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FLOATING RATE PREFERRED SECURITIES GUARANTEE AGREEMENT
by and between
1ST SOURCE CORPORATION
and
STATE STREET BANK AND TRUST COMPANY
--------------------, 1997
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TABLE OF CONTENTS
Page No.
ARTICLE I DEFINITIONS AND INTERPRETATION 1
Section 1.1. Definitions and Interpretation 1
ARTICLE II TRUST INDENTURE ACT 4
Section 2.1. Trust Indenture Act; Application 4
Section 2.2. Lists of Holders of Securities 4
Section 2.3. Reports by the Preferred Guarantee Trustee 5
Section 2.4. Periodic Reports to Preferred Guarantee Trustee 5
Section 2.5. Evidence of Compliance with Conditions Precedent 5
Section 2.6. Events of Default; Waiver 5
Section 2.7. Event of Default; Notice 5
Section 2.8. Conflicting Interests 6
ARTICLE III POWERS, DUTIES AND RIGHTS OF PREFERRED
GUARANTEE TRUSTEE 6
Section 3.1. Powers and Duties of the Preferred Guarantee Trustee 6
Section 3.2. Certain Rights of Preferred Guarantee Trustee 7
Section 3.3. Not Responsible for Recitals or Issuance of Guarantee 9
ARTICLE IV PREFERRED GUARANTEE TRUSTEE 9
Section 4.1. Preferred Guarantee Trustee; Eligibility 9
Section 4.2. Appointment, Removal and Resignation of Preferred
Guarantee Trustees 9
ARTICLE V GUARANTEE 10
Section 5.1. Guarantee 10
Section 5.2. Waiver of Notice and Demand 10
Section 5.3. Obligations not Affected 11
Section 5.4. Rights of Holders 12
Section 5.5. Guarantee of Payment 12
Section 5.6. Subrogation 12
Section 5.7. Independent Obligations 12
ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION 12
Section 6.1. Limitation of Transactions 12
Section 6.2. Ranking 13
ARTICLE VII TERMINATION 13
Section 7.1. Termination 13
ARTICLE VIII INDEMNIFICATION 13
Section 8.1. Exculpation 13
Section 8.2. Indemnification 14
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ARTICLE IX MISCELLANEOUS 14
Section 9.1. Successors and Assigns 14
Section 9.2. Amendments 14
Section 9.3. Notices 14
Section 9.4. Benefit 15
Section 9.5. Governing Law 15
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CROSS REFERENCE TABLE
Section of Trust Section of
Indenture Act of Guarantee
1939, as amended Agreement
---------------- ---------
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.
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FLOATING RATE PREFERRED SECURITIES GUARANTEE AGREEMENT
THIS FLOATING RATE PREFERRED SECURITIES GUARANTEE AGREEMENT
(this "Preferred Securities Guarantee"), dated as of ----------------,
1997 is executed and delivered by 1ST SOURCE CORPORATION, an
Indiana 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 1st Source Capital Trust II, 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 ---------- preferred securities,
having an aggregate liquidation amount of $----------, designated
the Floating Rate 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:
(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;
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(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 day on which
federal or state banking institutions in New York, 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 Agreement is located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Department.
"Covered Person" means any Holder or beneficial owner of
Preferred Securities.
"Debentures" means the Floating Rate Subordinated Debentures
due March 31, 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 1st Source Corporation, an Indiana
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 (as defined in the Trust
Agreement) 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 Debentures to the Holders in exchange
for 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" shall mean any holder, as registered on the books
and records of the Trust, of any Preferred Securities; provided,
however, that, in determining whether the holders of the requisite
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percentage of Preferred Securities have given any request, notice,
consent or waiver hereunder, "Holder" shall not include the Guarantor
or any Affiliate of the Guarantor.
"Indemnified Person" means the 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 of the Debenture
Issuer are to be issued to the Property Trustee of the Trust.
"Liquidation Distribution" has the meaning provided therefor
in the definition of Guarantee Payments.
"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.
"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.
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"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.
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. Lists of Holders of Securities.
(a) In the event the Preferred Guarantee Trustee is not
also the Transfer Agent, 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 ("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.
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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 Preferred Guarantee
Trustee shall also comply with the requirements of Section 313(d)
of the Trust Indenture Act.
Section 2.4. Periodic Reports to 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 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
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.
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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 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.
(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
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(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;
(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 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;
(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;
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(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 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) any action taken by the Preferred Guarantee
Trustee or its agents hereunder shall bind the Holders of the
Preferred Securities, and the signature of the Preferred
Guarantee Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party shall be
required to inquire as to the authority of the 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.
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(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 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
PREFERRED GUARANTEE TRUSTEE
Section 4.1. 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 of America 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
Guarantor shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act.
Section 4.2. Appointment, Removal and Resignation of Preferred
Guarantee Trustees.
(a) Subject to Section 4.2(b), the Preferred Guarantee
Trustee may be appointed or removed without cause at any time by
the Guarantor.
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(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 amounts accrued to the date of
such termination, removal or resignation.
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.
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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 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.
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Section 5.4. Rights of 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 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 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.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
Section 6.1. Limitation of Transactions.
So long as any Preferred Securities remain outstanding, if
there shall have occurred an Event of Default under this
Preferred Securities Guarantee, an Event of Default under the
Trust Agreement or during an Extended Interest Payment Period (as
defined in the Indenture), 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 shareholders' rights plan, or the issuance of
stock under any such plan in
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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) and (b) the Guarantor shall not
make any payment of interest or principal on or repay, repurchase
or redeem any debt securities issued by the Guarantor which rank
pari passu with or junior to the Debentures.
Section 6.2 Ranking.
This Preferred Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank
(i) subordinate and junior in right of payment to all other
liabilities 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
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 Preferred
Securities, (ii) upon full payment of the amounts payable in
accordance with the Trust Agreement upon liquidation of the
Trust, or (iii) upon 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
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Guarantor, including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of 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 materially
adversely affect the rights of Holders (in which case no consent
of Holders will be required), this Preferred Securities Guarantee
may only be amended with the prior approval of the Holders of at
least a Majority in liquidation amount of the Preferred
Securities. The provisions of Article VI of the Trust Agreement
with respect to meetings of 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:
(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
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
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(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):
1st Source Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial 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.
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 INDIANA.
This Preferred Securities Guarantee is executed as of the
day and year first above written.
1ST SOURCE CORPORATION
as Guarantor
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
STATE STREET BANK AND TRUST COMPANY,
as Preferred Guarantee Trustee
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
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