required by the rules
and regulations of the Commission, the Exchange or state securities or blue
sky laws. In connection with the filings referred to above, the Depositor and
C. Q. Chandler IV, Jay L. Smith and Brian Sullivan, each as Trustees and not
in their individual capacities, hereby constitutes and appoints C. Q.
Chandler IV, Jay L. Smith and Brian Sullivan, and each of them, as its true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for the Depositor or such Trustee or in the Depositor's or
such Trustees' name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to the 1933 Act
Registration Statement and the 1934 Act Registration Statement and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Commission, the Exchange and administrators of the state
securities or blue sky laws, granting unto said attorneys-in-fact and agents
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as the Depositor or such Trustee might or could do in
person, hereby ratifying and confirming all that said attorneys-in- fact and
agents or any of them, or their respective substitute or substitutes, shall
do or cause to be done by virtue hereof.
5. This Trust Agreement may be executed in one or more
counterparts.
6. The number of Trustees initially shall be four and thereafter
the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Depositor which may
increase or decrease the number of Trustees; provided, however, that to the
extent required by the Business Trust Act, one Trustee shall either be a
natural person who is a resident of the State of Delaware or, if not a
natural person, an entity which has its principal place of business in the
State of Delaware and otherwise meets the requirements of applicable Delaware
law. Subject to the foregoing, the Depositor is entitled to appoint or remove
without cause any Trustee at any time. The Trustees may resign upon 30 days'
prior notice to the Depositor.
7. This Trust Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to
conflict of laws of principles).
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed as of the day and year first above written.
INTRUST FINANCIAL CORPORATION,
as Depositor
By:
----------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY,
as Trustee
By:
----------------------------------
Name:
Title:
2
<PAGE> 3
-------------------------------------
C. Q. Chandler IV, as Trustee
-------------------------------------
Jay L. Smith, as Trustee
-------------------------------------
Brian Sullivan, as Trustee
3
<PAGE> 1
==============================================================================
INTRUST CAPITAL TRUST
AMENDED AND RESTATED
TRUST AGREEMENT
AMONG
INTRUST FINANCIAL CORPORATION, AS DEPOSITOR
STATE STREET BANK AND TRUST COMPANY, AS PROPERTY TRUSTEE
WILMINGTON TRUST COMPANY, AS DELAWARE TRUSTEE,
AND
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
DATED AS OF -----------------, 1997
==============================================================================
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I. DEFINED TERMS
Section 101. Definitions
ARTICLE II ESTABLISHMENT OF THE TRUST
Section 201. Name.
Section 202. Office of the Delaware Trustee; Principal Place of Business.
Section 203. Initial Contribution of Trust Property; Organizational Expenses.
Section 204. Issuance of the Preferred Securities.
Section 205. Issuance of the Common Securities; Subscription and Purchase of the Debentures.
Section 206. Declaration of Trust
Section 207. Authorization to Enter Into Certain Transactions
Section 208. Assets of Trust
Section 209. Title to Trust Property
ARTICLE III. PAYMENT ACCOUNT
Section 301. Payment Account
ARTICLE IV. DISTRIBUTIONS; REDEMPTION
Section 401. Distributions
Section 402. Redemption.
Section 403. Subordination of the Common Securities.
Section 404. Payment Procedures
Section 405. Tax Returns and Reports
Section 406. Payment of Taxes, Duties, Etc. of the Trust
Section 407. Payments under the Indenture
ARTICLE V. THE TRUST SECURITIES CERTIFICATES
Section 501. Initial Ownership
Section 502. The Trust Securities Certificates
Section 503. Execution, Authentication and Delivery of the Trust Securities Certificates
Section 504. Registration of Transfer and Exchange of the Preferred Securities Certificates.
i
<PAGE> 3
Section 505. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates
Section 506. Persons Deemed the Securityholders
Section 507. Access to List of the Securityholders' Names and Addresses
Section 508. Maintenance of Office or Agency
Section 509. Appointment of the Paying Agent
Section 510. Ownership of the Common Securities by the Depositor
Section 511. The Preferred Securities Certificates
Section 512. [Intentionally Omitted]
Section 513. [Intentionally Omitted]
Section 514. Rights of the Securityholders.
ARTICLE VI. ACTS OF THE SECURITYHOLDERS; MEETINGS; VOTING
Section 601. Limitations on Voting Rights
Section 602. Notice of Meetings
Section 603. Meetings of the Preferred Securityholders
Section 604. Voting Rights
Section 605. Proxies, Etc
Section 606. Securityholder Action by Written Consent
Section 607. Record Date for Voting and Other Purposes
Section 608. Acts of the Securityholders
Section 609. Inspection of Records
ARTICLE VII. REPRESENTATIONS AND WARRANTIES
Section 701. Representations and Warranties of the Bank and the Property Trustee.
Section 702. Representations and Warranties of the Delaware Bank and the Delaware Trustee.
Section 703. Representations and Warranties of the Depositor
ARTICLE VIII TRUSTEES
Section 801. Certain Duties and Responsibilities
Section 802. Certain Notices
Section 803. Certain Rights of the Property Trustee
Section 804. Not Responsible for Recitals or Issuance of Securities
Section 806. Compensation; Indemnity; Fees
Section 807. Corporate Property Trustee Required; Eligibility of Trustees
ii
<PAGE> 4
Section 808. Conflicting Interests
Section 809. Co-Trustees and Separate Trustee
Section 810. Resignation and Removal; Appointment of Successor
Section 811. Acceptance of Appointment by Successor
Section 812. Merger, Conversion, Consolidation or Succession to Business
Section 813. Preferential Collection of Claims Against Depositor or Trust
Section 814. Reports by the Property Trustee
Section 815. Reports to the Property Trustee
Section 816. Evidence of Compliance with Conditions Precedent
Section 817. Number of Trustees
Section 818. Delegation of Power
Section 819. Voting
iii
<PAGE> 5
ARTICLE IX. TERMINATION, LIQUIDATION AND MERGER
Section 901. Termination upon Expiration Date
Section 902. Early Termination
Section 903. Termination
Section 904. Liquidation
Section 905. Mergers, Consolidations, Amalgamations or Replacements of the Trust
ARTICLE X. MISCELLANEOUS PROVISIONS
Section 1001. Limitation of Rights of the Securityholders
Section 1002. Amendment
Section 1003. Separability
Section 1004. Governing Law
Section 1005. Payments Due on Non-Business Day
Section 1006. Successors
Section 1007. Headings
Section 1008. Reports, Notices and Demands
Section 1009. Agreement not to Petition
Section 1010. Trust Indenture Act; Conflict with Trust Indenture Act
Section 1011. Acceptance of Terms of the Trust Agreement, the Guarantee and the Indenture
EXHIBITS
Exhibit A Certificate of Trust
Exhibit B [Intentionally Omitted]
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Expense Agreement
Exhibit E Form of Preferred Securities Certificate
</TABLE>
iv
<PAGE> 6
<TABLE>
CROSS-REFERENCE TABLE
<CAPTION>
Section of Section of Amended
Trust Indenture Act and Restated
of 1939, as amended Trust Agreement
- ------------------- ---------------
<S> <C>
310(a)(1) 807
310(a)(2) 807
310(a)(3) 807
310(a)(4) 207(a)(ii)
310(b) 808
311(a) 813
311(b) 813
312(a) 507
312(b) 507
312(c) 507
313(a) 814(a)
313(a)(4) 814(b)
313(b) 814(b)
313(c) 1008
313(d) 814(c)
314(a) 815
314(b) Not Applicable
314(c)(1) 816
314(c)(2) 816
314(c)(3) Not Applicable
314(d) Not Applicable
314(e) 101, 816
315(a) 801(a), 803(a)
315(b) 802, 1008
315(c) 801(a)
315(d) 801, 803
316(a)(2) Not Applicable
316(b) Not Applicable
316(c) 607
317(a)(1) Not Applicable
317(a)(2) Not Applicable
317(b) 509
318(a) 1010
Note: This Cross-Reference Table does not constitute part of this Agreement
and shall not affect any interpretation of any of its terms or provisions.
</TABLE>
v
<PAGE> 7
AMENDED AND RESTATED TRUST AGREEMENT
AMENDED AND RESTATED TRUST AGREEMENT, dated as of ---------, 1997,
among (i) INTRUST FINANCIAL CORPORATION, a Kansas corporation (including any
successors or assigns, the "Depositor"), (ii) STATE STREET BANK AND TRUST
COMPANY, a trust company duly organized and existing under the laws of the
Commonwealth of Massachusetts, as property trustee (the "Property Trustee"
and, in its separate corporate capacity and not in its capacity as Property
Trustee, the "Bank"), (iii) WILMINGTON TRUST COMPANY, a Delaware banking
corporation duly organized and existing under the laws of the State of
Delaware, as Delaware trustee (the "Delaware Trustee," and, in its separate
corporate capacity and not in its capacity as Delaware Trustee, the "Delaware
Bank") (iv) C. Q. Chandler, IV, an individual, Jay L. Smith, an individual,
and Brian Sullivan, an individual, each of whose address is c/o INTRUST
Financial Corporation, 105 North Main Street, Box One, Wichita, Kansas 67202
(each an "Administrative Trustee" and collectively the "Administrative
Trustees") (the Property Trustee, the Delaware Trustee and the Administrative
Trustees referred to collectively as the "Trustees"), and (v) the several
Holders (as hereinafter defined).
RECITALS
WHEREAS, the Depositor, the Delaware Trustee, and C. Q. Chandler, IV,
Jay L. Smith and Brian Sullivan, each as an Administrative Trustee, have
heretofore duly declared and established a business trust pursuant to the
Delaware Business Trust Act (as hereinafter defined) by the entering into of
that certain Trust Agreement, dated as of ---------, 1997 (the "Original
Trust Agreement"), and by the execution and filing by the Delaware Trustee,
the Depositor and the Administrative Trustees with the Secretary of State of
the State of Delaware of the Certificate of Trust, filed on --------------,
1997, the form of which is attached as Exhibit A; and
WHEREAS, the Depositor, the Delaware Trustee, the Property Trustee and
the Administrative Trustees desire to amend and restate the Original Trust
Agreement in its entirety as set forth herein to provide for, among other
things, (i) the issuance of the Common Securities (as defined herein) by the
Trust (as defined herein) to the Depositor; (ii) the issuance and sale of the
Preferred Securities (as defined herein) by the Trust pursuant to the
Underwriting Agreement (as defined herein); (iii) the acquisition by
<PAGE> 8
the Trust from the Depositor of all of the right, title and interest in the
Debentures (as defined herein); and (iv) the appointment of the Trustees;
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each party, for the benefit of
the other parties and for the benefit of the Securityholders (as defined
herein), hereby amends and restates the Original Trust Agreement in its
entirety and agrees as follows:
ARTICLE I
DEFINED TERMS
SECTION 101. DEFINITIONS.
For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article I have the meanings assigned to
them in this Article I and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to
them therein;
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Trust Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 608.
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of additional interest
accrued on interest in arrears and paid by the Depositor on a Like Amount of
Debentures for such period.
"Additional Payments" has the meaning specified in Section 1.1 of the
Indenture.
2
<PAGE> 9
"Administrative Trustee" means each of C. Q. Chandler, IV, Jay L. Smith
and Brian Sullivan, solely in his or her capacity as Administrative Trustee of
the Trust formed and continued hereunder and not in his or her individual
capacity, or such Administrative Trustee's successor in interest in such
capacity, or any successor trustee appointed as herein provided.
"Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding with power to vote 10%
or more of the outstanding voting securities or other ownership interests of
the specified Person; (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person; (c) any Person
directly or indirectly controlling, controlled by, or under common control
with the specified Person; (d) a partnership in which the specified Person is
a general partner; (e) any officer or director of the specified Person; and
(f) if the specified Person is an individual, any entity of which the
specified Person is an officer, director or general partner.
"Authenticating Agent" means an authenticating agent with respect to
the Preferred Securities appointed by the Property Trustee pursuant to Section
503.
"Bank" has the meaning specified in the Preamble to this Trust
Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in
the premises adjudging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking liquidation or reorganization of or in
respect of such Person under the United States Bankruptcy Code of 1978, as
amended, or any other similar applicable federal or state law, and the
continuance of any such decree or order unvacated and unstayed for a period
of 90 days; or the commencement of an involuntary case under the United
States Bankruptcy Code of 1978, as amended, in respect of such Person, which
shall continue undismissed for a period of 90 days or entry of an order for
relief in such case; or the entry of a decree or order of a court having
jurisdiction in the premises for the appointment on the ground of insolvency
or bankruptcy of a receiver, custodian, liquidator,
3
<PAGE> 10
trustee or assignee in bankruptcy or insolvency of such Person or of its
property, or for the winding up or liquidation of its affairs, and such
decree or order shall have remained in force unvacated and unstayed for a
period of 90 days; or
(b) the institution by such Person of proceedings to be adjudicated a
voluntary bankrupt, or the consent by such Person to the filing of a
bankruptcy proceeding against it, or the filing by such Person of a petition
or answer or consent seeking liquidation or reorganization under the United
States Bankruptcy Code of 1978, as amended, or other similar applicable
Federal or State law, or the consent by such Person to the filing of any such
petition or to the appointment on the ground of insolvency or bankruptcy of a
receiver or custodian or liquidator or trustee or assignee in bankruptcy or
insolvency of such Person or of its property, or shall make a general
assignment for the benefit of creditors.
"Bankruptcy Laws" has the meaning specified in Section 1009.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly
adopted by the Depositor's Board of Directors, or such committee of the Board
of Directors or officers of the Depositor to which authority to act on behalf
of the Board of Directors has been delegated, and to be in full force and
effect on the date of such certification, and delivered to the appropriate
Trustee.
"Business Day" means any day other than a Saturday or Sunday or a day
on which federal or state banking institutions in the Borough of Manhattan, the
City of New York are authorized or required by law, executive order or
regulation to close, or a day on which the Corporate Trust Office of the
Property Trustee or the Corporate Trust Office of the Debenture Trustee is
closed for business.
"Certificate of Trust" means the certificate of trust filed with the
Secretary of State of the State of Delaware with respect to the Trust, as
amended or restated from time to time.
"Closing Date" means the date of execution and delivery of this Trust
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Common Security" means an undivided beneficial interest in the assets
of the Trust, having a Liquidation Amount of $25 and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.
"Corporate Trust Office" means the office at which, at any particular
time, the corporate trust business of the Property Trustee or the Debenture
Trustee, as the case may be, shall be principally administered, which office
at the date hereof, in each such case, is located at Two International Place,
4th Floor, Boston, Massachusetts 02110, Attention: Corporate Trust
Department.
"Debenture Event of Default" means an "Event of Default" as defined in
Section 7.1 of the Indenture.
"Debenture Redemption Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption under the
Indenture.
"Debenture Trustee" means State Street Bank and Trust Company, a
banking corporation organized under the laws of the Commonwealth of
Massachusetts and any successor thereto, as trustee under the Indenture.
"Debentures" means the $51,546,400 aggregate principal amount (or up to
$59,278,375 aggregate principal amount if the Underwriter exercises its
Option and there is an Option Closing Date) of the Depositor's ----%
Subordinated Debentures due 2027, issued pursuant to the Indenture.
"Delaware Bank" has the meaning specified in the Preamble to this Trust
Agreement.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Delaware Code Sections 3801 et seq. as it may be amended
from time to time.
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"Delaware Trustee" means the commercial bank or trust company
identified as the "Delaware Trustee" in the Preamble to this Trust Agreement
solely in its capacity as Delaware Trustee of the Trust formed and continued
hereunder and not in its individual capacity, or its successor in interest in
such capacity, or any successor trustee appointed as herein provided.
"Depositor" has the meaning specified in the Preamble to this Trust
Agreement.
"Distribution Date" has the meaning specified in Section 401(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 401.
"Early Termination Event" has the meaning specified in Section 902.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Trust or the Property Trustee in the payment of
any Distribution when it becomes due and payable, and continuation of such
default for a period of 30 days; or
(c) default by the Trust or the Property Trustee in the payment of
any Redemption Price of any Trust Security when it becomes due and payable;
or
(d) default in the performance, or breach, in any material respect,
of any covenant or warranty of the Trustees in this Trust Agreement (other
than a covenant or warranty a default in the performance of which or the
breach of which is dealt with in clause (b) or (c), above) and continuation
of such default or breach for a period of 60 days after there has been given,
by registered or certified mail, to the defaulting Trustee or Trustees by the
Holders of at least 25% in aggregate Liquidation Amount
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of the Outstanding Preferred Securities a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the Property
Trustee and the failure by the Depositor to appoint a successor Property
Trustee within 60 days thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Depositor and the Trust, substantially in the form attached as
Exhibit D, as amended from time to time.
"Expiration Date" has the meaning specified in Section 901.
"Extension Period" has the meaning specified in Section 4.1 of the
Indenture.
"Guarantee" means the Preferred Securities Guarantee Agreement executed
and delivered by the Depositor and State Street Bank and Trust Company, as
trustee, contemporaneously with the execution and delivery of this Trust
Agreement, for the benefit of the Holders of the Preferred Securities, as
amended from time to time.
"Indenture" means the Indenture, dated as of ---------------, 1997,
between the Depositor and the Debenture Trustee, as trustee, as amended or
supplemented from time to time pertaining to the Debentures of the Depositor.
"Investment Company Act," means the Investment Company Act of 1940, as
amended, as in effect at the date of execution of this instrument.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security
interest or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to the
principal amount of Debentures to be contemporaneously redeemed in accordance
with the Indenture and the proceeds of which shall be used to pay the
Redemption Price of such Trust Securities; and (b) with respect to
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a distribution of Debentures to Holders of Trust Securities in connection
with a termination or liquidation of the Trust, Debentures having a principal
amount equal to the Liquidation Amount of the Trust Securities of the Holder
to whom such Debentures are distributed. Each Debenture distributed pursuant
to clause (b) above shall carry with it accumulated interest in an amount
equal to the accumulated and unpaid interest then due on such Debenture.
"Liquidation Amount" means the stated amount of $25 per Trust Security.
"Liquidation Date" means the date on which Debentures are to be
distributed to Holders of Trust Securities in connection with a termination
and liquidation of the Trust pursuant to Section 904(a).
"Liquidation Distribution" has the meaning specified in Section 904(d).
"Officers' Certificate" means a certificate signed by the President or
a Vice President and by the Treasurer or an Assistant Treasurer or the
Controller or an Assistant Controller or the Secretary or an Assistant
Secretary, of the Depositor, and delivered to the appropriate Trustee. One of
the officers signing an Officers' Certificate given pursuant to Section 816
shall be the principal executive, financial or accounting officer of the
Depositor. Any Officers' Certificate delivered with respect to compliance
with a condition or covenant provided for in this Trust Agreement shall
include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such Officers' opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
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"Opinion of Counsel" means an opinion in writing of legal counsel, who
may be counsel for the Trust, the Property Trustee, the Delaware Trustee or
the Depositor, but not an employee of any thereof, and who shall be
reasonably acceptable to the Property Trustee.
"Option" means the grant by the Trust to the Underwriter of an option
to purchase all or any portion of an additional 300,000 Preferred Securities,
pursuant to the terms of the Underwriting Agreement.
"Option Closing Date" means the time, date of payment and delivery of
the Preferred Securities Certificates purchased pursuant to the Underwriter's
exercise of the Option, as more particularly described in the Underwriting
Agreement.
"Original Trust Agreement" has the meaning specified in the Recitals to
this Trust Agreement.
"Outstanding", when used with respect to the Preferred Securities,
means, as of the date of determination, all of the Preferred Securities
theretofore executed and delivered under this Trust Agreement, except:
(a) the Preferred Securities theretofore canceled by the Property
Trustee or delivered to the Property Trustee for cancellation;
(b) the Preferred Securities for whose payment or redemption money in
the necessary amount has been theretofore deposited with the Property Trustee
or any Paying Agent for the Holders of such Preferred Securities; provided
that, if such Preferred Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Trust Agreement; and
(c) the Preferred Securities which have been paid or in exchange for
or in lieu of which other Preferred Securities have been executed and
delivered pursuant to Sections 504, 505 and 511; provided, however, that in
determining whether the Holders of the requisite Liquidation Amount of the
Outstanding Preferred Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the Preferred
Securities owned by the Depositor, any Trustee or any Affiliate of the
Depositor or any Trustee shall be disregarded and deemed not to be
Outstanding, except that (a) in determining whether any Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only the Preferred Securities that such Trustee
knows to be so owned shall be so disregarded; and (b) the
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foregoing shall not apply at any time when all of the Outstanding Preferred
Securities are owned by the Depositor, one or more of the Trustees and/or any
such Affiliate. The Preferred Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Administrative Trustees the pledgee's right so to act
with respect to such Preferred Securities and the pledgee is not the
Depositor or any other Obligor upon the Preferred Securities or a Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with the Depositor or any Affiliate of the Depositor.
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 509 and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Securityholders in which all amounts paid
in respect of the Debentures shall be held and from which the Property
Trustee shall make payments to the Securityholders in accordance with
Sections 401 and 402.
"Person" means any individual, corporation, partnership, joint venture,
trust, limited liability company or corporation, unincorporated organization
or government or any agency or political subdivision thereof.
"Preferred Security" means an undivided beneficial interest in the assets
of the Trust, having a Liquidation Amount of $25 and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
"Preferred Securities Certificate", means a certificate evidencing
ownership of Preferred Securities, substantially in the form attached as
Exhibit E.
"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee," in the Preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust heretofore formed and
continued hereunder and not in its individual capacity, or its successor in
interest in such capacity, or any successor property trustee appointed as herein
provided.
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"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date and the stated
maturity of the Debentures shall be a Redemption Date for a Like Amount of
Trust Securities.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, paid by the Depositor upon the
concurrent redemption of a Like Amount of Debentures, allocated on a pro rata
basis (based on Liquidation Amounts) among the Trust Securities.
"Relevant Trustee" shall have the meaning specified in Section 810.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 504.
"Securityholder" or "Holder" means a Person in whose name a Trust
Security is or Trust Securities are registered in the Securities Register;
any such Person is a beneficial owner within the meaning of the Delaware
Business Trust Act.
"Trust" means the Delaware business trust created and continued hereby
and identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including all exhibits hereto, including, for
all purposes of this Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such modification, amendment
or supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this instrument was executed;
provided, however, that in the event the Trust Indenture Act of 1939, as
amended, is amended after such date, "Trust Indenture Act" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so amended.
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"Trust Property" means (a) the Debentures; (b) the rights of the
Property Trustee under the Guarantee; (c) any cash on deposit in, or owing
to, the Payment Account; and (d) all proceeds and rights in respect of the
foregoing and any other property and assets for the time being held or deemed
to be held by the Property Trustee pursuant to the trusts of this Trust
Agreement.
"Trust Security" means any one of the Common Securities or the
Preferred Securities.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
"Trustees" means, collectively, the Property Trustee, the Delaware
Trustee and the Administrative Trustees.
"Underwriter" means Stifel, Nicolaus & Company, Incorporated having its
business address at 500 North Broadway, St. Louis, Missouri 63102.
"Underwriting Agreement" means the Underwriting Agreement, dated as of
- ------------, 1997, among the Trust, the Depositor and the Underwriter.
ARTICLE II
ESTABLISHMENT OF THE TRUST
SECTION 201. NAME.
The Trust created and continued hereby shall be known as "INTRUST
Capital Trust," as such name may be modified from time to time by the
Administrative Trustees following written notice to the Holders of Trust
Securities and the other Trustees, in which name the Trustees may engage in
the transactions contemplated hereby, make and execute contracts and other
instruments on behalf of the Trust and sue and be sued.
SECTION 202. OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF
BUSINESS.
The address of the Delaware Trustee in the State of Delaware is c/o
Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-0001, Attention: Corporate Trust Administration,
or such other address in the State of Delaware as the Delaware Trustee may
designate by written notice to the Securityholders and the Depositor. The
principal executive office of the Trust is c/o INTRUST Financial Corporation,
105 North Main Street, Box One, Wichita, Kansas 67202, Attention: Chief
Executive Officer.
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SECTION 203. INITIAL CONTRIBUTION OF TRUST PROPERTY;
ORGANIZATIONAL EXPENSES.
The Trustees acknowledge receipt in trust from the Depositor in
connection with the Original Trust Agreement of the sum of $25, which
constituted the initial Trust Property. The Depositor shall pay
organizational expenses of the Trust as they arise or shall, upon request of
any Trustee, promptly reimburse such Trustee for any such expenses paid by
such Trustee. The Depositor shall make no claim upon the Trust Property for
the payment of such expenses.
SECTION 204. ISSUANCE OF THE PREFERRED SECURITIES.
On ----------, 1997, the Depositor and an Administrative Trustee, on
behalf of the Trust and pursuant to the Original Trust Agreement, executed
and delivered the Underwriting Agreement. Contemporaneously with the
execution and delivery of this Trust Agreement, an Administrative Trustee, on
behalf of the Trust, shall execute in accordance with Section 502, and
deliver in accordance with the Underwriting Agreement, Preferred Securities
Certificates, registered in the name of the Persons entitled thereto, in an
aggregate amount of 2,000,000 Preferred Securities having an aggregate
Liquidation Amount of $50,000,000 against receipt of the aggregate purchase
price of such Preferred Securities of $50,000,000, which amount such
Administrative Trustee shall promptly deliver to the Property Trustee. If the
Underwriter exercises its Option and there is an Option Closing, then an
Administrative Trustee, on behalf of the Trust, shall execute in accordance
with Section 502, and deliver in accordance with the Underwriting Agreement,
additional Preferred Securities Certificates, registered in the name of the
Persons entitled thereto, in an aggregate amount of up to 300,000 Preferred
Securities having an aggregate Liquidation Amount of up to $7,500,000
against receipt of the aggregate purchase price of such Preferred Securities
equal to the product of $25 multiplied by the number of the Preferred
Securities purchased pursuant to the Option, which amount such Administrative
Trustee shall promptly deliver to the Property Trustee.
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SECTION 205. ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION AND
PURCHASE OF THE DEBENTURES.
(a) Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Trust, shall execute
in accordance with Section 502 and deliver to the Depositor, Common
Securities Certificates, registered in the name of the Depositor, in an
aggregate amount of 61,856 Common Securities having an aggregate Liquidation
Amount of $1,546,400 against payment by the Depositor of such amount.
Contemporaneously therewith, an Administrative Trustee, on behalf of the
Trust, shall subscribe to and purchase from the Depositor Debentures,
registered in the name of the Property Trustee on behalf of the Trust and
having an aggregate principal amount equal to $51,546,400, and, in
satisfaction of the purchase price for such Debentures, the Property Trustee,
on behalf of the Trust, shall deliver to the Depositor the sum of
$51,546,400.
(b) If the Underwriter exercises the Option and there is an Option
Closing Date, then an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 502, and deliver to the Depositor, Common
Securities Certificates, registered in the name of the Depositor, in an
aggregate amount of up to 9,278 Common Securities having an aggregate
Liquidation Amount of up to $231,950 against payment by the Depositor of an
amount equal to the product of $25 multiplied by number of additional Common
Securities purchased by the Depositor. Contemporaneously therewith, an
Administrative Trustee, on behalf of the Trust, shall subscribe to and
purchase from the Depositor, Debentures, registered in the name of the
Property Trustee on behalf of the Trust and having an aggregate principal
amount of up to $7,731,950, and, in satisfaction of the purchase price of
such Debentures, the Property Trustee, on behalf of the Trust, shall deliver
to the Depositor an amount equal to the sum of the amounts received from one
of the Administrative Trustees pursuant to the first sentence of this Section
205(b) and to the last sentence of Section 204.
SECTION 206. DECLARATION OF TRUST.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Trust Securities and use the proceeds from such sale to acquire the
Debentures; and (b) to engage in those activities necessary, convenient or
incidental thereto. The Depositor hereby appoints the Trustees as trustees
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of the Trust, to have all the rights, powers and duties to the extent set
forth herein, and the Trustees hereby accept such appointment. The Property
Trustee hereby declares that it shall hold the Trust Property in trust upon
and subject to the conditions set forth herein for the benefit of the
Securityholders. The Administrative Trustees shall have all rights, powers
and duties set forth herein and in accordance with applicable law with
respect to accomplishing the purposes of the Trust. The Delaware Trustee
shall not be entitled to exercise any powers, nor shall the Delaware Trustee
have any of the duties and responsibilities, of the Property Trustee or the
Administrative Trustees set forth herein. The Delaware Trustee shall be one
of the Trustees of the Trust for the sole and limited purpose of fulfilling
the requirements of Section 3807 of the Delaware Business Trust Act.
SECTION 207. AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.
(a) The Trustees shall conduct the affairs of the Trust in accordance
with the terms of this Trust Agreement. Subject to the limitations set forth
in paragraph (b) of this Section 207 and Article VIII, and in accordance with
the following provisions (i) and (ii), the Administrative Trustees shall have
the authority to enter into all transactions and agreements determined by the
Administrative Trustees to be appropriate in exercising the authority,
express or implied, otherwise granted to the Administrative Trustees under
this Trust Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following:
(i) As among the Trustees, each Administrative Trustee, acting
singly or jointly, shall have the power and authority to act on behalf of the
Trust with respect to the following matters:
(A) the issuance and sale of the Trust Securities;
(B) to cause the Trust to enter into, and to execute,
deliver and perform on behalf of the Trust, the Expense Agreement and such
other agreements or documents as may be necessary or desirable in connection
with the purposes and function of the Trust;
(C) assisting in the registration of the Preferred
Securities under the Securities Act of 1933, as amended, and under state
securities or blue sky laws, and the qualification of this Trust Agreement as
a trust indenture under the Trust Indenture Act;
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(D) assisting in the listing of the Preferred Securities
upon the American Stock Exchange or such securities exchange or exchanges as
shall be determined by the Depositor and the registration of the Preferred
Securities under the Exchange Act, and the preparation and filing of all
periodic and other reports and other documents pursuant to the foregoing;
(E) the sending of notices (other than notices of
default) and other information regarding the Trust Securities and the
Debentures to the Securityholders in accordance with this Trust Agreement;
(F) the appointment of a Paying Agent, Authenticating
Agent and Securities Registrar in accordance with this Trust Agreement;
(G) to the extent provided in this Trust Agreement, the
winding up of the affairs of and liquidation of the Trust and the
preparation, execution and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(H) to take all action that may be necessary or
appropriate for the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory business trust
under the laws of the State of Delaware and of each other jurisdiction in
which such existence is necessary to protect the limited liability of the
Holders of the Preferred Securities or to enable the Trust to effect the
purposes for which the Trust was created; and
(I) the taking of any action incidental to the foregoing
as the Administrative Trustees may from time to time determine is necessary
or advisable to give effect to the terms of this Trust Agreement for the
benefit of the Securityholders (without consideration of the effect of any
such action on any particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall have the
power, duty and authority to act on behalf of the Trust with respect to the
following matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and any other
payments made in respect of the Debentures in the Payment Account;
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(D) the distribution of amounts owed to the
Securityholders in respect of the Trust Securities in accordance with the
terms of this Trust Agreement;
(E) the exercise of all of the rights, powers and
privileges of a holder of the Debentures;
(F) the sending of notices of default and other
information regarding the Trust Securities and the Debentures to the
Securityholders in accordance with this Trust Agreement;
(G) the distribution of the Trust Property in accordance
with the terms of this Trust Agreement;
(H) to the extent provided in this Trust Agreement, the
winding up of the affairs of and liquidation of the Trust;
(I) after an Event of Default, the taking of any action
incidental to the foregoing as the Property Trustee may from time to time
determine is necessary or advisable to give effect to the terms of this Trust
Agreement and protect and conserve the Trust Property for the benefit of the
Securityholders (without consideration of the effect of any such action on
any particular Securityholder);
(J) registering transfers of the Trust Securities in
accordance with this Trust Agreement; and
(K) except as otherwise provided in this Section
207(a)(ii), the Property Trustee shall have none of the duties, liabilities,
powers or the authority of the Administrative Trustees set forth in Section
207(a)(i).
(b) So long as this Trust Agreement remains in effect, the Trust (or
the Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees shall not (i) acquire any investments or
engage in any activities not authorized by this Trust Agreement; (ii) sell,
assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of
any of the Trust Property or interests therein, including to Securityholders,
except as expressly provided herein; (iii) take any action that would cause
the Trust to fail or cease to qualify as a "grantor trust" for United States
federal income tax purposes; (iv) incur any indebtedness for borrowed money
or issue any other debt; or (v) take
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or consent to any action that would result in the placement of a Lien on any
of the Trust Property. The Administrative Trustees shall defend all claims
and demands of all Persons at any time claiming any Lien on any of the Trust
Property adverse to the interest of the Trust or the Securityholders in their
capacity as Securityholders.
(c) In connection with the issue and sale of the Preferred
Securities, the Depositor shall have the right and responsibility to assist
the Trust with respect to, or effect on behalf of the Trust, the following
(and any actions taken by the Depositor in furtherance of the following prior
to the date of this Trust Agreement are hereby ratified and confirmed in all
respects):
(i) the preparation and filing by the Trust with the Commission
and the execution on behalf of the Trust of a registration statement on the
appropriate form in relation to the Preferred Securities and the Debentures,
including any amendments thereto;
(ii) the determination of the States in which to take
appropriate action to qualify or register for sale all or part of the
Preferred Securities and to do any and all such acts, other than actions
which must be taken by or on behalf of the Trust, and advise the Trustees of
actions they must take on behalf of the Trust, and prepare for execution and
filing any documents to be executed and filed by the Trust or on behalf of
the Trust, as the Depositor deems necessary or advisable in order to comply
with the applicable laws of any such States;
(iii) the preparation for filing by the Trust and execution on
behalf of the Trust of an application to the American Stock Exchange or a
national stock exchange or other organizations for listing upon notice of
issuance of any Preferred Securities and to file or cause an Administrative
Trustee to file thereafter with such exchange or organization such
notifications and documents as may be necessary from time to time;
(iv) the preparation for filing by the Trust with the Commission
and the execution on behalf of the Trust of a registration statement on Form
8-A relating to the registration of the Preferred Securities under Section
12(b) or 12(g) of the Exchange Act, including any amendments thereto;
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(v) the negotiation of the terms of, and the execution and
delivery of, the Underwriting Agreement providing for the sale of the Preferred
Securities; and
(vi) the taking of any other actions necessary or desirable to
carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs of
the Trust and to operate the Trust so that the Trust shall not be deemed to
be an "investment company" required to be registered under the Investment
Company Act, shall be classified as a "grantor trust" and not as an
association taxable as a corporation for United States federal income tax
purposes and so that the Debentures shall be treated as indebtedness of the
Depositor for United States federal income tax purposes. In this connection,
subject to Section 1002, the Depositor and the Administrative Trustees are
authorized to take any action, not inconsistent with applicable law or this
Trust Agreement, that each of the Depositor and the Administrative Trustees
determines in their discretion to be necessary or desirable for such
purposes.
SECTION 208. ASSETS OF TRUST.
The assets of the Trust shall consist of the Trust Property.
SECTION 209. TITLE TO TRUST PROPERTY.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered
by the Property Trustee for the benefit of the Securityholders in accordance
with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
SECTION 301. PAYMENT ACCOUNT.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and any agent of the
Property Trustee shall have exclusive control and sole right of withdrawal
with respect to the Payment Account for the purpose of making deposits and
withdrawals from the Payment Account in accordance with this Trust Agreement.
All monies and other property deposited or held from time to
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time in the Payment Account shall be held by the Property Trustee in the
Payment Account for the exclusive benefit of the Securityholders and for
distribution as herein provided, including (and subject to) any priority of
payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal of or interest on, and any
other payments or proceeds with respect to, the Debentures. Amounts held in
the Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 401. DISTRIBUTIONS.
(a) Distributions on the Trust Securities shall be cumulative, and
shall accumulate whether or not there are funds of the Trust available for
the payment of Distributions. Distributions shall accumulate from ----------,
1997, and, except during any Extension Period with respect to the Debentures,
shall be payable quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year, commencing on March 31, 1998. If any date on which
a Distribution is otherwise payable on the Trust Securities is not a Business
Day, then the payment of such Distribution shall be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) with the same force and effect as if
made on such date (each date on which distributions are payable in accordance
with this Section 401(a), a "Distribution Date").
(b) The Trust Securities represent undivided beneficial interests in
the Trust Property. Distributions on the Trust Securities shall be payable
at a rate of ---% per annum of the Liquidation Amount of the Trust
Securities. The amount of Distributions payable for any full period shall be
computed on the basis of a 360-day year of twelve 30-day months. The amount
of Distributions for any partial period shall be computed on the basis of the
number of days elapsed in a 360-day year of twelve 30-day months. During any
Extension Period with respect to the Debentures, Distributions on the
Preferred Securities shall be deferred for a period equal to the Extension
Period. The amount of Distributions payable for any period shall include the
Additional Amounts, if any.
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(c) Distributions on the Trust Securities shall be made by the
Property Trustee solely from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust has funds then on hand
and immediately available by 12:30 p.m. on each Distribution Date in the
Payment Account for the payment of such Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on
the Securities Register for the Trust Securities on the relevant record date,
which shall be the 15th day of the month in which the Distribution is payable.
SECTION 402. REDEMPTION.
(a) On each Debenture Redemption Date and at maturity of the
Debentures, the Trust shall be required to redeem a Like Amount of Trust
Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the Redemption Date to each Holder of Trust Securities to be
redeemed, at such Holder's address appearing in the Securities Register. The
Property Trustee shall have no responsibility for the accuracy of any CUSIP
number contained in such notice. All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the outstanding Trust Securities are to be
redeemed, the identification and the aggregate Liquidation Amount of the
particular Trust Securities to be redeemed; and
(v) that, on the Redemption Date, the Redemption Price shall
become due and payable upon each such Trust Security to be redeemed and that
Distributions thereon shall cease to accumulate on and after said date.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of the Debentures. Redemptions of the Trust
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Securities shall be made and the Redemption Price shall be payable on each
Redemption Date only to the extent that the Trust has immediately available
funds then on hand and available in the Payment Account for the payment of
such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect
of any of the Preferred Securities, then, by 12:00 noon, New York City time,
on the Redemption Date, subject to Section 402(c), the Property Trustee shall
deposit with the Paying Agent funds sufficient to pay the applicable
Redemption Price and shall give the Paying Agent irrevocable instructions and
authority to pay the Redemption Price to the Holders thereof upon surrender
of their Preferred Securities Certificates. Notwithstanding the foregoing,
Distributions payable on or prior to the Redemption Date for any Trust
Securities called for redemption shall be payable to the Holders of such
Trust Securities as they appear on the Securities Register for the Trust
Securities on the relevant record dates for the related Distribution Dates.
If notice of redemption shall have been given and funds deposited as
required, then upon the date of such deposit, all rights of Securityholders
holding Trust Securities so called for redemption shall cease, except the
right of such Securityholders to receive the Redemption Price and any
Distribution payable on or prior to the Redemption Date, but without
interest, and such Trust Securities shall cease to be Outstanding. In the
event that any date on which any Redemption Price is payable is not a
Business Day, then payment of the Redemption Price payable on such date shall
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) with the same force
and effect as if made on such date. In the event that payment of the
Redemption Price in respect of any Trust Securities called for redemption is
improperly withheld or refused and not paid either by the Trust or by the
Depositor pursuant to the Guarantee, Distributions on such Trust Securities
shall continue to accumulate, at the then applicable rate, from the
Redemption Date originally established by the Trust for such Trust Securities
to the date such Redemption Price is actually paid, in which case the actual
payment date shall be the date fixed for redemption for purposes of
calculating the Redemption Price.
(e) Payment of the Redemption Price on the Trust Securities shall be
made to the record holders thereof as they appear on the Securities Register
for the Trust Securities on the relevant record date, which shall be the date
15 days prior to the relevant Redemption Date.
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(f) Subject to Section 403(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Property Trustee from the Outstanding Preferred Securities not previously
called for redemption, by such method (including, without limitation, by lot)
as the Property Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of portions (equal to the Liquidation Amount
or an integral multiple of such Liquidation Amount in excess thereof) of the
Liquidation Amount of the Preferred Securities of a denomination larger than
such Liquidation Amount. The Property Trustee shall promptly notify the
Securities Registrar in writing of the Preferred Securities selected for
redemption and, in the case of any Preferred Securities selected for partial
redemption, the Liquidation Amount thereof to be redeemed. For all purposes
of this Trust Agreement, unless the context otherwise requires, all
provisions relating to the redemption of the Preferred Securities shall
relate, in the case of any Preferred Securities redeemed or to be redeemed
only in part, to the portion of the Liquidation Amount of the Preferred
Securities which has been or is to be redeemed.
SECTION 403. SUBORDINATION OF THE COMMON SECURITIES.
(a) Payment of Distributions (including Additional Amounts, if
applicable) on, and the Redemption Price of, the Trust Securities, as
applicable, shall be made, subject to Section 402(f), pro rata among the
Common Securities and the Preferred Securities based on the Liquidation
Amount of the Trust Securities; provided, however, that if on any
Distribution Date or Redemption Date any Event of Default resulting from a
Debenture Event of Default shall have occurred and be continuing, no payment
of any Distribution (including Additional Amounts, if applicable) on, or
Redemption Price of, any Common Security, and no other payment on account of
the redemption, liquidation or other acquisition of the Common Securities,
shall be made unless payment in full in cash of all accumulated and unpaid
Distributions (including Additional Amounts, if applicable) on all
Outstanding Preferred Securities for all Distribution periods terminating on
or prior thereto, or in the case of payment of the Redemption Price the full
amount of such Redemption Price on all Outstanding Preferred Securities then
called for redemption, shall have
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been made or provided for, and all funds immediately available to the
Property Trustee shall first be applied to the payment in full in cash of all
Distributions (including Additional Amounts, if applicable) on, or the
Redemption Price of, the Preferred Securities then due and payable.
(b) In the case of the occurrence of any Event of Default resulting
from a Debenture Event of Default, the Holder of the Common Securities shall
be deemed to have waived any right to act with respect to any such Event of
Default under this Trust Agreement until the effect of all such Events of
Default with respect to the Preferred Securities shall have been cured,
waived or otherwise eliminated. Until any such Event of Default under this
Trust Agreement with respect to the Preferred Securities shall have been so
cured, waived or otherwise eliminated, the Property Trustee shall act solely
on behalf of the Holders of the Preferred Securities and not the Holder of
the Common Securities, and only the Holders of the Preferred Securities shall
have the right to direct the Property Trustee to act on their behalf.
SECTION 404. PAYMENT PROCEDURES.
Payments of Distributions (including Additional Amounts, if applicable)
in respect of the Preferred Securities shall be made by check mailed to the
address of the Person entitled thereto as such address shall appear on the
Securities Register. Payments in respect of the Common Securities shall be
made in such manner as shall be mutually agreed between the Property Trustee
and the Common Securityholder.
SECTION 405. TAX RETURNS AND REPORTS.
The Administrative Trustees shall prepare (or cause to be prepared), at
the Depositor's expense, and file all United States federal, state and local
tax and information returns and reports required to be filed by or in respect
of the Trust. In this regard, the Administrative Trustees shall (a) prepare
and file (or cause to be prepared and filed) the appropriate Internal Revenue
Service form required to be filed in respect of the Trust in each taxable
year of the Trust; and (b) prepare and furnish (or cause to be prepared and
furnished) to each Securityholder the appropriate Internal Revenue Service
form required to be furnished to such Securityholder or the information
required to be provided on such form. The Administrative Trustees shall
provide the Depositor with a copy of all such returns and reports promptly
after such filing or furnishing. The Property Trustee
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shall comply with United States federal withholding and backup withholding
tax laws and information reporting requirements with respect to any payments
to the Securityholders under the Trust Securities.
SECTION 406. PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST.
Upon receipt under the Debentures of Additional Payments, the Property
Trustee, at the direction of an Administrative Trustee or the Depositor,
shall promptly pay any taxes, duties or governmental charges of whatsoever
nature (other than withholding taxes) imposed on the Trust by the United
States or any other taxing authority.
SECTION 407. PAYMENTS UNDER THE INDENTURE.
Any amount payable hereunder to any Holder of Preferred Securities
shall be reduced by the amount of any corresponding payment such Holder has
directly received under the Indenture pursuant to Section 514(b) or (c)
hereof.
ARTICLE V
THE TRUST SECURITIES CERTIFICATES
SECTION 501. INITIAL OWNERSHIP.
Upon the creation of the Trust and the contribution by the Depositor
pursuant to Section 203 and until the issuance of the Trust Securities, and
at any time during which no Trust Securities are outstanding, the Depositor
shall be the sole beneficial owner of the Trust.
SECTION 502. THE TRUST SECURITIES CERTIFICATES.
The Preferred Securities Certificates shall be issued in minimum
denominations of the Liquidation Amount and integral multiples of such
Liquidation Amount in excess thereof, and the Common Securities Certificates
shall be issued in denominations of the Liquidation Amount and integral
multiples thereof. The Trust Securities Certificates shall be executed on
behalf of the Trust by manual or facsimile signature of at least one
Administrative Trustee. The Trust Securities Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of the
Trust, shall be validly issued and entitled to the benefits of this Trust
Agreement, notwithstanding that such individuals or any
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of them shall have ceased to be so authorized prior to the delivery of such
Trust Securities Certificates or did not hold such offices at the date of
delivery of such Trust Securities Certificates. A transferee of a Trust
Securities Certificate shall become a Securityholder, and shall be entitled
to the rights and subject to the obligations of a Securityholder hereunder,
upon due registration of such Trust Securities Certificate in such
transferee's name pursuant to Sections 504 and 511.
SECTION 503. EXECUTION, AUTHENTICATION AND DELIVERY OF THE TRUST
SECURITIES CERTIFICATES.
(a) On the Closing Date and on the date on which the Underwriter
exercises the Option, as applicable, the Administrative Trustees shall cause
the Trust Securities Certificates, in an aggregate Liquidation Amount as
provided in Sections 204 and 205, to be executed on behalf of the Trust by
the manual or facsimile signature of at least one of the Administrative
Trustees and delivered to or upon the written order of the Depositor, signed
by its Chief Executive Officer, President, any Vice President, the Treasurer
or any Assistant Treasurer without further corporate action by the Depositor,
in authorized denominations.
(b) A Preferred Securities Certificate shall not be valid until
authenticated by the manual signature of an authorized signatory of the
Property Trustee. The signature shall be conclusive evidence that the
Preferred Securities Certificate has been authenticated under this Trust
Agreement. Each Preferred Security Certificate shall be dated the date of
its authentication.
(c) Upon the written order of the Trust signed by an Administrative
Trustee, the Property Trustee shall authenticate and make available for
delivery the Preferred Securities Certificates.
(d) The Property Trustee may appoint an Authenticating Agent
acceptable to the Trust to authenticate the Preferred Securities. An
Authenticating Agent may authenticate the Preferred Securities whenever the
Property Trustee may do so. Each reference in this Trust Agreement to
authentication by the Property Trustee includes authentication by such agent.
An Authenticating Agent has the same rights as the Property Trustee to deal
with the Depositor or the Trust.
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SECTION 504. REGISTRATION OF TRANSFER AND EXCHANGE OF THE
PREFERRED SECURITIES CERTIFICATES.
(a) The Depositor shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 508, a register or registers for the
purpose of registering the Trust Securities Certificates and transfers and
exchanges of the Preferred Securities Certificates (herein referred to as the
"Securities Register") in which the registrar designated by the Depositor
(the "Securities Registrar"), subject to such reasonable regulations as it
may prescribe, shall provide for the registration of the Preferred Securities
Certificates and the Common Securities Certificates (subject to Section 510
in the case of the Common Securities Certificates) and registration of
transfers and exchanges of the Preferred Securities Certificates as herein
provided. The Property Trustee shall be the initial Securities Registrar.
(b) Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to Section
508, the Administrative Trustees or any one of them shall execute and
deliver, in the name of the designated transferee or transferees, one or more
new Preferred Securities Certificates in authorized denominations of a like
aggregate Liquidation Amount dated the date of execution by the manual or
facsimile signature of such Administrative Trustee or Trustees. The
Securities Registrar shall not be required to register the transfer of any of
the Preferred Securities that have been called for redemption. At the option
of a Holder, the Preferred Securities Certificates may be exchanged for other
Preferred Securities Certificates in authorized denominations of the same
class and of a like aggregate Liquidation Amount upon surrender of the
Preferred Securities Certificates to be exchanged at the office or agency
maintained pursuant to Section 508.
(c) Every Preferred Securities Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Property Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly
authorized in writing. Each Preferred Securities Certificate surrendered for
registration of transfer or exchange shall be canceled and subsequently
disposed of by the Property Trustee in accordance with its customary
practice. The Trust shall not be required to (i) issue, register the transfer
of, or exchange any of the Preferred Securities during a
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period beginning at the opening of business 15 calendar days before the date
of mailing of a notice of redemption of any of the Preferred Securities
called for redemption and ending at the close of business on the day of such
mailing; or (ii) register the transfer of or exchange any of the Preferred
Securities so selected for redemption, in whole or in part, except the
unredeemed portion of any such Preferred Securities being redeemed in part.
(d) No service charge shall be made for any registration of transfer
or exchange of Preferred Securities Certificates, but the Securities
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of the Preferred Securities Certificates.
SECTION 505. MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES
CERTIFICATES.
If (a) any mutilated Trust Securities Certificate shall be surrendered
to the Securities Registrar, or if the Securities Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Securities Certificate; and (b) there shall be delivered to the Securities
Registrar, the Property Trustee and the Administrative Trustees such security
or indemnity as may be required by them to save each of them harmless, then
in the absence of notice that such Trust Securities Certificate shall have
been acquired by a bona fide purchaser, the Administrative Trustees, or any
one of them, on behalf of the Trust shall execute and make available for
delivery, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Trust Securities Certificate, a new Trust Securities Certificate of
like class, tenor and denomination. In connection with the issuance of any
new Trust Securities Certificate under this Section 505, the Administrative
Trustees or the Securities Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith. Any duplicate Trust Securities Certificate issued
pursuant to this Section 505 shall constitute conclusive evidence of an
undivided beneficial interest in the assets of the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
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SECTION 506. PERSONS DEEMED THE SECURITYHOLDERS.
The Trustees, the Paying Agent and the Securities Registrar shall treat
the Person in whose name any Trust Securities Certificate shall be registered
in the Securities Register as the owner of such Trust Securities Certificate
for the purpose of receiving Distributions and for all other purposes
whatsoever, and neither the Trustees nor the Securities Registrar shall be
bound by any notice to the contrary.
SECTION 507. ACCESS TO LIST OF THE SECURITYHOLDERS' NAMES AND
ADDRESSES.
At any time when the Property Trustee is not also acting as the
Securities Registrar, the Administrative Trustees or the Depositor shall
furnish or cause to be furnished to the Property Trustee (a) semi-annually on
or before January 15 and July 15 in each year, a list, in such form as the
Property Trustee may reasonably require, of the names and addresses of the
Securityholders as of the most recent record date; and (b) promptly after
receipt by any Administrative Trustee or the Depositor of a request therefor
from the Property Trustee in order to enable the Property Trustee to
discharge its obligations under this Trust Agreement, in each case to the
extent such information is in the possession or control of the Administrative
Trustees or the Depositor and is not identical to a previously supplied list
or has not otherwise been received by the Property Trustee in its capacity as
Securities Registrar. The rights of the Securityholders to communicate with
other Securityholders with respect to their rights under this Trust Agreement
or under the Trust Securities, and the corresponding rights of the Trustee
shall be as provided in the Trust Indenture Act. Each Holder, by receiving
and holding a Trust Securities Certificate, and each owner shall be deemed to
have agreed not to hold the Depositor, the Property Trustee or the
Administrative Trustees accountable by reason of the disclosure of its name
and address, regardless of the source from which such information was
derived.
SECTION 508. MAINTENANCE OF OFFICE OR AGENCY.
The Administrative Trustees shall maintain in a location or locations
designated by the Administrative Trustees, an office or offices or agency or
agencies where the Preferred Securities Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Trustees in respect of the Trust Securities
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Certificates may be served. The Administrative Trustees initially designate
the Corporate Trust Office of the Property Trustee, Two International Place,
4th Floor, Boston, Massachusetts 02110, as the principal corporate trust
office for such purposes. The Administrative Trustees shall give prompt
written notice to the Depositor and to the Securityholders of any change in
the location of the Securities Register or any such office or agency.
SECTION 509. APPOINTMENT OF THE PAYING AGENT.
The Paying Agent shall initially be the Property Trustee, and any
co-paying agent chosen by the Property Trustee must be acceptable to the
Administrative Trustees and the Depositor. The Paying Agent shall make
Distributions to the Securityholders from the Payment Account and shall
report the amounts of such Distributions to the Property Trustee and the
Administrative Trustees. Any Paying Agent shall have the revocable power to
withdraw funds from the Payment Account for the purpose of making the
Distributions referred to above. The Administrative Trustees may revoke such
power and remove the Paying Agent if such Trustees determine in their sole
discretion that the Paying Agent shall have failed to perform its obligations
under this Trust Agreement in any material respect. Any Person acting as
Paying Agent shall be permitted to resign as Paying Agent upon 30 days'
written notice to the Administrative Trustees, the Property Trustee and the
Depositor. In the event that the Property Trustee shall no longer be the
Paying Agent or a successor Paying Agent shall resign or its authority to act
be revoked, the Administrative Trustees shall appoint a successor that is
acceptable to the Property Trustee and the Depositor to act as the Paying
Agent (which shall be a bank or trust company). The Administrative Trustees
shall cause such successor Paying Agent or any additional Paying Agent
appointed by the Administrative Trustees to execute and deliver to the
Trustees an instrument in which such successor Paying Agent or additional
Paying Agent shall agree with the Trustees that as Paying Agent, such
successor Paying Agent or additional Paying Agent shall hold all sums, if
any, held by it for payment to the Securityholders in trust for the benefit
of the Securityholders entitled thereto until such sums shall be paid to such
Securityholders. The Paying Agent shall return all unclaimed funds to the
Property Trustee and, upon removal of a Paying Agent, such Paying Agent shall
also return all funds in its possession to the Property Trustee. The
provisions of Sections 801, 803 and 806 shall apply to the Property Trustee
also in its role as the Paying Agent, for so long as the Property
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Trustee shall act as Paying Agent and, to the extent applicable, to any other
Paying Agent appointed hereunder. Any reference in this Trust Agreement to
the Paying Agent shall include any co-paying agent unless the context
requires otherwise.
SECTION 510. OWNERSHIP OF THE COMMON SECURITIES BY THE DEPOSITOR.
On the Closing Date, the Depositor shall acquire and retain beneficial
and record ownership of the Common Securities. To the fullest extent
permitted by law, any attempted transfer of the Common Securities (other than
a transfer in connection with a merger or consolidation of the Depositor into
another corporation pursuant to Section 12.1 of the Indenture) shall be void.
The Administrative Trustees shall cause each Common Securities Certificate
issued to the Depositor to contain a legend stating "THIS CERTIFICATE IS NOT
TRANSFERABLE".
SECTION 511. THE PREFERRED SECURITIES CERTIFICATES.
(a) Each owner shall receive a Preferred Securities Certificate
representing such owner's interest in such Preferred Securities. Upon the
issuance of the Preferred Securities Certificates, the Trustees shall
recognize the record holders of the Preferred Securities Certificates as the
Securityholders. The Preferred Securities Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees, as evidenced by the
execution thereof by the Administrative Trustees or any one of them.
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive
Common Securities Certificate.
SECTION 512. [INTENTIONALLY OMITTED]
SECTION 513. [INTENTIONALLY OMITTED]
SECTION 514. RIGHTS OF THE SECURITYHOLDERS.
(a) The legal title to the Trust Property is vested exclusively in
the Property Trustee (in its capacity as such) in accordance with Section
209, and the Securityholders shall not have any right or title therein other
than
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the undivided beneficial interest in the assets of the Trust conferred by
their Trust Securities and they shall have no right to call for any partition
or division of property, profits or rights of the Trust except as described
below. The Trust Securities shall be personal property giving only the rights
specifically set forth therein and in this Trust Agreement. The Trust
Securities shall have no preemptive or similar rights. When issued and
delivered to Holders of the Preferred Securities against payment of the
purchase price therefor, the Preferred Securities shall be fully paid and
nonassessable interests in the Trust. The Holders of the Preferred
Securities, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the
State of Delaware.
(b) For so long as any of the Preferred Securities remain
Outstanding, if, upon a Debenture Event of Default, the Debenture Trustee
fails or the holders of not less than 25% in principal amount of the
outstanding Debentures fail to declare the principal of all of the Debentures
to be immediately due and payable, the Holders of at least 25% in Liquidation
Amount of the Preferred Securities then Outstanding shall have such right by
a notice in writing to the Depositor and the Debenture Trustee; and upon any
such declaration such principal amount of and the accrued interest on all of
the Debentures shall become immediately due and payable, provided that the
payment of principal and interest on such Debentures shall remain
subordinated to the extent provided in the Indenture.
(c) For so long as any of the Preferred Securities remain
Outstanding, upon a Debenture Event of Default arising from the failure to
pay interest or principal on the Debentures, the Holders of any of the
Preferred Securities then Outstanding shall, to the fullest extent permitted
by law, have the right to directly institute proceedings for enforcement of
payment to such Holders of principal of or interest on the Debentures having
a principal amount equal to the Liquidation Amount of the Preferred
Securities of such Holders.
ARTICLE VI
ACTS OF THE SECURITYHOLDERS; MEETINGS; VOTING
SECTION 601. LIMITATIONS ON VOTING RIGHTS.
(a) Except as provided in this Section 601, in Sections 514, 810 and
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1002 and in the Indenture and as otherwise set forth in the Guarantee or
required by law, no Holder of Preferred Securities shall have any right to vote
or in any manner otherwise control the administration, operation and management
of the Trust or the obligations of the parties hereto; nor shall anything herein
set forth, or contained in the terms of the Trust Securities Certificates, be
construed so as to constitute the Securityholders from time to time as partners
or members of an association.
(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing
any trust or power conferred on the Debenture Trustee with respect to such
Debentures; (ii) waive any past default which is waivable under Article VII
of the Indenture; (iii) exercise any right to rescind or annul a declaration
that the principal of all the Debentures shall be due and payable; or (iv)
consent to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of at least a majority in
Liquidation Amount of all the Outstanding Preferred Securities; provided,
however, that where a consent under the Indenture would require the consent
of each holder of outstanding Debentures affected thereby, no such consent
shall be given by the Property Trustee without the prior written consent of
each Holder of the Preferred Securities. The Trustees shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Outstanding Preferred Securities, except when authorized by a subsequent vote
of the Holders of the Outstanding Preferred Securities. The Property Trustee
shall notify each Holder of the Outstanding Preferred Securities of any
notice of default received from the Debenture Trustee with respect to the
Debentures. In addition to obtaining the foregoing approvals of the Holders
of the Preferred Securities, prior to taking any of the foregoing actions,
the Trustees shall, at the expense of the Depositor, obtain an Opinion of
Counsel experienced in such matters to the effect that the Trust shall
continue to be classified as a grantor trust and not as an association
taxable as a corporation for United States federal income tax purposes on
account of such action.
(c) If any proposed amendment to the Trust Agreement provides for, or
the Trustees otherwise propose to effect, (i) any action that would adversely
affect the powers, preferences or special rights of the holders of the Preferred
Securities, whether by way of amendment
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to the Trust Agreement or otherwise; or (ii) the dissolution, winding-up or
termination of the Trust, other than pursuant to the terms of this Trust
Agreement, then the Holders of the Outstanding Preferred Securities as a
class shall be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of the
Holders of, with respect to matters described in (i) above, at least 66 2/3%
in Liquidation Amount of the Outstanding Preferred Securities and with respect
to matters described in (ii) above, at least a Majority in Liquidation Amount
of the Outstanding Preferred Securities. No amendment to this Trust Agreement
may be made if, as a result of such amendment, the Trust would cease to be
classified as a grantor trust or would be classified as an association taxable
as a corporation for United States federal income tax
purposes.
SECTION 602. NOTICE OF MEETINGS.
Notice of all meetings of the Preferred Securityholders, stating the
time, place and purpose of the meeting, shall be given by the Property
Trustee pursuant to Section 1008 to each Preferred Securityholder of record,
at his or her registered address, at least 15 days and not more than 90 days
before the meeting. At any such meeting, any business properly before the
meeting may be so considered whether or not stated in the notice of the
meeting. Any adjourned meeting may be held as adjourned without further
notice.
SECTION 603. MEETINGS OF THE PREFERRED SECURITYHOLDERS.
(a) No annual meeting of the Securityholders is required to be held.
The Administrative Trustees, however, shall call a meeting of the
Securityholders to vote on any matter in respect of which the Preferred
Securityholders are entitled to vote upon the written request of the
Preferred Securityholders of 25% of the Outstanding Preferred Securities
(based upon their aggregate Liquidation Amount) and the Administrative
Trustees or the Property Trustee may, at any time in their discretion, call a
meeting of the Preferred Securityholders to vote on any matters as to which
the Preferred Securityholders are entitled to vote.
(b) The Preferred Securityholders of record of 50% of the Outstanding
Preferred Securities (based upon their aggregate Liquidation Amount), present
in person or by proxy, shall constitute a quorum at any meeting of the
Securityholders.
(c) If a quorum is present at a meeting, an affirmative vote by the
Preferred Securityholders of record present, in person or by proxy, holding
more than a majority of the Preferred Securities (based upon their
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aggregate Liquidation Amount) held by the Preferred Securityholders of record
present, either in person or by proxy, at such meeting shall constitute the
action of the Securityholders, unless this Trust Agreement requires a greater
number of affirmative votes.
SECTION 604. VOTING RIGHTS.
The Securityholders shall be entitled to one vote for each dollar value
of Liquidation Amount represented by their Trust Securities in respect of any
matter as to which such Securityholders are entitled to vote (and such dollar
value shall be $25 per Preferred Security until such time, if any, as the
Liquidation Amount is changed as provided herein).
SECTION 605. PROXIES, ETC.
At any meeting of the Securityholders, any Securityholder entitled to
vote thereat may vote by proxy, provided that no proxy, shall be voted at any
meeting unless it shall have been placed on file with the Administrative
Trustees, or with such other officer or agent of the Trust as the
Administrative Trustees may direct, for verification prior to the time at
which such vote shall be taken. When Trust Securities are held jointly by
several persons, any one of them may vote at any meeting in person or by
proxy in respect of such Trust Securities, but if more than one of them shall
be present at such meeting in person or by proxy, and such joint owners or
their proxies so present disagree as to any vote to be cast, such vote shall
not be received in respect of such Trust Securities. A proxy purporting to be
executed by or on behalf of a Securityholder shall be deemed valid unless
challenged at or prior to its exercise, and, the burden of proving invalidity
shall rest on the challenger. No proxy shall be valid more than three years
after its date of execution.
SECTION 606. SECURITYHOLDER ACTION BY WRITTEN CONSENT.
Any action which may be taken by the Securityholders at a meeting may
be taken without a meeting if the Securityholders holding more than a majority
of all of the Outstanding Trust Securities (based upon their aggregate
Liquidation Amount) entitled to vote in respect of such action (or such
larger proportion thereof as shall be required by any express provision of
this Trust Agreement) shall consent to the action in writing.
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SECTION 607. RECORD DATE FOR VOTING AND OTHER PURPOSES.
For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate
in any Distribution on the Trust Securities in respect of which a record date
is not otherwise provided for in this Trust Agreement, or for the purpose of
any other action, the Administrative Trustees may from time to time fix a
date, not more than 90 days prior to the date of any meeting of the
Securityholders or the payment of Distribution or other action, as the case
may be, as a record date for the determination of the identity of the
Securityholders of record for such purposes.
SECTION 608. ACTS OF THE SECURITYHOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Trust Agreement to be
given, made or taken by the Securityholders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such
Securityholders in person or by an agent duly appointed in writing; and,
except as otherwise expressly provided herein, such action shall become
effective when such instrument or instruments are delivered to an
Administrative Trustee. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Securityholders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Trust Agreement and
(subject to Section 801) conclusive in favor of the Trustees, if made in the
manner provided in this Section 608.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him or her the execution
thereof. Where such execution is by a signer acting in a capacity other than
his or her individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his or her authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which any Trustee
receiving the same deems sufficient.
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(c) The ownership of the Preferred Securities shall be proved by the
Securities Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Securityholder of any Trust Security shall bind
every future Securityholder of the same Trust Security and the Securityholder
of every Trust Security issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of anything done, omitted
or suffered to be done by the Trustees or the Trust in reliance thereon,
whether or not notation of such action is made upon such Trust Security.
(e) Without limiting the foregoing, a Securityholder entitled
hereunder to take any action hereunder with regard to any particular Trust
Security may do so with regard to all or any part of the Liquidation Amount
of such Trust Security or by one or more duly appointed agents each of which
may do so pursuant to such appointment with regard to all or any part of such
Liquidation Amount.
(f) A Securityholder may institute a legal proceeding directly
against the Depositor under the Guarantee to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Guarantee
Trustee (as defined in the Guarantee), the Trust or any Person.
SECTION 609. INSPECTION OF RECORDS.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection and copying by
any Securityholder and its authorized representatives during normal business
hours for any purpose reasonably related to such Securityholder's interest as
a Securityholder.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 701. REPRESENTATIONS AND WARRANTIES OF THE BANK AND THE
PROPERTY TRUSTEE.
The Bank and the Property Trustee, each severally on behalf of and as
to itself, as of the date hereof, and each successor Property Trustee at the
time of the successor Property Trustee's acceptance of its appointment as
Property Trustee hereunder (the term "Bank" being used to refer to such
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successor Property Trustee in its separate corporate capacity) hereby
represents and warrants (as applicable) for the benefit of the Depositor and
the Securityholders that:
(a) the Bank is a trust company duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation;
(b) the Bank has full corporate power, authority and legal right to
execute, deliver and perform its obligations under this Trust Agreement and
has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and
delivered by the Property Trustee and constitutes the valid and legally
binding agreement of the Property Trustee enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors, rights and to general
equity principles;
(d) the execution, delivery and performance by the Property Trustee
of this Trust Agreement has been duly authorized by all necessary corporate
or other action on the part of the Property Trustee and does not require any
approval of stockholders of the Bank and such execution, delivery and
performance shall not (i) violate the Bank's charter or by-laws; (ii) violate
any provision of, or constitute, with or without notice or lapse of time, a
default under, or result in the creation or imposition of, any Lien on any
properties included in the Trust Property pursuant to the provisions of, any
indenture, mortgage, credit agreement, license or other agreement or
instrument to which the Property Trustee or the Bank is a party or by which
it is bound; or (iii) violate any law, governmental rule or regulation of the
United States or its jurisdiction of incorporation, as the case may be,
governing the banking or trust powers of the Bank or the Property Trustee (as
appropriate in context) or any order, judgment or decree applicable to the
Property Trustee or the Bank;
(e) neither the authorization, execution or delivery by the Property
Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Property Trustee contemplated herein requires the consent
or approval of, the giving of notice to, the registration with or the taking
of any other action with respect to any governmental authority or
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agency under any existing federal law governing the banking or trust powers
of the Bank or the Property Trustee, as the case may be, under the laws of
the United States or its jurisdiction of incorporation; and
(f) there are no proceedings pending or, to the best of the Property
Trustee's knowledge, threatened against or affecting the Bank or the Property
Trustee in any court or before any governmental authority, agency or
arbitration board or tribunal which, individually or in the aggregate, would
materially and adversely affect the Trust or would question the right, power
and authority of the Property Trustee to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
SECTION 702. REPRESENTATIONS AND WARRANTIES OF THE DELAWARE BANK
AND THE DELAWARE TRUSTEE.
The Delaware Bank and the Delaware Trustee, each severally on behalf of
and as to itself, as of the date hereof, and each successor Delaware Trustee
at the time of the successor Delaware Trustee's acceptance of appointment as
Delaware Trustee hereunder (the term "Delaware Bank" being used to refer to
such successor Delaware Trustee in its separate corporate capacity), hereby
represents and warrants (as applicable) for the benefit of the Depositor and
the Securityholders that:
(a) the Delaware Bank is a Delaware banking corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware;
(b) the Delaware Bank has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and
delivered by the Delaware Trustee and constitutes the valid and legally
binding agreement of the Delaware Trustee enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors, rights and to general
equity principles;
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(d) the execution, delivery and performance by the Delaware Trustee
of this Trust Agreement has been duly authorized by all necessary corporate or
other action on the part of the Delaware Trustee and does not require any
approval of stockholders of the Delaware Bank and such execution, delivery
and performance shall not (i) violate the Delaware Bank's charter or by-laws;
(ii) violate any provision of, or constitute, with or without notice or lapse
of time, a default under, or result in the creation or imposition of, any
Lien on any properties included in the Trust Property pursuant to the
provisions of, any indenture, mortgage, credit agreement, license or other
agreement or instrument to which the Delaware Bank or the Delaware Trustee is
a party or by which it is bound; or (iii) violate any law, governmental rule
or regulation of the United States or the State of Delaware, as the case may
be, governing the banking or trust powers of the Delaware Bank or the
Delaware Trustee (as appropriate in context) or any order, judgment or decree
applicable to the Delaware Bank or the Delaware Trustee;
(e) neither the authorization, execution or delivery by the Delaware
Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Delaware Trustee contemplated herein or therein requires
the consent or approval of, the giving of notice to, the registration with or
the taking of any other action with respect to any governmental authority or
agency under any existing federal law governing the banking or trust powers
of the Delaware Bank or the Delaware Trustee, as the case may be, under the
laws of the United States or the State of Delaware; and
(f) there are no proceedings pending or, to the best of the Delaware
Trustee's knowledge, threatened against or affecting the Delaware Bank or the
Delaware Trustee in any court or before any governmental authority, agency or
arbitration board or tribunal which, individually or in the aggregate, would
materially and adversely affect the Trust or would question the right, power
and authority of the Delaware Trustee to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
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SECTION 703. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
The Depositor hereby represents and warrants for the benefit of the
Securityholders that:
(a) the Trust Securities Certificates issued on the Closing Date or
the Option Closing Date, if applicable, on behalf of the Trust have been duly
authorized and, shall be, as of such date or dates, if applicable, duly and
validly executed, issued and delivered by the Administrative Trustees
pursuant to the terms and provisions of, and in accordance with the
requirements of, this Trust Agreement and the Securityholders shall be, as of
such date or dates, if applicable, entitled to the benefits of this Trust
Agreement; and
(b) there are no taxes, fees or other governmental charges payable by
the Trust (or the Trustees on behalf of the Trust) under the laws of the
State of Delaware or any political subdivision thereof in connection with the
execution, delivery and performance by the Bank, the Property Trustee or the
Delaware Trustee, as the case may be, of this Trust Agreement.
ARTICLE VIII
TRUSTEES
SECTION 801. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee, by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Trust Agreement shall require the Trustees to expend or risk their own funds
or otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if
they shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably
assured to it. No Administrative Trustee nor the Delaware Trustee shall be
liable for its act or omissions hereunder except as a result of its own gross
negligence or willful misconduct. The Property Trustee's liability shall be
determined under the Trust Indenture Act. Whether or not therein expressly so
provided, every provision of this Trust Agreement relating to the conduct or
affecting the liability of or affording protection to the Trustees shall be
subject to the provisions of
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this Section 801. To the extent that, at law or in equity, the Delaware
Trustee or an Administrative Trustee has duties (including fiduciary duties)
and liabilities relating thereto to the Trust or to the Securityholders, the
Delaware Trustee or such Administrative Trustee shall not be liable to the
Trust or to any Securityholder for such Trustee's good faith reliance on the
provisions of this Trust Agreement. The provisions of this Trust Agreement,
to the extent that they restrict the duties and liabilities of the Delaware
Trustee or the Administrative Trustees otherwise existing at law or in
equity, are agreed by the Depositor and the Securityholders to replace such
other duties and liabilities of the Delaware Trustee and the Administrative
Trustees, as the case may be.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and
proceeds from the Trust Property and only to the extent that there shall be
sufficient revenue or proceeds from the Trust Property to enable the Property
Trustee or a Paying Agent to make payments in accordance with the terms
hereof. With respect to the relationship of each Securityholder and the
Trustee, each Securityholder, by its acceptance of a Trust Security, agrees
that it shall look solely to the revenue and proceeds from the Trust Property
to the extent legally available for distribution to it as herein provided and
that the Trustees are not personally liable to it for any amount
distributable in respect of any Trust Security or for any other liability in
respect of any Trust Security. This Section 801(b) does not limit the
liability of the Trustees expressly set forth elsewhere in this Trust
Agreement or, in the case of the Property Trustee, in the Trust Indenture
Act.
(c) No provision of this Trust Agreement shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property Trustee,
unless it shall be proved that the Property Trustee was negligent in
ascertaining the pertinent facts;
(ii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a majority in Liquidation
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Amount of the Trust Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under
this Trust Agreement;
(iii) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Payment Account shall be to deal with such property in a similar manner as
the Property Trustee deals with similar property for its own account, subject
to the protections and limitations on liability afforded to the Property
Trustee under this Trust Agreement and the Trust Indenture Act;
(iv) the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Depositor and money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Payment Account maintained
by the Property Trustee pursuant to Section 301 and except to the extent
otherwise required by law; and
(v) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the Depositor
with their respective duties under this Trust Agreement, nor shall the
Property Trustee be liable for the negligence, default or misconduct of the
Administrative Trustees or the Depositor.
SECTION 802. CERTAIN NOTICES.
(a) Within 5 Business Days after the occurrence of any Event of
Default actually known to the Property Trustee, the Property Trustee shall
transmit, in the manner and to the extent provided in Section 1008, notice of
such Event of Default to the Securityholders, the Administrative Trustees and
the Depositor, unless such Event of Default shall have been cured or waived.
For purposes of this Section 802, the term "Event of Default" means any event
that is, or after notice or lapse of time or both would become, an Event of
Default.
(b) The Administrative Trustees shall transmit to the
Securityholders, in the manner and to the extent provided in Section 1008,
notice of the Depositor's election to begin or further extend an Extension
Period on the Debentures (unless such election shall have been revoked), and
of any election by the Depositor to extend or accelerate the Maturity Date of
the Debentures within the time specified for transmitting such notice to the
holders of the Debentures pursuant to the Indenture as originally executed.
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SECTION 803. CERTAIN RIGHTS OF THE PROPERTY TRUSTEE.
Subject to the provisions of Section 801:
(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, Opinion of Counsel,
certificate, written representation of a Holder or transferee, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of action;
or (ii) in construing any of the provisions of this Trust Agreement, the
Property Trustee finds the same ambiguous or inconsistent with other
provisions contained herein; or (iii) the Property Trustee is unsure of the
application of any provision of this Trust Agreement, then, except as to any
matter as to which the Preferred Securityholders are entitled to vote under
the terms of this Trust Agreement, the Property Trustee shall deliver a
notice to the Depositor requesting written instructions of the Depositor as
to the course of action to be taken and the Property Trustee shall take such
action, or refrain from taking such action, as the Property Trustee shall be
instructed in writing to take, or to refrain from taking, by the Depositor;
provided, however, that if the Property Trustee does not receive such
instructions of the Depositor within 10 Business Days after it has delivered
such notice, or such reasonably shorter period of time set forth in such
notice (which to the extent practicable shall not be less than 2 Business
Days), it may, but shall be under no duty to, take or refrain from taking
such action not inconsistent with this Trust Agreement as it shall deem
advisable and in the best interests of the Securityholders, in which event
the Property Trustee shall have no liability except for its own bad faith,
negligence or willful misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently evidenced
by an Officers' Certificate;
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(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established before
undertaking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence
of bad faith on its part, request and conclusively rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly delivered
by the Depositor or the Administrative Trustees;
(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement, any filing under tax or securities laws or any filing
under tax or securities laws) or any rerecording, refiling or reregistration
thereof;
(f) the Property Trustee may consult with counsel of its choice
(which counsel may be counsel to the Depositor or any of its Affiliates) and
the advice of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon and, in accordance with such
advice, such counsel may be counsel to the Depositor or any of its
Affiliates, and may include any of its employees; the Property Trustee shall
have the right at any time to seek instructions concerning the administration
of this Trust Agreement from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Trust Agreement at the request,
order or direction of any of the Securityholders, pursuant to this Trust
Agreement, unless such Securityholders shall have offered to the Property
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that may be incurred therein or thereby; nothing contained herein
shall, however, relieve the Property Trustee of the obligation, upon the
occurrence of an Event of Default (that has not been cured or waived) to
exercise such of the rights and powers vested in it by this Trust Agreement, and
to use the same degree of care and skill in their exercise as a prudent man
would exercise or use under the circumstances in the conduct of his own affairs;
(h) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or
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document, unless requested in writing to do so by the Holders of not less
than a majority in Liquidation Amount of the Securities, but the Property
Trustee may make such further inquiry or investigation into such facts or
matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys, provided that the Property Trustee shall be
responsible for its own negligence or recklessness with respect to selection
of any agent or attorney appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with respect
to enforcing any remedy or right or taking any other action hereunder the
Property Trustee (i) may request instructions from the Holders of the Trust
Securities which instructions may only be given by the Holders of the same
proportion in Liquidation Amount of the Trust Securities as would be entitled
to direct the Property Trustee under the terms of the Trust Securities in
respect of such remedy, right or action; (ii) may refrain from enforcing such
remedy or right or taking such other action until such instructions are
received; and (iii) shall be protected in acting in accordance with such
instructions; and
(k) except as otherwise expressly provided by this Trust Agreement,
the Property Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Trust Agreement. No
provision of this Trust Agreement shall be deemed to impose any duty or
obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property
Trustee shall be construed to be a duty.
SECTION 804. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES.
The Recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Trust, and the Trustees do not assume
any responsibility for their correctness. The Trustees shall not be
accountable for the use or application by the Depositor of the proceeds of
the Debentures.
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SECTION 805. MAY HOLD SECURITIES.
Any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of the
Trust Securities and, subject to Sections 808 and 813 and except as provided
in the definition of the term "Outstanding" in Article I, may otherwise deal
with the Trust with the same rights it would have if it were not a Trustee or
such other agent.
SECTION 806. COMPENSATION; INDEMNITY; FEES.
The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable compensation
for all services rendered by them hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this
Trust Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to such Trustee's negligence,
bad faith or willful misconduct (or, in the case of the Administrative
Trustees or the Delaware Trustee, any such expense, disbursement or advance
as may be attributable to its, his or her gross negligence, bad faith or
willful misconduct); and
(c) to indemnify each of the Trustees or any predecessor Trustee for,
and to hold the Trustees harmless against, any loss, damage, claims,
liability, penalty or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of this Trust Agreement, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder, except any such expense,
disbursement or advance as may be attributable to such Trustee's negligence,
bad faith or willful misconduct (or, in the case of the Administrative
Trustees or the Delaware Trustee, any such expense, disbursement or advance as
may be attributable to its, his or her gross negligence, bad faith or willful
misconduct).
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No Trustee may claim any Lien or charge on any Trust Property as a
result of any amount due pursuant to this Section 806.
SECTION 807. CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF
TRUSTEES.
(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that
is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000. If any such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the purposes
of this Section 807, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Property Trustee with
respect to the Trust Securities shall cease to be eligible in accordance with
the provisions of this Section 807, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article VIII.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee with respect to
the Trust Securities. The Delaware Trustee shall either be (i) a natural
person who is at least 21 years of age and a resident of the State of
Delaware; or (ii) a legal entity with its principal place of business in the
State of Delaware and that otherwise meets the requirements of applicable
Delaware law that shall act through one or more persons authorized to bind
such entity.
SECTION 808. CONFLICTING INTERESTS.
If the Property Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Property Trustee shall
either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and
this Trust Agreement.
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SECTION 809. CO-TRUSTEES AND SEPARATE TRUSTEE.
(a) Unless an Event of Default shall have occurred and be continuing,
at any time or times, for the purpose of meeting the legal requirements of
the Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Depositor shall have power to
appoint, and upon the written request of the Property Trustee, the Depositor
shall for such purpose join with the Property Trustee in the execution,
delivery and performance of all instruments and agreements necessary or
proper to appoint, one or more Persons approved by the Property Trustee
either to act as co-trustee, jointly with the Property Trustee, of all or any
part of such Trust Property, or to the extent required by law to act as
separate trustee of any such property, in either case with such powers as may
be provided in the instrument of appointment, and to vest in such Person or
Persons in the capacity aforesaid, any property, title, right or power deemed
necessary or desirable, subject to the other provisions of this Section 809.
If the Depositor does not join in such appointment within 15 days after the
receipt by it of a request so to do, or in case a Debenture Event of Default
has occurred and is continuing, the Property Trustee alone shall have power
to make such appointment. Any co-trustee or separate trustee appointed
pursuant to this Section 809 shall either be (i) a natural person who is at
least 21 years of age and a resident of the United States; or (ii) a legal
entity with its principal place of business in the United States that shall
act through one or more persons authorized to bind such entity.
(b) Should any written instrument from the Depositor be required by
any co-trustee or separate trustee so appointed for more fully confirming to
such co-trustee or separate trustee such property, title, right, or power,
any and all such instruments shall, on request, be executed, acknowledged,
and delivered by the Depositor.
(c) Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the
following terms, namely:
(i) The Trust Securities shall be executed and delivered and
all rights, powers, duties and obligations hereunder in respect of the
custody
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of securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees specified hereunder, shall be
exercised, solely by such Trustees and not by such co-trustee or separate
trustee.
(ii) The rights, powers, duties and obligations hereby conferred
or imposed upon the Property Trustee in respect of any property covered by
such appointment shall be conferred or imposed upon and exercised or
performed by the Property Trustee or by the Property Trustee and such
co-trustee or separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except to the extent
that under any law of any jurisdiction in which any particular act is to be
performed, the Property Trustee shall be incompetent or unqualified to
perform such act, in which event such rights, powers, duties and obligations
shall be exercised and performed by such co-trustee or separate trustee.
(iii) The Property Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Depositor, may
accept the resignation of or remove any co-trustee or separate trustee
appointed under this Section 809, and, in case a Debenture Event of Default
has occurred and is continuing, the Property Trustee shall have the power to
accept the resignation of, or remove, any such co-trustee or separate trustee
without the concurrence of the Depositor. Upon the written request of the
Property Trustee, the Depositor shall join with the Property Trustee in the
execution, delivery and performance of all instruments and agreements
necessary or proper to effectuate such resignation or removal. A successor to
any co-trustee or separate trustee so resigned or removed may be appointed in
the manner provided in this Section 809.
(iv) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property Trustee or
any other trustee hereunder.
(v) The Property Trustee shall not be liable by reason of any
act of a co-trustee or separate trustee.
(vi) Any Act of the Holders delivered to the Property Trustee
shall be deemed to have been delivered to each such co-trustee and separate
trustee.
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SECTION 810. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of any Trustee (the "Relevant Trustee")
and no appointment of a successor Trustee pursuant to this Article VIII shall
become effective until the acceptance of appointment by the successor Trustee
in accordance with the applicable requirements of Section 811.
(b) Subject to the immediately preceding paragraph, the Relevant
Trustee may resign at any time with respect to the Trust Securities by giving
written notice thereof to the Securityholders. If the instrument of
acceptance by the successor Trustee required by Section 811 shall not have
been delivered to the Relevant Trustee within 30 days after the giving of
such notice of resignation, the Relevant Trustee may petition, at the expense
of the Depositor, any court of competent jurisdiction for the appointment of
a successor Relevant Trustee with respect to the Trust Securities.
(c) Unless a Debenture Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by an Act of the Common
Securityholder. If a Debenture Event of Default shall have occurred and be
continuing, the Property Trustee or the Delaware Trustee, or both of them,
may be removed at such time by an Act of the Holders of a majority in
Liquidation Amount of the Preferred Securities, delivered to the Relevant
Trustee (in its individual capacity and on behalf of the Trust). An
Administrative Trustee may be removed by the Common Securityholder at any
time.
(d) If any Trustee shall resign, be removed or become incapable of
acting as Trustee, or if a vacancy shall occur in the office of any Trustee
for any cause, at a time when no Debenture Event of Default shall have
occurred and be continuing, the Common Securityholder, by an Act of the
Common Securityholder delivered to the retiring Trustee, shall promptly
appoint a successor Trustee or Trustees with respect to the Trust Securities
and the Trust, and the successor Trustee shall comply with the applicable
requirements of Section 811. If the Property Trustee or the Delaware Trustee
shall resign, be removed or become incapable of continuing to act as the
Property Trustee or the Delaware Trustee, as the case may be, at a time when
a Debenture Event of Default shall have occurred and is continuing, the
Preferred Securityholders, by an Act of the
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Securityholders of a majority in Liquidation Amount of the Preferred
Securities then Outstanding delivered to the retiring Relevant Trustee, shall
promptly appoint a successor Relevant Trustee or Trustees with respect to the
Trust Securities and the Trust, and such successor Trustee shall comply with
the applicable requirements of Section 811. If an Administrative Trustee
shall resign, be removed or become incapable of acting as an Administrative
Trustee, at a time when a Debenture Event of Default shall have occurred and
be continuing, the Common Securityholder, by an Act of the Common
Securityholder delivered to an Administrative Trustee, shall promptly appoint
a successor Administrative Trustee or Administrative Trustees with respect to
the Trust Securities and the Trust, and such successor Administrative Trustee
or Administrative Trustees shall comply with the applicable requirements of
Section 811. If no successor Relevant Trustee with respect to the Trust
Securities shall have been so appointed by the Common Securityholder or the
Preferred Securityholders and accepted appointment in the manner required by
Section 811, any Securityholder who has been a Securityholder of Trust
Securities for six consecutive months on behalf of himself or herself and all
others similarly situated may petition a court of competent jurisdiction for
the appointment of a successor Relevant Trustee with respect to the Trust
Securities.
(e) The Property Trustee shall give notice of each resignation and
each removal of a Trustee and each appointment of a successor Trustee to all
the Securityholders in the manner provided in Section 1008 and shall give
notice to the Depositor. Each notice shall include the name of the successor
Relevant Trustee and the address of its Corporate Trust Office if it is the
Property Trustee.
(f) Notwithstanding the foregoing or any other provision of this
Trust Agreement, in the event any Administrative Trustee or a Delaware
Trustee who is a natural person dies or becomes, in the opinion of the
Depositor, incompetent or incapacitated, the vacancy created by such death,
incompetence or incapacity may be filled by (a) the unanimous act of the
remaining Administrative Trustees if there are at least two of them; or (b)
otherwise by the Depositor (with the successor in each case being a Person
who satisfies the eligibility requirement for Administrative Trustees set
forth in Section 807).
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SECTION 811. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Relevant
Trustee with respect to the Trust Securities and the Trust, the retiring
Relevant Trustee and each successor Relevant Trustee with respect to the
Trust Securities shall execute and deliver an instrument hereto wherein each
successor Relevant Trustee shall accept such appointment and which shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to
the Trust Securities and the Trust and upon the execution and delivery of
such instrument the resignation or removal of the retiring Relevant Trustee
shall become effective to the extent provided therein and each such successor
Relevant Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring
Relevant Trustee with respect to the Trust Securities and the Trust; but, on
request of the Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall duly assign, transfer and deliver to such successor Relevant
Trustee all the Trust Property, all proceeds thereof and money held by such
retiring Relevant Trustee hereunder with respect to the Trust Securities and
the Trust.
(b) Upon request of any such successor Relevant Trustee, the Trust
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Relevant Trustee all such rights, powers and
trusts referred to in the immediately preceding paragraph, as the case may
be.
(c) No successor Relevant Trustee shall accept its appointment unless
at the time of such acceptance such successor Relevant Trustee shall be
qualified and eligible under this Article VIII.
SECTION 812. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any Person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which such Relevant Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust
business of such Relevant Trustee, shall be the successor of such Relevant
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Trustee hereunder, provided such Person shall be otherwise qualified and
eligible under this Article VIII, without the execution or filing of any
paper or any further act on the part of any of the parties hereto.
SECTION 813. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE
DEPOSITOR OR THE TRUST.
If and when the Property Trustee or the Delaware Trustee shall be or
become a creditor of the Depositor or the Trust (or any other obligor upon
the Debentures or the Trust Securities), the Property Trustee or the Delaware
Trustee, as the case may be, shall be subject to and shall take all actions
necessary in order to comply with the provisions of the Trust Indenture Act
regarding the collection of claims against the Depositor or the Trust (or any
such other obligor).
SECTION 814. REPORTS BY THE PROPERTY TRUSTEE.
(a) The Property Trustee shall transmit to the Securityholders such
reports concerning the Property Trustee, its actions under this Trust
Agreement and the property and funds in its possession as the Property
Trustee as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to the Holders, be filed by the Property Trustee with the
American Stock Exchange, and each national securities exchange or other
organization upon which the Trust Securities are listed, and also with the
Commission and the Depositor.
SECTION 815. REPORTS TO THE PROPERTY TRUSTEE.
The Depositor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information
as required by Section 314 of the Trust Indenture Act (if any) and the
compliance certificate required by Section 314(a) of the Trust Indenture Act
in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act.
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SECTION 816. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with
any conditions precedent, if any, provided for in this Trust Agreement that
relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) of the Trust Indenture Act shall be given in
the form of an Officers' Certificate.
SECTION 817. NUMBER OF TRUSTEES.
(a) The number of Trustees shall be five, provided that the Holder of
all of the Common Securities by written instrument may increase or decrease
the number of the Administrative Trustees. The Property Trustee and the
Delaware Trustee may be the same Person.
(b) If a Trustee ceases to hold office for any reason and the number
of the Administrative Trustees is not reduced pursuant to Section 817(a), or
if the number of the Trustees is increased pursuant to Section 817(a), a
vacancy shall occur. The vacancy shall be filled with a Trustee appointed in
accordance with Section 810.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not
operate to annul the Trust. Whenever a vacancy in the number of the
Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 810, the
Administrative Trustees in office, regardless of their number (and
notwithstanding any other provision of this Agreement), shall have all the
powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Trust Agreement.
SECTION 818. DELEGATION OF POWER.
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21
his or her power for the purpose of executing any documents contemplated in
Section 207(a); and
(b) The Administrative Trustees shall have power to delegate from
time to time to such of their number or to the Depositor the doing of such
things and the execution of such instruments either in the name of the Trust
or the names of the Administrative Trustees or otherwise as the
Administrative Trustees may deem expedient, to the extent such
delegation is not prohibited by applicable law or contrary to the provisions
of the Trust, as set forth herein.
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SECTION 819. VOTING.
Except as otherwise provided in this Trust Agreement, the consent or
approval of the Administrative Trustees shall require consent or approval by
not less than a majority of the Administrative Trustees, unless there are
only two, in which case both must consent.
ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
SECTION 901. TERMINATION UPON EXPIRATION DATE.
Unless earlier dissolved, the Trust shall automatically dissolve
December 31, 2052 (the "Expiration Date") subject to distribution of the
Trust Property in accordance with Section 904.
SECTION 902. EARLY TERMINATION.
The first to occur of any of the following events is an "Early
Termination Event:"
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor;
(b) delivery of written direction to the Property Trustee by the
Depositor at any time (which direction is wholly optional and within the
discretion of the Depositor) to dissolve the Trust and distribute the
Debentures to the Securityholders in exchange for the Preferred Securities in
accordance with Section 904;
(c) the redemption of all of the Preferred Securities in connection
with the redemption of all of the Debentures; and
(d) the entrance of an order for dissolution of the Trust by a court
of competent jurisdiction.
SECTION 903. TERMINATION.
The respective obligations and responsibilities of the Trustees and the
Trust created and continued hereby shall terminate upon the latest to
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occur of the following: (a) the distribution by the Property Trustee to the
Securityholders upon the liquidation of the Trust pursuant to Section 904, or
upon the redemption of all of the Trust Securities pursuant to Section 402,
of all amounts required to be distributed hereunder upon the final payment of
the Trust Securities; (b) the payment of any expenses owed by the Trust; (c)
the discharge of all administrative duties of the Administrative Trustees,
including the performance of any tax reporting obligations with respect to
the Trust or the Securityholders; and (d) the filing of a Certificate of
Cancellation by the Administrative Trustee under the Delaware Business Trust
Act.
SECTION 904. LIQUIDATION.
(a) If an Early Termination Event specified in clause (a), (b), or
(d) of Section 902 occurs or upon the Expiration Date, the Trust shall be
liquidated by the Trustees as expeditiously as the Trustees determine to be
possible by distributing, after satisfaction of liabilities to creditors of
the Trust as provided by applicable law, to each Securityholder a Like Amount
of Debentures, subject to Section 904(d). Notice of liquidation shall be
given by the Property Trustee by first-class mail, postage prepaid, mailed
not later than 30 nor more than 60 days prior to the Liquidation Date to each
Holder of Trust Securities at such Holder's address appearing in the
Securities Register. All notices of liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust
Securities shall no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange shall be deemed to
represent a Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics by
which the Holders may exchange the Trust Securities Certificates for the
Debentures, or, if Section 904(d) applies, receive a Liquidation
Distribution, as the Administrative Trustees or the Property Trustee shall
deem appropriate.
(b) Except where Section 902(c) or 904(d) applies, in order to effect
the liquidation of the Trust and distribution of the Debentures to the
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the
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Liquidation Date) and, either itself acting as exchange agent or through the
appointment of a separate exchange agent, shall establish such procedures as
it shall deem appropriate to effect the distribution of Debentures in
exchange for the Outstanding Trust Securities Certificates.
(c) Except where Section 902(c) or 904(d) applies, after the
Liquidation Date, (i) the Trust Securities shall no longer be deemed to be
outstanding; (ii) certificates representing a Like Amount of the Debentures
shall be issued to the Holders of Trust Securities Certificates upon
surrender of such certificates to the Administrative Trustees or their agent
for exchange; (iii) the Depositor shall use its reasonable efforts to have
the Debentures listed on the American Stock Exchange or on such other
securities exchange or other organization as the Preferred Securities are
then listed or traded; (iv) any Trust Securities Certificates not so
surrendered for exchange shall be deemed to represent a Like Amount of
Debentures, accruing interest at the rate provided for in the Debentures from
the last Distribution Date on which a Distribution was made on such Trust
Securities Certificates until such certificates are so surrendered (and until
such certificates are so surrendered, no payments of interest or principal
shall be made to Holders of the Trust Securities Certificates with respect to
such Debentures); and (v) all rights of the Securityholders holding the Trust
Securities shall cease, except the right of such Securityholders to receive
the Debentures upon surrender of the Trust Securities Certificates.
(d) In the event that, notwithstanding the other provisions of this
Section 904, whether because of an order for dissolution entered by a court
of competent jurisdiction or otherwise, distribution of the Debentures in the
manner provided herein is determined by the Property Trustee not to be
practical, the Trust Property shall be liquidated, and the Trust shall be
dissolved, wound-up or terminated, by the Property Trustee in such manner as
the Property Trustee determines. In such event, on the date of the
dissolution, winding-up or other termination of the Trust, the
Securityholders shall be entitled to receive out of the assets of the Trust
available for distribution to the Securityholders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, an
amount equal to the Liquidation Amount per Trust Security plus accumulated
and unpaid Distributions thereon to the date of payment (such amount being
the "Liquidation Distribution"). If, upon any such dissolution, winding-up or
termination, the Liquidation Distribution can be paid only in part because
the Trust has insufficient assets available to pay in full the
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aggregate Liquidation Distribution, then, subject to the next succeeding
sentence, the amounts payable by the Trust on the Trust Securities shall be
paid on a pro rata basis (based upon Liquidation Amounts, subject to Section
407). The Holder of the Common Securities shall be entitled to receive the
Liquidation Distributions upon any such dissolution, winding-up or
termination pro rata (determined as aforesaid) with the Holders of the
Preferred Securities, except that, if a Debenture Event of Default has
occurred and is continuing, the Preferred Securities shall have a priority
over the Common Securities.
SECTION 905. MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR
REPLACEMENTS OF THE TRUST.
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except
pursuant to this Section 905. At the request of the Depositor, with the
consent of the Administrative Trustees and without the consent of the Holders
of the Preferred Securities, the Property Trustee or the Delaware Trustee,
the Trust may merge with or into, consolidate, amalgamate, be replaced by or
convey, transfer or lease its properties and assets substantially as an
entirety to a trust organized as such under the laws of any State; provided,
that (i) such successor entity either (a) expressly assumes all of the
obligations of the Trust with respect to the Preferred Securities; or (b)
substitutes for the Preferred Securities other securities having
substantially the same terms as the Preferred Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the
Preferred Securities rank in priority with respect to distributions and
payments upon liquidation, redemption and otherwise; (ii) the Depositor
expressly appoints a trustee of such successor entity possessing
substantially the same powers and duties as the Property Trustee as the
holder of the Debentures; (iii) the Successor Securities are listed or
traded, or any Successor Securities shall be listed or traded upon
notification of issuance, on any national securities exchange or other
organization on which the Preferred Securities are then listed, if any; (iv)
such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease does not adversely affect the rights, preferences and privileges of
the Holders of the Preferred Securities (including any Successor Securities)
in any material respect; (v) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Depositor has
received an Opinion of Counsel to the effect that (a)
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such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease does not adversely affect the rights, preferences and privileges of
the Holders of the Preferred Securities (including any Successor Securities)
in any material respect; and (b) following such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, neither the Trust
nor such successor entity shall be required to register as an "investment
company" under the Investment Company Act; and (vi) the Depositor owns all of
the Common Securities of such successor entity and guarantees the obligations
of such successor entity under the Successor Securities at least to the
extent provided by the Guarantee, the Debentures, the Indenture, this Trust
Agreement and the Expense Agreement. Notwithstanding the foregoing, the Trust
shall not, except with the consent of the Holders of 100% in Liquidation
Amount of the Preferred Securities, consolidate, amalgamate, merge with or
into, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to any other Person or permit any other
Person to consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger or replacement would cause the Trust or
the successor entity to be classified as other than a grantor trust for
United States federal income tax purposes.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 1001. LIMITATION OF RIGHTS OF THE SECURITYHOLDERS.
The death or incapacity of any Person having an interest, beneficial or
otherwise, in the Trust Securities shall not operate to terminate this Trust
Agreement, nor entitle the legal representatives or heirs of such Person or
any Securityholder for such Person to claim an accounting, take any action or
bring any proceeding in any court for a partition or winding-up of the
arrangements contemplated hereby, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
SECTION 1002. AMENDMENT.
(a) This Trust Agreement may be amended from time to time by the
Trustees and the Depositor, without the consent of any Securityholders, (i)
as provided in Section 811 with respect to acceptance of appointment by a
successor Trustee; (ii) to cure any ambiguity, correct or supplement any
provision herein or therein which may be inconsistent with any other
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provision herein or therein, or to make any other provisions with respect to
matters or questions arising under this Trust Agreement, that shall not be
inconsistent with the other provisions of this Trust Agreement; (iii) to
modify, eliminate or add to any provisions of this Trust Agreement to such
extent as shall be necessary to ensure that the Trust shall be classified for
United States federal income tax purposes as a grantor trust at all times
that any of the Trust Securities are outstanding or to ensure that the Trust
shall not be required to register as an "investment company" under the
Investment Company Act; or (iv) to reduce or increase the Liquidation Amount
per Trust Security and simultaneously to correspondingly increase or decrease
the number of Trust Securities issued and outstanding solely for the purpose
of maintaining the eligibility of the Preferred Securities for quotation or
listing on any national securities exchange or other organization on which
the Preferred Securities are then quoted or listed (including, if applicable,
the American Stock Exchange); provided, however, that in the case of clause
(ii), such action shall not adversely affect the interests of any
Securityholder, and provided further, that in the case of clause (iv) the
aggregate Liquidation Amount of the Trust Securities outstanding upon completion
of any such reduction must be the same as the aggregate Liquidation Amount of
the Trust Securities outstanding immediately prior to such reduction or
increase, and any amendments of this Trust Agreement shall become effective when
notice thereof is given to the Securityholders (or, in the case of an amendment
pursuant to clause (iv), as of the date specified in the notice).
(b) Except as provided in Section 601(c) or Section 1002(c) hereof,
any provision of this Trust Agreement may be amended by the Trustees and the
Depositor (i) with the consent of the Trust Securityholders representing not
less than a majority (based upon Liquidation Amounts) of the Trust Securities
then Outstanding; and (ii) upon receipt by the Trustees of an Opinion of
Counsel to the effect that such amendment or the exercise of any power
granted to the Trustees in accordance with such amendment shall not affect
the Trust's status as a grantor trust for United States federal income tax
purposes or the Trust's exemption from status of an "investment company"
under the Investment Company Act.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Securityholder (such
consent being obtained in accordance with Section 603 or 606 hereof), this
Trust Agreement may not be amended to (i) change the amount or
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timing of any Distribution on the Trust Securities or otherwise adversely
affect the amount of any Distribution required to be made in respect of the
Trust Securities as of a specified date; or (ii) restrict the right of a
Securityholder to institute suit for the enforcement of any such payment on
or after such date; notwithstanding any other provision herein, without the
unanimous consent of the Securityholders (such consent being obtained in
accordance with Section 603 or 606 hereof), this paragraph (c) of this
Section 1002 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption
from status of an "investment company" under the Investment Company Act or to
fail or cease to be classified as a grantor trust for United States federal
income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor, this Trust Agreement may not be amended
in a manner which imposes any additional obligation on the Depositor.
(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees shall promptly provide to the Depositor a copy of
such amendment.
(g) Upon the request of the Depositor, accompanied by its board
resolutions authorizing the execution of any such amendments to this Trust
Agreement, and upon the filing with the Property Trustee and the Delaware
Trustee of evidence of the consent of the Securityholders required to consent
thereto as aforesaid, the Property Trustee and the Delaware Trustee shall
join with the Depositor in the execution of such amendment to this Trust
Agreement unless such amendment affects the Property Trustee's or the
Delaware Trustee's own rights, duties, immunities under this Trust Agreement
or otherwise in which case the Property Trustee and Delaware Trustee may in
their own discretion but shall not be obligated to enter into such amendment
to this Trust Agreement. The Property Trustee and Delaware Trustee, subject
to the provisions of Section 801, may receive an Opinion of Counsel as
conclusive evidence that any amendment to this Trust Agreement executed
pursuant to this Article X is authorized or permitted by, and conforms to,
the terms of this Article X and that it is proper for the Property Trustee
and Delaware Trustee under the provisions of this Article X to join in the
execution thereof.
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SECTION 1003. SEPARABILITY.
In case any provision in this Trust Agreement or in the Trust
Securities Certificates shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 1004. GOVERNING LAW.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST
AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES).
SECTION 1005. PAYMENTS DUE ON NON-BUSINESS DAY.
If the date fixed for any payment on any Trust Security shall be a day
that is not a Business Day, then such payment need not be made on such date
but may be made on the next succeeding day which is a Business Day, with the
same force and effect as though made on the date fixed for such payment, and
no distribution shall accumulate thereon for the period after such date.
SECTION 1006. SUCCESSORS.
This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Trust or the Relevant
Trustee(s), including any successor by operation of law. Except in connection
with a consolidation, merger or sale involving the Depositor that is
permitted under Article XII of the Indenture and pursuant to which the
assignee agrees in writing to perform the Depositor's obligations hereunder,
the Depositor shall not assign its obligations hereunder.
SECTION 1007. HEADINGS.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
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SECTION 1008. REPORTS, NOTICES AND DEMANDS.
Any report, notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be given or
served to or upon any Securityholder or the Depositor may be given or served
in writing by deposit thereof, first-class postage prepaid, in the United
States mail, hand delivery or facsimile transmission, in each case,
addressed, (a) in the case of a Preferred Securityholder, to such Preferred
Securityholder as such Securityholder's name and address may appear on the
Securities Register; and (b) in the case of the Common Securityholder or the
Depositor, to INTRUST Financial Corporation, 105 North Main Street, Box One,
Wichita, Kansas 67202, Attention: Chief Executive Officer, facsimile no.:
(316) 383-1828. Any notice to the Preferred Securityholders shall also be
given to such owners as have, within two years preceding the giving of such
notice, filed their names and addresses with the Property Trustee for that
purpose. Such notice, demand or other communication to or upon a
Securityholder shall be deemed to have been sufficiently given or made, for
all purposes, upon hand delivery, mailing or transmission.
Any notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Trust, the Property Trustee or the Administrative Trustees shall be given in
writing addressed (until another address is published by the Trust) as
follows: (a) with respect to the Property Trustee to State Street Bank and
Trust Company, Two International Place, 4th Floor, Boston, Massachusetts
02110, Attention: Corporate Trust Department; (b) with respect to the
Delaware Trustee, to Wilmington Trust Company, Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate
Trust Administration; and (c) with respect to the Administrative Trustees, to
them at the address above for notices to the Depositor, marked "Attention:
Administrative Trustees of INTRUST Capital Trust, c/o Chief Executive
Officer, INTRUST Financial Corporation." Such notice, demand or other
communication to or upon the Trust or the Property Trustee shall be deemed to
have been sufficiently given or made only upon actual receipt of the writing
by the Trust or the Property Trustee.
64
<PAGE> 71
SECTION 1009. AGREEMENT NOT TO PETITION.
Each of the Trustees and the Depositor agrees for the benefit of the
Securityholders that, until at least one year and 1 day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join
in the filing of, a petition against the Trust under any bankruptcy,
insolvency, reorganization or other similar law (including, without
limitation, the United States Bankruptcy Code of 1978, as amended)
(collectively, "Bankruptcy Laws") or otherwise join in the commencement of
any proceeding against the Trust under any Bankruptcy Law. In the event the
Depositor takes action in violation of this Section 1009, the Property
Trustee agrees, for the benefit of the Securityholders, that at the expense
of the Depositor (which expense shall be paid prior to the filing), it shall
file an answer with the bankruptcy court or otherwise properly contest the
filing of such petition by the Depositor against the Trust or the
commencement of such action and raise the defense that the Depositor has
agreed in writing not to take such action and should be stopped and precluded
therefrom. The provisions of this Section 1009 shall survive the termination
of this Trust Agreement.
SECTION 1010. TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE
ACT.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall,
to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required
provision shall control. If any provision of this Trust Agreement modifies or
excludes any provision of the Trust Indenture Act which may be so modified or
excluded, the latter provision shall be deemed to apply to this Trust
Agreement as so modified or to be excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the Trust Securities as equity
securities representing undivided beneficial interests in the assets of the
Trust.
65
<PAGE> 72
SECTION 1011. ACCEPTANCE OF TERMS OF THE TRUST AGREEMENT, THE
GUARANTEE AND THE INDENTURE.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE
UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A
BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF
THIS TRUST AGREEMENT AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER
TERMS OF THE GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT
OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND
PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE
AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.
INTRUST FINANCIAL CORPORATION,
as Depositor
By:
-------------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY,
as Property Trustee
By:
-------------------------------------
Name:
Title:
66
<PAGE> 73
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By:
-------------------------------------
Name:
Title:
-----------------------------------------
C. Q. Chandler, IV, as Administrative Trustee
-----------------------------------------
Jay L. Smith, as Administrative Trustee
-----------------------------------------
Brian Sullivan, as Administrative Trustee
67
<PAGE> 74
EXHIBIT A
CERTIFICATE OF TRUST
OF
INTRUST CAPITAL TRUST
THIS CERTIFICATE OF TRUST OF INTRUST CAPITAL TRUST (the "Trust"), dated
as of -----------, 1997, is being duly executed and filed by WILMINGTON TRUST
COMPANY, a Delaware banking corporation, C. Q. Chandler, IV, Jay L. Smith and
Brian Sullivan, each an individual, as trustees, to form a business trust
under the Delaware Business Trust Act (12 Del. C. Section 3801 et seq.).
1. NAME. The name of the business trust formed hereby is INTRUST
Capital Trust.
2. DELAWARE TRUSTEE. The name and business address of the trustee of
the Trust in the State of Delaware is Wilmington Trust Company, Rodney Square
North, 1100 North Market Street, Wilmington, Delaware 19890-0001, Attention:
Corporate Trust
Administration.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective on
- -----------, 1997.
IN WITNESS WHEREOF, each of the undersigned, being a trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.
WILMINGTON TRUST COMPANY, as trustee
By:
-------------------------------------
Name:
-------------------------------
Title:
-------------------------------
-------------------------------------
C. Q. Chandler, IV, as Trustee
-------------------------------------
Jay L. Smith, as Trustee
-------------------------------------
Brian Sullivan, as Trustee
A-1
<PAGE> 75
EXHIBIT B
[INTENTIONALLY OMITTED]
B-1
<PAGE> 76
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE
CERTIFICATE NUMBER C-1 NUMBER OF COMMON SECURITIES
-----------------
CERTIFICATE EVIDENCING COMMON SECURITIES
OF
INTRUST CAPITAL TRUST
COMMON SECURITIES
LIQUIDATION AMOUNT $25 PER COMMON SECURITY
INTRUST CAPITAL TRUST, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that INTRUST
FINANCIAL CORPORATION (the "Holder") is the registered owner of
- ------------------------------------- common securities of the Trust
representing undivided beneficial interests in the assets of the Trust and
designated the -----% Common Securities (liquidation amount $25 per Common
Security) (the "Common Securities"). In accordance with Section 510 of the
Trust Agreement (as defined below), the Common Securities are not
transferable and any attempted transfer hereof shall be void. The
designations, rights, privileges, restrictions, preferences, and other terms
and provisions of the Common Securities are set forth in, and this
certificate and the Common Securities represented hereby are issued and shall
in all respects be subject to the terms and provisions of, the Amended and
Restated Trust Agreement of the Trust dated as of ----------, 1997, as the
same may be amended from time to time (the "Trust Agreement"), including the
designation of the terms of the Common Securities as set forth therein. The
Trust shall furnish a copy of the Trust Agreement to the Holder without
charge upon written request to the Trust at its principal place of business
or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this ---- day of ------------, 1997.
INTRUST CAPITAL TRUST
By:
-----------------------------------
Name:
Title: Administrative Trustee
C-1
<PAGE> 77
EXHIBIT D
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT AS TO EXPENSES AND LIABILITIES (this "Agreement") dated as of
- ------------, 1997, between INTRUST FINANCIAL CORPORATION, a Kansas
corporation (the "Company"), and INTRUST CAPITAL TRUST, a Delaware business
trust (the "Trust").
RECITALS
WHEREAS, the Trust intends to issue its common securities (the "Common
Securities") to, and receive the Debentures from, the Company and to issue
and sell up to 2,300,000 ----% Cumulative Trust Preferred Securities (the
"Preferred Securities") with such powers, preferences and special rights and
restrictions as are set forth in the Amended and Restated Trust Agreement of
the Trust dated as of ------------, 1997, as the same may be amended from
time to time (the "Trust Agreement");
WHEREAS, the Company shall directly or indirectly own all of the Common
Securities of the Trust and shall issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase the Company hereby agrees shall benefit
the Company and which purchase the Company acknowledges shall be made in
reliance upon the execution and delivery of this Agreement, the Company,
including in its capacity as holder of the Common Securities, and the Trust
hereby agree as follows:
ARTICLE I
SECTION 1.1. GUARANTEE BY THE COMPANY
Subject to the terms and conditions hereof, the Company, including in
its capacity as holder of the Common Securities, hereby irrevocably and
unconditionally guarantees to each person or entity to whom the Trust is now
or hereafter becomes indebted or liable (the "Beneficiaries") the full
payment when and as due, of any and all Obligations (as hereinafter defined)
to such Beneficiaries. As used herein, "Obligations" means any costs,
expenses or liabilities of the Trust other than obligations of the Trust to
pay to the holders of any Preferred Securities or other similar interests in
the Trust the amounts due such holders pursuant to the terms of the Preferred
Securities or such other similar interests, as the case may be. This
Agreement is intended to be for the benefit of, and to be enforceable by, all
such Beneficiaries, whether or not such Beneficiaries have received notice
hereof.
D-1
<PAGE> 78
SECTION 1.2. TERM OF AGREEMENT
This Agreement shall terminate and be of no further force and effect
upon the later of (a) the date on which full payment has been made of all
amounts payable to all holders of all the Preferred Securities (whether upon
redemption, liquidation, exchange or otherwise); and (b) the date on which
there are no Beneficiaries remaining; provided, however, that this Agreement
shall continue to be effective or shall be reinstated, as the case may be, if
at any time any holder of the Preferred Securities or any Beneficiary must
restore payment of any sums paid under the Preferred Securities, under any
obligation under the Preferred Securities Guarantee Agreement dated the date
hereof by the Company and State Street Bank and Trust Company as guarantee
trustee, or under this Agreement for any reason whatsoever. This Agreement is
continuing, irrevocable, unconditional and absolute.
SECTION 1.3. WAIVER OF NOTICE
The Company hereby waives notice of acceptance of this Agreement and of
any obligation to which it applies or may apply, and the Company hereby
waives presentment, demand for payment, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.
SECTION 1.4. NO IMPAIRMENT
The obligations, covenants, agreements and duties of the Company under
this Agreement shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:
(a) the extension of time for the payment by the Trust of all or
any portion of the Obligations or for the performance of any other obligation
under, arising out of, or in connection with, the Obligations;
(b) any failure, omission, delay or lack of diligence on the part
of the Beneficiaries to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Beneficiaries with respect to the
Obligations or any action on the part of the Trust granting indulgence or
extension of any kind; or
D-2
<PAGE> 79
(c) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Trust or
any of the assets of the Trust.
There shall be no obligation of the Beneficiaries to give notice to, or
obtain the consent of, the Company with respect to the happening of any of
the foregoing.
SECTION 1.5. ENFORCEMENT
A Beneficiary may enforce this Agreement directly against the Company,
and the Company waives any right or remedy to require that any action be
brought against the Trust or any other person or entity before proceeding
against the Company.
ARTICLE II
SECTION 2.1. BINDING EFFECT
All guarantees and agreements contained in this Agreement shall bind
the successors, assigns, receivers, trustees and representatives of the
Company and shall inure to the benefit of the Beneficiaries.
SECTION 2.2. AMENDMENT
So long as there remains any Beneficiary or any Preferred Securities of
any series are outstanding, this Agreement shall not be modified or amended
in any manner adverse to such Beneficiary or to the holders of the Preferred
Securities.
SECTION 2.3. NOTICES
Any notice, request or other communication required or permitted to be
given hereunder shall be given in writing by delivering the same by facsimile
transmission (confirmed by mail), telex, or by registered or certified mail,
addressed as follows (and if so given, shall be deemed given when mailed or
upon receipt of an answer back, if sent by telex):
D-3
<PAGE> 80
INTRUST Capital Trust c/o INTRUST Financial Corporation, 105 North Main
Street, Box One, Wichita, Kansas 67202. Facsimile No.: (316) 383-1828.
Attention: Chief Executive Officer.
INTRUST Financial Corporation, 105 North Main Street, Box One, Wichita,
Kansas 67202. Facsimile No.: (316) 383-1828. Attention: Chief Executive
Officer.
SECTION 2.4 This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of Kansas (without
regard to conflict of laws principles).
[The remainder of this page has been left blank intentionally]
D-4
<PAGE> 81
THIS AGREEMENT is executed as of the day and year first above written.
INTRUST FINANCIAL CORPORATION
By:
-------------------------------
Name:
Title:
INTRUST CAPITAL TRUST
By:
-------------------------------
Name:
Title: Administrative Trustee
D-5
<PAGE> 82
EXHIBIT E
Certificate Number Number of Preferred Securities
P-
Certificate Evidencing Preferred Securities
of
INTRUST Capital Trust
----% Cumulative Trust Preferred Securities
(Liquidation Amount $25 per Preferred Security)
CUSIP NO.
--------------
INTRUST CAPITAL TRUST, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that
- -------------- (the "Holder") is the registered owner of ----- preferred
securities of the Trust representing undivided beneficial interests in the
assets of the Trust and designated the ----------% Cumulative Trust Preferred
Securities (Liquidation Amount $25 per Preferred Security) (the "Preferred
Securities"). The Preferred Securities are transferable on the books and records
of the Trust, in person or by a duly authorized attorney, upon surrender of this
Certificate duly endorsed and in proper form for transfer as provided in
Section 504 of the Trust Agreement (as defined herein). The designations,
rights, privileges, restrictions, preferences, and other terms and provisions
of the Preferred Securities are set forth in, and this Certificate and the
Preferred Securities represented hereby are issued and shall in all respects
be subject to the terms and provisions of, the Amended and Restated Trust
Agreement of the Trust dated as of -------------, 1997, as the same may be
amended from time to time (the "Trust Agreement"), including the designation
of the terms of the Preferred Securities as set forth therein. The Holder is
entitled to the benefits of the Preferred Securities Guarantee Agreement
entered into by INTRUST Financial Corporation, a Kansas corporation, and
State Street Bank and Trust Company, as guarantee trustee, dated as of
- ---------------, 1997 (the "Guarantee"), to the extent provided therein. The
Trust shall furnish a copy of the Trust Agreement and the Guarantee to the
Holder without charge upon written request to the Trust at its principal
place of business or registered office.
E-1
<PAGE> 83
Upon receipt of this Certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
Unless the Certificate of Authentication has been manually executed by the
Authentication Agent, this Certificate is not valid or effective.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this -----day of ---------------, 1997.
INTRUST CAPITAL TRUST
By:
-------------------------------------
-------------------------------------
Administrative Trustee
FORM OF CERTIFICATE OF AUTHENTICATION
CERTIFICATE OF AUTHENTICATION
This is one of the ---% Cumulative Trust Preferred Securities referred
to in the within-mentioned Amended and Restated Trust Agreement.
Dated:
STATE STREET BANK & TRUST COMPANY,
as Authenticating Agent and Registrar
By:
-------------------------------------
Authorized Signatory
E-2
<PAGE> 84
[FORM ON REVERSE OF CERTIFICATE]
The Trust will furnish without charge to any registered owner of
Preferred Securities who so requests, a copy of the Trust Agreement and the
Guarantee. Any such request should be in writing and addressed to INTRUST
Capital Trust, c/o INTRUST Financial Corporation, 105 North Main Street, Box
One, Wichita, Kansas 67202 or to the Registrar named on the face of this
Certificate.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants UNIF GIFT MIN ACT - .....Custodian.....
in common (Cust) (Minor)
TEN ENT - as tenants under Uniform Gifts to
by the entireties Minors Act...........
JT TEN - as joint tenants (State)
with right of UNIF TRF MIN ACT - .....Custodian
survivorship and (until age)........
not as tenants .......under Uniform
in common (Minor)
TOD - transfer on death Transfers to Minors
direction in event Act................
owner's death, (State)
to person named on
face and subject to
TOD rules referenced
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, hereby sell, assign and
----------------------------
transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------
- -------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- ---------------------------------------------------------- Preferred Securities
represented by the within Certificate, and do hereby irrevocably constitute and
appoint
- -----------------------------------------------------------------------Attorney
to transfer the said Preferred Securities on the books of the within named
Trust with full power of substitution in the premises.
Dated,
----------------------------
-------------------------------------------------------
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN
UPON THE FACE OF THE CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERNATION OR ENLARGEMENT
OR ANY CHANGE WHATEVER.
SIGNATURE(S) GUARANTEED:
- --------------------------------------------------------------------------
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED MEDALLION SIGNATURE GUARANTEE PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15.
E-3
<PAGE> 1
===============================================================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
BY AND BETWEEN
INTRUST FINANCIAL CORPORATION
AND
STATE STREET BANK AND TRUST COMPANY
---------------, 1997
===============================================================================
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page No.
<S> <C>
ARTICLE I. DEFINITIONS AND INTERPRETATION 1
Section 1.1. Definitions and Interpretation. 1
ARTICLE II. TRUST INDENTURE ACT 6
Section 2.1. Trust Indenture Act; Application. 6
Section 2.2. The List of Holders of the Securities. 6
Section 2.3. Reports by the Preferred Guarantee Trustee 6
Section 2.4. Periodic Reports to the Preferred Guarantee Trustee 7
Section 2.5. Evidence of Compliance with Conditions Precedent 7
Section 2.6. Events of Default; Waiver 7
Section 2.7. Event of Default; Notice 7
Section 2.8. Conflicting Interests 8
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE PREFERRED GUARANTEE TRUSTEE 8
Section 3.1. Powers and Duties of the Preferred Guarantee Trustee 8
Section 3.2. Certain Rights of the Preferred Guarantee Trustee 10
Section 3.3. Not Responsible for Recitals or Issuance of Guarantee 12
ARTICLE IV. THE PREFERRED GUARANTEE TRUSTEE 13
Section 4.1. The Preferred Guarantee Trustee; Eligibility 13
Section 4.2. Appointment, Removal and Resignation of the
Preferred Guarantee Trustee 14
ARTICLE V. GUARANTEE 15
Section 5.1. Guarantee 15
Section 5.2. Waiver of Notice and Demand 15
Section 5.3. Obligations not Affected 15
Section 5.4. Rights of the Holders 16
Section 5.5. Guarantee of Payment 17
Section 5.6. Subrogation 17
Section 5.7. Independent Obligations 17
<PAGE> 3
<S> <C>
Section 5.8. Right to Elect Directors 18
ARTICLE VI. LIMITATION OF TRANSACTIONS; SUBORDINATION 18
Section 6.1. Limitation on Transactions 18
Section 6.2 Ranking 18
ARTICLE VII. TERMINATION 19
Section 7.1. Termination 19
ARTICLE VIII. INDEMNIFICATION 19
Section 8.1. Exculpation 19
Section 8.2. Indemnification 20
ARTICLE IX. MISCELLANEOUS 20
Section 9.1. Successors and Assigns 20
Section 9.2. Amendments 20
Section 9.3. Notices 20
Section 9.4. Benefit 21
Section 9.5. Governing Law 22
</TABLE>
ii
<PAGE> 4
<TABLE>
CROSS-REFERENCE TABLE
<CAPTION>
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
- ------------------- ---------
<S> <C>
310(a) 4.1(a)
310(b) 4.1(c), 2.8
310(c) Not Applicable
311(a) 2.2(b)
311(b) 2.2(b)
311(c) Not Applicable
312(a) 2.2(a)
312(b) 2.2(b)
313 2.3
314(a) 2.4
314(b) Not Applicable
314(c) 2.5
314(d) Not Applicable
314(e) 1.1, 2.5,3.2
314(f) 2.1, 3.2
315(a) 3.1(d)
315(b) 2.7
315(c) 3.1
315(d) 3.1(d)
316(a) 1.1, 2.6, 5.4
316(b) 5.3
317(a) 3.1
317(b) Not Applicable
318(a) 2.1(a)
318(b) 2.1
318(c) 2.1(b)
Note: This Cross-Reference Table does not constitute part of this Agreement
and shall not affect the interpretation of any of its terms or provisions.
</TABLE>
iii
<PAGE> 5
PREFERRED SECURITIES GUARANTEE AGREEMENT
THIS PREFERRED SECURITIES GUARANTEE AGREEMENT (this "Preferred
Securities Guarantee"), dated as of -----------, 1997, is executed and
delivered by INTRUST FINANCIAL CORPORATION, a Kansas corporation (the
"Guarantor"), and STATE STREET BANK AND TRUST COMPANY, a trust company
organized and existing under the laws of the Commonwealth of Massachusetts,
as trustee (the "Preferred Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Preferred Securities (as
defined herein) of INTRUST CAPITAL TRUST, a Delaware statutory business trust
(the "Trust").
RECITALS
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of -----------, 1997, among the trustees of the Trust
named therein, the Guarantor, as depositor, and the holders from time to time
of undivided beneficial interests in the assets of the Trust, the Trust is
issuing on the date hereof up to 2,000,000 preferred securities, having an
aggregate liquidation amount of $50,000,000, designated the --------%
Cumulative Trust Preferred Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree,
to the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I.
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINITIONS AND INTERPRETATION.
In this Preferred Securities Guarantee, unless the context otherwise
requires:
<PAGE> 6
(a) capitalized terms used in this Preferred Securities Guarantee but
not defined in the preamble above have the respective meanings assigned to
them in this Section 1.1;
(b) terms defined in the Trust Agreement as at the date of execution of
this Preferred Securities Guarantee have the same meaning when used in this
Preferred Securities Guarantee;
(c) a term defined anywhere in this Preferred Securities Guarantee has
the same meaning throughout;
(d) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities Guarantee as
modified, supplemented or amended from time to time;
(e) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred Securities
Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning when
used in this Preferred Securities Guarantee, unless otherwise defined in this
Preferred Securities Guarantee or unless the context otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday or a Sunday or a day
on which federal or state banking institutions in the Borough of Manhattan,
the City of New York are authorized or required by law, executive order or
regulation to close or a day on which the Corporate Trust Office of the
Preferred Guarantee Trustee is closed for business.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee
Trustee shall, at any particular time, be principally administered, which
office at the date of execution of this Preferred Securities Guarantee is
located at Two International Place, 4th Floor, Boston, Massachusetts 02110,
Attention: Corporate Trust Department.
2
<PAGE> 7
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the ----% Subordinated Debentures due ------------,
2027, of the Debenture Issuer held by the Property Trustee of the Trust.
"Debenture Issuer" means the Guarantor.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"Guarantor" means INTRUST Financial Corporation, a Kansas corporation.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent
not paid or made by the Trust: (i) any accrued and unpaid Distributions that
are required to be paid on such Preferred Securities, to the extent the Trust
shall have funds available therefor, (ii) the redemption price, including all
accrued and unpaid Distributions to the date of redemption (the "Redemption
Price"), to the extent the Trust has funds available therefor, with respect
to any Preferred Securities called for redemption by the Trust, and (iii)
upon a voluntary or involuntary dissolution, winding-up or termination of the
Trust (other than in connection with the distribution of the Debentures to
the Holders in exchange for the Preferred Securities as provided in the Trust
Agreement), the lesser of (a) the aggregate of the Liquidation Amount and all
accrued and unpaid Distributions on the Preferred Securities to the date of
payment, to the extent the Trust shall have funds available therefor (the
"Liquidation Distribution"), and (b) the amount of assets of the Trust
remaining available for distribution to Holders in liquidation of the Trust.
"Holder" means a Person in whose name a Preferred Security is or
Preferred Securities are registered in the Securities Register; provided,
however, that, in determining whether the holders of the requisite percentage of
the Preferred Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor or any Affiliate of the
Guarantor.
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"Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of -------------, 1997, among
the Debenture Issuer and State Street Bank and Trust Company, as trustee, and
any indenture supplemental thereto pursuant to which the Debentures are to be
issued to the Property Trustee of the Trust.
"Liquidation Distribution" has the meaning provided therefor in the
definition of Guarantee Payments.
"List of Holders" has the meaning set forth in Section 2.2 of this
Preferred Securities Guarantee.
"Majority in Liquidation Amount of the Preferred Securities" means the
holders of more than 50% of the Liquidation Amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all of the Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two authorized officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided
for in this Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
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"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"Preferred Guarantee Trustee" means State Street Bank and Trust Company,
until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee
Trustee.
"Redemption Price" has the meaning provided therefor in the definition
of Guarantee Payments.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice-president, any assistant
vice-president, any assistant secretary, the treasurer, any assistant
treasurer or other officer of the Corporate Trust Office of the Preferred
Guarantee Trustee customarily performing functions similar to those performed
by any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended,
as in force at the date of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939, as amended, is
amended after such date, "Trust Indenture Act" means, to the extent required
by any such amendment, the Trust Indenture Act of 1939, as so amended.
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ARTICLE II.
TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION.
(a) This Preferred Securities Guarantee is subject to the provisions of
the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions.
(b) If and to the extent that any provision of this Preferred Securities
Guarantee limits, qualifies or conflicts with the duties imposed by Section
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2. THE LIST OF HOLDERS OF THE SECURITIES.
(a) In the event the Preferred Guarantee Trustee is not also the
Securities Registrar, the Guarantor shall provide the Preferred Guarantee
Trustee with a list, in such form as the Preferred Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of the
Preferred Securities (the "List of Holders") as of such date, (i) within 1
Business Day after January 1 and June 30 of each year, and (ii) at any other
time within 30 days of receipt by the Guarantor of a written request for a
List of Holders as of a date no more than 15 days before such List of Holders
is given to the Preferred Guarantee Trustee; provided, that the Guarantor
shall not be obligated to provide such List of Holders at any time the List
of Holders does not differ from the most recent List of Holders given to the
Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new
List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. REPORTS BY THE PREFERRED GUARANTEE TRUSTEE.
On or before July 15 of each year, the Preferred Guarantee Trustee shall
provide to the Holders of the Preferred Securities such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The
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Preferred Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4. PERIODIC REPORTS TO THE PREFERRED GUARANTEE TRUSTEE.
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and
the compliance certificate required by Section 314 of the Trust Indenture Act
in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act.
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section 314(c)(1) may
be given in the form of an Officers' Certificate.
SECTION 2.6. EVENTS OF DEFAULT; WAIVER.
The Holders of a Majority in Liquidation Amount of the Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every
purpose of this Preferred Securities Guarantee, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
SECTION 2.7. EVENT OF DEFAULT; NOTICE.
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default actually known to a Responsible Officer of the Preferred Guarantee
Trustee, unless such defaults have been cured before the giving of such
notice; provided, that the Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible
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Officer of the Preferred Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the
Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee
shall have received written notice, or of which a Responsible Officer of the
Preferred Guarantee Trustee charged with the administration of the Trust
Agreement shall have obtained actual knowledge of such Event of Default.
SECTION 2.8. CONFLICTING INTERESTS.
The Trust Agreement shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III.
POWERS, DUTIES AND RIGHTS OF THE PREFERRED GUARANTEE
TRUSTEE
SECTION 3.1. POWERS AND DUTIES OF THE PREFERRED GUARANTEE TRUSTEE.
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders of the Preferred Securities,
and the Preferred Guarantee Trustee shall not transfer this Preferred
Securities Guarantee to any Person except a Holder of Preferred Securities
exercising his or her rights pursuant to Section 5.4(b) or to a Successor
Preferred Guarantee Trustee on acceptance by such Successor Preferred
Guarantee Trustee of its appointment to act as Successor Preferred Guarantee
Trustee. The right, title and interest of the Preferred Guarantee Trustee
shall automatically vest in any Successor Preferred Guarantee Trustee, and
such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.
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(c) The Preferred Guarantee Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants shall
be read into this Preferred Securities Guarantee against the Preferred
Guarantee Trustee. In case an Event of Default has occurred (that has not
been cured or waived pursuant to Section 2.6) and is actually known to a
Responsible Officer of the Preferred Guarantee Trustee, the Preferred
Guarantee Trustee shall exercise such of the rights and powers vested in it
by this Preferred Securities Guarantee, and use the same degree of care and
skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee
Trustee shall be determined solely by the express provisions of this
Preferred Securities Guarantee, and the Preferred Guarantee Trustee shall not
be liable except for the performance of such duties and obligations as are
specifically set forth in this Preferred Securities Guarantee, and no implied
covenants or obligations shall be read into this Preferred Securities
Guarantee against the Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Preferred
Guarantee Trustee and conforming to the requirements of this Preferred
Securities Guarantee; but in the case of any such certificates or opinions
that by any provision hereof are specifically required to be furnished to the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall be under a
duty to examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
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(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
Liquidation Amount of the Preferred Securities relating to the time, method
and place of conducting any proceeding for any remedy available to the
Preferred Guarantee Trustee, or exercising any trust or power conferred upon
the Preferred Guarantee Trustee under this Preferred Securities Guarantee;
and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if the Preferred
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it under
the terms of this Preferred Securities Guarantee or indemnity, reasonably
satisfactory to the Preferred Guarantee Trustee, against such risk or
liability is not reasonably assured to it.
SECTION 3.2. CERTAIN RIGHTS OF THE PREFERRED GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) the Preferred Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate;
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(iii) whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate which, upon
receipt of such request, shall be promptly delivered by the Guarantor;
(iv) the Preferred Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any rerecording,
refiling or registration thereof);
(v) the Preferred Guarantee Trustee may consult with counsel, and
the written advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any of its employees. The
Preferred Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Preferred Securities
Guarantee from any court of competent jurisdiction;
(vi) the Preferred Guarantee Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the Preferred Guarantee Trustee such security
and indemnity, reasonably satisfactory to the Preferred Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses and the
expenses of the Preferred Guarantee Trustee's agents, nominees or custodians)
and liabilities that might be incurred by it in complying with such request
or direction, including such reasonable advances as may be requested by the
Preferred Guarantee Trustee; provided that, nothing contained in this Section
3.2(a)(vi) shall be taken to relieve the Preferred Guarantee Trustee, upon
the occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Preferred Securities Guarantee;
(vii) the Preferred Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
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indebtedness or other paper or document, but the Preferred Guarantee Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by or
through agents, nominees, custodians or attorneys, and the Preferred
Guarantee Trustee shall not be responsible for any misconduct or negligence
on the part of any agent or attorney appointed with due care by it hereunder;
(ix) no third party shall be required to inquire as to the
authority of the Preferred Guarantee Trustee to so act or as to its
compliance with any of the terms and provisions of this Preferred Securities
Guarantee, both of which shall be conclusively evidenced by the Preferred
Guarantee Trustee's or its agent's taking such action;
(x) whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the Preferred Guarantee Trustee (i) may request
instructions from the Holders of a Majority in Liquidation Amount of the
Preferred Securities, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and (iii)
shall be protected in conclusively relying on or acting in accordance with
such instructions.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal,
or in which the Preferred Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or
acts or to exercise any such right, power, duty or obligation. No permissive
power or authority available to the Preferred Guarantee Trustee shall be
construed to be a duty.
SECTION 3.3. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE.
The Recitals contained in this Guarantee shall be taken as the statements
of the Guarantor, and the Preferred Guarantee Trustee does not
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assume any responsibility for their correctness. The Preferred Guarantee
Trustee makes no representation as to the validity or sufficiency of this
Preferred Securities Guarantee.
ARTICLE IV.
THE PREFERRED GUARANTEE TRUSTEE
SECTION 4.1. THE PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws
of the United States or any state or territory thereof or of the District of
Columbia, or a corporation or Person permitted by the Securities and Exchange
Commission to act as an institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000, and subject to
supervision or examination by federal, state, territorial or District of
Columbia authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this Section
4.1(a)(ii), the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee
shall immediately resign in the manner and with the effect set out in Section
4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and the Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
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SECTION 4.2. APPOINTMENT, REMOVAL AND RESIGNATION OF THE PREFERRED
GUARANTEE TRUSTEE.
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Guarantee
Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Preferred Guarantee
Trustee and delivered to the Guarantor, which resignation shall not take
effect until a Successor Preferred Guarantee Trustee has been appointed and
has accepted such appointment by instrument in writing executed by such
Successor Preferred Guarantee Trustee and delivered to the Guarantor and the
resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or removal
or resignation of the Preferred Guarantee Trustee pursuant to this Section
4.2, the Guarantor shall pay to the Preferred Guarantee Trustee all fees and
expenses accrued to the date of such termination, removal or resignation.
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ARTICLE V.
GUARANTEE
SECTION 5.1. GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Trust), as and when due, regardless of any defense,
right of set-off or counterclaim that the Trust may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Trust to pay such amounts to the Holders.
SECTION 5.2. WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first
against the Trust or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3. OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the Guarantor under
this Preferred Securities Guarantee shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be
performed or observed by the Trust;
(b) the extension of time for the payment by the Trust of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or
any other sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under, arising
out of, or in connection with, the Preferred Securities (other than an
extension of time for payment of Distributions, Redemption Price, Liquidation
Distribution or other sum payable that results from the extension of any
interest payment period on the Debentures or any
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extension of the maturity date of the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Trust granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of
debt of, or other similar proceedings affecting, the Trust or any of the
assets of the Trust;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) any failure or omission to receive any regulatory approval or
consent required in connection with the Preferred Securities (or the common
equity securities issued by the Trust), including the failure to receive any
approval of the Board of Governors of the Federal Reserve System required for
the redemption of the Preferred Securities;
(g) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(h) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the intent
of this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4. RIGHTS OF THE HOLDERS.
(a) The Holders of a Majority in Liquidation Amount of the Preferred
Securities have the right to direct the time, method and place of conducting
of any proceeding for any remedy available to the Preferred Guarantee Trustee
in respect of this Preferred Securities Guarantee or
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exercising any trust or power conferred upon the Preferred Guarantee Trustee
under this Preferred Securities Guarantee.
(b) Any Holder of Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce its rights under this
Preferred Securities Guarantee, without first instituting a legal proceeding
against the Trust, the Preferred Guarantee Trustee or any other Person.
SECTION 5.5. GUARANTEE OF PAYMENT.
This Preferred Securities Guarantee creates a guarantee of payment and
not of collection.
SECTION 5.6. SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the Holders
of the Preferred Securities against the Trust in respect of any amounts paid
to such Holders by the Guarantor under this Preferred Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent
required by mandatory provisions of law) be entitled to enforce or exercise
any right that it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under
this Preferred Securities Guarantee, if, at the time of any such payment, any
amounts are due and unpaid under this Preferred Securities Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7. INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Trust with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to
in subsections (a) through (h), inclusive, of Section 5.3 hereof.
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SECTION 5.8. RIGHT TO ELECT DIRECTORS.
If at any time or from time to time any Distributions payable on the
Preferred Securities are in arrears for six quarterly periods, then the
Holders of Preferred Securities, voting separately as a class, will be
entitled to elect two directors, as a special class of directors (the
"Preferred Directors"), to the Guarantor's Board of Directors at the next
special or annual meeting of the shareholders of the Guarantor.
The Preferred Directors shall serve one-year terms on the Guarantor's
Board of Directors, commencing on the date of their election and shall be
eligible for re-election for an unlimited number of one year terms; provided,
however, that such terms shall immediately terminate upon the Guarantor curing
the arrearage described in this Section 5.8 by paying or depositing with the
Trustee a sum sufficient to pay all such arrearages.
The Guarantor and the Trust agree that the election of the Preferred
Directors and any related proxy solicitation shall be governed by, to the
extent applicable, the laws of the State of Kansas, federal laws and the
Securities Exchange Commission's Rules and Regulations as in effect at the
time of any such election and solicitation.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. LIMITATION ON TRANSACTIONS.
So long as any of the Preferred Securities remain outstanding, if any of
the circumstances described in Section 5.6 of the Indenture shall have
occurred, then (a) the Guarantor shall not declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase, acquire or make
a liquidation payment with respect to, any of its capital stock (other than
(i) dividends or distributions in common stock of the Guarantor or any
declaration of a non-cash dividend in connection with the implementation of a
shareholder rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto,
and (ii) purchases of common stock of the Guarantor related to the rights
under any of the Guarantor's benefit plans for its directors, officers or
employees of), (b) the Guarantor shall not make any payment of principal or
interest on or repay, repurchase or redeem any debt securities issued by the
Guarantor which rank pari passu with or junior to the Debentures other than
payments under this Preferred Securities Guarantee and (c) the Guarantor
shall not redeem, purchase or acquire less than all of the Outstanding
Debentures or any of the Preferred Securities.
SECTION 6.2 RANKING.
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right
of payment to all Senior Debt, Subordinated Debt and Additional Senior
Obligations (as defined in the Indenture) of the Guarantor, (ii) pari passu
with the most senior preferred securities or preference stock now or
hereafter issued by the Guarantor and with any guarantee now or hereafter
entered into by the Guarantor in respect of any preferred
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<PAGE> 23
securities or preference stock of any Affiliate of the Guarantor, and (iii)
senior to the Guarantor's common stock.
ARTICLE VII.
TERMINATION
SECTION 7.1. TERMINATION.
This Preferred Securities Guarantee shall terminate upon (i) full payment of
the Redemption Price of all the Preferred Securities, (ii) full payment of
the amounts payable in accordance with the Trust Agreement upon liquidation
of the Trust, or (iii) distribution of the Debentures to the Holders of the
Preferred Securities. Notwithstanding the foregoing, this Preferred
Securities Guarantee shall continue to be effective or shall be reinstated,
as the case may be, if at any time any Holder of Preferred Securities must
restore payment of any sums paid under the Preferred Securities or under this
Preferred Securities Guarantee.
ARTICLE VIII.
INDEMNIFICATION
SECTION 8.1. EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this
Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except
that an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters
the Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Guarantor, including information, opinions,
reports or statements as to the value and amount of
19
<PAGE> 24
the assets, liabilities, profits, losses, or any other facts pertinent to the
existence and amount of assets from which Distributions to the Holders of the
Preferred Securities might properly be paid.
SECTION 8.2. INDEMNIFICATION.
The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees
and expenses) of defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of its powers
or duties hereunder. The obligation to indemnify as set forth in this Section
8.2 shall survive the termination of this Preferred Securities Guarantee.
ARTICLE IX.
MISCELLANEOUS
SECTION 9.1. SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the
Holders of the Preferred Securities then outstanding.
SECTION 9.2. AMENDMENTS.
Except with respect to any changes that do not adversely affect the rights
of the Holders (in which case no consent of the Holders will be required), this
Preferred Securities Guarantee may only be amended with the prior approval of
the Holders of at least 66-2/3% in Liquidation Amount of the Preferred
Securities. The provisions of Article VI of the Trust Agreement with respect to
meetings of the Holders of the Preferred Securities apply to the giving of such
approval.
SECTION 9.3. NOTICES.
All notices provided for in this Preferred Securities Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
20
<PAGE> 25
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
State Street Bank and Trust Company
Two International Place, 4th Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Department
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Preferred Securities):
INTRUST Financial Corporation
105 North Main Street
Box One
Wichita, Kansas 67202
Attention: Chief Executive Officer
(c) If given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 9.4. BENEFIT.
This Preferred Securities Guarantee is solely for the benefit of the Holders
of the Preferred Securities and, subject to Section 3.1(a), is not separately
transferable from the Preferred Securities.
21
<PAGE> 26
SECTION 9.5. GOVERNING LAW.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF KANSAS.
This Preferred Securities Guarantee is executed as of the day and year
first above written.
INTRUST FINANCIAL CORPORATION,
as Guarantor
By -------------------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY,
as Preferred Guarantee Trustee
By -------------------------------------------
Name:
Title:
22
<PAGE> 1
EXHIBIT-5.1
Opinion re legality
[Letterhead of Bryan Cave LLP]
November --, 1997
INTRUST Financial Corporation
105 North Main Street, Box One
Wichita, Kansas 67202
Attention: Board of Directors
INTRUST Capital Trust
c/o INTRUST Financial Corporation
105 North Main Street, Box One
Wichita, Kansas 67202
Attention: Administrative Trustees
Gentlemen:
We have acted as special counsel to INTRUST Financial Corporation, a
Kansas corporation (the "Company"), and INTRUST Capital Trust, a Delaware
statutory business trust ("INTRUST Capital"), in connection with the
preparation of a Registration Statement on Form S-3 (the "Registration
Statement") to be filed by the Company and INTRUST Capital with the
Securities and Exchange Commission (the "SEC") for the purpose of registering
under the Securities Act of 1933, as amended, preferred securities (the
"Preferred Securities") of INTRUST Capital, subordinated debentures (the
"Subordinated Debentures") of the Company and the guarantee of the Company
with respect to the Preferred Securities (the "Guarantee").
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the certificate
of trust (the "Certificate of Trust") filed by INTRUST Capital with the
Secretary of State of the State of Delaware on November --, 1997; (ii) the
Trust Agreement, dated as of November --, 1997, with respect to INTRUST
Capital; (iii) the form of the Amended and Restated Trust Agreement with
respect to INTRUST Capital; (iv) the form of the Preferred Securities of
INTRUST Capital; (v) the form of the Guarantee between the Company and State
Street Bank and Trust Company, as trustee; (vi) the form of the Subordinated
Debentures; and (vii) the form of the indenture (the "Indenture"), between
the Company and State Street Bank and Trust Company, as trustee, in each case
in the form filed as an exhibit to the Registration Statement. We have also
examined originals or copies, certified, or otherwise identified to our
satisfaction, of such other documents, certificates, and records as we have
deemed necessary or appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as copies and the authenticity of the originals of
such copies. In examining documents executed by parties other than the
Company or INTRUST Capital, we have assumed that such parties had the power,
corporate or otherwise, to enter into and perform all obligations thereunder
and have also assumed the due authorization by all requisite action,
corporate or otherwise, and execution and delivery by such parties of such
documents and that, except as set forth in paragraphs (1) and (2) below, such
documents constitute valid and binding obligations of such parties. In
addition, we have assumed that the Amended and Restated Trust Agreement of
INTRUST Capital, the Preferred Securities of INTRUST Capital, the Guarantee,
the Subordinated Debentures and the Indenture, when executed, will be
executed in
<PAGE> 2
substantially the form reviewed by us. As to any facts material to the
opinions expressed herein which were not independently established or
verified, we have relied upon oral or written statements and representations
of officers, trustees, and other representatives of the Company, INTRUST
Capital, and others.
We are members of the bar of the states of Missouri, and we express no
opinion as to the laws of any other jurisdiction.
Based upon and subject to the foregoing and to other qualifications and
limitations set forth herein, we are of the opinion that:
1. After the Indenture has been duly executed and delivered, the
Subordinated Debentures, when duly executed, delivered, authenticated and
issued in accordance with the Indenture and delivered and paid for as
contemplated by the Registration Statement, will be valid and binding
obligations of the Company, entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, except to the
extent that enforcement thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, or other similar laws now or hereafter in effect
relating to creditors' rights generally, and (ii) general principles of
equity regardless of whether enforceability is considered in a proceeding at
law or in equity.
2. The Guarantee, when duly executed and delivered by the parties
thereto, will be a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, or other similar laws now or hereafter in effect
relating to creditors' rights generally, and (ii) general principles of
equity regardless of whether enforceability is considered in a proceeding at
law or in equity.
We hereby consent to the reference to us under the caption "Validity of
Securities" in the Prospectus forming a part of the Registration Statement
and to the inclusion of this legal opinion as an Exhibit to the Registration
Statement.
Very truly yours,
/s/ BRYAN CAVE LLP
2
Opinion re legality: Richards, Layton & Finger Opinion
<PAGE> 1
[Letterhead of Richards, Layton & Finger]
November 19, 1997
INTRUST Capital Trust
c/o INTRUST Financial Corporation
105 North Main Street, Box 1
Wichita, Kansas 67202
Re: INTRUST Capital Trust
---------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for INTRUST Capital Trust, a
Delaware business trust (the "Trust"), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our examination
of documents have been limited to the examination of originals or copies of the
following:
(a) The Certificate of Trust of the Trust (the "Certificate"), as filed
in the office of the Secretary of the State of Delaware (the "Secretary of
State") on November 19, 1997;
(b) The Trust Agreement of the Trust, dated as of November 19, 1997,
among INTRUST Financial Corporation, a Kansas corporation (the "Company"),
and the trustees of the Trust named therein;
<PAGE> 2
INTRUST Capital Trust
c/o INTRUST Financial Corporation
November 19, 1997
Page 2
(c) The Registration Statement (the "Registration Statement") on
Form S-3, including a prospectus (the "Prospectus") relating to the %
----
Cumulative Trust Preferred Securities of the Trust representing preferred
undivided beneficial interests in the Trust (each, a "Preferred Security"
and collectively, the "Preferred Securities"), as filed by the Company and
the Trust as set forth therein with the Securities and Exchange Commission
on November 19, 1997;
(d) A form of Amended and Restated Trust Agreement of the Trust, to be
entered into among the Company, the trustees of the Trust named therein, and
the holders, from time to time, of undivided beneficial interests in the
Trust (the "Trust Agreement"), attached as an exhibit to the Registration
Statement; and
(e) A Certificate of Good Standing for the Trust, dated November 19,
1997, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed above, and we have assumed that there exists no
provision in any document that we have not reviewed that bears upon or is
inconsistent with the opinions stated herein. We have conducted no
independent factual investigation of our own but rather have relied solely
upon the foregoing documents, the statements and information set forth
therein and the additional matters recited or assumed herein, all of which
we have assumed to be true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and that the Trust Agreement and the
Certificate are in full force and effect and have not been amended, (ii)
except to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the
legal capacity of natural persons who are parties to the documents
<PAGE> 3
INTRUST Capital Trust
c/o INTRUST Financial Corporation
November 19, 1997
Page 3
examined by us, (iv) that each of the parties to the documents examined by us
has the power and authority to execute and deliver, and to perform its
obligations under, such documents, (v) the due authorization, execution and
delivery by all parties thereto of all documents examined by us, (vi) the
receipt by each Person to whom a Preferred Security is to be issued by the
Trust (collectively, the "Preferred Security Holders") of a Preferred Security
Certificate for such Preferred Security and the payment for the Preferred
Security acquired by it, in accordance with the Trust Agreement and the
Prospectus, and (vii) that the Preferred Securities are issued and sold to the
Preferred Security Holders in accordance with the Trust Agreement and the
Prospectus. We have not participated in the preparation of the Registration
Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal
laws and rules and regulations relating thereto. Our opinions are rendered only
with respect to Delaware laws and rules, regulations and orders thereunder which
are currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, 12 Del. C.
-------
Section 3801, et seq.
-- ----
2. The Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the Trust,
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement. In addition, we hereby
consent to the use of our name under the heading "Validity of Securities" in
the Prospectus. In giving the foregoing consents, we do not thereby admit
that we come within the category of Persons whose
<PAGE> 4
INTRUST Capital Trust
c/o INTRUST Financial Corporation
November 19, 1997
Page 4
consent is required under Section 7 of the Securities Act of 1933, as amended,
or the rules and regulations of the Securities and Exchange Commission
thereunder. Except as stated above, without our prior written consent, this
opinion may not be furnished or quoted to, or relied upon by, any other Person
for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger
Richards, Layton & Finger
EAM
<PAGE> 1
EXHIBIT-8.1
Opinion re tax matters
[Letterhead of Bryan Cave LLP]
November --, 1997
INTRUST Financial Corporation
105 North Main Street, Box One
Wichita, Kansas 67202
Attention: Board of Directors
Gentlemen:
We have acted as tax counsel to INTRUST Financial Corporation, a Kansas
corporation (the "Company"), in connection with the proposed issuance of (i)
Preferred Securities (the "Preferred Securities") of INTRUST Capital Trust, a
statutory business trust created under the laws of Delaware (the "Trust"),
pursuant to the terms of the Amended and Restated Trust Agreement between the
Company and State Street Bank and Trust Company, as trustee (the "Trust
Agreement"), to be offered in an underwritten public offering, (ii)
Subordinated Debentures (the "Debentures") of the Company pursuant to the
terms of an indenture from the Company to State Street Bank and Trust Company,
as trustee (the "Indenture"), to be sold by the Company to the Trust, and
(iii) the Preferred Securities Guarantee Agreement of the Company with respect
to the Preferred Securities (the "Guarantee") between the Company and State
Street Bank and Trust Company, as trustee. The Preferred Securities and the
Debentures are to be issued as contemplated by the registration statement on
Form S-3 (the "Registration Statement") to be filed by the Company and the
Trust to register the issuance of the Preferred Securities, the Debentures and
the Guarantee under the Securities Act of 1933, as amended (the "Act").
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of documents, corporate records and other instruments as
we have deemed necessary or appropriate for purposes of this opinion including
(i) the Registration Statement, (ii) the Form of Indenture attached as an
exhibit to the Registration Statement, (iii) the Form of the Debentures
attached as an exhibit to the Registration Statement (iv) the Form of Trust
Agreement attached as an exhibit to the Registration Statement, (v) the Form
of Guarantee attached as an exhibit to the Registration Statement, and (vi)
the Form of Preferred Security Certificate attached as an exhibit to the
Registration Statement (collectively the "Documents"). In such examination,
we have assumed the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents submitted to
us as certified or photostatic copies, the authenticity of the originals of
such latter documents, the genuineness of all signatures and the correctness
of all representations made therein. We have further assumed that there are
no agreements or understandings contemplated therein other than those
contained in the Documents.
1
<PAGE> 2
Based upon the foregoing, and assuming (i) the final Documents will be
substantially identical to the forms attached as exhibits to the Registration
Statement, and (ii) full compliance with all the terms of the final documents,
we are of the opinion that the statements contained in the preliminary
prospectus constituting part of the Registration Statement under the caption
"Certain Federal Income Tax Consequences," insofar as such statements
constitute matters of law or legal conclusions, as qualified therein,
constitute an accurate description, in general terms, of the material United
States federal income tax consequences to such holders.
The opinion expressed above is based on existing provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), existing Treasury
regulations, published interpretations of the Code and such Treasury
regulations by the Internal Revenue Service, and existing court decisions, any
of which could be changed at any time. Any such changes may or may not be
retroactively applied. We note that there is no authority directly on point
dealing with securities such as the Preferred Securities or of transactions of
the type described herein. Further, you should be aware that opinions of
counsel are not binding on the Internal Revenue Service or the courts. We
express no opinion as to any matters not specifically covered by the foregoing
opinions or as to the effect on the matters covered by this opinion of the
laws of any other jurisdiction. Additionally, we undertake no obligation to
update this opinion in the event there is either a change in the legal
authorities, in the facts (including the taking of any action by any party to
any of the transactions described in the Documents relating to such
transactions) or in the Documents on which this opinion is based, or an
inaccuracy in any of the representations or warranties upon which we have
relied in rendering this opinion.
This letter is not being delivered for the benefit of, nor may it be
relied upon by, the holders of the Debentures, the Guarantee or the Preferred
Securities or any other party to which it is not specifically addressed or on
which reliance is not expressly permitted hereby.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to reference to our firm under the caption "Certain
Federal Income Tax Consequences" and "Validity of Securities" in the
preliminary prospectus constituting a part of the Registration Statement.
Very truly yours,
/s/ BRYAN CAVE LLP
2
<PAGE> 1
<TABLE>
INTRUST FINANCIAL CORPORATION
COMPUTATION OF CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
<CAPTION>
Nine Months Ended
September 30
(unaudited) Years Ended December 31,
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Excluding interest on deposits:
Net income 11,745 9,693 1,680 12,387 18,969 17,626 17,513
Income taxes 6,521 5,406 51 6,379 10,884 8,154 4,867
Fixed charges, excluding preferred stock
dividends and capitalized interest 7,826 6,860 9,102 8,270 5,103 3,319 2,832
Earnings 26,092 21,959 10,833 27,036 34,956 29,099 25,212
Interest excluding interest on deposits 7,826 6,860 9,102 8,270 5,103 3,319 2,832
Preferred stock dividends -- -- -- -- -- -- --
Capitalized interest -- -- -- -- -- -- --
Fixed charges 7,826 6,860 9,102 8,270 5,103 3,319 2,832
Earnings to fixed charges, excluding interest
on deposits 3.33 3.20 1.19 3.27 6.85 8.77 8.90
Including interest on deposits:
Net income 11,745 9,693 1,680 12,387 18,969 17,626 17,513
Income taxes 6,521 5,406 51 6,379 10,884 8,154 4,867
Fixed charges, excluding preferred stock
dividends and capitalized interest 44,423 42,132 56,436 53,460 38,267 34,253 38,368
Earnings 62,689 57,231 58,167 72,226 68,120 60,033 60,748
Interest, including interest on deposits 44,423 42,132 56,436 53,460 38,267 34,253 38,368
Preferred stock dividends -- -- -- -- -- -- --
Capitalized interest -- -- -- -- -- -- --
Fixed charges 44,423 42,132 56,436 53,460 38,267 34,253 38,368
Earnings to fixed charges, including interest
on deposits 1.41 1.36 1.03 1.35 1.78 1.75 1.58
</TABLE>
<PAGE> 1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated February 14,
1997 included in the INTRUST Financial Corporation Annual Report on Form 10-K
for the year ended December 31, 1996 and to all references to our Firm included
in this registration statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Oklahoma City, Oklahoma
November 20, 1997
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) --
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
John R. Towers, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
--------------------
INTRUST FINANCIAL CORPORATION
(Exact name of obligor as specified in its charter)
KANSAS 48-0937376
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
105 NORTH MAIN STREET, BOX ONE
WICHITA, KANSAS 67202
(Address of principal executive offices) (Zip Code)
--------------------
% SUBORDINATED DEBENTURES
(Title of indenture securities)
<PAGE> 2
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY
AUTHORITY TO WHICH IT IS SUBJECT.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System,
Washington, D.C., Federal Deposit Insurance Corporation,
Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE
TRUST POWERS.
Trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE
EACH SUCH AFFILIATION.
The obligor is not an affiliate of the trustee or of its
parent, State Street Boston Corporation.
(See note on page 2.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT
OF ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE
TRUSTEE AS NOW IN EFFECT.
A copy of the Articles of Association of the trustee, as
now in effect, is on file with the Securities and Exchange
Commission as Exhibit 1 to Amendment No. 1 to the Statement
of Eligibility and Qualification of Trustee (Form T-1)
filed with the Registration Statement of Morse Shoe, Inc.
thereto.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO
COMMENCE BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF
ASSOCIATION.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the
trustee to commence business was necessary or issued is on
file with the Securities and Exchange Commission as Exhibit
2 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference thereto.
3. A COYP OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE
CORPORATE TRUST POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN
THE DOCUMENTS SPECIFIED IN PARAGRAPH (1) OR (2), ABOVE.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and
Exchange Commission as Exhibit 3 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by
reference thereto.
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR
INSTRUMENTS CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in effect, is
on file with the Securities and Exchange Commission as
Exhibit 4 to the Statement of Eligibility and Qualification
of Trustee (Form T-1) filed with the Registration Statement
of Eastern Edison Company (File No. 33-37823) and is
incorporated herein by reference thereto.
1
<PAGE> 3
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE
OBLIGOR IS IN DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATE INSTITUTIONAL TRUSTEES
REQUIRED BY SECTION 321(b) OF THE ACT.
The consent of the trustee required by Section 321(b) of
the Act is annexed hereto as Exhibit 6 and made a part
hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING
OR EXAMINING AUTHORITY.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority is annexed hereto as
Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates
to matters peculiarly within the knowledge of the obligor or any underwriter
for the obligor, the trustee has relied upon information furnished to it by
the obligor and the underwriters, and the trustee disclaims responsibility
for the accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which
would have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts,
has duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 14th day of November, 1997.
STATE STREET BANK AND TRUST COMPANY
By: /S/ Paul D. Allen
------------------------------------
Paul D. Allen
Vice President
2
<PAGE> 4
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by INTRUST
Financial Corporation of its % Subordinated Debentures, we hereby consent
that reports of examination by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and
Exchange Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /S/ Paul D. Allen
-------------------------------
Paul D. Allen
Vice President
Dated: November 14, 1997
3
<PAGE> 5
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this
commonwealth and a member of the Federal Reserve System, at the close of
business June 30, 1997, published in accordance with a call made by the
-------------
Federal Reserve Bank of this District pursuant to the provisions of the
Federal Reserve Act and in accordance with a call made by the Commissioner of
Banks under General Laws, Chapter 172, Section 22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin 1,842,337
Interest-bearing balances 8,771,397
Securities 10,596,119
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary 5,953,036
Loans and lease financing receivables:
Loans and leases, net of unearned income 5,769,090
Allowance for loan and lease losses 74,031
Allocated transfer risk reserve 0
Loans and leases, net of unearned income and allowances 5,695,059
Assets held in trading accounts 916,608
Premises and fixed assets 374,999
Other real estate owned 755
Investments in unconsolidated subsidiaries 28,992
Customers' liability to this bank on acceptances outstanding 99,209
Intangible assets 229,412
Other assets 1,589,526
----------
Total assets 36,097,449
==========
LIABILITIES
Deposits:
In domestic offices 11,082,135
Noninterest-bearing 8,932,019
Interest-bearing . 2,150,116
In foreign offices and Edge subsidiary 13,811,677
Noninterest-bearing 112,281
Interest-bearing 13,699,396
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary 6,785,263
Demand notes issued to the U.S. Treasury and Trading Liabilities 755,676
Other borrowed money 716,013
Subordinated notes and debentures .. 0
Bank's liability on acceptances executed and outstanding 99,605
Other liabilities 841,566
Total liabilities 34,091,935
----------
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock 29,931
Surplus 437,183
Undivided profits and capital reserves/Net unrealized holding gains (losses) 1,542,695
Cumulative foreign currency translation adjustments (4,295)
Total equity capital 2,005,514
----------
Total liabilities and equity capital 36,097,449
</TABLE>
4
<PAGE> 6
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true
and correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
5
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
---------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) --
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
John R. Towers, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
--------------------
INTRUST CAPITAL TRUST
(Exact name of obligor as specified in its charter)
DELAWARE XX-XXXXXXX
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
105 NORTH MAIN STREET, BOX ONE
WICHITA, KANSAS 67202
(Address of principal executive offices) (Zip Code)
--------------------
PREFERRED SECURITIES
(Title of indenture securities)
<PAGE> 2
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY
AUTHORITY TO WHICH IT IS SUBJECT.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington,
D.C., Federal Deposit Insurance Corporation, Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST
POWERS.
Trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
The obligor is not an affiliate of the trustee or of its parent,
State Street Boston Corporation.
(See note on page 2.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS
NOW IN EFFECT.
A copy of the Articles of Association of the trustee, as now in
effect, is on file with the Securities and Exchange Commission as
Exhibit 1 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the Registration
Statement of Morse Shoe, Inc. (File No. 22-17940) and is incorporated
herein by reference thereto.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO
COMMENCE BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the trustee to
commence business was necessary or issued is on file with the
Securities and Exchange Commission as Exhibit 2 to Amendment No. 1 to
the Statement of Eligibility and Qualification of Trustee (Form T-1)
filed with the Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference thereto.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE
TRUST POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN THE DOCUMENTS SPECIFIED
IN PARAGRAPH (1) OR (2), ABOVE.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and Exchange
Commission as Exhibit 3 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No. 22-17940) and is
incorporated herein by reference thereto.
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR INSTRUMENTS
CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in effect, is
on file with the Securities and Exchange Commission as Exhibit 4 to
the Statement of Eligibility and Qualification of Trustee (Form T-1)
filed with the Registration Statement of Eastern Edison Company (File
No. 33-37823) and is incorporated herein by reference thereto.
1
<PAGE> 3
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE
OBLIGOR IS IN DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES
REQUIRED BY SECTION 321(b) OF THE ACT.
The consent of the trustee required by Section 321(b) of the Act
is annexed hereto as Exhibit 6 and made a part hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING OR EXAMINING
AUTHORITY.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising or
examining authority is annexed hereto as Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates
to matters peculiarly within the knowledge of the obligor or any underwriter
for the obligor, the trustee has relied upon information furnished to it by
the obligor and the underwriters, and the trustee disclaims responsibility
for the accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which
would have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts,
has duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 14th day of November, 1997.
STATE STREET BANK AND TRUST COMPANY
By: /S/ Paul D. Allen
-------------------------------------
PAUL D. ALLEN
VICE PRESIDENT
2
<PAGE> 4
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by INTRUST
CAPITAL TRUST of its PREFERRED SECURITIES, we hereby consent that reports of
examination by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /S/ Paul D. Allen
-------------------------------------
PAUL D. ALLEN
VICE PRESIDENT
DATED: NOVEMBER 14, 1997
3
<PAGE> 5
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this
commonwealth and a member of the Federal Reserve System, at the close of
business June 30, 1997, published in accordance with a call made by the
-------------
Federal Reserve Bank of this District pursuant to the provisions of the
Federal Reserve Act and in accordance with a call made by the Commissioner of
Banks under General Laws, Chapter 172, Section 22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin 1,842,337
Interest-bearing balances 8,771,397
Securities 10,596,119
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary 5,953,036
Loans and lease financing receivables:
Loans and leases, net of unearned income 5,769,090
Allowance for loan and lease losses 74,031
Allocated transfer risk reserve 0
Loans and leases, net of unearned income and allowances 5,695,059
Assets held in trading accounts 916,608
Premises and fixed assets 374,999
Other real estate owned 755
Investments in unconsolidated subsidiaries 28,992
Customers' liability to this bank on acceptances outstanding 99,209
Intangible assets 229,412
Other assets 1,589,526
----------
Total assets 36,097,449
==========
LIABILITIES
Deposits:
In domestic offices 11,082,135
Noninterest-bearing 8,932,019
Interest-bearing 2,150,116
In foreign offices and Edge subsidiary 13,811,677
Noninterest-bearing 112,281
Interest-bearing 13,699,396
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary 6,785,263
Demand notes issued to the U.S. Treasury and Trading Liabilities 755,676
Other borrowed money 716,013
Subordinated notes and debentures 0
Bank's liability on acceptances executed and outstanding 99,605
Other liabilities 841,566
Total liabilities 34,091,935
----------
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock 29,931
Surplus 437,183
Undivided profits and capital reserves/Net unrealized holding gains (losses) 1,542,695
Cumulative foreign currency translation adjustments (4,295)
Total equity capital 2,005,514
----------
Total liabilities and equity capital 36,097,449
</TABLE>
4
<PAGE> 6
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true
and correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
5
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) --
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
John R. Towers, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
--------------------
INTRUST FINANCIAL CORPORATION
(Exact name of obligor as specified in its charter)
KANSAS 48-0937376
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
105 NORTH MAIN STREET, BOX ONE
WICHITA, KANSAS 67202
(Address of principal executive offices) (Zip Code)
--------------------
GUARANTEE
(Title of indenture securities)
<PAGE> 2
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY
AUTHORITY TO WHICH IT IS SUBJECT.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System,
Washington, D.C., Federal Deposit Insurance Corporation, Washington, D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE
TRUST POWERS.
Trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE
EACH SUCH AFFILIATION.
The obligor is not an affiliate of the trustee or of its parent,
State Street Boston Corporation.
(See note on page 2.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS
NOW IN EFFECT.
A copy of the Articles of Association of the trustee, as
now in effect, is on file with the Securities and Exchange
Commission as Exhibit 1 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No. 22-17940) and is
incorporated herein by reference thereto.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO
COMMENCE BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the trustee to
commence business was necessary or issued is on file with the
Securities and Exchange Commission as Exhibit 2 to Amendment
No. 1 to the Statement of Eligibility and Qualification of
Trustee (Form T-1) filed with the Registration Statement
of Morse Shoe, Inc. (File No. 22-17940) and is incorporated herein
by reference thereto.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE
CORPORATE TRUST POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN
THE DOCUMENTS SPECIFIED IN PARAGRAPH (1) OR (2), ABOVE.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and Exchange
Commission as Exhibit 3 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No. 22-17940) and
is incorporated herein by reference thereto.
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR
INSTRUMENTS CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in effect, is
on file with the Securities and Exchange Commission as Exhibit 4 to
the Statement of Eligibility and Qualification of Trustee (Form T-1)
filed with the Registration Statement of Eastern Edison Company
(File No. 33-37823) and is incorporated herein by reference thereto.
1
<PAGE> 3
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE
OBLIGOR IS IN DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES
REQUIRED BY SECTION 321(b) OF THE ACT.
The consent of the trustee required by Section 321(b) of the Act
is annexed hereto as Exhibit 6 and made a part hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING
OR EXAMINING AUTHORITY.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising
or examining authority is annexed hereto as Exhibit 7 and made a
part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates
to matters peculiarly within the knowledge of the obligor or any underwriter
for the obligor, the trustee has relied upon information furnished to it by
the obligor and the underwriters, and the trustee disclaims responsibility
for the accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which
would have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts,
has duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 14th day of November, 1997.
STATE STREET BANK AND TRUST COMPANY
By: /S/ Paul D. Allen
---------------------------------------
PAUL D. ALLEN
VICE PRESIDENT
2
<PAGE> 4
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by INTRUST
FINANCIAL CORPORATION of its GUARANTEE, we hereby consent that reports
of examination by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /S/ Paul D. Allen
---------------------------------------
PAUL D. ALLEN
VICE PRESIDENT
DATED: NOVEMBER 14, 1997
3
<PAGE> 5
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this
commonwealth and a member of the Federal Reserve System, at the close of
business June 30, 1997, published in accordance with a call made by the
-------------
Federal Reserve Bank of this District pursuant to the provisions of the
Federal Reserve Act and in accordance with a call made by the Commissioner of
Banks under General Laws, Chapter 172, Section 22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin 1,842,337
Interest-bearing balances 8,771,397
Securities 10,596,119
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary 5,953,036
Loans and lease financing receivables:
Loans and leases, net of unearned income 5,769,090
Allowance for loan and lease losses 74,031
Allocated transfer risk reserve 0
Loans and leases, net of unearned income and allowances 5,695,059
Assets held in trading accounts 916,608
Premises and fixed assets 374,999
Other real estate owned 755
Investments in unconsolidated subsidiaries 28,992
Customers' liability to this bank on acceptances outstanding 99,209
Intangible assets 229,412
Other assets 1,589,526
----------
Total assets 36,097,449
==========
LIABILITIES
Deposits:
In domestic offices 11,082,135
Noninterest-bearing 8,932,019
Interest-bearing 2,150,116
In foreign offices and Edge subsidiary 13,811,677
Noninterest-bearing 112,281
Interest-bearing 13,699,396
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary 6,785,263
Demand notes issued to the U.S. Treasury and Trading Liabilities 755,676
Other borrowed money 716,013
Subordinated notes and debentures 0
Bank's liability on acceptances executed and outstanding 99,605
Other liabilities 841,566
Total liabilities 34,091,935
----------
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock 29,931
Surplus 437,183
Undivided profits and capital reserves/Net unrealized holding gains (losses) 1,542,695
Cumulative foreign currency translation adjustments (4,295)
Total equity capital 2,005,514
----------
Total liabilities and equity capital 36,097,449
</TABLE>
4
<PAGE> 6
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true
and correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
5
