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EXHIBIT 4.7
PREFERRED SECURITIES GUARANTEE AGREEMENT
BY AND BETWEEN
FIRST MERCHANTS CORPORATION
AND
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION
DATED AS OF [______________]
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TABLE OF CONTENTS
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Page No.
ARTICLE I DEFINITIONS AND INTERPRETATION.................................................................1
1.1 Definitions and Interpretation...............................................................1
ARTICLE II TRUST INDENTURE ACT............................................................................5
2.1 Trust Indenture Act; Application.............................................................5
2.2 Lists of Holders of Securities...............................................................5
2.3 Reports by the Guarantee Trustee.............................................................5
2.4 Periodic Reports to Guarantee Trustee........................................................6
2.5 Evidence of Compliance with Conditions Precedent.............................................6
2.6 Events of Default; Waiver....................................................................6
2.7 Event of Default; Notice.....................................................................6
ARTICLE III POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE................................................7
3.1 Powers and Duties of the Guarantee Trustee...................................................7
3.2 Certain Rights of Guarantee Trustee..........................................................9
3.3 Not Responsible for Recitals or Issuance of Guarantee.......................................11
ARTICLE IV GUARANTEE TRUSTEE.............................................................................11
4.1 Guarantee Trustee; Eligibility..............................................................11
4.2 Appointment, Removal and Resignation of Guarantee Trustee...................................12
ARTICLE V GUARANTEE.................................................................................... 13
5.1 Guarantee...................................................................................13
5.2 Waiver of Notice and Demand.................................................................13
5.3 Obligations not Affected....................................................................13
5.4 Rights of Holders...........................................................................14
5.5 Guarantee of Payment........................................................................15
5.6 Subrogation.................................................................................15
5.7 Independent Obligations.....................................................................15
ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION.....................................................15
6.1 Limitation of Transactions..................................................................15
6.2 Ranking.....................................................................................16
ARTICLE VII TERMINATION..................................................................................16
7.1 Termination.................................................................................16
ARTICLE VIII INDEMNIFICATION.............................................................................17
8.1 Exculpation.................................................................................17
8.2 Indemnification.............................................................................17
ARTICLE IX MISCELLANEOUS.................................................................................18
9.1 Successors and Assigns......................................................................18
9.2 Amendments..................................................................................18
9.3 Notices.....................................................................................18
9.4 Benefit.....................................................................................19
9.5 Governing Law...............................................................................19
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CROSS REFERENCE TABLE
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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)
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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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PREFERRED SECURITIES GUARANTEE AGREEMENT
This PREFERRED SECURITIES GUARANTEE AGREEMENT (this "Preferred Securities
Guarantee"), dated as of [________________], is executed and delivered by FIRST
MERCHANTS CORPORATION, an Indiana corporation (the "Guarantor"), and FIRST UNION
TRUST COMPANY, NATIONAL ASSOCIATION, (the "Guarantee Trustee"), for the benefit
of the Holders (as defined herein) from time to time of the Preferred Securities
(as defined herein) of First Merchants Capital Trust [I/II/III], a Delaware
statutory business trust (the "Trust").
RECITALS
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of [___________________], 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 [______________] preferred securities, having an
aggregate Liquidation Amount of up to $[_____________] designated the [____]%
Cumulative Trust 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
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, unless otherwise
defined in this Preferred Securities Guarantee;
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(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, Sunday, 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 Guarantee Trustee is closed for business.
"Corporate Trust Office" means the office of the Guarantee Trustee at which
the corporate trust business of the Guarantee Trustee shall, at any particular
time, be principally administered, which office at the date of execution of this
Agreement is located at One Rodney Square, 920 King Street, Suite 102,
Wilmington, Delaware 19801, Attention: Corporate Trust Trustee Administration.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the [___]% Junior Subordinated Debentures due
[_________________], the Debenture Issuer held by the Property Trustee of the
Trust.
"Debenture Issuer" means First Merchants Corporation, issuer of the
Debentures under the Indenture.
"Event of Default" means a default by the Guarantor on any of its payments
or other obligations under this Preferred Securities Guarantee.
"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
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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 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.
"Guarantee Trustee" means First Union Trust Company, National Association,
until a Successor 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 Guarantee Trustee.
"Guarantor" means First Merchants Corporation, an Indiana corporation.
"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 percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor, the Guarantee Trustee or any of their respective
Affiliates.
"Indemnified Person" means the Guarantee Trustee, any Affiliate of the
Guarantee Trustee, or any officers, directors, shareholders, members, partners,
employees, representatives, nominees, custodians or agents of the Guarantee
Trustee.
"Indenture" means the Indenture dated as of [___________________], among
the Debenture Issuer and First Union Trust Company, National Association, as
trustee, and any indenture supplemental thereto pursuant to which the Debentures
are to be issued to the Property Trustee of the Trust, including, without
limitation, that certain First Supplemental Indenture dated as of [___________].
"Liquidation Amount" means the stated value of $[__] per Preferred
Security.
"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 of all of the Preferred
Securities.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two authorized officers of such Person, at least one of whom shall be
the principal executive officer, principal financial officer, principal
accounting officer, treasurer or any vice president of such
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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 Securities" means the [_____]% Cumulative Trust Preferred
Securities representing 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 distributions and
payments upon liquidation, redemption and otherwise are subordinated to the
rights of holders of Preferred Securities.
"Redemption Price" has the meaning provided therefor in the definition of
Guarantee Payments.
"Responsible Officer" means, with respect to the Guarantee Trustee, any
officer within the Corporate Trust Office of the Guarantee Trustee with direct
responsibility for the administration of this Preferred Securities Guarantee,
including any vice-president, any assistant vice-president, any assistant
secretary or other officer or assistant officer of the 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 Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
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ARTICLE II
TRUST INDENTURE ACT
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.
2.2 LISTS OF HOLDERS OF SECURITIES.
(a) In the event the Guarantee Trustee is not also acting in the
capacity of the Property Trustee under the Trust Agreement, the
Guarantor shall cause to be provided to the Guarantee Trustee a
list, in such form as the Guarantee Trustee may reasonably
require, of the names and addresses of the Holders of the
Preferred Securities ("List of Holders") as of the date (i)
within one Business Day after March 15, June 15, September 15 and
December 15, 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 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
caused to have been given to the Guarantee Trustee by the
Guarantor. The Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture
Act.
2.3 REPORTS BY THE GUARANTEE TRUSTEE.
On or before July 31 of each year, commencing [_________________] the
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 Guarantee Trustee shall also comply with the requirements of Section 313(d)
of the Trust Indenture Act.
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2.4 PERIODIC REPORTS TO GUARANTEE TRUSTEE.
The Guarantor shall provide to the 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.
2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the 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.
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.
2.7 EVENT OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of
all Events of Default actually known to a Responsible Officer of
the Guarantee Trustee, unless such defaults have been cured
before the giving of such notice; PROVIDED, that, except in the
case of a default by Guarantor on any of its payment obligations,
the Guarantee Trustee shall be protected in withholding such
notice if and so long as a Responsible Officer of the Guarantee
Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of the Preferred
Securities.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have
received written notice, or of which a Responsible Officer of the
Guarantee Trustee charged with the administration of the Trust
Agreement shall have obtained actual knowledge.
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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 GUARANTEE TRUSTEE
3.1 POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) This Preferred Securities Guarantee shall be held by the
Guarantee Trustee for the benefit of the Holders of the Preferred
Securities, and the 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 Guarantee Trustee on acceptance
by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the
Guarantee Trustee shall automatically vest in any Successor
Guarantee Trustee, and such vesting and cessation of title shall
be effective whether or not conveyancing documents have been
executed and delivered pursuant to the appointment of such
Successor Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Guarantee Trustee has occurred and is continuing, the
Guarantee Trustee shall enforce this Preferred Securities
Guarantee for the benefit of the Holders of the Preferred
Securities.
(c) The 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 Guarantee Trustee. In case an
Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6) and is actually known to a Responsible
Officer of the Guarantee Trustee, the Guarantee Trustee shall
exercise such of the rights and powers vested in it by this
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.
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(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Guarantee Trustee from liability for its
own negligent action, its own negligent failure to act, or its
own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that
may have occurred:
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express
provisions of this Preferred Securities Guarantee,
and the Guarantee Trustee shall not be liable
except for the performance of such duties and
obligations as are specifically set forth in this
Preferred Securities Guarantee, and no implied
covenants or obligations shall be read into this
Preferred Securities Guarantee against the
Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may
conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and
conforming to the requirements of this 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 Guarantee Trustee, the Guarantee Trustee
shall be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Preferred Securities
Guarantee;
(ii) the Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer
of the Guarantee Trustee, unless it shall be proved that
the Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of
not less than a Majority in Liquidation Amount of the
Preferred Securities relating to the time, method and
place of conducting any proceeding for any remedy
available to the Guarantee Trustee, or exercising any
trust or power conferred upon the Guarantee Trustee under
this Preferred Securities Guarantee; and
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(iv) no provision of this Preferred Securities Guarantee shall
require the 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 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 Guarantee Trustee, against such risk
or liability is not reasonably assured to it.
3.2 CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) the Guarantee Trustee may conclusively rely, and shall be
fully protected in acting or refraining from acting upon,
any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to
be genuine and to have been signed, sent or presented by
the proper party or parties;
(ii) Any direction or act of the Guarantor contemplated by
this Preferred Securities Guarantee shall be sufficiently
evidenced by an Officers' Certificate;
(iii) whenever, in the administration of this Preferred
Securities Guarantee, the Guarantee Trustee shall deem it
desirable that a matter be proved or established before
taking, suffering or omitting any action hereunder, the
Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith
on its part, request and conclusively rely upon an
Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Guarantor;
(iv) the Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or
any rerecording, refiling or registration thereof);
(v) the Guarantee Trustee may consult with counsel, 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
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may be counsel to the Guarantor or any of its Affiliates
and may include any of its employees. The Guarantee
Trustee shall have the right at any time to seek
instructions concerning the administration of this
Preferred Securities Guarantee from any court of
competent jurisdiction;
(vi) the 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 Guarantee Trustee such security and
indemnity, reasonably satisfactory to the Guarantee
Trustee, against the costs, expenses (including
attorneys' fees and expenses and the expenses of the
Guarantee Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying
with such request or direction, including such reasonable
advances as may be requested by the Guarantee Trustee;
PROVIDED that, nothing contained in this Section
3.2(a)(vi) shall be taken to relieve the Guarantee
Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested
in it by this Preferred Securities Guarantee;
(vii) the Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
paper or document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or
investigation into such facts or matters as it may see
fit;
(viii) the Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents, nominees, custodians or
attorneys, and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part
of any agent or attorney appointed with due care by it
hereunder;
(ix) no third party shall be required to inquire as to the
authority of the Guarantee Trustee to so act or as to its
compliance with any of the terms and provisions of this
Preferred Securities Guarantee, both of which shall be
conclusively evidenced by the Guarantee Trustee's or its
agent's taking such action; and
(x) whenever in the administration of this Preferred
Securities Guarantee the Guarantee Trustee shall deem it
desirable to receive
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instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Guarantee
Trustee (i) may request instructions from the Holders of
a Majority in Liquidation Amount of the 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 Guarantee Trustee
to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in
which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable
law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or
authority available to the Guarantee Trustee shall be construed
to be a duty.
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 Guarantee Trustee does not assume any responsibility
for their correctness. The Guarantee Trustee makes no representation as to the
validity or sufficiency of this Preferred Securities Guarantee.
ARTICLE IV
GUARANTEE TRUSTEE
4.1 GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any state or
territory thereof or of the District of Columbia, or 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
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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 Guarantee Trustee shall cease to be eligible
to so act under Section 4.1(a), the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in
Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the
Trust Indenture Act.
4.2 APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE TRUSTEE.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed in accordance with
Section 4.2(a) until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by written instrument
executed by such Successor Guarantee Trustee and delivered to the
Guarantor.
(c) The Guarantee Trustee appointed to office shall hold office until
a Successor Guarantee Trustee shall have been appointed or until
its removal or resignation. The Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Guarantee Trustee and
delivered to the Guarantor, which resignation shall not take
effect until a Successor Guarantee Trustee has been appointed and
has accepted such appointment by instrument in writing executed
by such Successor Guarantee Trustee and delivered to the
Guarantor and the resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of
resignation, the resigning Guarantee Trustee may petition any
court of competent jurisdiction for appointment of a Successor
Guarantee Trustee. Such court may thereupon, after prescribing
such notice, if any, as it may deem proper, appoint a Successor
Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts or omissions to
act of any Successor Guarantee Trustee.
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(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall pay to the Guarantee Trustee all
fees and expenses accrued to the date of such termination,
removal or resignation.
ARTICLE V
GUARANTEE
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.
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.
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
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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.
5.4 RIGHTS OF HOLDERS.
(a) Subject to Section 5.4(b), 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 Guarantee Trustee in respect of
this Preferred Securities Guarantee or exercising any trust or
power conferred upon the Guarantee Trustee under this Preferred
Securities Guarantee.
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(b) Any Holder of Preferred Securities may institute and prosecute 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 Guarantee
Trustee or any other Person.
5.5 GUARANTEE OF PAYMENT.
This Preferred Securities Guarantee creates a guarantee of payment and not
of collection.
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.
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
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, and shall not allow any of its Subsidiaries to 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 (A) dividends or distributions in common stock of the Guarantor or
any Subsidiary 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
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stock under any such plan in the future, or the redemption or repurchase of any
such rights pursuant thereto, (B) purchases of common stock of the Guarantor
related to the rights under any benefit plans for its directors, officers or
employees, (C) as a result of a reclassification of its capital stock into
another class of its capital stock, or (D) payments of dividends or
distributions to the Guarantor); (b) the Guarantor shall not make, and shall not
allow any of its Subsidiaries to make, any payment of interest, principal or
premium, if any, or repay, repurchase or redeem any debt securities issued by
the Guarantor which rank PARI PASSU with or junior to the Debentures of such
series or make any guarantee payments with respect to any guarantee by the
Guarantor of the debt securities of any subsidiary of the Guarantor if such
guarantee ranks PARI PASSU with or junior in interest to the Debentures of such
series; PROVIDED, HOWEVER, that notwithstanding the foregoing the Guarantor may
make payments pursuant to its obligations under this Guarantee; and (c) the
Guarantor shall not redeem, purchase or acquire less than all of the outstanding
Debentures of such series or any of the Preferred Securities relating to such
Trust.
For purposes of this Section, "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, limited liability company, 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. For purposes of this Section, "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.
6.2 RANKING.
This Preferred Securities Guarantee will constitute an unsecured obligation
of the Guarantor and will rank subordinate and junior in right of payment to all
Senior Debt, Subordinated Debt and Additional Senior Obligations, of the
Guarantor (as defined in the Indenture), to the extent and in the manner set
forth in the Indenture, and the applicable provisions of the Indenture will
apply, in all relevant respects, to the obligations of the Guarantor hereunder.
ARTICLE VII
TERMINATION
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
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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
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, bad faith 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 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.
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, bad faith or willful misconduct 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.
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The obligation to indemnify as set forth in this Section 8.2 shall survive the
termination of this Preferred Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
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.
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.
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 Guarantee Trustee, at the Guarantee Trustee's
mailing address set forth below (or such other address as the
Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
First Union Trust Company, National Association
One Rodney Square
920 King Street, Suite 102
Wilmington, DE 19801
Fax: (302) 888-7544
Attention: Corporate Trust Trustee Administration
(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):
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First Merchants Corporation
200 East Jackson Street
Post Office Box 792
Muncie, Indiana 47308
Fax: (765) 741-7283
Attention: Larry R. Helms, Esq.,
Senior Vice President & General Counsel
(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.
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.
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.
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IN WITNESS WHEREOF, this Preferred Securities Guarantee is executed as of
the day and year first above written.
FIRST MERCHANTS CORPORATION,
AS GUARANTOR
By:
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Name:
---------------------------------
Title:
--------------------------------
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION,
AS GUARANTEE TRUSTEE
By:
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Name:
---------------------------------
Title:
--------------------------------
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