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GUARANTEE AGREEMENT
between
MAINSOURCE FINANCIAL GROUP, INC.,
as Guarantor,
and
THE BANK OF NEW YORK,
as Guarantee Trustee
Dated as of June 12, 2003
MAINSOURCE STATUTORY TRUST III
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TABLE OF CONTENTS
ARTICLE I INTERPRETATION AND DEFINITIONS .............................................................2
Section 1.1. Interpretation..............................................................................2
Section 1.2. Definitions.................................................................................2
ARTICLE II REPORTS ....................................................................................5
Section 2.1. List of Holders.............................................................................6
Section 2.2. Periodic Reports to the Guarantee Trustee...................................................6
Section 2.3. Event of Default; Waiver....................................................................6
Section 2.4. Event of Default; Notice....................................................................6
ARTICLE III POWERS, DUTIES AND RIGHTS OF THE
GUARANTEE TRUSTEE .......................................................................7
Section 3.1. Powers and Duties of the Guarantee Trustee..................................................7
Section 3.2. Certain Rights of the Guarantee Trustee.....................................................8
Section 3.3. Compensation................................................................................9
Section 3.4. Indemnity...................................................................................9
Section 3.5. Securities.................................................................................10
ARTICLE IV GUARANTEE TRUSTEE .........................................................................10
Section 4.1. Guarantee Trustee; Eligibility.............................................................10
Section 4.2. Appointment, Removal and Resignation of the
Guarantee Trustee......................................................................11
ARTICLE V GUARANTEE .................................................................................11
Section 5.1. Guarantee..................................................................................11
Section 5.2. Waiver of Notice and Demand................................................................12
Section 5.3. Obligations Not Affected...................................................................12
Section 5.4. Rights of Holders..........................................................................13
Section 5.5. Guarantee of Payment.......................................................................13
Section 5.6. Subrogation................................................................................13
Section 5.7. Independent Obligations....................................................................13
Section 5.8. Enforcement................................................................................13
ARTICLE VI COVENANTS AND SUBORDINATION................................................................14
Section 6.1. Dividends, Distributions and Payments......................................................14
Section 6.2. Subordination..............................................................................14
Section 6.3. Pari Passu Guarantees......................................................................14
ARTICLE VII TERMINATION................................................................................15
Section 7.1. Termination................................................................................15
ARTICLE VIII MISCELLANEOUS..............................................................................15
Section 8.1. Successors and Assigns.....................................................................15
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Section 8.2. Amendments.................................................................................16
Section 8.3. Notices....................................................................................16
Section 8.4. Benefit....................................................................................17
Section 8.5. Governing Law..............................................................................17
Section 8.6. Submission to Jurisdiction.................................................................17
Section 8.7. Counterparts...............................................................................17
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GUARANTEE AGREEMENT, dated as of June 12, 2003, executed and delivered
by MAINSOURCE FINANCIAL GROUP, INC., an Indiana corporation (the "Guarantor")
having its principal office at 000 Xxxxx Xxxxxxxx, Xxxxxxxxxx, Xxxxxxx 00000,
and THE BANK OF NEW YORK, a New York banking corporation, as trustee (in such
capacity, the "Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined herein) of
MainSource Statutory Trust III, a Delaware statutory trust (the "Issuer").
W I T N E S S E T H :
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as
of the date hereof (the "Trust Agreement"), among the Guarantor, as Depositor,
the Property Trustee, the Delaware Trustee and the Administrative Trustees named
therein and the holders from time to time of the Preferred Securities (as
hereinafter defined), the Issuer is issuing $7,000,000 aggregate Liquidation
Amount (as defined in the Trust Agreement) of its Floating Rate Preferred
Securities (Liquidation Amount $1,000 per preferred security) (the "Preferred
Securities") representing preferred undivided beneficial interests in the assets
of the Issuer and having the terms set forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Issuer's
Common Securities (as defined below), will be used to purchase the Notes (as
defined in the Trust Agreement) of the Guarantor; and
WHEREAS, as incentive for the Holders to purchase Preferred Securities
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth herein, 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 Guarantee Agreement to
provide as follows for the benefit of the Holders from time to time of the
Preferred Securities:
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1. Interpretation.
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not defined
in the preamble hereto have the respective meanings assigned to them in Section
1.2;
(b) the words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation";
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections
are to Articles and Sections of this Guarantee Agreement unless otherwise
specified;
(e) the words "hereby", "herein", "hereof" and "hereunder" and other
words of similar import refer to this Guarantee Agreement as a whole and not to
any particular Article, Section or other subdivision;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include
the masculine, feminine and neuter genders.
Section 1.2. Definitions.
As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings:
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person; provided, that the
Issuer shall not be deemed to be an Affiliate of the Guarantor. For the
purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the
foregoing.
"Beneficiaries" means any Person to whom the Issuer is or
hereafter becomes indebted or liable.
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"Board of Directors" means either the board of directors of
the Guarantor or any duly authorized committee of that board.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Debt" means with respect to any Person, whether recourse is
to all or a portion of the assets of such Person, whether currently
existing or hereafter incurred, and whether or not contingent and
without duplication, (i) every obligation of such Person for money
borrowed; (ii) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person; (iv) every obligation
of such Person issued or assumed as the deferred purchase price of
property or services (but excluding trade accounts payable arising in
the ordinary course of business); (v) every capital lease obligation of
such Person; (vi) all indebtedness of such Person, whether incurred on
or prior to the date of this Guarantee Agreement or thereafter
incurred, for claims in respect of derivative products, including
interest rate, foreign exchange rate and commodity forward contracts,
options, swaps and similar arrangements; (vii) every obligation of the
type referred to in clauses (i) through (vi) of another Person and all
dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable for, directly or
indirectly, as obligor or otherwise; and (viii) any renewals,
extensions, refundings, amendments or modifications of any obligation
of the type referred to in clauses (i) through (vii).
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Guarantee Agreement;
provided, that except with respect to a default in payment of any
Guarantee Payments, the Guarantor shall have received notice of default
from the Guarantee Trustee and shall not have cured such default within
thirty (30) days after receipt of such notice.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred
Securities, to the extent not paid or made by or on behalf of the
Issuer: (i) any accumulated and unpaid Distributions (as defined in the
Trust Agreement) required to be paid on the Preferred Securities, to
the extent the Issuer shall have funds on hand available therefor at
such time, (ii) the Redemption Price with respect to any Preferred
Securities to the extent the Issuer shall have funds on hand available
therefor at such time, and (iii) upon a voluntary or involuntary
termination, winding up or liquidation of the Issuer, unless Notes are
distributed to the Holders, the lesser of (a) the aggregate of the
Liquidation Amount of $1,000 per Preferred Security plus accumulated
and unpaid Distributions on the Preferred Securities to the date of
payment, to the extent that the Issuer shall have funds available
therefor at such time and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the
Issuer after satisfaction of liabilities to creditors of the Issuer in
accordance with applicable law (in either case, the "Liquidation
Distribution").
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"Guarantee Trustee" means The Bank of New York, until a
Successor Guarantee Trustee, as defined below, has been appointed and
has accepted such appointment pursuant to the terms of this Guarantee
Agreement, and thereafter means each such Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and
records of the Issuer, of any Preferred Securities; provided, 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 Affiliate of the Guarantor or the Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture, dated as
of the date hereof, as supplemented and amended, between the Guarantor
and The Bank of New York, as trustee.
"List of Holders" has the meaning specified in Section 2.1.
"Majority in Liquidation Amount of the Preferred Securities"
means a vote by the Holder(s), voting separately as a class, of more
than fifty percent (50%) of the aggregate Liquidation Amount of all
then outstanding Preferred Securities issued by the Issuer.
"Obligations" means any costs, expenses or liabilities (but
not including liabilities related to taxes) of the Issuer, other than
obligations of the Issuer to pay to holders of any Trust Securities the
amounts due such holders pursuant to the terms of the Trust Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chief Executive Officer, Chief Financial
Officer, President or a Vice President of such Person, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary of such Person, and delivered to the Guarantee Trustee. Any
Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Guarantee Agreement (other
than the certificate provided pursuant to Section 2.4) shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each 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 officer, such
condition or covenant has been complied with.
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"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint
stock company, limited liability company, trust, unincorporated
association, government or any agency or political subdivision thereof
or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee
Trustee, any Senior Vice President, any Vice President, any Assistant
Vice President, the Secretary, any Assistant Secretary, the Treasurer,
any Assistant Treasurer, any Trust Officer or Assistant Trust Officer
or any other officer of the Corporate Trust Department of the Guarantee
Trustee 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.
"Senior Debt" means the principal of and any premium and
interest on (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Guarantor
whether or not such claim for post-petition interest is allowed in such
proceeding) all Debt of the Guarantor, whether incurred on or prior to
the date of the Indenture or thereafter incurred, unless it is provided
in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, that such obligations are not superior in
right of payment to the Preferred Securities; provided, however, that
if the Guarantor is subject to the regulation and supervision of an
"appropriate Federal banking agency" within the meaning of 12 U.S.C.
1813(q), the Guarantor shall have received the approval of such
appropriate Federal banking agency prior to issuing any such
obligation; provided further, that Senior Debt shall not include any
other debt securities, and guarantees in respect of such debt
securities, issued to any trust other than the Issuer (or a trustee of
such trust), partnership or other entity affiliated with the Guarantor
that is a financing vehicle of the Guarantor (a "financing entity"), in
connection with the issuance by such financing entity of equity
securities or other securities that are treated as equity capital for
regulatory capital purposes guaranteed by the Guarantor pursuant to an
instrument that ranks pari passu with or junior in right of payment to
this Guarantee Agreement, including, without limitation, securities
issued by MainSource Statutory Trust I and MainSource Statutory Trust
II.
"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 and as in effect on the date of this Guarantee Agreement.
Capitalized or otherwise defined terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Trust Agreement as in
effect on the date hereof.
ARTICLE II
REPORTS
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Section 2.1. List of Holders.
The Guarantor shall furnish or cause to be furnished to the Guarantee
Trustee at such times as the Guarantee Trustee may request in writing, within
thirty (30) days after the receipt by the Guarantor of any such request, a list,
in such form as the Guarantee Trustee may reasonably require, of the names and
addresses of the Holders (the "List of Holders") as of a date not more than
fifteen (15) days prior to the time such list is furnished, in each case to the
extent such information is in the possession or control of the Guarantor and is
not identical to a previously supplied list of Holders or has not otherwise been
received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
Section 2.2. Periodic Reports to the Guarantee Trustee.
The Guarantor shall deliver to the Guarantee Trustee, within one
hundred and twenty (120) days after the end of each fiscal year of the Guarantor
ending after the date of this Guarantee Agreement, an Officers' Certificate
covering the preceding fiscal year, stating whether or not to the knowledge of
the signers thereof the Guarantor is in default in the performance or observance
of any of the terms or provisions or any of the conditions of this Guarantee
Agreement (without regard to any period of grace or requirement of notice
provided hereunder) and, if the Guarantor shall be in default thereof,
specifying all such defaults and the nature and status thereof of which they
have knowledge.
Section 2.3. Event of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the Preferred
Securities may, on behalf of the Holders, 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 Guarantee Agreement, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent therefrom.
Section 2.4. Event of Default; Notice.
(a) The Guarantee Trustee shall, within ninety (90) days after the
occurrence of a default, transmit to the Holders notices of all defaults
actually known to the Guarantee Trustee, unless such defaults have been cured or
waived before the giving of such notice, provided, that, except in the case of a
default in the payment of a Guarantee Payment, the Guarantee Trustee shall be
protected in withholding such notice if and so long as the Board of Directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Guarantee Trustee in good faith determine that the withholding
of such notice is in the interests of the Holders. For the purpose of this
Section 2.4, the term "default" means any event that is, or after notice or
lapse of time or both would become, an Event of Default.
(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 a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained written notice, of such Event of Default
from the Guarantor or a Holder.
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ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
Section 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee for
the benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising its rights pursuant
to Section 5.4(d) or to a Successor Guarantee Trustee upon 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, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, 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) The rights, immunities, duties and responsibilities of the
Guarantee Trustee shall be as provided by this Guarantee Agreement and there
shall be no other duties or obligations, express or implied, of the Guarantee
Trustee. Notwithstanding the foregoing, no provisions of this Guarantee
Agreement shall require the Guarantee Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not herein expressly so provided, every provision of this Guarantee
Agreement relating to the conduct or affecting the liability of or affording
protection to the Guarantee Trustee shall be subject to the provisions of this
Section 3.1. To the extent that, at law or in equity, the Guarantee Trustee has
duties and liabilities relating to the Guarantor or the Holders, the Guarantee
Trustee shall not be liable to any Holder for the Guarantee Trustee's good faith
reliance on the provisions of this Guarantee Agreement. The provisions of this
Guarantee Agreement, to the extent that they restrict the duties and liabilities
of the Guarantee Trustee otherwise existing at law or in equity, are agreed by
the Guarantor and the Holders to replace such other duties and liabilities of
the Guarantee Trustee.
(c) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action,
negligent failure to act or own willful misconduct, except that:
(i) 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; and
(ii) 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
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Guarantee Trustee, or exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement.
Section 3.2. Certain Rights of the 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 in good faith and in accordance
with the terms hereof 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 reasonably
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
Guarantee Agreement shall be sufficiently evidenced by an Officers' Certificate
unless otherwise prescribed herein;
(iii) the Guarantee Trustee may consult with counsel, and the advice of
such counsel shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted to be taken by it hereunder in good
faith and in reliance thereon and in accordance with such advice. Such counsel
may be counsel to the Guarantee Trustee, the Guarantor or any of its Affiliates
and may be one of its employees. The Guarantee Trustee shall have the right at
any time to seek instructions concerning the administration of this Guarantee
Agreement from any court of competent jurisdiction;
(iv) the Guarantee Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Guarantee Agreement at the request
or direction of any Holder, unless such Holder shall have provided to the
Guarantee Trustee reasonable security or indemnity against the costs, expenses
(including reasonable attorneys' fees and expenses) 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)(iv) 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 Guarantee Agreement;
(v) 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, and if the Guarantee
Trustee shall determine to make such inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Guarantor, personally
or by agent or attorney;
(vi) the Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents, attorneys,
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custodians or nominees and the Guarantee Trustee shall not be responsible for
any misconduct or negligence on the part of any such agent, attorney, custodian
or nominee appointed with due care by it hereunder;
(vii) whenever in the administration of this Guarantee Agreement the
Guarantee Trustee shall deem it desirable to receive instructions with respect
to enforcing any remedy or right hereunder, the Guarantee Trustee (A) may
request instructions from the Holders of a Majority in Liquidation Amount of the
Preferred Securities, (B) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received and (C) shall be
protected in acting in accordance with such instructions;
(viii) except as otherwise expressly provided by this Guarantee
Agreement, the Guarantee Trustee shall not be under any obligation to take any
action that is discretionary under the provisions of this Guarantee Agreement;
and
(ix) whenever, in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting to take 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 rely upon an Officers' Certificate
which, upon receipt of such request from the Guarantee Trustee, shall be
promptly delivered by the Guarantor.
(b) No provision of this Guarantee Agreement 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 to act in accordance with such power and
authority.
Section 3.3. Compensation.
The Guarantor agrees to pay to the Guarantee Trustee from time to time
reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provisions of law in regard to the
compensation of a trustee of an express trust) and to reimburse the Guarantee
Trustee upon request for all reasonable expenses, disbursements and advances
(including the reasonable fees and expenses of its attorneys and agents)
incurred or made by the Guarantee Trustee in accordance with any provisions of
this Guarantee Agreement.
Section 3.4. Indemnity.
The Guarantor agrees to indemnify and hold harmless the Guarantee
Trustee and any of its Affiliates and any of their officers, directors,
shareholders, employees, representatives or agents from and against any loss,
damage, liability, tax (other than income, franchise or other taxes imposed on
amounts paid pursuant to Section 3.3), penalty, expense or claim of any kind or
nature whatsoever incurred without negligence, bad faith or willful misconduct
on its part, arising out of or in connection with the acceptance or
administration of this Guarantee
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Agreement, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder. The Guarantee Trustee will not claim or exact any
lien or charge on any Guarantee Payments as a result of any amount due to it
under this Guarantee Agreement. This indemnity shall survive the termination of
this Agreement or the resignation or removal of the Guarantee Trustee.
In no event shall the Guarantee Trustee be liable for any indirect,
special, punitive or consequential loss or damage of any kind whatsoever,
including, but not limited to, lost profits, even if the Guarantee Trustee has
been advised of the likelihood of such loss or damage and regardless of the form
of action.
In no event shall the Guarantee Trustee be liable for any failure or
delay in the performance of its obligations hereunder because of circumstances
beyond its control, including, but not limited to, acts of God, flood, war
(declared or undeclared), terrorism, fire, riot, embargo, government action,
including any laws, ordinances, regulations, governmental action or the like
which delay, restrict or prohibit the providing of the services contemplated by
this Guarantee Agreement.
Section 3.5. Securities.
The Guarantee Trustee or any other agent of the Guarantee Trustee, in
its individual or any other capacity, may become the owner or pledgee of Common
or Preferred Securities.
ARTICLE IV
GUARANTEE TRUSTEE
Section 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 or of any State thereof, authorized to exercise corporate
trust powers, having a combined capital and surplus of at least fifty million
dollars ($50,000,000), subject to supervision or examination by Federal or State
authority and having an office within the United States. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of such supervising or examining authority, then, for the purposes
of this Section 4.1, 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).
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(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 shall either eliminate such interest or resign in the manner
and with the effect set out in Section 4.2(c).
Section 4.2. Appointment, Removal and Resignation of the 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, except during an Event of
Default.
(b) The Guarantee Trustee shall not be removed 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 hereunder 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 thirty (30) days
after delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, 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.
ARTICLE V
GUARANTEE
Section 5.1. Guarantee.
(a) The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by or on behalf of the Issuer), as and when due, regardless of
any defense (except for the defense of payment by the Issuer), right of set-off
or counterclaim which the Issuer 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 Issuer to pay such
amounts to the Holders. The Guarantor shall give prompt written notice to the
Guarantee Trustee in the event it makes any direct payment to the Holders
hereunder.
(b) The Guarantor hereby also agrees to assume any and all Obligations
of the Issuer, and, in the event any such Obligation is not so assumed, subject
to the terms and conditions hereof, the Guarantor hereby irrevocably and
unconditionally guarantees to each Beneficiary the
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full payment, when and as due, of any and all Obligations to such Beneficiaries.
This Guarantee is intended to be for the Beneficiaries who have received notice
hereof.
Section 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
Section 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment of
Distributions that results from the extension of any interest payment period on
the Notes as provided in the Indenture), 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;
(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 Issuer 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 Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) 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.
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There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.
Section 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (a) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (b) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (c) the Holders of a Majority in Liquidation
Amount of the Preferred Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee in respect of this Guarantee Agreement or exercising any trust or power
conferred upon the Guarantee Trustee under this Guarantee Agreement; and (d) any
Holder may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Guarantee Agreement, without first instituting a
legal proceeding against the Guarantee Trustee, the Issuer or any other Person.
Section 5.5. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer) or upon distribution of Notes to Holders as provided in the Trust
Agreement.
Section 5.6. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, that, the Guarantor
shall not (except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any rights it may acquire by way of subrogation
or any indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Guarantee Agreement, if, at the time of any such payment, any
amounts are due and unpaid under this Guarantee Agreement. 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 Issuer 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 Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3.
Section 5.8. Enforcement.
A Beneficiary may enforce the Obligations of the Guarantor contained in
Section 5.1(b) directly against the Guarantor, and the Guarantor waives any
right or remedy to require that any
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action be brought against the Issuer or any other person or entity before
proceeding against the Guarantor.
ARTICLE VI
COVENANTS AND SUBORDINATION
Section 6.1. Dividends, Distributions and Payments.
So long as any Preferred Securities remain outstanding, if there shall
have occurred and be continuing an Event of Default or the Guarantor shall have
entered into an Extension Period as provided for in the Indenture and such
period, or any extension thereof, shall have commenced and be continuing, then
the Guarantor may not (a) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make liquidation payment with respect to, any of
the Guarantor's capital stock or (b) make any payment of principal of or any
interest or premium on or repay, repurchase or redeem any debt securities of the
Guarantor that rank pari passu in all respects with or junior in interest to the
Preferred Securities (other than (i) repurchases, redemptions or other
acquisitions of shares of capital stock of the Guarantor in connection with any
employment contract, benefit plan or other similar arrangement with or for the
benefit of any one or more employees, officers, directors or consultants, in
connection with a dividend reinvestment or stockholder stock purchase plan or in
connection with the issuance of capital stock of the Guarantor (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to the occurrence of such Event of
Default or the applicable Extension Period, (ii) as a result of an exchange or
conversion of any class or series of the Guarantor's capital stock (or any
capital stock of a subsidiary of the Guarantor) for any class or series of the
Guarantor's capital stock or any class of series of the Guarantor's indebtedness
for any class or series of the Guarantor's capital stock, (iii) the purchase of
fractional interests in shares of the Guarantor's capital stock pursuant to the
conversions or exchange provisions of such capital stock or the security being
converted or exchanged, (iv) any declaration of a dividend in connection with
any rights plan, the issuance of rights, stock or other property under any
rights plan or the redemption or repurchase of rights pursuant thereto, or (v)
any dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior to such stock).
Section 6.2. Subordination.
The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Debt of the Guarantor.
Section 6.3. Pari Passu Guarantees.
(a) The obligations of the Guarantor under this Guarantee Agreement
shall rank pari passu with the obligations of the Guarantor under any similar
guarantee agreements issued by the
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Guarantor with respect to preferred securities (if any) similar to the Preferred
Securities, issued by trusts other than the Issuer established or to be
established by the Guarantor (if any), in each case similar to the Issuer,
including, without limitation, the Guarantee Agreement, dated December 19, 2002,
issued by the Guarantor with respect to the preferred securities issued by
MainSource Statutory Trust I, and the Guarantee Agreement, dated April 1, 2003,
issued by the Guarantor with respect to the preferred securities issued by
MainSource Statutory Trust II.
(b) The right of the Guarantor to participate in any distribution of
assets of any of its subsidiaries upon any such subsidiary's liquidation or
reorganization or otherwise is subject to the prior claims of creditors of that
subsidiary, except to the extent the Guarantor may itself be recognized as a
creditor of that subsidiary. Accordingly, the Guarantor's obligations under this
Guarantee will be effectively subordinated to all existing and future
liabilities of the Guarantor's subsidiaries, and claimants should look only to
the assets of the Guarantor for payments thereunder. This Guarantee does not
limit the incurrence or issuance of other secured or unsecured debt of the
Guarantor, including Senior Debt of the Guarantor, under any indenture or
agreement that the Guarantor may enter into in the future or otherwise.
ARTICLE VII
TERMINATION
Section 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force and
effect upon (a) full payment of the Redemption Price of all Preferred
Securities, (b) the distribution of Notes to the Holders in exchange for all of
the Preferred Securities or (c) full payment of the amounts payable in
accordance with the Trust Agreement upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to Preferred Securities or
this Guarantee Agreement. The obligations of the Guarantor under Sections 3.3
and 3.4 shall survive any such termination or the resignation and removal of the
Guarantee Trustee.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement
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. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article VIII of the
Indenture and pursuant to which the successor or assignee agrees in writing to
perform
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the Guarantor's obligations hereunder, the Guarantor shall not assign its rights
or delegate its obligations hereunder without the prior approval of the Holders
of a Majority in Liquidation Amount of the Preferred Securities.
Section 8.2. Amendments.
Except with respect to any changes that do not adversely affect the
rights of the Holders in any material respect (in which case no consent of the
Holders will be required), this Guarantee Agreement may only be amended with the
prior approval of the Guarantor, the Guarantee Trustee and the Holders of not
less than a Majority in Liquidation Amount of the Preferred Securities. The
provisions of Article VI of the Trust Agreement concerning meetings or consents
of the Holders shall apply to the giving of such approval.
Section 8.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address or facsimile number set
forth below or such other address, facsimile number or to the attention of such
other Person as the Guarantor may give notice to the Guarantee Trustee and the
Holders:
MainSource Financial Group, Inc.
000 Xxxxx
Xxxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Chief Financial Officer
(b) if given to the Issuer, at the Issuer's address or facsimile number
set forth below or such other address, facsimile number or to the attention of
such other Person as the Issuer may give notice to the Guarantee Trustee and the
Holders:
MainSource Statutory Trust III
000 Xxxxx
Xxxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Administrative Trustee
(c) if given to the Guarantee Trustee, at the address or facsimile
number set forth below or such other address, facsimile number or to the
attention of such other Person as the Guarantee Trustee may give notice to the
Guarantor and the Holders:
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Corporate Trust Administration
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(d) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder 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 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Preferred Securities.
Section 8.5. Governing Law.
This Guarantee Agreement and the rights and obligations of each party
hereto, shall be construed and enforced in accordance with and governed by the
laws of the State of New York without reference to its conflict of laws
provisions (other than Section 5-1401 of the General Obligations Law).
Section 8.6. Submission to Jurisdiction.
ANY LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH
RESPECT TO OR ARISING OUT OF THIS GUARANTEE AGREEMENT MAY BE BROUGHT IN OR
REMOVED TO THE COURTS OF THE STATE OF NEW YORK, IN AND FOR THE COUNTY OF NEW
YORK, OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK
(IN EACH CASE SITTING IN THE BOROUGH OF MANHATTAN). BY EXECUTION AND DELIVERY OF
THIS GUARANTEE AGREEMENT, EACH PARTY ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS (AND COURTS OF APPEALS THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT OF OR
IN CONNECTION WITH THIS GUARANTEE AGREEMENT.
Section 8.7. Counterparts.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
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IN WITNESS WHEREOF, the undersigned have executed this Guarantee
Agreement as of the date first above written.
[COMPANY]
By: _________________________________________
Name
Title:
THE BANK OF NEW YORK, not in its individual
capacity, but solely as Guarantee Trustee
By: _________________________________________
Name
Title:
