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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 18, 1999
REGISTRATION NO. 333-_____________
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
REPUBLIC BANCSHARES, INC.
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Florida 59-3347653
--------------------------------- -------------------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
111 Second Avenue, N.E.,
Suite 300
St. Petersburg, Florida 33701
(727) 823-7300
----------------------------------------------------------------
(Address, Including Zip Code, and Telephone Number,
Including Area Code of Registrant's Principal Executive Offices)
- - - - - - - - - - - - -
Christopher M. Hunter, Esq.
General Counsel and Corporate Secretary
Republic Bancshares, Inc.
111 Second Avenue, N.E.,
Suite 300
St. Petersburg, Florida 33701
(727) 823-7300
---------------------------------------------------------
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
- - - - - - - - - - - - - -
Please send copies of all communications to:
John A. Buchman, Esq.
Holland & Knight LLP
2100 Pennsylvania Avenue, N.W.
Suite 400
Washington, D.C. 20037-3202
(202) 955-3000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after this registration statement becomes effective.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] ______________
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ______________
If delivery of this prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Each Amount Aggregate Aggregate Amount of
Class of Securities To Be Price Offering Registration
To Be Registered Registered Per Unit Price Fee
<S> <C> <C> <C> <C>
7% Convertible $15,000,000 100% $15,000,000 $4,170.00
Debentures due 2014
Common Stock, par 833,334 shares n/a n/a n/a
value $2.00
per share
Common Stock, par 208,848 shares $14.875(1) $ 3,106,614(1) $ 864.00
value $2.00
per share
</TABLE>
(1) Computed pursuant to Rule 457(c) of the Securities Act of 1933, as amended,
based on the average of the high and low reported sales prices of Republic
Bancshares' common stock as quoted on the Nasdaq National Market on
November 12, 1999.
<PAGE> 3
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................................................................. 1
Forward-Looking Statements.......................................................... 2
Risk Factors........................................................................ 3
Use of Proceeds..................................................................... 10
Business of Republic and the Bank................................................... 10
Description of the Debentures....................................................... 11
Selling Shareholders................................................................ 20
Plan of Distribution................................................................ 22
Legal Matters....................................................................... 24
Experts............................................................................. 25
Where You Can Find More Information................................................. 25
Incorporation by Reference.......................................................... 26
</TABLE>
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THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PRELIMINARY PROSPECTUS IS NOT AN OFFER TO SELL NOR DOES IT SEEK AN OFFER TO BUY
THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED NOVEMBER __, 1999
PROSPECTUS
REPUBLIC BANCSHARES, INC.
$15,000,000 OF
7% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2014
AND
1,042,182 SHARES
COMMON STOCK
--------------------------------------
This is a public offering of 7% Convertible Subordinated Debentures due
October 1, 2014, issued by us to certain institutional investors (the "Selling
Debentureholders") on September 23, 1999. The debentures may be converted into
a maximum of 833,334 shares of our common stock (the "Conversion Shares"). In
addition, two investment banking firms (the "Selling Stockholders") are
publicly offering for sale 208,848 shares of our common stock acquired by them
in our May 1998 public offering of common stock. In total, this prospectus
relates to the registration of $15,000,000 worth of debentures and 1,042,182
shares of common stock. The Selling Debentureholders and the Selling
Stockholders, whom we refer to collectively in this prospectus as the "Selling
Shareholders," are identified on page 20.
The Selling Debentureholders, who may become holders of the Conversion
Shares, and the Selling Stockholders may sell the debentures and common stock
(the "Securities") from time to time as described in the "Plan of Distribution"
section, which begins on page 22. We will not receive any of the proceeds from
the sale of the debentures by the Selling Debentureholders or the sale of the
common stock offered by any holders of the Conversion Shares or the Selling
Stockholders.
The sales price for the debentures and the common stock may vary from
transaction to transaction.
Our common stock is traded on the Nasdaq National Market under the
symbol "REPB." On November 12, 1999, the last reported sale price of our common
stock on the Nasdaq National Market was $14.875.
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THIS INVESTMENT INVOLVES RISK. THUS, BEFORE MAKING AN INVESTMENT IN OUR
SECURITIES, YOU SHOULD READ THE "RISK FACTORS" SECTION OF THIS PROSPECTUS
BEGINNING AT PAGE 3.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS DETERMINED WHETHER THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SECURITIES ARE NOT BANK ACCOUNTS AND ARE NOT INSURED BY THE FDIC OR
ANY OTHER STATE OR FEDERAL AGENCY.
--------------------------------------
The date of this prospectus is November __, 1999.
<PAGE> 7
PROSPECTUS SUMMARY
This summary is qualified by more detailed information appearing in
other sections of this prospectus. The other information is important, so
please read this entire prospectus carefully.
THE COMPANY
Republic Bancshares, Inc. is a bank holding company registered with the
Board of Governors of the Federal Reserve System under the Bank Holding Company
Act of 1956. We conduct business activities through our principal subsidiary,
Republic Bank, a Florida-chartered commercial bank headquartered in St.
Petersburg, Florida. As of October 31, 1999, there were 10,533,919 shares of
our common stock outstanding held by approximately 1,092 holders of record, not
including shares held in street name.
THE OFFERING
This prospectus relates to debentures and common stock that may be
publicly offered by two different groups of holders. Most recently, on
September 23, 1999, we issued $15,000,000 of our 7% Convertible Subordinated
Debentures due on October 1, 2014 to the Selling Debentureholders in a private
placement offering. Among other provisions, the debentures include a feature
that permits the holders to convert the debentures into shares of common stock
at a conversion price of $18.00 per share. At the conversion price, each $1,000
of outstanding principal of the debentures may be converted into 55.55556
shares of common stock. The Indenture, dated as of September 17, 1999, under
which the debentures were issued, requires us to register the debentures and
the Conversion Shares with the Securities and Exchange Commission. This
registration must be completed upon the earlier of any other registration by
us of our securities or December 31, 2000.
The two Selling Stockholders acquired 85,798 and 123,050 shares of
common stock, respectively, from us in our May 1998 public offering of common
stock. In order to enable the Selling Stockholders to publicly sell their
shares of common stock, we have agreed to register these shares. Our agreement
to register the Selling Stockholders' shares triggers our obligation under the
Indenture to register the debentures and the Conversion Shares.
We will not receive any of the proceeds from the sale of the
debentures, the Conversion Shares or the shares of common stock being offered
by the Selling Shareholders.
We have prepared this prospectus and registered the debentures, the
Conversion Shares and the common stock being offered by the Selling
Shareholders. A Selling Debentureholder may sell or otherwise transfer the
debentures from time to time pursuant to this prospectus without any sales
limitations or other restrictions. Further, if a debenture holder converts its
debentures into Conversion Shares, it may then sell the common stock under this
prospectus. Finally, the Selling Stockholders may offer pursuant to this
prospectus the shares of common stock that they acquired in May 1998. We intend
to use our best efforts to keep the registration
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effective through September 22, 2000 so that during this period the Selling
Shareholders may sell their Securities at such time(s) and in such amount(s) as
they desire.
FORWARD-LOOKING STATEMENTS
Some of the information in this prospectus contains forward-looking
statements that involve risks and unknown factors. Forward-looking statements
are contained in this section and in other sections of this prospectus
(including documents incorporated by reference; see "Incorporation by
Reference"). You can identify these statements by forward-looking language such
as "may," "will," "expect," "anticipate," "believe," "estimate," and "continue"
or similar words. You should read statements that contain these words carefully
because they:
o discuss our future expectations;
o contain projections of our future results of operations or of our
financial condition; or
o state other "forward-looking" information.
We believe it is important to communicate our expectations to our
investors. However, there may be events in the future that we are not able to
accurately predict or over which we have no control. The "Risk Factors" section
of this prospectus, as well as any cautionary language in this prospectus,
provides examples of risks, uncertainties and events that may cause our actual
results to differ materially from the expectations we describe in our
forward-looking statements. Before you invest in either the debentures or the
common stock, you should be aware that the occurrence of the events described
in the "Risk Factors" section and elsewhere in this prospectus could have a
material adverse effect on our business, operating results and financial
condition. Such adverse effects could also adversely affect our ability to pay
interest on our debentures, as well as the liquidity and market price of our
debentures and common stock, and, therefore, your investment.
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RISK FACTORS
An investment in our debentures or common stock involves risk. Before
you make a decision to invest in the debentures or common stock in this
offering, you should consider carefully the risk factors outlined below. In
addition to the following factors, you should consider the other information
contained in this prospectus and the information that we refer you to.
OUR DEBENTURES AND OUR COMMON STOCK ARE NOT FDIC-INSURED BANK DEPOSITS.
Shares of our debentures and common stock are not deposits, savings
accounts or other obligations of the Bank and are not guaranteed by us or any
other entity. They will not be insured by the FDIC or any other governmental
agency and may not be used as collateral to secure a loan from us or any of our
affiliates. The Securities are also subject to investment risks, including
possible loss of the principal amount invested.
OUR ABILITY TO PAY INTEREST ON THE DEBENTURES WILL BE LIMITED BY OUR
BANK'S ABILITY TO PROVIDE US WITH THE NECESSARY FUNDS.
We are a bank holding company, and substantially all of our assets are
held by our Bank. Our ability to make payments on the debentures depends
primarily on the results of operations of our Bank and its ability to provide
funds to us. Our Bank is a separate and distinct legal entity and has no
obligation to pay any amounts due under the debentures or to make funds
available, whether by dividend, loan or otherwise, for such purpose. In
addition, there are various legal limitations on the extent to which our Bank
may extend credit, pay dividends or otherwise supply funds to, or engage in
transactions with, us or some of our other subsidiaries.
THE DEBENTURES WILL BE SUBORDINATED TO ALL OF OUR EXISTING SENIOR
INDEBTEDNESS AND MAY BE SUBORDINATE TO FUTURE SENIOR INDEBTEDNESS.
The debentures rank behind all of our existing indebtedness and all of
our future borrowings, except $2,750,000 of junior term debt issued to our
directors and any future trade payables or other indebtedness that expressly
provide that they rank equal with, or are subordinated in right of payment to,
the debentures. As a result, upon any distribution to our creditors in a
bankruptcy, liquidation or reorganization or similar proceeding relating to us
or our property, the holders of our senior debt will be entitled to be paid in
full in cash before any payment may be made with respect to the debentures.
Because we are a holding company, the creditors of our subsidiaries also will
have priority over us and you in any distribution of the subsidiaries' assets
in a bankruptcy, liquidation, reorganization, or dissolution, except to the
extent that we are recognized as a creditor of our subsidiaries. The debentures
will be effectively subordinated to all existing and future liabilities of our
subsidiaries, and you should look only to our assets for payments on the
debentures.
In addition, all interest and principal payments on the debentures will
be blocked in the event of a payment default on senior debt that causes such
debt to become due and payable immediately until the default has been cured or
waived and may be blocked in the event of
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certain non-payment defaults on senior debt. In the event of a bankruptcy,
liquidation or reorganization or similar proceeding relating to us, holders of
the debentures will participate with all other holders of our subordinated
indebtedness in the assets remaining after we have paid all of the senior debt.
In any of these cases, we may not have sufficient funds to pay all of our
creditors, and holders of the debentures may receive less, ratably, than the
holders of senior debt. Immediately following their issuance in September 1999,
the debentures were subordinated to approximately $38.75 million of senior
debt. We are permitted to borrow substantial additional indebtedness, including
senior debt, in the future under the terms of the Indenture.
THE DEBENTURES ARE ILLIQUID SECURITIES FOR WHICH NO ACTIVE TRADING
MARKET EXISTS.
When issued in September 1999, the debentures were a new series of
securities with no established trading market and limited liquidity. Even
following the registration of the debentures, it is unlikely that an active
market for the debentures will develop or, if developed, be maintained. The
debentures should not be considered liquid investments. If the Selling
Debentureholders or purchasers of the debentures from the Selling
Debentureholders do not elect to convert the debentures into common stock, they
should be prepared to hold the debentures until maturity. The debentures are
not traded on any stock exchange and there is no independent public market for
the debentures. At present, we do not anticipate applying for a listing for
such public trading.
WE MAY CONTINUE TO EXPERIENCE SIGNIFICANT LOSSES FROM OUR PRIOR
MORTGAGE BANKING ACTIVITIES.
We incurred a loss of $12.4 million in 1998 resulting primarily from a
$15.0 million loss from our mortgage banking activities, a restructuring charge
of $6.7 million, and additional charges for legal and other costs of $818,000
that we recorded at the end of 1998.
As part of our mortgage banking activities in 1997 and 1998, we
originated high loan-to-value mortgage loans ("High LTV loans") where the
amount of the loan could equal or exceed the appraised value of the property
securing the loan. We sold many of these High LTV loans to entities that
packaged them in larger pools of mortgage loans and, in turn, sold off
interests in those pools to institutional investors. In connection with several
of these transactions, we purchased certain residual interests in these pools,
as well as a subordinate tranche interest in one such pool. As of September 30,
1999, we retained on our books approximately $24.6 million of these residual
interests, a subordinate tranche of $10.9 million, and approximately $101.6
million of High LTV loans. We value the residual interests based on our
assumptions as to prepayment rates, delinquency rates, default rates and credit
losses on the loans in the pools. If our assumptions turn out to be too low, we
will need to write down the value of these interests. Similarly, if our loan
loss allowances for the High LTV loans are not sufficient to cover credit
losses on the loans, we will need to take additional charges to our earnings.
In the event that we incur a substantial amount of additional expenses
or charges relating to our mortgage banking activities or assets, our financial
condition could deteriorate, causing a
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reduction in the price of our common stock and potentially making it very
difficult, if not impossible, for us to continue to pay interest on the
debentures.
OUR NEW BRANCH OFFICES MAY NOT BECOME PROFITABLE AS SOON AS WE EXPECT
THEM TO BE.
During the past year we have opened 24 additional branches throughout
Florida. A large portion of these offices are located in communities where the
Bank has not previously operated. Currently, operating expenses at most of
these new branches exceed revenues given their relatively small deposit bases.
We project that most if not all of the new branches will become profitable
within the next several years. However, if competition from other banks and
thrifts in these new markets is more intense than we expect, or if we are
unable to attract as many new customers as we anticipate, it may take a much
longer period of time, if ever, for our additional branches to become
profitable.
OUR EXISTING LOAN LOSS ALLOWANCES MAY NOT BE ADEQUATE TO FULLY COVER
LOSSES ON LOANS THAT WE HAVE MADE AND RETAIN ON OUR BOOKS.
Making any loan involves risks, including risks resulting from or
associated with changes in economic and industry conditions, associated with
the creditworthiness of individual borrowers, and resulting from uncertainties
as to the future value of collateral. Commercial loans do not comprise the bulk
of our loans in our core markets. We will need to increase our commercial
lending in order to meet our strategic goals. We expect to focus our commercial
lending on loans to small- and medium-sized businesses, which may result in a
large concentration of loans to such businesses. Our management will try to
minimize our credit exposure by carefully monitoring the concentration of loans
within specific industries and by using prudent loan approval procedures.
However, such monitoring and procedures may not reduce lending risks.
Additionally, as we expand into new geographic markets, our credit
administration and loan underwriting policies will have to adapt to the local
lending and economic environments. We cannot be certain that our credit
administration personnel, policies and procedures can adequately adapt to the
new geographic markets.
We establish our allowance for loan losses after considering a wide
variety of factors. We will maintain the allowance at a level that management
considers adequate to cover inherent loan losses. The amount of future losses
is susceptible to changes in economic, operating and other conditions,
including changes in interest rates. Such changes may be beyond our control and
losses may exceed current estimates. Although we believe that our allowances
for loan losses are adequate to absorb losses on any existing loan that may
become uncollectible, we cannot be certain that the allowances will be enough
to cover actual loan losses in the future. If we do not adapt our credit
policies and procedures to changes in the market on an adequate and timely
basis, or provide sufficient oversight to our lending activities, then
non-performing assets could increase. An increase in non-performing assets
could cause operating losses, impair liquidity and erode capital, and could
materially adversely affect our business, future prospects, financial condition
or results of operations.
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UNPREDICTABLE ECONOMIC CONDITIONS IN FLORIDA AND ELSEWHERE MAY
ADVERSELY AFFECT OUR FINANCIAL PERFORMANCE.
Economic and political conditions, both domestic and international, and
governmental monetary policies affect commercial banks and other financial
institutions. Conditions such as inflation, recession, unemployment, volatile
interest rates, restricted money supply, scarce natural resources,
international disorders and other factors beyond our control may adversely
affect our profitability. General economic conditions in Florida, and
especially in those parts of the state where our operations are located, will
also significantly determine our future success. A prolonged economic
dislocation or recession, whether in Florida generally or in any or all of our
markets, could cause our non-performing assets to increase, which could cause
operating losses, impaired liquidity and the erosion of capital. Such an
economic dislocation or recession could result from a variety of causes,
including natural disasters such as hurricanes, floods or tornadoes, or a
prolonged downturn in the various industries upon which the economies of
Florida and/or our particular markets depend. Future adverse changes in the
Florida economy or our local markets could materially adversely affect our
business, future prospects, financial condition or results of operations.
MOST OF OUR REAL ESTATE LOANS ARE SECURED BY COMMERCIAL AND RESIDENTIAL
PROPERTY LOCATED IN FLORIDA.
On September 30, 1999, our real estate loans, which include residential
mortgages and construction and commercial loans secured by real estate,
comprised 82.1% of our total loan portfolio, net of deferred loan fees. We
presently generate substantially all of our real estate mortgage loans in
Florida. Therefore, conditions of the Florida real estate market could strongly
influence the level of our non-performing mortgage loans and our results of
operations and financial condition. Changes in general or local economic
conditions, changes in government rules or policies, and the availability of
loans to potential purchasers, among other things, affect real estate values
and the demand for mortgages and construction loans. In addition, Florida is
vulnerable to certain natural disaster risks, such as floods, hurricanes and
tornadoes, which borrowers' standard hazard insurance policies typically do not
cover. Uninsured disasters may prevent borrowers from repaying the loans we
have made. The existence of adverse economic conditions, declines in real
estate values or the occurrence of natural disasters in Florida could
materially adversely affect our business, future prospects, financial condition
or results of operations. In addition, loans secured by real estate subject us
to risks associated with environmental regulation.
CHANGES IN INTEREST RATES COULD REDUCE OUR FUTURE EARNINGS.
Our results of operations are directly affected by levels of, and
fluctuations in, interest rates. Changes in interest rates could reduce our net
interest income, result in higher loan losses, and reduce loan originations and
corresponding loan servicing income. A substantial and/or sustained increase in
interest rates could prevent us from originating or selling loans with returns
consistent with past practices. It could also prevent borrowers with lower
incomes or having variable rate loans from meeting scheduled debt service
requirements. A rapid increase or decrease in interest rates could materially
adversely affect our net interest margin, future
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prospects, financial condition or results of operations because of imbalances
in the maturities of our assets and liabilities and the mix of our adjustable
and fixed rate loans. Interest rates are highly sensitive to many factors that
are beyond our control, including general economic conditions and the policies
of various government and regulatory authorities. Changes to the discount rate
by the Federal Reserve Board usually lead to corresponding interest rate
changes, which affect our interest income, interest expense and the value of
our investment portfolio. Also, governmental policies, such as the creation of
a tax deduction for individual retirement accounts, can alter the rate of
savings and affect the costs of funds. The nature, timing and effect on us and
our results of operations of any future changes in federal monetary and fiscal
policies are not predictable. Such changes could materially adversely affect
our business, future prospects, financial condition or results of operation.
WE AND/OR OUR SIGNIFICANT CUSTOMERS MAY NOT BE YEAR 2000 COMPLIANT.
Many companies, including financial institutions like the Bank, face
potentially serious issues associated with the inability of existing data
processing hardware and software to appropriately recognize calendar dates
beginning in the year 2000. Many computer programs that can only distinguish
the final two digits of the year entered may read entries for the year 2000 as
the year 1900 and erroneously compute payments, interest charges or
delinquencies accordingly. Year 2000 issues relate to our computer hardware and
software systems and other devices employing computer chips as well as those of
our third party vendors. We believe that our vendors have already identified
and corrected the software applications and hardware devices that we expect
this issue to impact. We also believe that our vendors have substantially
completed all of the necessary computer system and application changes to make
our systems year 2000 compliant. However, it is possible that all necessary
modifications will not have been identified and corrected, and that unforeseen
difficulties or costs may arise. In addition, we cannot assure that the changes
made to our systems, or the systems of the companies that we rely on, will
prevent future year 2000-related problems from arising. Also, the failure of
another company to properly modify its systems may negatively impact our
systems or operations.
Year 2000 issues also may negatively affect the businesses of some of
our customers. Any financial difficulties incurred by our commercial customers
in solving year 2000 issues could negatively affect their ability to repay
loans that we extended. The failure or delay of our customers or other third
parties in addressing the Year 2000 issue could materially adversely affect our
business, future prospects, financial condition, or results of operations. In
addition, public overreaction to Year 2000 issues also could adversely affect
us.
TECHNOLOGICAL ADVANCES MAY AFFECT OUR FUTURE PROFITABILITY AND ABILITY
TO COMPETE WITH OTHER PROVIDERS OF FINANCIAL SERVICES.
The banking industry is undergoing technological changes with frequent
introductions of new technology-driven products and services. Management
believes this trend will continue. Our ability to use technology to provide
products and services that will satisfy customer demands for convenience, as
well as to enhance efficiencies in our operations, may influence our success.
In addition to improving customer services, the effective use of technology
increases efficiency and enables financial institutions to reduce costs.
Management believes that keeping pace with
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technological advances is important, as long as it does not adversely impact
our emphasis on personalized services. While we seek to improve our capacity to
use technological innovations, our strategy is based on the belief that
customer demand for personal contact and strategically placed branch offices
will continue for the foreseeable future. Thus, we will continue to operate our
recently expanded branch network and to provide customers ready access to
qualified personnel at a time when many banks are consolidating their branch
networks and automating customer responses. We cannot be certain this strategy
will succeed.
Technological advances of our competitors may result in the loss of
customer relationships. The sophistication of our business requires us to use
thorough and accurate management information systems. If we fail to effectively
implement, maintain, update and use updated management information systems, it
could prevent us from recognizing in a timely manner any deterioration in the
performance of our business. Many of our competitors have substantially greater
resources to invest in technological and infrastructure improvements. We cannot
assure that we can implement new technology-driven products and services
effectively or that we can market successfully such products and services to
our clients. Our failure to acquire, implement or market new technology could
materially adversely affect our business, future prospects, financial condition
or results of operations.
OUR FUTURE OPERATIONS COULD BE NEGATIVELY IMPACTED BY NEW OR DIFFERENT
GOVERNMENT REGULATIONS.
As a registered bank holding company, we are subject to the supervision
of, and regular examination by, the Federal Reserve Board. Our Bank is a
state-chartered commercial bank, which is subject to regulation, supervision
and examination by the Florida Department of Banking and Finance and the FDIC.
In addition, we are subject to various other laws and regulations and
supervision and examination by other regulatory agencies, all of which directly
or indirectly affect our operations and management and our ability to
distribute dividends. These regulations protect and benefit depositors and
customers rather than our shareholders. We are subject to future legislation
and government policy, including new or changed regulations that could
materially adversely affect the banking industry as a whole, including our
operations.
FLUCTUATIONS IN OUR QUARTERLY FINANCIAL RESULTS COULD CAUSE THE PRICE
OF OUR COMMON STOCK TO BE HIGHLY VOLATILE.
The trading price of our common stock could fluctuate significantly in
response to quarterly variations in our actual or anticipated operating
results, changes in general market conditions and other factors. In particular,
we cannot forecast our quarterly revenues with complete accuracy, and we base
our expense levels in part on our ongoing efforts to cut costs and improve the
efficiency of our operations. If revenue levels are below expectations, we may
not be able to reduce expenses as quickly as we would like, and operating
results probably would be adversely affected. Before we fully implement our
business objective to reduce costs, period to period comparisons of our results
may not be meaningful, and you should not rely on them to predict future
performance. In some future quarter, our operating results may be below the
expectations of public market analysts and investors, which may materially
adversely affect the market price of our common stock.
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WE HAVE NO PLANS TO PAY DIVIDENDS ON OUR COMMON STOCK IN THE
FORESEEABLE FUTURE.
We do not anticipate paying any dividends to holders of our common
stock in the foreseeable future. Earnings of the Bank are expected to be
retained by the Bank to enhance its capital structure or to be used by us to
repay our outstanding borrowings from SunTrust Bank and our directors and our
other senior debt. Dividend distributions of state banks are restricted by
statute and regulation.
WE FACE INCREASING COMPETITION FROM OTHER PROVIDERS OF FINANCIAL
SERVICES.
We compete with other bank holding companies, state and national
commercial banks, savings and loan associations, consumer finance companies,
credit unions, securities brokerages, insurance companies, mortgage banking
companies, money market and other mutual funds, asset-based non-bank lenders
and other financial institutions and financial services providers. Many of
these competitors have substantially greater resources and lending limits, have
larger branch networks and are able to offer a broader range of products and
services than we do. Changes in the law have increased competition among
financial institutions. Such changes have enabled out-of-state financial
institutions to enter the Florida market. Recent legislative and regulatory
changes and technological advances have enabled customers to conduct banking
activities without regard to geographic barriers through computer and
telephone-based banking and similar services.
The United States Congress or the Florida Legislature or the applicable
bank regulatory agencies could pass laws or adopt rules that may further
increase competition. For example, financial services modernization legislation
that was recently enacted will make it possible for commercial banks,
securities underwriting firms and insurance companies to affiliate under a
common holding company structure. Such financial services conglomerates will be
able to offer their customers a much broader array of banking and financial
products and services than those currently offered by our Bank. Also, these
entities will be able to share customer information among each other without
having to notify or obtain a customer's consent. In contrast, the Bank will be
required to give its customers the right to prevent the Bank from sharing
information about them with other third-party financial services providers,
thus placing the Bank at a potential competitive disadvantage as compared to
the conglomerates.
Competition from credit unions for deposits and loans may also
increase. Credit unions are not-for-profit cooperative lending organizations
that are not subject to certain federal taxes and fees or the Community
Reinvestment Act that we are subject to. As a result of their lower operating
costs, they may be able to offer slightly higher interest rates on deposit
accounts and slightly lower interest rates on consumer loans. In August 1998,
Congress passed a law that loosened the membership restrictions that previously
required credit unions to serve a limited number of customers who share common
employers or professions. The new law may increase credit unions' competitive
advantage.
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If we are unable to compete effectively for deposit, loan and other
banking and financial products and services with customers in our markets, it
will materially adversely affect our business, future prospects, financial
condition and results of operations.
OUR DIRECTORS AND EXECUTIVE OFFICERS WILL BE ABLE TO EXERT A
CONTROLLING INFLUENCE OVER THE POLICIES AND MANAGEMENT OF THE COMPANY.
Our directors and executive officers will continue to be able to
exercise control over us. Company insiders, together, will be able to strongly
influence the outcome of director elections or block a significant transaction
that might otherwise be approved by the shareholders. After the Offering, we
anticipate that our directors and executive officers will directly or
indirectly own at least 4,239,662 shares of common stock, representing 40.2% of
the total number of shares anticipated to be outstanding following the
Offering.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the debentures or the
common stock by the debenture holders, holders of the Conversion Shares or the
Selling Stockholders.
BUSINESS OF REPUBLIC AND THE BANK
GENERAL
We are a registered bank holding company whose principal subsidiary is
Republic Bank, a Florida-chartered commercial bank headquartered in St.
Petersburg, Florida. We are regulated by the Federal Reserve Board, and our
Bank is regulated by the Florida Department of Banking and Finance and the
FDIC. The Bank's deposits are insured by the FDIC up to applicable limits, and
the Bank is a member of the Federal Home Loan Bank of Atlanta. We are now the
second largest independent commercial bank holding company headquartered in
Florida, based on our September 30, 1999 assets of approximately $2.5 billion.
The Bank provides a broad range of traditional retail and commercial
banking services, emphasizing one-to-four family residential, commercial real
estate, construction/land development and business lending. In the fourth
quarter of 1998, we significantly reduced the size of our mortgage banking
activities. In connection with this reduction, we recorded a restructuring
charge of $6.7 million, as well as an additional charge of $818,000 for legal
and other costs. As of September 30, 1999, we still owned approximately $102
million in High LTV loans that we had originated in 1998 through our mortgage
banking activities, as well as $35.5 million in mortgage-backed and
mortgage-related securities that we acquired in connection with these
activities.
Our principal executive offices are located at 111 Second Avenue N.E.,
Suite 300, St. Petersburg, Florida, 33701, and our telephone number is (727)
823-7300.
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RECENT DEVELOPMENTS
On November 3, 1999, we were served with a complaint filed in Dade
County, Florida circuit court by 18 former shareholders of Bankers Savings
Bank, F.S.B., a federal savings bank in Coral Gables, Florida that we acquired
on November 4, 1998. The complaint alleges that, prior to acquiring Bankers
Savings, we knew but never disclosed to the public or to the Bankers Savings
stockholders that we were going to incur a substantial loss in the fourth
quarter of 1998 due to operating losses in our Bank's mortgage banking division.
The complaint further alleges claims against us based upon breach of contract,
fraud and violations of the Florida Statutes governing securities transactions.
We believe that the lawsuit is without merit, and we intend to vigorously
defend against such suit.
DESCRIPTION OF THE DEBENTURES
The following summary of the terms of the debentures is not complete
and is qualified in its entirety by the provisions set forth in the Indenture,
including the definitions of certain terms used below. A copy of the Indenture
is available to each prospective purchaser from us without charge.
GENERAL
The debentures are a series of debt securities issued under an
Indenture between the Company and U.S. Bank Trust National Association, as
trustee. The debentures are not deposits or savings accounts and are not
insured by the FDIC or any other governmental agency. The terms of the
debentures are set forth either in the Indenture or, if referred to in the
Indenture, the Trust Indenture Act of 1939, as amended. We recommend that
prospective purchasers of the debentures read the Indenture and the Trust
Indenture Act for a more complete description of the debentures.
The debentures are general unsecured obligations of ours, $15,000,000
in aggregate principal amount. The debentures are not secured by our assets or
otherwise, and do not have the benefit of a sinking fund for the retirement of
principal. The debentures have subordinate payment rights and liquidation
rights to all of our present and future senior indebtedness, which may include
our obligations to the Bank. The debentures have superior payment rights to
$2,750,000 in our junior term debt issued to our directors in September 1999.
However, the junior term debt may be called and retired by us before the
debentures are redeemed. The $10 million balance on our loan from SunTrust
Bank, as well as the $28.75 million in aggregate principal amount of junior
subordinated debentures that we issued in July 1997, have superior payment and
liquidation rights to the debentures, but the debentures rank on a par with all
of our other subordinated indebtedness, if any. We or any of our subsidiaries,
including the Bank, may incur additional debt constituting senior indebtedness
(as defined in the Indenture, to include all obligations for borrowed money,
capitalized lease obligations, goods, property, services and guaranteed
indebtedness, and indebtedness incurred in any acquisition transaction and
other indebtedness) or indebtedness that ranks on a par with the debentures.
The
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Indenture does not limit the total indebtedness that either we or any of our
subsidiaries may incur. The debentures are subordinate to all of our
indebtedness that does not state that it is subordinate to or on par with the
debentures. Our right to participate in any distribution of assets of any
subsidiary, upon its liquidation or reorganization or otherwise (and thus the
ability of holders of the debentures to benefit indirectly from any such
distribution) is subject to the prior claims of creditors of that subsidiary,
including depositors of the Bank.
PRINCIPAL, MATURITY AND INTEREST
The debentures mature on October 1, 2014, unless redeemed earlier at
our option. The debentures bear interest at 7% per annum commencing on September
23, 1999, or from the most recent interest payment date to which interest has
been paid or provided for. Interest on the debentures is payable semi-annually
on April 1 and October 1 of each year, commencing April 1, 2000, to the person
in whose name the debenture is registered at the close of business on the
preceding March 15 or September 15, as the case may be. Interest on the
debentures is computed on the basis of a 360-day year, or twelve 30-day months.
U.S. Bank Trust National Association, the trustee under the Indenture,
also serves as debenture registrar and paying agent for the debentures.
Principal and interest are payable by check mailed by the Trustee to the person
entitled to payment on the interest payment date.
The debentures are denominated in U.S. dollars, and payments of
principal, interest and any premiums on the debentures are payable in U.S.
dollars. The debentures were issued only in registered form, without coupons, in
denominations of $5,000 and integral multiples thereof, with a minimum
subscription of $50,000. The debentures may be transferred or exchanged by
presenting them either endorsed or accompanied by a written instrument of
transfer to the debenture registrar. If money for the payment of principal,
interest or any premiums remains unclaimed for two years after the debentures
are redeemed, it will be returned to us at our request. Thereafter, the holder
may only look to us for payment.
Our primary source of funds for the payment of principal and interest
on the debentures is dividends from the Bank. From time to time while the
debentures are outstanding, the Bank may be subject to regulatory or contractual
constraints that restrict its ability to pay dividends to us.
REDEMPTION OR REPURCHASE OF DEBENTURES
The debentures are redeemable, in whole or in part, essentially under
two different situations, both of which would be at our option. In either case,
we would be required to give at least 30 days' but not more than 60 days' notice
prior to the redemption date. Also, amounts required to be paid on redemption
would include accrued interest to the redemption date. We have no mandatory
redemption obligations with respect to the debentures.
First, the debentures are redeemable at any time after October 1, 2004,
at the following redemption prices (expressed as percentages of principal
amount), when redeemed during the twelve-month periods indicated below:
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<TABLE>
<CAPTION>
October 1 through September 30
<S> <C> <C>
2004 2005............................... 106%
2005 2006............................... 105%
2006 2007............................... 104%
2007 2008............................... 103%
2008 2009............................... 102%
2009 2010............................... 101%
2010 and thereafter ......................................... 100%
</TABLE>
Second, the debentures may also be redeemed at par at any time after
the "closing price" of our common stock equals or exceeds 130% of the price at
which the debentures can be converted (e.g., currently 130% of $18.00, or
$23.40) for at least 20 consecutive trading days. The "closing price" will be
the closing bid price per share of our common stock on the Nasdaq National
Market. If our common stock is traded on a national securities exchange, the
closing price will be the closing price for the common stock on that exchange
or the highest bid quotation on an automated quotation system. If the common
stock is not then listed on the Nasdaq National Market or on an exchange or
included on an automated quotation system, the closing price will be as
reported by the National Quotation Bureau, Inc. or similar reporting service.
If we elect to redeem less than all of the debentures, the Trustee will
select the debentures to be redeemed either on a pro rata basis among all
holders or in accordance with a method the Trustee considers to be fair and
appropriate, such as by lot. In the event of partial redemption by lot, the
Trustee must select the particular debentures to be redeemed not less than 30
nor more than 60 days before the redemption date. Portions of debentures
selected for partial redemption must be in amounts of $5,000 or whole multiples
of $5,000.
We may, at any time, repurchase debentures at any price in private
transactions or the open market, if any. Debentures that we purchase will be
sent to the Trustee for cancellation.
CONVERTIBILITY
Holders have the right, at their option, to convert each $1,000
principal amount of authorized $5,000 denominations of debentures into 55.55556
shares of common stock. This conversion ratio translates into a conversion price
of $18.00 per share, which is subject to adjustment as described below. The
debentures can be converted into common stock at any time prior to maturity,
unless previously redeemed. If a debenture has been called for redemption, it
may still be converted until the close of business on the third business day
before the redemption date. If it has not been called for redemption, a
debenture converted into common stock will not be entitled to any accrued
interest payment. Conversely, a debenture converted following a call for
redemption will be entitled to accrued interest payments. Accordingly, if a
debenture not called for redemption is converted by a holder between the record
date and the payment date for an interest payment, when the holder presents the
debenture for conversion, it must pay an amount equal to the interest that it
will receive (as holder of record on the record date) on the interest payment
date.
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We will not issue fractional shares when a debenture is converted into
common stock. Where a holder would otherwise be entitled to a fractional share,
we will make a cash payment for the fractional share based upon the market price
of the common stock.
ANTI-DILUTION PROVISIONS
The conversion price of the debentures will be adjusted if one of the
following events occurs: (i) a dividend in shares of common stock or shares of
some class of our capital stock other than common stock is paid to holders of
the common stock; (ii) outstanding shares of common stock are subdivided,
combined or reclassified; (iii) all holders of the common stock receive
distributions of indebtedness or assets (excluding cash dividends or cash
distributions payable out of retained earnings, or stock dividends) or
subscription rights or warrants; or (iv) rights or warrants entitling anyone to
subscribe for or to purchase common stock or securities or instruments
convertible into common stock are issued, in each case at less than current
market price for the common stock. We will not be required to make any
adjustments in the conversion price of less than one percent of the conversion
price. However, where we do not make an adjustment, this will be taken into
account in the computation of any subsequent adjustment.
In case of any reclassification or change of outstanding common stock
(with certain exceptions), or in case of our consolidation or merger with or
into another entity (with certain exceptions), or in case of any transfer or
conveyance of substantially all of our property, then the successor entity will
be required to give each holder the right to convert its debentures into the
kind and amount of securities or property that could have been received if the
holder had converted its debentures into common stock immediately prior to such
reclassification, change, consolidation, merger, transfer or conveyance.
SUBORDINATION
The principal, interest, and any premium on the debentures is
subordinated and junior in right of payment to the prior payment of principal in
full of all of our senior indebtedness. Except as noted below with respect to
the junior term debt, the debentures will rank on a par with any subordinated
indebtedness that we subsequently issue. "Senior indebtedness" includes all of
our indebtedness, including obligations to general creditors, except any
particular indebtedness that expressly provides that it will be subordinate or
will rank equal in right of payment to the debentures. As of September 30, 1999,
$28,750,000 of our junior subordinated debentures and the remaining $10,000,000
balance of our borrowings from SunTrust Bank were included within the term
"senior indebtedness." An estimated $2,750,000 of junior term debt to our
directors is subordinate to the debentures. However, we may call and retire the
junior term debt prior to redemption of the debentures.
The Indenture does not limit the amount of our senior indebtedness or
other indebtedness, secured or unsecured, that we or any of our subsidiaries may
incur. If payments on any senior indebtedness have been accelerated, we will be
prohibited from making any payment of principal, interest, or any premium on the
debentures until payments of the senior indebtedness are made or provided for or
the interest or principal default that caused the acceleration is waived or
cured. Upon any distribution of our assets in connection with any dissolution,
winding up,
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<PAGE> 21
liquidation or reorganization, payment of principal, interest, or any premiums
on the debentures will be subordinated, to the extent and in the manner set
forth in the Indenture, to the prior payment in full of all senior indebtedness.
In such an event, certain of our general creditors may recover more, ratably,
than the holders of the debentures.
COVENANTS
As described below, the Indenture limits our ability to consolidate or
merge with, or sell all or substantially all of our assets to, another entity
and to pay dividends and make other capital distributions to our stockholders.
In addition, the Indenture contains certain customary covenants found in
indentures under the Trust Indenture Act, including covenants with respect to
the payment of principal and interest, maintenance of an office or agency for
administering the debentures, holding of funds for payments on the debentures in
trust, our payment of taxes and other claims, our maintenance of our properties
and our corporate existence, and delivery of annual certifications to the
Trustee.
CONSOLIDATION, MERGER OR SALE OF ASSETS
The Indenture provides that we may not merge or consolidate with, or
sell all or substantially all of our assets to, any entity unless we are the
surviving or successor entity and, immediately thereafter, we are not in default
under the Indenture. If we are not the surviving or successor entity, the
successor entity must expressly assume our obligations under the Indenture and,
immediately after such transaction, it must not be in default under the
Indenture. Any successor entity also must assume by supplemental indenture all
of our obligations under the debentures and the Indenture, and the entity will
succeed to, and may exercise, all of our rights and powers under the Indenture.
RESTRICTIONS ON DIVIDENDS AND OTHER DISTRIBUTIONS
The Indenture provides that we cannot declare or pay dividends on, or
purchase, redeem or acquire for value any of our capital stock, return any
capital to holders of capital stock, or make any distribution of assets to
holders of capital stock, unless after the date of any such purchase,
redemption, payment or distribution, we will retain cash, cash equivalents or
marketable securities in an amount sufficient to cover the two consecutive
semi-annual interest payments that will be due and payable on the debentures
following such date.
The Indenture does not restrict our sale of additional shares of
capital stock or other debt securities. Further, the Bank is not restricted by
the Indenture from issuing any of its shares of capital stock or debt
securities. The Indenture, however, does restrict our ability to pledge shares
of the capital stock of the Bank. At the present time, we have pledged 33.4% of
the Bank's outstanding common stock as security for a loan from SunTrust Bank.
The Indenture provides that the percentage of outstanding common stock of the
Bank (or other securities of the Bank convertible into common stock) pledged to
SunTrust may not be increased, that no other common stock (or such other
securities) of the Bank may be pledged while the SunTrust indebtedness is
outstanding, and that after the securities of the Bank presently pledged to
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<PAGE> 22
SunTrust are released, we may not pledge more than 20% of the outstanding common
stock of the Bank (or such other securities).
DEFAULTS AND REMEDIES
A default, as defined in the Indenture, includes:
- our failure to pay principal of or any premium on the
debentures at maturity or upon redemption (whether or not such
payment is prohibited by the subordination provisions);
- our failure to pay interest on any of the debentures within 30
days of any interest payment date (whether or not such payment
is prohibited by the subordination provisions);
- a failure to comply with any of our other agreements or
covenants in the Indenture within a 60-day period after the
notice specified below; and
- certain events of bankruptcy.
A failure under the third item listed above is not a default until the
Trustee notifies us in writing, or the holders of at least 25% in principal
amount of the debentures then outstanding notify us and the Trustee in writing,
of the default, and we do not cure the default within 60 days after we receive
the notice. The notice must specify the default, demand that it be remedied and
state that it is a "Notice of Default." The notice must be given by the Trustee
if the holders of at least 25% in principal amount of the debentures then
outstanding so request. Any notice required to be delivered by the Trustee to us
must be given promptly after the Trustee becomes aware of the default or the
holders request it to deliver the notice.
The Indenture generally provides that the Trustee will, within 90 days
after the occurrence of any default known to it, mail to the holders notice of
the default. However, except in the case of default in the payment of principal
of or interest on any of the debentures, the Trustee will not be required to
deliver a notice if it in good faith determines that the withholding of the
notice is in the interest of the holders.
The Indenture only permits acceleration of payment of principal of the
debentures upon a default resulting from certain events of bankruptcy,
liquidation or reorganization. If a default resulting from certain events of
bankruptcy has occurred and is continuing, the Trustee or the holders of not
less than 30% in aggregate principal amount of the debentures then outstanding
may declare the debentures to be immediately due and payable by giving notice in
writing to us (and to the Trustee if the holders give notice). An acceleration
and its consequences may be rescinded and past defaults waived by holders of a
majority in principal amount of the debentures then outstanding as set forth in
the Indenture. If other defaults under the Indenture, including any resulting
from our failure to pay principal or interest on the debentures, have occurred
and are continuing, the Trustee may, in its discretion, proceed to protect and
enforce its
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<PAGE> 23
rights and the rights of the holders by initiating whatever judicial proceedings
it deems most effectual under the circumstances.
No holder may pursue any remedy under the Indenture unless it (i) has
previously given to the Trustee and us written notice of a continuing default,
and (ii) the holders of at least 30% in principal amount of the debentures then
outstanding have requested in writing that the Trustee pursue the remedy. If the
holders offer the Trustee indemnity satisfactory to it against any loss,
liability or expense that might be incurred, and the Trustee has failed to act
within 60 days after its receipt of the notice, the holders will then be able to
proceed on their own.
The Indenture requires us to file periodic reports no less than
annually with the Trustee as to the absence of defaults.
SATISFACTION, DISCHARGE AND DEFEASANCE
The Indenture provides that we will, at our option, either:
(a) be deemed to have paid and discharged the entire indebtedness
represented by the debentures (except for the obligation to pay the
principal, interest and any premium on the debentures and certain
obligations to register the transfer or exchange of the debentures, to
replace temporary or mutilated, destroyed, lost or stolen debentures,
to maintain an office or agency in respect to the debentures and to
hold moneys for payment in trust) ("legal defeasance"); or
(b) cease to be under any obligation to comply with certain terms,
provisions or conditions of the Indenture (those terms, provisions or
conditions described in the Indenture under "Consolidation, Merger or
Sale") or the terms, provisions or conditions of the debentures
("covenant defeasance"), in either case, on the 91st day after:
(i) we have paid or caused to be paid all other sums payable with
respect to the outstanding debentures and we have delivered to
the Trustee a certificate from an authorized officer and an
opinion of legal counsel, each stating that all conditions
precedent relating to the satisfaction and discharge of the
entire indebtedness on all of the outstanding debentures have
been complied with;
(ii) we have deposited or caused to be deposited irrevocably with
the Trustee as a trust fund specifically pledged as security
for the benefit of the holders of the debentures, (x) dollars
in an amount, or (y) U.S. government obligations (which
through the payment of interest and principal thereon in
accordance with their terms will provide, not later than the
due date of any payment of principal, interest, and any
premium on the outstanding debentures) in an amount, or (z) a
combination of (x) and (y), sufficient to pay and discharge
each installment of principal of, and interest and any premium
on, the outstanding debentures on the dates such installments
are due; and
(iii) no default has occurred and is continuing on the date of such
deposit.
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Among the conditions of our exercising any such option, we are required to
deliver to the Trustee an opinion of independent counsel of recognized standing
to the effect that the deposit and related defeasance would not cause the
holders of the debentures to recognize income, gain or loss for federal income
tax purposes and that the holders will be subject to federal income tax in the
same amounts, in the same manner and at the same times as would have been the
case if such deposit and related defeasance had not occurred.
MODIFICATION OF THE INDENTURE
Most of the terms of the Indenture and the debentures may be modified
with the consent of the holders of at least two thirds of the principal amount
of debentures then outstanding. However, each holder must agree to: (i) an
extension of maturity of the debentures; (ii) a reduction in principal amount of
or the rate of interest on the debentures; (iii) an increase in the conversion
price of the debentures; (iv) a reduction in any premium payable upon
redemption; or (v) a reduction in the holder approval percentages required for
modification.
We will not be required to comply with any covenant or condition set
forth in the Indenture if, before the time for such compliance, the holders of
at least two thirds of the principal amount of debentures then outstanding
either waive compliance in such instance or generally waive compliance with the
covenant or condition. No such waiver, however, may extend to or affect such
covenant or condition except to the extent so expressly waived. Also, until the
waiver has become effective, our obligation and the duties of the Trustee under
any such covenant will remain in full force and effect. No supplemental
indenture may affect the seniority rights of the holders of senior indebtedness
without the consent of those holders.
The Indenture provides that the Trustee and we may, without the consent
of any holders of debentures, enter into supplemental indentures for purposes,
among other things, of: (a) evidencing the fact that another entity has
succeeded to our rights and assumed our obligations and covenants; (b) making
any change that does not adversely affect the rights of any holders; or (c)
curing any ambiguity, defect or inconsistency. In no event may any modification
to the Indenture made by the Trustee and us adversely affect the interest of the
holders of the debentures in any material respect.
REGARDING THE TRUSTEE
We and our subsidiaries may maintain deposit accounts and conduct other
banking transactions with the Trustee in the ordinary course of our businesses.
TRANSFER AND EXCHANGE OF THE DEBENTURES
Under the Indenture, the Trustee as debenture registrar is responsible
for registering ownership and transfers of ownership of the debentures in a
register to be kept at its corporate trust office in Ft. Lauderdale, Florida.
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Before the debentures are subject to an effective registration
statement, they will bear legends restricting transfers of ownership unless
either registered under the Securities Act of 1933, as amended (the "Act"), or
the Trustee and we receive an opinion of counsel that such registration is not
necessary. During this time, transfer of ownership of a debenture cannot be
reflected in the debenture register unless a holder first presents to us for
surrender such debenture endorsed by the holder or accompanied by an executed
written instrument of transfer, together with appropriate documentation, such as
a legal opinion, that we determine satisfactory to establish such compliance
with the above legend restrictions.
A debenture holder may exchange its debentures for other debentures of
any authorized denominations having the same aggregate principal amount as those
exchanged. All debentures issued after their transfer or exchange have been
registered will evidence the same debt and be entitled to the same benefits as
those debentures that were surrendered. We are not required to register the
transfer of or exchange (i) any debentures for any period beginning 15 business
days before debentures are selected for redemption and ending on the date of
selection or (ii) any debentures selected for redemption in whole or in part. We
will not assess a service charge for the registration of any transfer or
exchange of debentures. However, we may require a payment from the holder
sufficient to cover any tax or other governmental charge that may be imposed in
connection with the registration.
REGISTRATION OF THE DEBENTURES
The Indenture requires us, at our expense, to file a registration
statement on the appropriate form with the SEC covering the registration of the
debentures and the Conversion Shares on the earlier of the first filing of a
registration statement by us for any other purpose or December 31, 2000. In
addition, we must register the debentures and the Conversion Shares prior to a
call for redemption. Our agreement to register the Selling Stockholders' shares
of common stock triggers our obligation to register the debentures and the
Conversion Shares under the Indenture.
Each Selling Debentureholder is deemed to have agreed by subscription
for, or by acceptance of, a debenture or the Conversion Shares, to provide us
with all information regarding the holder that we may reasonably request to
include the holder's securities in a registration statement covering the
debentures. After such filing, we are required to take all reasonable steps
necessary to promptly cause the registration statement to be declared effective.
Following the effectiveness of this registration of the debentures and
the Conversion Shares, we are required to use our best efforts to keep the
registration statement continuously effective and current until September 22,
2000. We will contemporaneously take at our expense those steps necessary to
assist holders in their compliance with registration or qualification
requirements of state securities laws that may be applicable to re-sales of the
debentures and the Conversion Shares in jurisdictions where the debentures were
originally offered and sold by us.
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SELLING SHAREHOLDERS
The debentures and common stock to which this prospectus relates are
being offered by two different groups of holders, the Selling Debentureholders
and the Selling Stockholders. As previously noted, on September 23, 1999, we
issued $15,000,000 of the debentures to the Selling Debentureholders in a
private placement offering. The debentures are convertible into shares of our
common stock at a conversion price of $18.00 per share, or 55.5556 shares for
each $1,000 principal amount of the debentures, with the entire $15,000,000 of
debentures being convertible into 833,334 shares of common stock. We are
required under the terms of the Indenture to register the debentures and the
Conversion Shares with the SEC upon the earlier of our filing a registration
statement with the SEC for any purpose or December 31, 2000. The Indenture also
requires us to use our best efforts to maintain the effectiveness of the
registration statement under September 22, 2000.
Prior to the first use of this prospectus for making offers and sales
of the debentures or the Conversion Shares, we will file an amendment to this
prospectus to set forth the name, amount of debentures purchased, number of
shares of common stock into which the debentures are convertible and number of
shares beneficially owned for each Selling Debentureholder that is entitled to
use this prospectus for effecting sales of its debentures and/or Conversion
Shares.
The second group, the Selling Stockholders, consists of William R.
Hough & Co. and Ryan, Beck & Co., two NASD-member investment banking firms
located in St. Petersburg, Florida and Livingston, New Jersey, respectively.
William R. Hough & Co. acquired 85,798 and Ryan, Beck & Co. acquired 123,050
shares of common stock in May 1998, when we completed a public offering of
2,642,150 shares of common stock. The Selling Stockholders were the two
co-managing underwriters in the public offering. In order to enable the Selling
Stockholders to publicly sell their shares of common stock, we have agreed to
register their shares with the SEC. Our agreement to register the Selling
Stockholders' shares triggers our obligation under the Indenture to register the
debentures and the Conversion Shares.
Given that we are obligated under the Indenture to use our best efforts
to maintain the effectiveness of the registration statement until September 22,
2000 for the Selling Debentureholders, the Selling Stockholders will also have
the ability to publicly sell their shares of common stock until that date.
One of the Selling Stockholders, William R. Hough & Co., is affiliated
with us. William R. Hough, who is our Chairman of the Board and beneficially
owns 4,050,089 shares of common stock (35.1% of the aggregate number of shares
outstanding), is also President and the controlling shareholder of William R.
Hough & Co. In the normal course of our business, we solicit competitive bids
from approved broker/dealers, including William R. Hough & Co., for sales of
mortgage-backed securities. During 1998 and 1997, we placed $547.2 million and
$115.4 million, respectively, of sales of these types of securities through
William R. Hough & Co. Additionally, under an agreement entered into in August
1995, we periodically lend money to William R. Hough & Co. through the use of
repurchase agreements in which we agree to purchase securities from the
securities firm with subsequent agreements to repurchase at a rate based on the
prevailing federal funds rate and 1/8 of 1%.
20
<PAGE> 27
As noted above, William R. Hough & Co. acted as one of the two
co-managing underwriters for our May 1998 public offering of common stock,
receiving $1.5 million in underwriting fees from us. In addition, in June 1998,
William R. Hough & Co. acted as one of the placement agents in connection with
a private placement offering of approximately $240 million in securities backed
by High LTV loans and received substantial placement agent fees in the
transaction.
William R. Hough & Co. in July 1997 also acted, together with Ryan,
Beck & Co., as one of the two co-managing underwriters for the public offering
by us and an affiliated business trust, RBI Capital Trust, of 2,500,000 shares
of the trust's 9.10% Cumulative Trust Preferred Securities. In that capacity,
Hough & Co. earned underwriting fees paid by us of $539,100. In December 1997,
Hough & Co. also participated as co-placement agent in a private placement by us
of securities representing interests in $60 million of HIGH LTV loans. The
securities firm received $450,000 in fees for its placement agent services.
Since July 1996, William R. Hough & Co. has been offering for sale
insurance and mutual fund products, as well as investment advisory services, on
the premises of the Bank. Under the original agreement between William R. Hough
& Co. and us, we were paid a monthly fee of $300 for each banking office
utilized by William R. Hough & Co., plus of 15% of the gross commissions earned
by the securities firm from its sales of non-insurance products. In 1997, we
entered into a new agreement with William R. Hough & Co. under which we are
paid 50% of the net profits earned by Hough & Co. from sales of investment
products on the Bank's premises.
We have also had significant prior dealings with the other Selling
Stockholder, Ryan, Beck & Co. As co-managing underwriter for our May 1998 public
offering of common stock, Ryan, Beck received $1,246,436 in underwriting fees.
In 1997, the securities firm also received $388,801 in underwriting and other
fees for RBI Capital Trust's and our July 1997 public offering of the 9.10%
Cumulative Trust Preferred Securities, as well as other investment banking
services.
The following table sets forth certain other information with respect
to the Selling Stockholders and the number of shares of common stock that may be
sold by them pursuant to this registration statement. Each Selling Stockholder
has sole voting and investment power with respect to the shares of common stock
that its owns.
21
<PAGE> 28
<TABLE>
<CAPTION>
Ownership of the Selling Ownership of the Selling
Stockholders' Common Stock Stockholders' Common Stock
Before the Offering After the Offering
Name Number Number of Number of
of Shares Percent(1) Shares Shares (2)
Being Offered
<S> <C> <C> <C> <C>
William R. Hough & Co. 85,798(3) .81% 85,798(3) -0-(3)
Ryan, Beck & Co. 123,050(4) 1.19% 123,050(4) -0-(4)
</TABLE>
(1) On October 31, 1999, there were 10,533,919 shares of our common stock
outstanding.
(2) Assumes that all shares being registered are sold.
(3) Does not include the 4,050,089 shares of common stock beneficially
owned on October 31, 1999 by William R. Hough, the President of William
R. Hough who is also our Chairman of the Board, or the 257,382 shares
of common stock owned by Mr. Hough's adult children, as to which Mr.
Hough disclaims any beneficial interest.
(4) Without consideration of any common stock that Ryan, Beck may own from
time to time in the ordinary course of conducting its broker-dealer
operations.
PLAN OF DISTRIBUTION
From time to time, the debentures and/or the Conversion Shares held by
the Selling Debentureholders and covered by this prospectus may be offered for
sale by the Selling Debentureholders, or by their respective pledgees, donees,
transferees or other successors in interests from time to time. In the
Indenture, we agreed to file with the SEC a registration statement under the Act
covering both the debentures and the Conversion Shares on the earlier of the
first filing of a registration statement by us for any other purpose or December
31, 2000. We further agreed to use our best efforts to keep the registration
continuously effective and current until September 22, 2000 with respect to the
debentures and the Conversion Shares. The purpose of such registration is to
provide the Selling Debentureholders with a public market for the debentures and
for the Conversion Shares should they exercise their conversion rights under
their debentures. Under the terms of the Indenture, we have agreed to pay all
expenses incurred in connection with the registration of the debentures and the
Conversion Shares, except we will not pay any selling commissions or
underwriting discounts relating to the sale of the shares.
The shares of common stock held by the Selling Shareholders and covered
by this prospectus may be offered for sale by the Selling Shareholders, or by
their respective pledgees, donees, transferees or other successors in interests
from time to time. As in the case of the debentures and the Conversion Shares,
we will pay all expenses incurred in connection with the registration of the
shares of our common stock being sold by the Selling Stockholders, except we
will not pay any selling commissions or underwriting discounts relating to the
sale of the shares. The Selling Stockholders may agree to indemnify any
broker-dealer or agent that participates in any transactions involving the
Selling Stockholders' shares of common stock against certain liabilities,
including liabilities arising under the Act. We will also indemnify the Selling
Stockholders and the Selling Debentureholders against any liability arising out
of any untrue or alleged untrue statement of a material fact or any omission or
alleged omission to include a material fact in this prospectus, in our
registration statement filed with the SEC or in any other regulatory filing made
by us in connection with this offering, unless such untrue statement or
22
<PAGE> 29
omission was made in reliance on written information that we have received from
the Selling Shareholders.
The Selling Shareholders or their pledgees, donees, transferees or
other successors (the "Transferors") will receive all of the proceeds from the
sale of the Securities sold under this prospectus. The Transferors may from time
to time and in their individual discretion sell the Securities offered under
this prospectus, at prices and upon terms then prevailing or at prices related
to the then-current market price. These sales may be made:
- in transactions (which may include block sales) on the Nasdaq
National Market or any other national securities exchange or
automated interdealer quotation system on which shares of the
common stock are then listed;
- in negotiated transactions; or
- through a combination of the methods of sale described above,
at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to
prevailing market prices or at negotiated prices.
The Transferors may sell the debentures, the Conversion Shares and the
common stock offered under this prospectus directly to purchasers or through
underwriters, agents or broker-dealers by one or more of the following means:
- ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
- purchases by a broker or dealer as principal and resale by
that broker or dealer for its account under this prospectus;
- a block trade in which the broker or dealer so engaged will
attempt to sell the debentures or common stock as agent but
may position and resell a portion of the block as principal to
facilitate the transaction;
- an exchange distribution in accordance with the rules of the
exchange or automated interdealer quotation system on which
the common stock is then listed; and
- the writing of options on the shares.
In effecting sales, broker-dealers engaged by the Transferors may arrange for
other broker-dealers to participate in resales.
In connection with the distribution of the Selling Shareholders' shares
of common stock, the Selling Shareholders may enter into hedging transactions
with broker-dealers. In connection with such transactions, broker-dealers may
engage in short sales of the Selling Shareholders' shares of common stock
registered hereunder in the course of hedging the positions they assume
23
<PAGE> 30
with the Selling Shareholders. The Selling Shareholders may have previously sold
other shares of common stock short and, in such event, could deliver their
shares of common stock registered hereunder to close out such short positions.
The Selling Shareholders may also enter into option or other transactions with
broker-dealers that require the delivery to the broker-dealer of the shares of
common stock registered hereunder, which the broker-dealer may resell or
otherwise transfer pursuant to this registration. The Selling Shareholders may
also loan or pledge their shares of common stock registered hereunder to a
broker-dealer, and the broker-dealer may sell the shares of common stock so
loaned or upon default the broker-dealer may effect sales of the pledged shares
pursuant to this registration. The Selling Shareholders may also pledge their
shares of common stock registered hereunder to a lender other than a
broker-dealer, and upon default such lender may sell the shares of common stock
so pledged pursuant to this registration.
Any underwriters, agents or broker-dealers involved in the distribution
of the shares may receive compensation in the form of discounts, concessions or
commissions from Transferors and/or the purchasers of the shares for which such
underwriters, agents or broker-dealers may act as agents or to whom they sell as
principals, or both (which compensation as to an underwriter, agent or
particular broker-dealer will be negotiated prior to the sale and may be in
excess of customary compensation). If required by applicable law, at the time a
particular offer of shares is made, the terms and conditions of that transaction
will be set forth in a supplement to this prospectus.
The Transferors and any underwriters, agents or broker-dealers who act
in connection with the sale of the securities under this prospectus may be
deemed to be "underwriters" within the meaning of Section 2(11) of the Act, and
any compensation received by them might be deemed to be underwriting discounts
and commissions under the Act.
This prospectus may be amended and supplemented from time to time to
describe a more specific plan of distribution or other pertinent information. In
addition, any securities covered by this prospectus that qualify for sale
pursuant to Rule 144 and Rule 145 or any other exemption from registration under
the Act may be sold under such exemption rather than pursuant to this
prospectus.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for
us by Holland & Knight LLP, Washington, D.C.
24
<PAGE> 31
EXPERTS
The financial statements incorporated by reference in this prospectus
and elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent certified public accountants, as indicated in their reports
with respect thereto, and are incorporated herein in reliance upon the authority
of said firm as experts in giving said reports.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. Security holders may read and copy these
reports, proxy statements and other information:
- At the Public Reference Room of the SEC, Room 1024 - Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549;
- At the public reference facilities at the SEC's regional
offices located at Seven World Trade Center, 13th Floor, New
York, New York 10048 or Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661;
- At the offices of The Nasdaq Stock Market, Inc., Reports
Section, 1735 K Street, N.W., Washington, D.C. 20006; or
- From the Internet site maintained by the SEC at
http://www.sec.gov, which contains reports, proxy and
information statements and other information regarding issuers
that file electronically with the SEC.
Some locations may charge prescribed rates or modest fees for copies.
For more information on the SEC public reference rooms, please call the SEC at
1-800-SEC-0330. You can also obtain information on the Bank, our principal
subsidiary, from the FDIC's Internet site at http://www.fdic.gov and from the
Bank's Internet site at http://www.republicbankfl.com.
We have filed with the SEC a registration statement on Form S-3 under
the Act with respect to the Securities offered under this prospectus. As
permitted by the SEC, this prospectus, which constitutes a part of the
registration statement, does not contain all of the information contained in the
registration statement. Additional information may be obtained from the
locations described above. Statements contained in the prospectus concerning the
contents of any other document are not necessarily complete, and in each
instance, we have filed copies of these documents with the SEC as an exhibit to
the registration statement. You should refer to the applicable documents for all
the details.
25
<PAGE> 32
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them. This means that we can disclose important information to you by
referring you to other documents that we have filed with the SEC. The
information incorporated by reference is considered to be part of this
prospectus as if fully included in this document. Further, later information
that we file with the SEC after the date of this prospectus will automatically
update and supercede the information contained in or referenced in this
document. This prospectus is part of the registration statement that we filed
with the SEC. Until September 22, 2000, the expiration of one year following the
date on which we issued the debentures, we will use our best efforts to keep the
registration statement effective by incorporating by reference the documents
listed below and any future filings made with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 as amended:
- Current Report on Form 8-K, filed November 12, 1999;
- Quarterly Reports on Form 10-Q for the quarters ended March
31, June 30, and September 30, 1999;
- Current Report on Form 8-K, filed October 4, 1999;
- Current Report on Form 8-K, filed July 8, 1999;
- Definitive proxy statement on Schedule 14A, filed April 13,
1999;
- Annual Report on Form 10-K for the fiscal year ended December
31, 1998, filed March 30, 1999;
- Current Report on Form 8-K, filed February 1, 1999;
- Current Report on Form 8-K, filed January 7, 1999; and
- The description of our common stock contained in our
Registration Statement on Form S-2, filed April 14, 1998.
(File No. 333-50087.)
You may request a copy of these filings, at no cost, by writing to us
at the following address: Republic Bancshares, Inc., Attention: Secretary, 111
Second Avenue, N.E., Suite 300, St. Petersburg, Florida 33701 or by telephoning
us at (727) 823-7300. Exhibits to these filings will not be provided unless the
exhibits requested are specifically incorporated by reference into the document
that this prospectus incorporates by reference.
No person is authorized to give you any information or to make any
representation other than as contained in this prospectus or incorporated by
reference in connection with this offering. You should not rely on any
unauthorized information or representation. You should not assume that the
information contained in this prospectus or any supplement is accurate as of any
date other than the date that appears on the front of that specific document.
26
<PAGE> 33
This prospectus does not constitute an offer to exchange or sell, or a
solicitation of an offer to exchange or purchase, the Securities offered by this
prospectus in any jurisdiction in which the sale of these Securities, or the
offer or solicitation of an offer relating to these Securities is not permitted
or legal.
27
<PAGE> 34
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the various expenses payable in
connection with the sale and distribution of the securities being registered,
other than underwriting discounts and commissions. All of the amounts shown are
estimates, except for the SEC registration fee. We do not expect our expenses in
connection with this offering to exceed $65,000.
<TABLE>
<CAPTION>
Amount
<S> <C>
SEC Registration $ 5,034
Legal Fees and Expenses $50,000
Accounting Fees and Expenses $ 5,000
Total $60,034
</TABLE>
Item 15. Indemnification of Directors and Officers.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Company pursuant to the following provisions, or otherwise, we
have been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
The Florida Business Corporation Act ("FBCA") grants each corporation
organized thereunder the power to indemnify its officers, directors, employees
and agents on certain conditions against liabilities arising out of any action
or proceeding to which any of them is a party by reason of being such officer,
director, employee or agent. The FBCA permits a Florida corporation, with the
approval of its shareholders, to include within its articles of incorporation a
provision eliminating or limiting the personal liability of its directors to
such corporation or its shareholders for monetary damages resulting from certain
breaches of the directors' fiduciary duty of care, both in suits by or on behalf
of the corporation and in actions by shareholders of the corporation.
The Company's Bylaws essentially provide that the Company will
indemnify its officers, directors, employees and agents to the full extent
permitted by the FBCA. Under the FBCA, other than in actions brought by or in
the right of the Company, such indemnification would apply if it were determined
in the specific case that the proposed indemnitee acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the Company and, with respect to any criminal proceeding, if such
person had no reasonable cause to believe that the conduct was unlawful. In
actions brought by or in the right of the Company, such indemnification would
apply if it were determined in the specific case that the proposed indemnitee
acted in good faith and in a manner such person reasonably believed to be
II-1
<PAGE> 35
in or not opposed to the best interests of the Company, except that no
indemnification may be made with respect to any matter as to which such person
is adjudged liable to the Company, unless, and only to the extent that, the
court determines upon application that, in view of all the circumstances of the
case, the proposed indemnitee is fairly and reasonably entitled to
indemnification for such expenses as the court deems proper. To the extent that
any director, officer, employee or agent of the Company has been successful on
the merits or otherwise in defense of any action, suit or proceeding, whether
civil, criminal, administrative or investigative, such person must be
indemnified against reasonable expenses incurred by such person in connection
with the action.
The Company's Bylaws also provide that a director of the Company will
have no indemnification rights for liability for: (i) willful misconduct or a
conscious disregard for the best interests of the Company or its stockholders;
(ii) acts or omissions constituting a violation of criminal law; (iii) the
payment of certain unlawful dividends and the making of certain unlawful stock
purchases or redemptions; or (iv) any transaction from which the director
derived an improper personal benefit.
Expenses, including attorneys' fees, incurred by a Company director or
officer in defending a civil or criminal action, suit or proceeding must be paid
by the Company in advance of the final disposition of the action upon receipt of
an undertaking by the director or officer to repay such amounts if he is
ultimately found not to be entitled to indemnification by the Company.
II-2
<PAGE> 36
Item 16. List of Exhibits.
<TABLE>
<CAPTION>
NUMBER DESCRIPTION OF EXHIBITS
<S> <C>
4 Indenture, dated as of September 17, 1999, between the Company
and U.S. Trust Bank National Association, as Trustee
5 Opinion of Holland & Knight LLP regarding the legality of the
securities being offered hereby
12 Statement regarding computation of earnings to fixed charges
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Holland & Knight LLP (included in Opinion filed as
Exhibit 5)
24 Power of Attorney (included on signature page of registration
statement)
25 Statement of eligibility of U.S. Trust Bank National
Association to act as Trustee
</TABLE>
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the SEC pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than a 20 percent change in the maximum table in the
effective registration statement; and
II-3
<PAGE> 37
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8 or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or forwarded to the SEC by the Company pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 15
above, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-4
<PAGE> 38
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe it meets all the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of St. Petersburg, State of Florida, on the 13th day of
November, 1999.
REPUBLIC BANCSHARES, INC.
By: /s/ ALFRED T. MAY
----------------------------------
Alfred T. May, Chief Executive
Officer and President
II-5
<PAGE> 39
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Alfred T. May and William R. Falzone or
either one of them (with full power to act alone), his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities, to sign and execute on behalf of the undersigned any and all
amendments to this registration statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection with any such amendments, as
fully to all intents and purposes as he or she might or could do in person, and
does hereby ratify and confirm all that said attorneys-in-fact and agents, or
their respective substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ ALFRED T. MAY Chief Executive Officer, President November 13, 1999
- ------------------------------- and Director (Principal Executive
Alfred T. May Officer)
/s/ WILLIAM R. FALZONE Treasurer (Principal Financial and November 13, 1999
- ------------------------------- Accounting Officer)
William R. Falzone
/s/ WILLIAM R. HOUGH Chairman of the Board November 13, 1999
- -------------------------------
William R. Hough
/s/ JOHN W. SAPANSKI Director November 13, 1999
- -------------------------------
John W. Sapanski
/s/ FRED HEMMER Director November 13, 1999
- -------------------------------
Fred Hemmer
/s/ MARLA HOUGH Director November 13, 1999
- -------------------------------
Marla Hough
/s/ WILLIAM J. MORRISON Director November 13, 1999
- -------------------------------
William J. Morrison
</TABLE>
II-6
<PAGE> 40
EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER DESCRIPTION OF EXHIBITS
<S> <C>
4 Indenture, dated as of September 17, 1999, between the Company
and U.S. Trust Bank National Association, as Trustee
5 Opinion of Holland & Knight LLP regarding the legality of the
securities being offered hereby
12 Statement regarding computation of earnings to fixed charges
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Holland & Knight LLP (included in Opinion filed as
Exhibit 5)
24 Power of attorney (included on signature page of registration
statement)
25 Statement of eligibility of U.S. Trust Bank National
Association to act as Trustee
</TABLE>
<PAGE> 1
EXHIBIT 4
================================================================================
REPUBLIC BANCSHARES, INC.
AND
U.S. BANK TRUST NATIONAL ASSOCIATION,
TRUSTEE
-------------------------------
INDENTURE
DATED AS OF SEPTEMBER 17, 1999
-------------------------------
$15,000,000
7% CONVERTIBLE SUBORDINATED DEBENTURES
DUE 2014
================================================================================
<PAGE> 2
Republic Bancshares, Inc.
Reconciliation and tie between Trust Indenture Act of
1939 and Indenture, dated as of September 17, 1999
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
- --------------------------- -----------------
<S> <C>
ss.310(a)(1) ............................................................................................. 7.8
(a)(2)................................................................................................. 7.8
(a)(3)................................................................................................. N/A
(a)(4)................................................................................................. N/A
(b) ................................................................................................... 7.8, 7.9
(c) ................................................................................................... N/A
ss.311(a) ................................................................................................ 7.12
(b) ................................................................................................... 7.12
(c).................................................................................................... N/A
ss.312(a) ................................................................................................ 5.1, 5.2
(b) ................................................................................................... 5.2
(c).................................................................................................... 5.2
ss.313(a) ................................................................................................ 5.3
(b)(1)................................................................................................. N/A
(b)(2) ................................................................................................ N/A
(c) ................................................................................................... 5.3
(d) ................................................................................................... 5.3
ss.314(a) ................................................................................................ 5.4
(b) ................................................................................................... N/A
(c) ................................................................................................... 2.2
(d) ................................................................................................... N/A
(e) ................................................................................................... 1.3
(f) ................................................................................................... N/A
ss.315(a) ................................................................................................ 7.1(a)
(b) ................................................................................................... 7.2
(c) ................................................................................................... 7.1(b)
(d) ................................................................................................... 7.1(c)
(e) ................................................................................................... 6.14
ss.316(a)(1)(A)........................................................................................... 6.12
(a)(1)(B).............................................................................................. 6.13
(a)(2)................................................................................................. N/A
(b) ................................................................................................... 6.8
ss.317(a)(1).............................................................................................. 6.3
(a)(2)................................................................................................. 6.4
(b) ................................................................................................... 4.3
ss.318(a) ................................................................................................ 1.7
</TABLE>
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NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
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RECITALS OF THE COMPANY................................................................................... 1
ARTICLE I - Definitions and Other Provisions of General Application ...................................... 1
SECTION 1.1. Definitions ........................................................................ 1
SECTION 1.2. Compliance Certificates and Opinions ............................................... 6
SECTION 1.3. Form of Documents Delivered to Trustee ............................................. 7
SECTION 1.4. Action by Debentureholders ......................................................... 7
SECTION 1.5. Notices, etc., to Trustee and Company............................................... 8
SECTION 1.6. Notices to Debentureholders; Waiver ................................................ 9
SECTION 1.7. Conflict with Trust Indenture Act ................................................. 9
SECTION 1.8. Effect of Headings and Table of Contents .......................................... 9
SECTION 1.9. Successors and Assigns ............................................................ 9
SECTION 1.10. Separability Clause ............................................................... 9
SECTION 1.11. Benefits of Indenture ............................................................. 10
SECTION 1.12. Legal Holidays ................................................................... 10
SECTION 1.13. Governing Law .................................................................... 10
ARTICLE II - Debenture Forms ........................................................................... 10
SECTION 2.1. Forms Generally .................................................................. 10
SECTION 2.2. Debentures in Global Form ........................................................ 10
SECTION 2.3. Form of Debenture ................................................................ 11
ARTICLE III - The Debentures ............................................................................ 19
SECTION 3.1. General Title; General Limitations; Terms of Debenture ........................... 19
SECTION 3.2. Denominations ..................................................................... 19
SECTION 3.3. Execution, Authentication and Delivery ............................................ 19
SECTION 3.4. Temporary Debentures .............................................................. 20
SECTION 3.5. Registration, Registration of Transfer and Exchange ............................... 20
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Debentures .................................. 22
SECTION 3.7. Payment of Interest; Interest Rights Preserved .................................... 23
SECTION 3.8. Persons Deemed Owners ............................................................. 24
SECTION 3.9. Cancellation ..................................................................... 24
SECTION 3.10. Computation of Interest ........................................................... 24
ARTICLE IV - Covenants .................................................................................. 24
SECTION 4.1. Payment of Principal and Interest ................................................. 24
SECTION 4.2. Maintenance of Office or Agency ................................................... 25
SECTION 4.3. Money for Debenture Payments to be Held in Trust .................................. 25
SECTION 4.4. Payment of Taxes and Other Claims ................................................. 26
SECTION 4.5. Maintenance of Properties ......................................................... 26
SECTION 4.6. Statement as to Compliance ........................................................ 26
SECTION 4.7. Corporate Existence ............................................................... 27
SECTION 4.8. Restrictions on Dividends, Redemptions and Other Payments ......................... 27
SECTION 4.9. Restrictions on Pledge of Bank Capital Stock ...................................... 27
</TABLE>
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ARTICLE V - Debentureholders' Lists and Reports by the Trustee and the Company .......................... 28
SECTION 5.1. Company to Furnish Trustee Names and Addresses of Debentureholders ................ 28
SECTION 5.2. Preservation of Information; Communications to Debentureholders ................... 28
SECTION 5.3. Reports by Trustee ................................................................ 28
SECTION 5.4. Reports by Company ................................................................ 28
ARTICLE VI - Remedies ................................................................................... 29
SECTION 6.1. Events of Default ................................................................. 29
SECTION 6.2. Acceleration of Maturity; Rescission and Annulment ................................ 30
SECTION 6.3. Suits for Enforcement by Trustee .................................................. 30
SECTION 6.4. Trustee May File Proofs of Claim .................................................. 31
SECTION 6.5. Trustee May Enforce Claims Without Possession of Debentures ....................... 31
SECTION 6.6. Application of Money Collected .................................................... 31
SECTION 6.7. Limitation on Suits ............................................................... 32
SECTION 6.8. Unconditional Right of Debentureholders to Receive Principal and Interest ......... 32
SECTION 6.9. Restoration of Rights and Remedies ................................................ 32
SECTION 6.10. Rights and Remedies Cumulative .................................................... 33
SECTION 6.11. Delay or Omission Not A Waiver .................................................... 33
SECTION 6.12. Control by Debentureholders ....................................................... 33
SECTION 6.13. Waiver of Past Defaults ........................................................... 33
SECTION 6.14. Undertaking for Costs ............................................................. 34
SECTION 6.15. Waiver of Stay or Extension Laws .................................................. 34
ARTICLE VII - The Trustee ............................................................................... 34
SECTION 7.1. Certain Duties and Responsibilities ............................................... 34
SECTION 7.2. Notice of Defaults ................................................................ 35
SECTION 7.3. Certain Rights of Trustee ......................................................... 35
SECTION 7.4. Not Responsible for Recitals or Issuance of Debentures ............................ 36
SECTION 7.5. May Hold Debentures ............................................................... 36
SECTION 7.6. Money Held in Trust ............................................................... 37
SECTION 7.7. Compensation and Reimbursement .................................................... 37
SECTION 7.8. Corporate Trustee Required; Eligibility; Disqualification ......................... 37
SECTION 7.9. Resignation and Removal; Appointment of Successor ................................. 38
SECTION 7.10. Acceptance of Appointment by Successor ............................................ 39
SECTION 7.11. Merger, Conversion, Consolidation or Succession to Business of Trustee ............ 39
SECTION 7.12. Preferential Collection of Claims against Company ................................. 39
ARTICLE VIII - Supplemental Indentures .................................................................. 39
SECTION 8.1. Supplemental Indentures Without Consent of Debentureholders ....................... 40
SECTION 8.2. Supplemental Indentures With Consent of Debentureholders .......................... 41
SECTION 8.3. Execution of Supplemental Indentures .............................................. 41
SECTION 8.4. Effect of Supplemental Indentures ................................................. 41
SECTION 8.5. Conformity with Trust Indenture Act ............................................... 41
SECTION 8.6. Reference in Debentures to Supplemental Indentures ................................ 41
SECTION 8.7. Subordination Unimpaired .......................................................... 41
</TABLE>
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ARTICLE IX - Consolidation, Merger, Conveyance, Transfer or Lease ....................................... 42
SECTION 9.1. Company May Consolidate, etc., Only on Certain Terms .............................. 42
SECTION 9.2. Successor Corporation Substituted ................................................. 42
SECTION 9.3. Limitation on Lease of Properties as Entirety ..................................... 42
ARTICLE X - Satisfaction, Discharge and Defeasance ...................................................... 42
SECTION 10.1. Satisfaction and Discharge of Indenture ........................................... 42
SECTION 10.2. Application of Trust Money ........................................................ 43
SECTION 10.3. Satisfaction, Discharge and Defeasance of Debentures .............................. 44
ARTICLE XI - Subordination of Debentures ................................................................. 45
SECTION 11.1. Subordination ..................................................................... 45
SECTION 11.2. Distribution of Assets, etc ....................................................... 45
SECTION 11.3. Subrogation ....................................................................... 46
SECTION 11.4. Obligation of the Company Unconditional ........................................... 47
SECTION 11.5. Payments on Debentures Permitted .................................................. 47
SECTION 11.6. Effectuation of Subordination by Trustee .......................................... 47
SECTION 11.7. Knowledge of Trustee .............................................................. 48
SECTION 11.8. Trustee May Hold Senior Indebtedness .............................................. 48
SECTION 11.9. Rights of Holders of Senior Indebtedness Not Impaired ............................. 48
SECTION 11.10. Alteration of Senior Indebtedness ................................................. 48
SECTION 11.11. Article Applicable to Paying Agents ............................................... 48
SECTION 11.12. Trustee Not Fiduciary for Holders of Senior Indebtedness .......................... 48
SECTION 11.13. Subordinated Junior Term Debt ..................................................... 48
ARTICLE XII - Redemption ................................................................................ 49
SECTION 12.1. Mandatory Redemption .............................................................. 49
SECTION 12.2. Optional Redemption ............................................................... 49
SECTION 12.3. Notices to Trustee ................................................................ 49
SECTION 12.4. Selection of Debentures to be Redeemed ............................................ 50
SECTION 12.5. Notice of Redemption .............................................................. 50
SECTION 12.6. Effect of Notice of Redemption .................................................... 50
SECTION 12.7. Deposit of Redemption Price ....................................................... 51
SECTION 12.8. Debentures Redeemed in Part ....................................................... 51
SECTION 12.9. Repurchasing of Debentures ........................................................ 51
ARTICLE XIII - Conversion of Debentures ................................................................. 51
SECTION 13.1. Conversion Privilege .............................................................. 51
SECTION 13.2. Manner of Exercise of Conversion Privilege ........................................ 51
SECTION 13.3. Cash Adjustment Upon Conversion ................................................... 52
SECTION 13.4. Conversion Price .................................................................. 52
SECTION 13.5. Adjustment of Conversion Price .................................................... 52
SECTION 13.6. Effect of Reclassifications, Consolidations, Mergers or
Sales on Conversion Privileges .................................................... 54
</TABLE>
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SECTION 13.7. Taxes on Conversions .............................................................. 55
SECTION 13.8. Company to Reserve Stock .......................................................... 55
SECTION 13.9. Disclaimer by Trustee of Responsibility for Certain Matters ....................... 55
SECTION 13.10. Company to Give Notice of Certain Events .......................................... 56
ARTICLE XIV - Immunity of Directors, Officers, Employees and Stockholders ............................... 56
SECTION 14.1. Exemption from Individual Liability ............................................... 56
ARTICLE XV - Registration Under Securities Act .......................................................... 57
SECTION 15.1. Debentures Entitled to Registration ................................................ 57
SECTION 15.2. Debenture Registration Statement ................................................... 57
SECTION 15.3. Timing of Filing Debenture Registration Statement .................................. 57
SECTION 15.4. Period of Effectiveness; State Law Requirements .................................... 57
SECTION 15.5. Debentureholder to Supply Information .............................................. 57
SECTION 15.6. Exception to Requirements .......................................................... 58
</TABLE>
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THIS INDENTURE, dated as of September 17, 1999, by and between REPUBLIC
BANCSHARES, INC., a corporation duly organized and existing under the laws of
the State of Florida (the "Company"), and U.S. BANK TRUST NATIONAL ASSOCIATION
(the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation, execution and delivery of
its debentures, to be known as 7% Convertible Subordinated Debentures Due 2014
(the "Debentures"), the amount and terms of which are as hereinafter provided;
and, to provide the terms and conditions upon which the Debentures are to be
authenticated, issued and delivered, the Company has duly authorized the
execution and delivery of this Indenture.
All acts and things necessary to make the Debentures, when executed by
the Company and authenticated and delivered by the Trustee as in this Indenture
provided, the valid, binding and legal obligations of the Company, and to
constitute these presents as a valid indenture and agreement according to its
terms, have been done and performed, and the execution of this Indenture and the
issue hereunder of the Debentures have in all respects been duly authorized, and
the Company, in the exercise of the legal right and power vested in it, executes
this Indenture and proposes to make, execute, and deliver the Debentures.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
Each party agrees as follows for the benefit of the other party and for
the equal and proportionate benefit of the Debentureholders (as hereinafter
defined):
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. Definitions.
For all purposes of this Indenture and of any indenture supplemental
hereto, except as otherwise expressly provided or unless the context otherwise
requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as the
singular;
(2) the term "this Indenture" means this instrument as
originally executed or as it may from time to time be supplemented or
amended by one or more indentures supplemental hereto entered into
pursuant to the applicable provisions hereof;
(3) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(4) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in effect on the date of execution of this
Indenture; and
(5) all references in this instrument to "Articles",
"Sections" and other subdivisions are to the designated Articles,
Sections and other subdivisions of this instrument as originally
executed; the
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<PAGE> 8
words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
Certain terms used principally in Article Seven are defined in
that Article.
"Act" when used with respect to any Debentureholder has the meaning
specified in Section 1.4.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with such specified Person. 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.
"Authorized Newspaper" means a newspaper of general circulation in the
relevant area (e.g., in the Place of Payment as provided in Sections 3.7 and
4.3), printed in the English language and customarily published on each Business
Day, whether or not published on Saturdays, Sundays or holidays. Whenever
successive weekly publications in an Authorized Newspaper are required hereunder
they may be made (unless otherwise expressly provided herein) on the same or
different days of the week and in the same or different Authorized Newspapers.
"Bank Capital Stock" means any and all shares, interests, participation
rights or other equivalents (however designated and whether common, preferred or
other) of the corporate stock of Republic Bank, a Subsidiary of the Company,
together with any and all other securities of Republic Bank convertible or
exchangeable, with or without additional consideration, into the corporate stock
of Republic Bank.
"Board of Directors" means either the board of directors of the Company
or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each day which is neither a Saturday, Sunday nor
other day on which banking institutions in the Place of Payment are authorized
by law or required by executive order to close.
"Capitalized Lease Obligation" means any lease obligation of a Person
incurred with respect to any property (whether real, personal or mixed) acquired
or leased by such Person and used in its business that is required to be
recorded as a capitalized lease in accordance with generally accepted accounting
principles.
"Capital Stock" means any and all shares, interests, participation
rights or other equivalents (however designated and whether common, preferred or
other) of corporate stock.
"Closing Price" means the closing bid price per share of Common Stock
on the Nasdaq National Market or, if then traded on a national securities
exchange, the closing price on that exchange or the highest bid quotation on an
automated quotation system, or if the Common Stock shall not then be listed on
the Nasdaq National Market or on an exchange or included on an automated
quotation system, as reported by the National Quotation Bureau, Inc. or similar
reporting service.
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<PAGE> 9
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties on such date.
"Common Stock" means the class of stock which, at the date of this
Indenture, is designated as Common Stock, par value $2.00 per share, of the
Company and the class or classes of stock, if any, into which such Common Stock
may thereafter be changed or reclassified.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request", "Company Order" and "Company Consent" mean,
respectively, a written request, order or consent signed in the name of the
Company by its Chairman of the Board of Directors, President or a Vice
President, and delivered to the Trustee.
"Conversion Price" means the price per share of Common Stock from time
to time in effect at which Debentures may be converted into Common Stock
pursuant to Article Thirteen.
"Debentures" means the debentures authenticated and delivered under
this Indenture.
"Debentureholder" or "Holder" means a Person in whose name a Debenture
is registered in the Debenture Register.
"Debenture Register" and "Debenture Registrar" have the respective
meanings specified in Section 3.5.
"Debenture Registration Statement" has the meaning specified in Section
15.2.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Depositary" means, if any Depositary is designated by the Company, The
Depositary Trust Company or any other clearing agency registered under the
Exchange Act subsequently designated as Depositary by the Company.
"Event of Default" has the meaning specified in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934 (15 U.S.C.
ss.ss.78a-78jj), as in force at the dATE as of which this instrument was
executed, or as hereafter amended.
"Indebtedness" means (i) all Obligations of the Company for borrowed
money (whether or not the recourse of the lender is to the whole of the assets
of the Company or only to a portion thereof), (ii) all indebtedness of the
Company which is evidenced by a note, debenture, bond or other similar
instrument, including Capitalized Lease Obligations, (iii) all indebtedness of
the Company representing the unpaid balance of the purchase price of any goods
or other property or balance owed for any services rendered, (iv) all
indebtedness of the Company, including Capitalized Lease Obligations incurred,
assumed or given in an
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acquisition (whether by way of purchase, merger or otherwise) of any business,
real property or other assets, (v) any indebtedness of others described in the
preceding clauses (i), (ii), (iii) and (iv) that the Company has guaranteed or
for which it is otherwise liable and (vi) any amendment, renewal, extension,
deferral, modification, restructuring or refunding of any such indebtedness,
obligation or guarantee.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Debentures.
"Junior Term Debt" means the Company's callable, non-convertible junior
subordinated term debt with a maturity of seven years, bearing an interest rate
of the then prevailing prime rate plus 1%, and limited to not more than
$4,000,000 in principal amount, which is issued or is to be issued at or about
the date of issuance of the Debentures.
"Maturity" when used with respect to any Debenture means the date on
which the principal of and interest on such Debenture becomes due and payable as
therein or herein provided, whether at the Stated Maturity or by declaration of
acceleration or otherwise.
"Obligations" means, with respect to any Indebtedness, any principal,
premium, interest, penalties, fees and other liabilities payable from time to
time and obligations performable under the documentation governing such
Indebtedness.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board of Directors, the President or a Vice President, and by the Chief
Financial Officer, the Treasurer, an Assistant Treasurer, the Controller, an
Assistant Controller, the Secretary or an Assistant Secretary of the Company,
and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may,
except as otherwise expressly provided in this Indenture, be counsel for the
Company.
"Outstanding" when used with respect to Debentures means, as of the
date of determination, all Debentures theretofore authenticated and delivered
under this Indenture, except:
(i) Debentures theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Debentures for whose payment money in the necessary
amount has been theretofore deposited with the Trustee or any Paying
Agent in trust for the Holders of such Debentures;
(iii) Debentures in exchange for or in lieu of which other
Debentures have been authenticated and delivered pursuant to this
Indenture; and
(iv) Debentures which have been surrendered for conversion
pursuant to Article Thirteen;
provided, however, that in determining whether the Holders of the requisite
principal amount of Debentures Outstanding have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Debentures owned
by the Company or any other obligor upon the Debentures or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Debentures which the Trustee knows to be so owned shall
be so disregarded. Debentures so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Debentures and
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<PAGE> 11
that the pledgee is not the Company or any other obligor upon the Debentures or
any Affiliate of the Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Debentures on behalf of the Company. The Company
or any of its subsidiaries may act as Paying Agent.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment" means a city or political subdivision thereof
designated as such by the Company in accordance with the terms of this
Indenture.
"Predecessor Debentures" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture; and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 3.6 in lieu
of a mutilated, lost, destroyed or stolen Debenture shall be deemed to evidence
the same debt as the mutilated, lost, destroyed or stolen Debenture.
"Principal Corporate Trust Office" means the principal corporate trust
office of the Trustee at the location set forth in Section 1.5 or at such other
location as the Trustee may from time to time designate by written notice to the
Company.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the close of business on the 15th day of the calendar month
immediately preceding the calendar month in which such Interest Payment Date
occurs, whether or not a Business Day.
"Responsible Officer" when used with respect to the Trustee means the
chairman or the vice chairman of the board of directors, the chairman or vice
chairman of the executive committee of the board of directors, the president,
any vice-president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any trust officer or
assistant trust officer, the controller and any assistant controller or any
other officer of the 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 his knowledge of and familiarity with the particular
subject.
"Responsible Officer of the Company" shall mean the Chairman or Vice
Chairman of the Board of Directors, the President, any Vice-President, the Chief
Financial Officer, the Treasurer, the Controller or the Secretary of the
Company.
"Securities Act" means the Securities Act of 1933 (15 U.S.C.
ss.ss.77a-77aa), as in force at the date as OF which this instrument was
executed, or as hereafter amended.
"Senior Indebtedness" means any and all Indebtedness of the Company,
except any particular Indebtedness, the instrument creating or evidencing the
same or pursuant to which the same is outstanding expressly provides that such
Indebtedness shall be subordinate or shall rank pari passu in right of payment
to the Debentures. The Company's currently outstanding 9.10% Junior Subordinated
Debentures Due 2027 issued under the Indenture dated as of July 31, 1997 between
the Company and Wilmington Trust Company are expressly included within the
meaning of "Senior Indebtedness". Accordingly, the Debentures are not superior
in right of payment to such 9.10% Junior Subordinated Debentures Due 2027. The
Junior Term Debt
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is not Senior Indebtedness, although under certain circumstances specified in
Section 11.13 it may be called by the Company and retired prior to payment of
the Debentures.
"Special Payment Date" has the meaning specified in Section 3.7.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity" when used with respect to any Debenture means the
date specified in such Debenture as the fixed date on which the principal of and
the interest on such Debenture is due and payable.
"Subsidiary" means, with respect to the Company, any corporation,
association or other business entity of which more than fifty percent (50%) of
the total voting power of shares of Capital Stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
officers or trustees thereof is at the time owned in the aggregate, directly or
indirectly, by the Company and its Subsidiaries.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939
(15 U.S.C. ss.ss.77aaa-77bbbb), as IN force at the date as of which this
instrument was executed, except as provided in Section 8.5.
"Vice President" when used with respect to the Company or the Trustee
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
"U.S. Government Obligations" means direct obligations of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged.
SECTION 1.2. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and, to the extent requested by the Trustee, an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent, if
any, have been complied with, except that in the case of any such application or
request as to which the furnishing of such documents is specifically required by
any provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
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(c) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him 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
individual, such condition or covenant has been complied with.
SECTION 1.3. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such counsel's certificate or opinion is
based are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that such certificate or opinion or representations are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4. Action by Debentureholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given
or taken by Debentureholders may be embodied in and evidenced by (i)
one or more instruments of substantially similar tenor signed by such
Debentureholders in person or by agent or proxy duly appointed in
writing. Except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to
the Company. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Debentureholders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Indenture
and (subject to Sections 7.1 and 7.3) conclusive in favor of the
Trustee and the Company, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness
of such execution or by the certificate of any notary public or other
officer authorized by law to take acknowledgments of deeds, certifying
that the individual signing such instrument or writing acknowledged to
him the execution thereof. Where such execution is by an officer of a
corporation or association or a member of a partnership or an employee
of a public or governmental agency on behalf of such corporation,
association, partnership or agency, or by an agent or fiduciary, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or
writing, or the authority of the
7
<PAGE> 14
Person executing the same, may also be proved in any other manner which
the Trustee deems sufficient.
(c) The ownership of Debentures shall be proved by the
Debenture Register or by a certificate of the Debenture Registrar
thereof.
(d) At any time prior to the taking of any action by the
Holders of the percentage in aggregate principal amount of the
Debentures specified in this Indenture in connection with such action,
any Holder which has consented to such action may, by filing written
notice with the Trustee at its Principal Corporate Trust Office and
upon proof of holding as provided in this Section 1.4, revoke such
action so far as concerns such Debenture. Except as aforesaid, any
request, demand, authorization, direction, notice, consent, waiver or
other action by the Holder of any Debenture shall be conclusive and
binding upon such Holder and upon all future Holders of such Debenture
and of every Debenture issued upon the registration of transfer thereof
or in exchange therefor or in lieu thereof, in respect of anything
done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon
such Debenture. Any action taken by the Holders of the percentage in
aggregate principal amount of the Debentures specified in the Indenture
in connection with such action shall be conclusive and binding upon the
Company, the Trustee and the Holders of all of the Debentures.
(e) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other
action, the Company may, at its option, by or pursuant to a Board
Resolution, fix in advance a record date for the determination of
Holders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company
shall have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or
other action may be given before or after such record date, but only
Holders of record at the close of business on such record date shall be
deemed to be the Holders for the purposes of determining whether
Holders of the requisite proportion of Outstanding Debentures have
authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other action, and
for that purpose the Outstanding Debentures shall be computed as of
such record date; provided that no such authorization, agreement or
consent by the Holders on such record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
SECTION 1.5. Notices, etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Debentureholders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Debentureholder or by the Company shall
be sufficient for every purpose hereunder if and only if made, given,
furnished or filed in writing to or with the Corporate Trust Department
of the Trustee at the Principal Corporate Trust Office which at the
date of this Indenture is 500 West Cypress Creek Road, Suite 560, Fort
Lauderdale, Florida 33309, or
(2) the Company by the Trustee or by any Debentureholder shall
be sufficient for every purpose hereunder if in writing and mailed,
first-class, postage prepaid, to the Company addressed to it at 111
Second Avenue N.E., Suite 300, St. Petersburg, Florida 33701, to the
attention of the Corporate Secretary, or at any other address furnished
in writing to the Trustee by the Company.
8
<PAGE> 15
Notwithstanding the foregoing, the Debentures first presented to the
Trustee for authentication after the execution and delivery of this Indenture
may be delivered by the Company for authentication, together with a Company
Order of the authentication and delivery of such Debentures, at Atlanta,
Georgia, or at such other place as may be determined by the Company and
reasonably acceptable to the Trustee.
SECTION 1.6. Notices to Debentureholders; Waiver.
Where this Indenture provides for notice to Debentureholders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first class, postage prepaid, to
each Debentureholder affected by such event, at his address as it appears on the
Debenture Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Debentureholders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular
Debentureholder shall affect the sufficiency of such notice with respect to
other Debentureholders. Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be equivalent of
such notice. Waivers of notice by Debentureholders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impractical to mail notice of any event to
Debentureholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice.
In case, by reason of the suspension of publication of any Authorized
Newspaper, or by reason of any other cause, it shall be impossible to make
publication of any notice in an Authorized Newspaper or Authorized Newspapers as
required by this Indenture, then such method of publication or notification as
shall be made with the approval of the Trustee shall constitute a sufficient
publication of such notice.
SECTION 1.7. Conflict with Trust Indenture Act.
This Indenture is prepared as if subject to the TIA, but without formal
qualification thereunder, and if any provision hereof limits, qualifies or
conflicts with another provision hereof that is required to be included in this
Indenture by any of the provisions of TIA, such TIA-required provision shall
control.
SECTION 1.8. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.9. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 1.10. Separability Clause.
In case any provision in this Indenture or in the Debentures shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
9
<PAGE> 16
SECTION 1.11. Benefits of Indenture.
Nothing in this Indenture or in the Debentures, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Indebtedness and the Debentureholders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 1.12. Legal Holidays.
In any case where the date of an Interest Payment Date or the Stated
Maturity of any Debenture shall not be a Business Day, then (notwithstanding any
other provision of the Debentures or this Indenture) payment of the principal
of, or interest on, any Debentures need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect as if
made on the nominal date of any such Interest Payment Date or Stated Maturity.
SECTION 1.13. Governing Law.
This Indenture and the Debentures issued hereunder shall be controlled,
construed and enforced in accordance with the laws of the State of Florida
applicable to contracts made and to be performed entirely in that State.
ARTICLE II
DEBENTURE FORMS
SECTION 2.1. Forms Generally.
The Debentures and the certificates of authentication thereon shall be
in substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon, as may be
required to comply with the rules of any securities exchange, or as may,
consistent herewith, be determined by the officers executing such Debentures, as
evidenced by their execution of the Debentures. Any portion of the text of any
Debenture may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Debenture.
The definitive Debentures shall be printed, lithographed or engraved on
steel engaged borders or may be produced in any other manner, all as determined
by the officers executing such Debentures as evidenced by their execution of
such Debentures.
SECTION 2.2. Debentures in Global Form.
The Debentures may be issued in whole or in part in global form and any
such Debenture in global form may provide that it shall represent the aggregate
or specified amount of Outstanding Debentures from time to time endorsed thereon
and may also provide that the aggregate amount of Outstanding Debentures
represented thereby may from time to time be reduced to reflect exchanges. Any
endorsement of a Debenture in global form to reflect the amount, or any increase
or decrease in the amount or changes in the rights of Holders of Outstanding
Debentures represented thereby, shall be made in such manner and by such Person
or Persons as shall be specified therein. Any instructions by the Company with
respect to a Debenture in global
10
<PAGE> 17
form shall be in writing but, to the extent not relevant, need not comply with
Section 314(c) of the Trust Indenture Act.
SECTION 2.3. Form of Debenture.
The Debentures shall include one or more legends required in the
judgment of the Company by applicable securities laws. Each Holder shall be
deemed to have agreed to the imposition of such legends by acceptance of a
Debenture or shares of Common Stock issued upon conversion thereof, and to have
agreed that so long as any of such legends remain on the certificates evidencing
such securities, prior to any transfer (including the sale, assignment, pledge,
hypothecation, gift or other transfer) of any of the same, to comply in all
respects with such legend requirements. Each certificate evidencing the
Debentures and the shares of Common Stock issued upon conversion of a Debenture
shall, upon any such transfer, bear such legends unless, immediately following
such transfer, such securities are no longer subject to restriction on transfer
under any applicable securities laws.
11
<PAGE> 18
[FORM OF FACE OF DEBENTURE]
REPUBLIC BANCSHARES, INC.
7% Convertible Subordinated Debentures
Due 2014
THIS IS NOT A DEPOSIT, SAVINGS ACCOUNT OR OTHER OBLIGATION OF ANY BANK
OR SAVINGS INSTITUTION, AND IS NOT INSURED BY THE BANK INSURANCE FUND
OR THE SAVINGS ASSOCIATION INSURANCE FUND OF THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
No. $
--------------- ---------------
[insert any applicable securities law legend]
REPUBLIC BANCSHARES, INC.
promises to pay to
or registered assigns,
the principal sum of
Dollars on October 1, 2014.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15 (whether or not a
Business Day)
Dated: , 1999
------------------
REPUBLIC BANCSHARES, INC.,
a Florida corporation
By:
By:
(SEAL)
This is one of the Debentures
referred to in the within-
mentioned Indenture:
U.S. Bank Trust National Association, as Trustee
By:
Vice President
12
<PAGE> 19
REPUBLIC BANCSHARES, INC.
7% Convertible Subordinated Debentures
Due 2014
1. Interest. Republic Bancshares, Inc., a corporation duly organized
and existing under the laws of the State of Florida (the "Company"), promises to
pay simple interest on the principal amount of this Debenture at the rate per
annum shown above from the date of issuance until maturity. The Company will pay
interest semi-annually on each April 1 and October 1 of each year, or if any
such day is not a Business Day (as defined in the Indenture), on the next
succeeding Business Day (each an "Interest Payment Date").
Interest on the Debentures will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
issuance; provided, that if there is no existing Default in the payment of
interest, and if this Debenture is authenticated between a record date referred
to on the face hereof and the next succeeding Interest Payment Date, interest
shall accrue from such next succeeding Interest Payment Date; provided further,
that the first Interest Payment Date shall be April 1, 2000. The Company shall
pay interest on overdue principal at the then applicable interest rate on the
Debentures; it shall pay interest on overdue installments of interest (without
regard to any applicable grace periods) at the same rate to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. Method of Payment. The Company will pay interest on the Debentures
(except defaulted interest) to the Persons who are registered Holders of
Debentures at the close of business on the record date next preceding the
Interest Payment Date, even if such Debentures are cancelled after such record
date and on or before such Interest Payment Date. The Holder must surrender this
Debenture to a Paying Agent to collect principal payments. The Company will pay
principal and interest in money of the United States that at the time of payment
is legal tender for payment of public and private debts. The Company, however,
may pay principal and interest by check payable in such money. It may mail an
interest check to a Holder's registered address.
3. Paying Agent and Registrar. Initially, the Trustee will act as
Paying Agent and Debenture Registrar. The Company may change any Paying Agent,
Debenture Registrar or co-registrar without notice to any Debentureholder. The
Company may act in any such capacity.
4. Indenture. This Debenture is one of a duly authorized issue of
Debentures of the Company issued under and pursuant to an Indenture dated as of
September 17, 1999 and all indentures supplemental thereto (herein referred to
as the "Indenture") between the Company and the Trustee. The terms of the
Debentures include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date of the Indenture. The Debentures are
subject to all such terms, and Debentureholders are referred to the Indenture
and such Act for a statement of such terms. The Debentures are limited to
$15,000,000 in aggregate principal amount. Capitalized terms used in this
Debenture and not defined in this Debenture shall have the meanings set forth in
the Indenture.
5. Optional Redemption. The Debentures shall be redeemable at the
option of the Company, in whole or in part, on not less than thirty (30) days
notice, but not more than sixty (60) days prior to the date fixed for
redemption, under the circumstances described herein. Under each of these
circumstances, amounts required to be paid on redemption shall include accrued
interest, if any, to the redemption date.
First, the Company may redeem all or any of the Debentures at any time,
or from time to time, after October 1, 2004, at the following redemption prices
(expressed as percentages of principal amount), when redeemed during the
12-month periods indicated below:
13
<PAGE> 20
October 1 through September 30
2004 2005 106%
2005 2006 105%
2006 2007 104%
2007 2008 103%
2008 2009 102%
2009 2010 101%
2010 and thereafter 100%
Second, the Company may redeem all or any of the Debentures at any
time, or from time to time, without the payment of any premium, after the
Closing Price (as defined in the Indenture) of the Common Stock for not less
than twenty (20) consecutive trading days equals or exceeds 130% of the
Conversion Price then in effect.
If the redemption date is subsequent to a record date with respect to
any Interest Payment Date, and on or prior to such Interest Payment Date the
Holder of such Debenture transfers the Debenture, then such accrued interest, if
any, shall be paid to the person who surrenders the Debenture for redemption
(and not the Holder as of the record date with respect to such Interest Payment
Date), and no other interest shall be payable thereon.
6. Mandatory Redemption. The Company shall have no mandatory redemption
or sinking fund obligations with respect to the Debentures.
7. Notice of Redemption. Notice of redemption shall be mailed at least
thirty (30) days but not more than sixty (60) days before the redemption date,
to each Holder of Debentures to be redeemed at its registered address.
Debentures may be redeemed in part but only in whole multiples of $5,000, unless
all of the Debentures held by a Holder are to be redeemed. On and after the
redemption date, interest ceases to accrue on Debentures or portions of them
called for redemption.
8. Registration under Securities Act. At the expense of the Company,
the Debentures, and shares of Common Stock issued or issuable upon conversion
thereof, shall be entitled to registration under applicable securities laws to
the extent set forth in the Indenture.
9. Conversion of Debenture. Subject to the provisions of the Indenture,
the Holder of this Debenture is entitled, at his option, at any time prior to
maturity, to convert each $1,000 principal amount of each authorized $5,000
denomination of this Debenture (in increments of $5,000 or whole multiples
thereof) into 55.55556 shares of Common Stock of the Company (a Conversion Price
of $18.00 principal amount of Debentures for each share of such Common Stock),
or at the adjusted Conversion Price in effect at the date of conversion
determined as provided in the Indenture, as said shares of Common Stock of the
Company shall be constituted at the date of conversion, except that, in case
this Debenture or any portion thereof shall be called for redemption, such
conversion right shall terminate with respect to this Debenture or portion
thereof, as the case may be, so called for redemption at the close of business
on the third (3rd) business day next preceding the date fixed for redemption as
provided in the Indenture. Subject to the foregoing, conversion may be effected
upon surrender of this Debenture to the Debenture Registrar accompanied by
written notice of election to convert, and (if new Debentures for the
unconverted portion of any Debenture shall be registered in a name other than
that of the Holder) by instruments of transfer, in form satisfactory to the
Debenture Registrar, duly executed by the registered Holder or by his duly
authorized attorney. Such surrender shall, if made during the period from the
close of business on the record date preceding an Interest Payment Date to the
opening of business on such Interest Payment Date (unless this Debenture or the
portion being converted shall
14
<PAGE> 21
have been called for redemption), also be accompanied by payment in funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of this Debenture then being
converted. Subject to the foregoing, no adjustment is to be made on conversion
for interest accrued hereon (unless this Debenture or the portion thereof being
converted shall have been called for redemption) or for dividends on Common
Stock issued on conversion. The Company is not required to issue fractional
shares upon any such conversion, but shall make adjustment therefor in cash on
the basis of the current market value of such fractional interest as provided in
the Indenture.
10. Denominations, Transfer, Exchange. The Debentures are in registered
form without coupons and only in denominations of $5,000 and integral multiples
thereof. As provided in the Indenture, and subject to certain limitations
therein set forth, Debentures may be surrendered for exchange or transfer for a
like aggregate principal amount of Debentures of the same or different
authorized denominations, as requested by the Holder surrendering the same. The
Debenture Registrar and the Trustee may require the Holder to furnish
appropriate endorsements and transfer documents and to pay a sum sufficient to
cover any tax or other governmental charges that may be imposed in connection
with the requested exchange or transfer. The Debenture Registrar need not
exchange or register the transfer of any Debentures or portion of a Debenture
selected for redemption. Also, it need not exchange or register the transfer of
any Debentures for a period of fifteen (15) days before a selection of
Debentures to be redeemed or during the period between a record date and the
next succeeding Interest Payment Date.
11. Persons Deemed Owners. Prior to due presentment to the Trustee for
registration of the transfer of this Debenture, the Company, the Trustee and
their respective agents may deem and treat the person in whose name this
Debenture is registered as the absolute owner hereof, whether or not this
Debenture shall be overdue and notwithstanding any notation of ownership or
other writing hereon, for the purpose of receiving payment of or on account of
the principal hereof and interest hereon, and for all other purposes, and
neither the Company, the Trustee, nor their agents shall be affected by any
notice to the contrary. The registered Holder of a Debenture shall be treated as
its owner for all purposes.
12. Amendments and Waivers. Subject to certain exceptions, the
Indenture or the Debentures may be amended with the consent of the Holders of at
least 66 2/3% in principal amount of the then outstanding Debentures, and any
existing default (except a payment default) may be waived with the consent of
the Holders of a majority in principal amount of the then outstanding
Debentures. Without the consent of any Debentureholder, the Indenture or the
Debentures may be amended to cure any ambiguity, defect or inconsistency, to
provide for assumption of Company obligations to Debentureholders, to provide
for uncertificated Debentures in addition to certificated Debentures, or to make
any change that does not adversely affect the rights of any Debentureholder.
13. Defaults and Remedies. Events of Default include: default in
payment of interest on the Debentures for thirty (30) days; default in payment
of principal on the Debentures at maturity, upon acceleration, redemption or
otherwise; failure by the Company for the period specified in the Indenture
after notice to it to perform certain covenants and to comply with any of its
other agreements in the Indenture or the Debentures; certain final judgments
which remain undischarged; and certain events of bankruptcy of the Company . If
an Event of Default resulting from such events of bankruptcy of the Company
occurs and is continuing, the Trustee or the Holders of at least 30% in
principal amount of the then outstanding Debentures may declare all the
Debentures to be due and payable immediately. If other Events of Default under
the Indenture shall have occurred and be continuing, the Trustee may, in its
discretion and subject to the indemnity provisions referenced hereinafter,
proceed to protect and enforce its rights and the rights of the Holders by such
appropriate judicial proceedings as the Trustee shall deem most effectual under
the circumstances. Debentureholders may not enforce the Indenture or the
Debentures except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Debentures.
Subject to
15
<PAGE> 22
certain limitations (including the indemnity referenced in the foregoing
sentence), Holders of a majority in principal amount of the then outstanding
Debentures may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Debentureholders notice of any continuing default
(except a default in payment of principal or interest) if it determines that
withholding notice is in their interests. The Company must furnish an annual
compliance certificate to the Trustee.
14. Trustee Dealings with the Company. The Trustee under the Indenture,
in its individual or any other capacity may make loans to, accept deposits from,
and perform services for the Company or its Affiliates, and may otherwise deal
with the Company or its Affiliates, as if it were not Trustee.
15. Subordination. The indebtedness evidenced by the Debentures is, to
the extent provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness (as defined in
the Indenture) of the Company whether outstanding on the date of the Indenture
or thereafter created, incurred, assumed or guaranteed, and is not secured by
any collateral, neither the assets of the Company nor any of its Affiliates or
Subsidiaries. Each Holder, by acceptance hereof, agrees to and shall be bound by
all provisions of the Indenture. Further, each Holder authorizes and directs the
Trustee to take such action on its behalf as may be necessary or appropriate to
acknowledge or effectuate, as between such Holder and the holders of Senior
Indebtedness, the subordination of this Debenture as provided in the Indenture,
and appoints the Trustee its attorney-in-fact for any and all such purposes.
16. No Recourse Against Others. No recourse shall be had for the
payment of the principal of or the interest on this Debenture, or for any claim
based hereon, or otherwise in respect hereof, or based on or in respect of the
Indenture against any Affiliate, stockholder, officer, director, or employee, as
such, past, present or future, of the Company, its Subsidiaries, or any
predecessor or successor corporations, or entities, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of the consideration for the issue hereof, expressly waived and released.
17. Authentication. This Debenture shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
18. Abbreviations. Customary abbreviations may be used in the name of a
Debentureholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), U/G/M/A (=
Uniform Gifts to Minors Act) and U/T/M/A (= Uniform Transfers to Minors Act).
The Company will furnish to any Debentureholder upon written request
and without charge a copy of the Indenture. Request may be made to:
Republic Bancshares, Inc.
111 Second Avenue N.E., Suite 300
St. Petersburg, Florida 33701
Attention: Corporate Secretary
16
<PAGE> 23
ASSIGNMENT FORM
To assign this Debenture, fill in the form below: (I) or (we) assign
and transfer this Debenture to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code
and irrevocably appoint
--------------------------------------------------------
agent to transfer this Debenture on the books of the Company.
- -------------------
The agent may substitute another to act for him.
Date:
-------------------------
Your Signature
-------------------------
(Sign exactly as your name appears on
the face of this Debenture)
Signature Guarantee:
---------------------------------------
17
<PAGE> 24
[FORM OF CONVERSION NOTICE]
REPUBLIC BANCSHARES, INC.
The undersigned owner of this Debenture hereby irrevocably exercises
the option to convert this Debenture, or the portion hereof (which is $5,000 or
a whole multiple thereof) below designated, into shares of Common Stock of
Republic Bancshares, Inc. in accordance with the terms of the Indenture referred
to in this Debenture, and directs that the shares issuable and deliverable upon
the conversion, together with any check in payment for fractional shares and any
Debentures representing any unconverted principal amount hereof, be issuable and
delivered to the registered holder hereof unless a different name has been
indicated below. If shares are to be issued in the name of a person other than
the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto. Any amount required to be paid by the undersigned on account of
interest accompanies this Debenture.
$
-------------------------------
Principal Amount to be Converted
(in a whole multiple of $5,000
if less than all)
Fill in for registration of shares of Common Stock and Debentures if to be
issued otherwise than to the registered holder.
- ---------------------------- ---------------------------------------
Name Other person's Social Security or other
taxpayer identifying number
- -----------------------------
Address
Please print your name and address including zip code:
- --------------------------------------------
- --------------------------------------------
Date:
- -------------------------------------------- ---------------------
Signature
Signature Guaranteed:
-------------------------------------------
18
<PAGE> 25
ARTICLE III
THE DEBENTURES
SECTION 3.1. General Title; General Limitations; Terms of Debenture.
The Debentures shall be known and designated as the "7% Convertible
Subordinated Debentures Due 2014" of the Company. Their Stated Maturity shall be
October 1, 2014, and they shall bear simple interest at the rate of 7% per annum
commencing upon the date of issuance until Maturity. Interest on each Debenture
shall be payable on the dates specified in the form of Debenture set forth in
Section 2.3. The aggregate principal amount of Debentures which may be
authenticated and delivered under this Indenture is limited to $15,000,000,
except for Debentures authenticated and delivered upon registration for transfer
of or in exchange for or in lieu of other Debentures, as provided herein.
The Person in whose name any Debenture is registered on the Regular
Record Date with respect to an Interest Payment Date will be entitled to receive
the interest payable on such Interest Payment Date, notwithstanding the
cancellation of such Debenture upon any registration of transfer or exchange or
conversion thereof subsequent to such Regular Record Date and prior to such
Interest Payment Date.
The principal of and interest on the Debentures shall be payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for public and private debts. Unless other arrangements are made
with the Debentureholders of record, interest payments shall be made by check
mailed to the Persons entitled thereto at their addresses last appearing on the
Debenture Register. Holders of Debentures must surrender Debentures at the
office or agency of the Company in the Place of Payment to collect the principal
payment on the Debentures.
The Debentures shall be subordinated in right of payment to Senior
Indebtedness of the Company as provided in Article Eleven.
SECTION 3.2. Denominations.
The Debentures shall be issuable only in fully registered form and
without coupons in denominations of $5,000 and any integral multiples thereof.
SECTION 3.3. Execution, Authentication and Delivery.
The Debentures shall be executed on behalf of the Company by its
Chairman of the Board of Directors, its President or one of its Vice Presidents
under its corporate seal, which may be in facsimile form and may be imprinted or
otherwise reproduced thereon and attested by its Secretary or its Assistant
Secretary. The signature of any of these officers on the Debentures may be
manual or facsimile.
Debentures bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Debentures or did not
hold such offices at the date of such Debentures.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debentures executed by the Company to
the Trustee for authentication, together with a Company Order of the
authentication and delivery of such Debentures; and the Trustee shall
authenticate and deliver
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such Debentures as in this Indenture provided and not otherwise. All Debentures
shall be dated the date of their authentication.
Notwithstanding the foregoing, if the Debentures are to be issued in
whole or in part in global form, then the Company shall execute and the Trustee
shall, in accordance with this Section and the Company Order with respect to
such Debentures, authenticate and make available for delivery one or more
Debentures in global form that (i) shall represent and shall be denominated in
an amount equal to the aggregate principal amount of the Outstanding Debentures,
(ii) shall be registered in the name of the Depositary, if any, for such
Debentures or the nominee of such Depositary, (iii) shall be delivered by the
Trustee to such Depositary, if any, or pursuant to such Depositary's instruction
and (iv) shall bear a legend substantially to the following effect: "Unless and
until it is exchanged in whole or in part for Debentures in certificated form,
this Debenture may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary" or to such other
effect as such Depositary, if any, and the Trustee may agree.
Each Depositary, if any, for a Book-Entry Debenture must, at the time
of its designation and at all times while it serves as Depositary, be a clearing
agency registered under the Exchange Act and any other applicable statute or
regulation. The Trustee shall have no responsibility to determine if the
Depositary is so registered. Each Depositary, if any, shall enter into an
agreement with the Trustee governing its respective rights with regard to
Book-Entry Debentures.
No Debenture shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose, unless there appears on such Debenture a
certificate of authentication substantially in the form provided for herein
executed by the Trustee; and such certificate upon any Debenture shall be
conclusive evidence, and the only evidence, that such Debenture has been duly
authenticated and delivered hereunder.
SECTION 3.4. Temporary Debentures.
Pending the preparation of definitive Debentures, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Debentures which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Debentures in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Debentures may determine, as evidenced by their
execution of such Debentures.
Except in the case of temporary Debentures in global form, which shall
be exchanged in accordance with the provisions hereof, if temporary Debentures
are issued, the Company will cause definitive Debentures to be prepared without
unreasonable delay. After the preparation of definitive Debentures, the
temporary Debentures shall be exchangeable for definitive Debentures upon
surrender of the temporary Debentures at the office or agency of the Company in
the Place of Payment, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Debentures, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Debentures of authorized denominations. Until so
exchanged, the temporary Debentures shall in all respects be entitled to the
same benefits under this Indenture as definitive Debentures.
SECTION 3.5. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Principal Corporate Trust
Office a register (herein referred to as the "Debenture Register") in which,
subject to such reasonable regulations as it may prescribe, the
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Company shall provide for the registration of Debentures and the registration of
transfers of Debentures. Any such register shall be in written form or in any
other form capable of being converted into written form within a reasonable
time. The Trustee is hereby appointed "Debenture Registrar" for the purpose of
registering Debentures and transfers of Debentures as herein provided.
Prior to the effectiveness of the Debenture Registration Statement as
contemplated by Section 15.2, or the removal by the Company pursuant to Section
15.6 of legends restricting transfer and stop transfer instructions, each
certificate representing a Debenture (whether upon original issuance or issuance
upon any transfer) shall contain one or more legends as contemplated by Section
2.3. One of such legends shall be substantially as follows:
THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, EXCHANGED,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THAT ACT AND ANY
APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT
NECESSARY HAS BEEN DELIVERED TO THE COMPANY AND THE TRUSTEE.
Accordingly, prior to the effectiveness of the Debenture Registration
Statement, or such removal of legends and stop transfer instructions, Debentures
shall not in any event be transferred by the Debenture Registrar in the absence
of a Company Order to the effect that the Holder requesting the registration of
a transfer has complied with the applicable legend requirements with respect to
such requested transfer. Such Company Order as furnished to the Debenture
Registrar shall be accompanied by a copy of the documentation [e.g., an opinion
of counsel, "accredited investor" and/or "qualified institutional buyer" (as
defined in Rule 501 and Rule 144A, respectively, within the regulations of the
Commission) representations, and investment representations] which the Company
determined to be satisfactory to establish compliance with such legend
requirements.
Upon presentation or surrender of a Debenture for registration of
transfer or exchange accompanied by a Company Order, if required, at the office
or agency of the Company in the Place of Payment, the Company shall execute, and
the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Debentures of any authorized
denominations, of a like aggregate principal amount. Every presented or
surrendered Debenture shall be duly endorsed, or be accompanied by a written
instrument of transfer duly executed, by the Holder thereof or his attorney duly
authorized in writing in form satisfactory to the Company or the Debenture
Registrar.
At the option of the Holder, Debentures (except a Book-Entry Debenture
representing all or a portion of the Debentures) may be exchanged for other
Debentures of any authorized denominations, of a like aggregate principal amount
upon surrender of the Debentures to be exchanged at such office or agency.
Whenever any Debentures are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Debentures which
the Debentureholder making the exchange is entitled to receive.
All Debentures issued upon any registration of transfer or exchange of
Debentures shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Debentures
surrendered upon such registration of transfer or exchange.
The Company shall not be required (i) to issue, to register the
transfer of or to exchange Debentures during a period beginning at the opening
of business on a Business Day fifteen (15) days before the day of any selection
of Debentures for redemption under Section 12.4 and ending at the close of
business on the day of selection or (ii) to register the transfer of or exchange
of any Debentures so selected for redemption in whole or in part, except the
unredeemed portion of any Debentures being redeemed in part.
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No service charge shall be made for any registration of transfer or
exchange of Debentures, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Debentures, other than
exchanges pursuant to Sections 3.4 or 8.6 not involving any transfer.
Notwithstanding any other provision of this Section, unless and until
it is exchanged in whole or in part for Debentures in certificated form, a
Book-Entry Debenture, if any, may not be transferred except as a whole by any
Depositary to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of any such Depositary or by any such
Depositary or any such nominee to a successor Depositary or a nominee of any
such successor Depositary.
If at any time the Depositary, if any, notifies the Company that it is
unwilling or unable to continue as Depositary or if at any time the Depositary,
if any, ceases to be a clearing agency registered under the Exchange Act, the
Company shall appoint such a successor Depositary. If a successor Depositary is
not appointed by the Company within ninety (90) days after the Company receives
such notice or becomes aware of such ineligibility, the Company shall execute,
and the Trustee, upon receipt of a Company Order for the authentication and
delivery of certificated Debentures, shall authenticate and make available for
delivery Debentures in certificated form in an aggregate principal amount equal
to the principal amount of the Book-Entry Debenture or Debentures in exchange
for such Book-Entry Debenture or Debentures.
The Company may at any time and in its sole discretion, and the Trustee
shall following any Event of Default, determine that the Debentures issued in
the form of one or more global Debentures shall no longer be represented by such
Book-Entry Debentures. In such event the Company shall execute, and the Trustee,
upon receipt of a Company Order for the authentication and delivery of
certificated Debentures, shall authenticate and make available for delivery,
Debentures in certificated form and in an aggregate principal amount equal to
the principal amount of the Debenture or Debentures in global form in exchange
for such Debenture or Debentures in global form.
In any exchange provided for in any of the preceding two paragraphs,
the Company shall execute and the Trustee shall authenticate and make available
for delivery Debentures in certificated form in authorized denominations.
Upon the exchange of a Book-Entry Debenture, if any, for Debentures in
certificated form, such Book-Entry Debentures shall be cancelled by the Trustee.
Debentures issued in exchange for a Book-Entry Debenture pursuant to this
Section shall be registered in such names and in such authorized denominations
as the Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall make
available for delivery such Debentures to the Persons in whose names such
Debentures are so registered.
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Debentures.
If (i) any mutilated Debenture is surrendered to the Trustee, or if the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Debenture, and (ii) there is delivered to the
Company and the Trustee such security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the Company or the
Trustee that such Debenture has been acquired by a bona fide purchaser, the
Company shall execute and upon its request the Trustee shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Debenture, a new Debenture of like tenor and principal amount, bearing a
number not contemporaneously outstanding.
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In case any such mutilated, destroyed, lost or stolen Debenture has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Debenture, pay or authorize the payment of such
Debenture (without surrender thereof except in the case of a mutilated
Debenture) if the applicant for such payment shall furnish to the Company (and
to the Trustee, if the Trustee is acting at the time as Paying Agent) such
security or indemnity as it may require to save it harmless and, in the case of
destruction, loss or theft, evidence to the satisfaction of the Company of the
destruction, loss or theft of such Debenture and of the ownership thereof.
Upon the issuance of any new Debenture under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Debenture issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Debenture shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Debenture shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Debentures duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debentures.
SECTION 3.7. Payment of Interest; Interest Rights Preserved.
Interest on any Debenture which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Debenture (or one or more Predecessor Debentures) is registered
at the close of business on the Regular Record Date for such interest payment.
Any interest on any Debenture which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the registered
Holder on the relevant Regular Record Date by virtue of having been such Holder;
and such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or Clause (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Debentures (or their
respective Predecessor Debentures) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Debenture and the date of the proposed
payment (the "Special Payment Date"), and at the same time the Company
shall deposit with the Trustee or the Paying Agent (or, if the Company
is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 4.3), an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest, or
shall make arrangements satisfactory to the Trustee for such deposit
prior to the Special Payment Date, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this Clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which
shall be not more than fifteen (15) nor less than ten (10)
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days prior to the Special Payment Date and not less than ten (10) days
after the receipt by the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the Company of such Special Record
Date and shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first
class, postage prepaid, to each Debentureholder at his address as it
appears in the Debenture Register, not less than ten (10) days prior to
such Special Record Date. The Trustee may, in its discretion, in the
name and at the expense of the Company, cause a similar notice to be
published at least once in an Authorized Newspaper in the Place of
Payment, but such publication shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been given as aforesaid, such Defaulted Interest shall be paid
on the Special Payment Date to the Persons in whose names the
Debentures (or their respective Predecessor Debentures) are registered
at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Debentures may be listed, and upon
such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this
Clause, such manner of payment shall be deemed practicable by the
Trustee.
SECTION 3.8. Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name any Debenture is registered as the absolute
owner of such Debenture for the purpose of receiving payment of principal of,
premium (if any) on, and, subject to Section 3.7, interest on, such Debenture
and for all other purposes whatsoever, whether or not such Debenture be overdue
and notwithstanding any notation of ownership or other writing thereon, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
SECTION 3.9. Cancellation.
All Debentures surrendered for payment, registration of transfer or
exchange or conversion shall, if surrendered to any person other than the
Trustee, be delivered to the Trustee and, if not already cancelled, shall be
promptly cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Debentures previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Debentures
so delivered shall be promptly cancelled by the Trustee. No Debentures shall be
authenticated in lieu of or in exchange for any Debentures cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Debentures held by the Trustee shall be destroyed and the Trustee shall deliver
a certificate of destruction to the Company.
SECTION 3.10. Computation of Interest.
Interest on the Debentures shall be computed on the basis of a 360-day
year of twelve 30-day months.
ARTICLE IV
COVENANTS
SECTION 4.1. Payment of Principal and Interest.
The Company will duly and punctually pay the principal of and interest
on the Debentures in accordance with the terms of the Debentures and this
Indenture. If at the applicable time the Trustee is acting as Paying Agent, then
not less than five (5) Business Days prior (if by check) and one (1) Business
Day prior
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(if by wire transfer) to an Interest Payment Date, the Company shall deposit
with the Trustee money sufficient for such payments.
SECTION 4.2. Maintenance of Office or Agency.
The Company will maintain an office or agency in the Place of Payment
where Debentures may be presented or surrendered for payment, where Debentures
may be surrendered for registration of transfer or for exchange or conversion
and where notices and demands to or upon the Company in respect of the
Debentures and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and of any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain such office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Principal Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee its agent to receive all such presentations,
surrenders, notices and demands.
SECTION 4.3. Money for Debenture Payments to be Held in Trust.
If the Company shall assume the duties of Paying Agent, it will, on or
before each due date of the principal of or interest or premium, if any, on any
of the Debentures, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal or interest or premium,
if any, so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided, and will promptly notify the Trustee
of its action or failure to so act.
Whenever the Company is not acting as its own Paying Agent, it will,
prior to each due date of the principal of or interest on any of the Debentures,
deposit with the Paying Agent a sum sufficient to pay the principal or interest
or premium, if any, so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such sums, and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
The Company will cause the Paying Agent (if other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of principal of
or interest or premium, if any, on the Debentures in trust for the
benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Debentures) in the making of any payment of
principal or interest or premium, if any; and
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct the Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same terms as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
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Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or interest or
premium, if any, on any Debenture and remaining unclaimed for two (2) years
after such principal or interest or premium, if any, has become due and payable,
shall be paid to the Company upon Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Debenture
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, including any interest thereon, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, shall at the expense of the Company cause to be published once, in an
Authorized Newspaper in the Place of Payment, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
thirty (30) days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Company.
The Trustee and the Paying Agent shall promptly pay to the Company upon
Company Request any excess money or securities held by them at any time.
SECTION 4.4. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, all material taxes, assessments and
governmental charges levied or imposed upon it or upon its income, profits or
property; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment or charge
whose amount, applicability or validity is being contested in good faith by
appropriate proceedings.
SECTION 4.5. Maintenance of Properties.
The Company will, in all material respects, cause all its properties
and the properties of its Subsidiaries used or useful in the conduct of the
business of the Company and its Subsidiaries to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company or a Subsidiary from
discontinuing the operation and maintenance of any of its properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business and is not disadvantageous in any material respect to the
Debentureholders.
SECTION 4.6. Statement as to Compliance.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company, a written statement signed by the Chairman
of the Board of Directors, the President or a Vice President and by the Chief
Financial Officer, the Treasurer, an Assistant Treasurer, the Controller or an
Assistant Controller of the Company, stating, as to each signatory thereof,
that:
(1) a review of the activities of the Company during such year
and of performance under this Indenture has been made under his
supervision, and
(2) to the best of his or her knowledge, based on such review,
the Company has performed and fulfilled all of its obligations under
this Indenture throughout such year, or, if an Event of Default shall
have occurred, specifying each such Event of Default known to him and
the nature and status thereof.
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The Company will, so long as any of the Debentures are Outstanding,
deliver to the Trustee, forthwith upon becoming aware of any Event of Default,
an Officer's Certificate specifying such Event of Default.
SECTION 4.7. Corporate Existence.
Subject to Article Nine, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory) and franchises of the Company and its
Subsidiaries; provided, however, that the Company shall not be required to
preserve any right or franchise of the Company or its Subsidiaries if the Board
of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company or its Subsidiaries and
that the loss thereof is not disadvantageous in any material respect to the
Debentureholders.
SECTION 4.8. Restrictions on Dividends, Redemptions and Other Payments.
The Company shall not declare or pay any dividends on, or purchase,
redeem or otherwise acquire for value, any of its Capital Stock now or hereafter
outstanding (other than redemption or repurchase of the Debentures in accordance
with the terms of this Indenture) or return any capital to holders of its
Capital Stock as such, or make any distribution of assets to holders of its
Capital Stock as such, unless, from and after the date of any such dividend
declaration (a "Declaration Date") or the date of any such purchase, redemption,
payment or distribution specified above (a "Redemption Date"), the Company
retains cash, cash equivalents (as determined in accordance with generally
accepted accounting principles) or marketable securities (with a market value as
measured on the applicable Declaration Date or Redemption Date) in an amount not
less than the aggregate amount of the two consecutive semi-annual interest
payments that will be due and payable on the Debentures following such
Declaration Date or Redemption Date, as the case may be; provided, however, that
the amount of each semiannual interest payment made by the Company with respect
to the Debentures following such Declaration Date or Redemption Date, as
applicable, shall be deducted from the aggregate amount of cash or cash
equivalents which the Company shall be required to retain pursuant to the
foregoing provision.
SECTION 4.9. Restrictions on Pledge of Bank Capital Stock.
At the date of this Indenture the Company has pledged 33.42% of the
outstanding Bank Capital Stock as security for indebtedness of the Company to
SunTrust Bank, Central Florida, N.A. ("SunTrust"). From and after the date of
this Indenture, and until this Indenture shall be satisfied and discharged as
provided in Section 10.1 and/or the Debentures have been Discharged (as defined
below) as provided in Section 10.3, (i) the percentage of outstanding Bank
Capital Stock pledged to the holder of such indebtedness to SunTrust (as such
indebtedness may be modified or amended at any time and irrespective of the
identity of the holder thereof, the "SunTrust Debt") shall not be increased,
(ii) no other Bank Capital Stock may be pledged while any part of the SunTrust
Debt is outstanding, and (iii) after the Bank Capital Stock presently pledged to
SunTrust is released, in whole or in part, the Company may not pledge more than
20% of the outstanding Bank Capital Stock. The term "pledge" (in any tense) as
used in this section is used in its broadest sense to include pledge (both
negative and affirmative), hypothecation and any and all other forms of any
deposit of property as security.
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ARTICLE V
DEBENTUREHOLDERS' LISTS AND REPORTS BY THE
TRUSTEE AND THE COMPANY
SECTION 5.1. Company to Furnish Trustee Names and Addresses of Debentureholders.
The Company will furnish or cause to be furnished to the Trustee (i)
not more than five (5) days after each Regular Record Date, a list, in such form
as the Trustee may reasonably require, of the names and addresses of the Holders
of Debentures as of such Regular Record Date; provided, however, that the
Company shall not be required to furnish the Trustee the names and addresses of
the Holders of Debentures if the Trustee receives such names and addresses of
the Holders of Debentures in its capacity as Debenture Registrar.
SECTION 5.2. Preservation of Information; Communications to Debentureholders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of Debentures contained
in the most recent list furnished to the Trustee as provided in Section
5.1 and the names and addresses of Holders of Debentures received by
the Trustee at any time that it is acting as Debenture Registrar (if so
acting). The Trustee may destroy any list furnished to it as provided
in Section 5.1 upon receipt of a new list so furnished.
(b) The Trustee shall comply with Section 312(b) of the TIA. The
Trustee, the Company, and any other Person shall have the protection of
Section 312(c) of the TIA.
SECTION 5.3. Reports by Trustee.
(a) So long as the Debentures are Outstanding, within sixty (60) days
after May 15 of each year (the "Reporting Date"), the Trustee shall, if
required by Section 313(a) of the TIA, transmit by mail to the Company
and all Debentureholders, as their names and addresses appear in the
Debenture Register, a brief report dated as of such Reporting Date that
complies with Section 313(a) of the TIA.
(b) A copy of each such report shall, at the time of such transmission
to the Company and the Debentureholders, be filed by the Trustee with
each securities exchange upon which the Debentures are listed, and also
with the Commission. The Company will notify the Trustee in writing
when and if the Debentures are listed on any securities exchange.
SECTION 5.4. Reports by Company.
The Company will:
(1) file with the Trustee, within thirty (30) days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) which the Company may be
required to file with the Commission pursuant to Section 13 or Section
15(d) of the Exchange Act; or, if the Company is not required to file
information, documents or reports pursuant to either of such sections,
then it will file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information,
documents and reports which may
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be required pursuant to Section 13 of the Exchange Act in respect of a
security listed and registered on a national securities exchange as may
be prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports, if any, with respect to
compliance by the Company with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations;
(3) transmit by mail to all Debentureholders as their names and
addresses appear in the Debenture Register, such summaries of any
information, documents and reports required to be filed by the Company
pursuant to paragraphs (1) and (2) of this Section as may be required by
rules and regulations prescribed from time to time by the Commission;
and
(4) furnish to the Trustee, not less often than annually, a brief
certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his or her knowledge of
the Company's compliance with all conditions and covenants set forth in
Article Four of this Indenture. For purposes of this paragraph, such
compliance shall be determined without regard to any period of grace or
requirement of notice provided under the Indenture.
ARTICLE VI
REMEDIES
SECTION 6.1. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events, continued for the period of time, if any, and after the giving
of the notice, if any, therein designated, (whatever the reason for such Event
of Default and whether it shall be voluntary or involuntary or be effected by
operation of law pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Debenture when it
becomes due and payable, and continuance of such default for a period
of thirty (30) days; or
(2) default in the payment of the principal of any Debenture at its
Maturity; or
(3) default in the performance, or breach, of any material covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in the performance or the breach of which is
elsewhere in this Section specifically dealt with), and continuance of
such default or breach for a period of sixty (60) days after there has
been given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least
twenty-five percent (25%) in aggregate principal amount of the
Debentures then Outstanding, a written notice specifying such default
or breach and requiring it to be remedied and stating that such notice
is a "Notice of Default" hereunder; or
(4) the entry of a decree or order by a court having jurisdiction in
the premises adjudging the Company a bankrupt, or approving as properly
filed a petition seeking liquidation, reorganization, arrangement,
adjustment or composition of or in respect of the Company under the
Federal Bankruptcy Act or any other applicable Federal or State law,
and the continuance of any such decree
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or order unstayed and in effect for a period of ninety (90) consecutive
days, or the institution by the Company of proceedings to be
adjudicated a bankrupt, or the consent by it to the institution of
bankruptcy proceedings against it, or the filing by it of a petition or
answer or consent seeking liquidation, reorganization or relief under
the Federal Bankruptcy Act or any other similar applicable Federal or
State law, or the taking of corporate action by the Company in
furtherance of any such action; or
(5) the entry of a decree or order by a court having jurisdiction in
the premises appointing a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Company or of any
substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of ninety (90) consecutive
days, or the consent by the Company to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official)
of the Company or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally
as they become due, or the taking of corporate action by the Company in
furtherance of any such action.
SECTION 6.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default described in paragraph (4) of Section 6.1 occurs
and is continuing, then the Trustee or the Holders of not less than thirty
percent (30%) in aggregate principal amount of the Debentures then Outstanding
may declare the principal of all the Debentures to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by the Debentureholders), and upon any such declaration, such principal shall
become immediately due and payable.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in principal amount of the Debentures then Outstanding, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if:
(1) the Company has paid or deposited with the Trustee a sum sufficient
to pay:
(a) all overdue interest on all Debentures;
(b) the principal of any Debentures which have become due
otherwise than by such declaration of acceleration and
interest thereon at the rate borne by the Debentures; and
(c) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel; and
(2) all Events of Default, other than the non-payment of the principal
of Debentures which have become due solely by such acceleration, have
been cured or waived as provided in Section 6.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 6.3. Suits for Enforcement by Trustee.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Debentureholders by such appropriate judicial proceedings, as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement
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of any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
SECTION 6.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company, or any other obligor upon the
Debentures or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Debentures
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(1) to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Debentures and to file such
other papers or documents as may be necessary or advisable in order to
have the claim of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Debentureholders allowed in such
judicial proceeding, and
(2) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each
Debentureholder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the
Debentureholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Debentureholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Debentures or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Debentureholder in any such proceeding.
SECTION 6.5. Trustee May Enforce Claims Without Possession of Debentures.
All rights of action and claims under this Indenture or the Debentures
may be prosecuted and enforced by the Trustee without the possession of any of
the Debentures or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Debentures in respect of which such
judgment has been recovered.
SECTION 6.6. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and in
case of the distribution of such money on account of principal or interest, upon
presentation of the Debentures and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
First: To the Trustee for amounts due under Section 7.7;
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Second: To the Debentureholders for amounts then due and unpaid upon the
Debentures for principal and interest, in respect of which or for the benefit of
which such money has been collected, ratably, without preference or priority of
any kind, according to the amounts due and payable on such Debentures for
principal and interest, respectively; and
Third: To the Company.
SECTION 6.7. Limitation on Suits.
No Holder of any Debenture shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee and
the Company of a continuing Event of Default;
(2) the Holders of not less than thirty percent (30%) in aggregate
principal amount of the Outstanding Debentures shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for sixty (60) days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceedings; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such sixty (60) day period by the Holders of a
majority in principal amount of the Outstanding Debentures;
it being understood and intended that no one or more Holders of Debentures shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all the Holders of
Debentures.
SECTION 6.8. Unconditional Right of Debentureholders to Receive Principal and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Debenture shall have the right which is absolute and unconditional to
receive payment of the principal of and interest on such Debenture on the Stated
Maturity expressed in such Debenture, and to institute suit for the enforcement
of any such payment, and such right shall not be impaired without the consent of
such Holder.
SECTION 6.9. Restoration of Rights and Remedies.
If the Trustee or any Debentureholder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Debentureholder, then and in every such case the Company,
the Trustee and the Debentureholders shall, subject to any determination in such
proceeding, be restored severally
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and respectively to their former positions hereunder, and thereafter all rights
and remedies of the Trustee and the Debentureholders shall continue as though no
such proceeding had been instituted.
SECTION 6.10. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Debentures in the last paragraph of
Section 3.6, no right or remedy herein conferred upon or reserved to the Trustee
or to the Debentureholders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 6.11. Delay or Omission Not A Waiver.
No delay or omission of the Trustee or of any Holder of any Debenture
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Debentureholders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the
Debentureholders, as the case may be.
SECTION 6.12. Control by Debentureholders.
Subject to Sections 7.1(c)(4) and 7.3(5), the Holders of a majority in
principal amount of the Outstanding Debentures shall have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred on the Trustee,
provided that:
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 6.13. Waiver of Past Defaults.
The Holders of a majority in principal amount of the Outstanding
Debentures may, on behalf of the Holders of all the Debentures, waive any past
default hereunder and its consequences, except a default:
(1) in the payment of the principal of or interest on any Debenture, or
(2) in respect of a covenant or provision hereof which under Article
Eight cannot be modified or amended without the consent of the Holders
of each Outstanding Debenture affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
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SECTION 6.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Debenture
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any negligent
action taken or negligent failure to act as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Debentureholder, or group of
Debentureholders, holding in the aggregate more than ten percent (10%) in
principal amount of the Outstanding Debentures, or to any suit instituted by any
Debentureholder for the enforcement of the payment of the principal of, or
interest on, any Debenture on or after the Stated Maturity expressed in such
Debenture.
SECTION 6.15. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE VII
THE TRUSTEE
SECTION 7.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into
this Indenture against the Trustee, and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the
case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of their own affairs.
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(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(1) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall
be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(3) the Trustee shall not be liable to any Holder or to the
Company with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of
the Holders of not less than a majority in principal amount of
the Outstanding Debentures relating to the time, method and
place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture; and
(4) no provision of this Indenture shall require the 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.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions
of this Section.
SECTION 7.2. Notice of Defaults.
Within ninety (90) days after the occurrence of any default hereunder,
the Trustee shall transmit by mail to all Debentureholders, as their names and
addresses appear in the Debenture Register, notice of such default hereunder
known to the Trustee, unless such default shall have been cured or waived;
provided, however, that, except in the case of any default of the character
specified in Section 6.1(1) or (2), the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors or Responsible Officers of the
Trustee in good faith determine that the withholding of such notice is in the
interests of the Debentureholders; and provided, further, that in the case of
any default of the character specified in Section 6.1(3), no such notice to
Debentureholders shall be given until at least sixty (60) days after the
occurrence thereof. For the purpose of this Section, "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default.
SECTION 7.3. Certain Rights of Trustee.
Except as otherwise provided in Section 7.1:
(1) the Trustee may rely conclusively on, and shall be protected in
acting or refraining from acting on, any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties;
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(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors shall be sufficiently evidenced by
a Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence
of bad faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Debentureholders pursuant to this Indenture,
unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such
request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture or other paper or document but the Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company,
personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due
care by it hereunder; and
(8) except with respect to Section 4.1 herein, the Trustee shall have
no duty to inquire as to the performance of the Company's covenants in
Article Four. In addition, the Trustee shall not be deemed to have
knowledge of any Event of Default except (i) any Event of Default
occurring pursuant to Sections 6.1(1) and 6.1(2) or (ii) any Event of
Default of which the Trustee shall have received written notification
or obtained actual knowledge.
SECTION 7.4. Not Responsible for Recitals or Issuance of Debentures.
The recitals contained herein and in the Debentures, except the
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Debentures, or with respect to any disclosure or offering materials used
in the sale of the Debentures. The Trustee shall not be accountable for the use
or application by the Company of Debentures or the proceeds thereof.
SECTION 7.5. May Hold Debentures.
The Trustee, any Paying Agent, Debenture Registrar or any other agent
of the Company, in its individual or any other capacity, may become the owner or
pledgee of Debentures and, subject to Sections 7.8
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and 7.12, if operative, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Paying Agent, Debenture Registrar or such
other agent.
SECTION 7.6. Money Held in Trust.
Money held by the Trustee in trust hereunder shall be held in a
separate interest-bearing account and invested as directed by the Company, and
such funds shall at all times be segregated from all other funds and assets
owned or held by the Trustee. Any interest on any money received by the Trustee
hereunder shall be for the benefit of the Company and shall be paid to the
Company upon Company Request.
SECTION 7.7. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of this trust, 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.
Subject to the provisions of Section 7.12, the Trustee shall have a
first charge, prior in right to the Holders, against any funds held by it, or
otherwise coming into its hands, following an Event of Default.
SECTION 7.8. Corporate Trustee Required; Eligibility; Disqualification.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or of any State or Territory or of the District of Columbia or a
corporation or other person permitted to act as Trustee by the Commission,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $25,000,000, and subject to supervision or
examination by Federal or State, Territorial or District of Columbia authority.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, 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.
Neither the Company nor any of its Affiliates shall serve as Trustee hereunder.
The Trustee shall be subject to the provisions of Section 310(b) of the Trust
Indenture Act. This Indenture shall always have a Trustee who satisfies the
requirements of Section 310(a)(1) of the Trust Indenture Act.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
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SECTION 7.9. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor trustee pursuant to this Article shall become effective until
the acceptance of appointment by the successor Trustee under Section
7.10.
(b) The Trustee may resign at any time by giving written notice thereof
to the Company. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within thirty (30) days
after the giving of such notice of resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Debentures, delivered
to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of
Section 310(b) of the Trust Indenture Act after written
request therefor by the Company or by any Debentureholder who
has been a bona fide Holder of a Debenture or Debentures for
at least six (6) months; or
(2) the Trustee shall cease to be eligible under Section
310(a) of the Trust Indenture Act and shall fail to resign
after written request therefor by the Company or by any such
Debentureholder; or
(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee
or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property
or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may
remove the Trustee and appoint a successor trustee, or (ii) subject to
the provisions of Section 6.14, any Debentureholder who has been a bona
fide Holder of a Debenture for at least six (6) months may, on behalf
of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any
cause, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee. If, within one (1) year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor
Trustee shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Debentures delivered to the Company
and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become successor
Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or
the Debentureholders and accepted appointment in the manner hereinafter
provided, any Debentureholder who has been a bona fide Holder of a
Debenture for at least six (6) months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction
for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee by mailing
written notice of such event by first-class mail, postage
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prepaid, to the Holders of Debentures as their names and addresses
appear in the Debenture Register. Each notice shall indicate the name
of the successor Trustee and the address of its Principal Corporate
Trust Office.
SECTION 7.10. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the registration or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee, and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder, subject nevertheless to its lien, if any,
provided for in Section 7.7. Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all of such rights, power
and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 7.11. Merger, Conversion, Consolidation or Succession to Business of
Trustee.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Debentures shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Debentures so authenticated with the same
effect as if the successor Trustee had itself authenticated such Debentures.
SECTION 7.12. Preferential Collection of Claims against Company.
The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act. A trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent indicated therein.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
SECTION 8.1. Supplemental Indentures Without Consent of Debentureholders.
Without the consent of the Holders of any Debentures, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
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(1) to evidence the succession of another corporation to the Company,
and the assumption by any such successor of the covenants of the
Company herein and in the Debentures contained; or
(2) to add to the covenants of the Company, for the benefit of the
Holders of the Debentures, or to surrender any right or power herein
conferred upon the Company; or
(3) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture which shall not be inconsistent with the
provisions of this Indenture, provided such action shall not adversely
affect the interests of the Holders of the Debentures; or
(4) to convey, transfer, assign, mortgage or pledge to or with the
Trustee any property or assets which the Company may desire to convey,
transfer, assign, mortgage or pledge; or
(5) to add to or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of
Debentures in bearer form, registrable or not registrable as to
principal, and with or without interest coupons.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property thereunder,
but the Trustee shall not be obligated to, but may in its discretion, enter into
any such supplemental indenture which affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
8.1 may be executed by the Company and the Trustee without the consent of the
Holders of any of the Debentures at the time Outstanding, notwithstanding any of
the provisions of Section 8.2.
SECTION 8.2. Supplemental Indentures With Consent of Debentureholders.
With the consent of the Holders of not less than sixty-six and two
thirds percent (66 2/3%) in principal amount of the Outstanding Debentures, by
Act of said Holders delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may amend this Indenture or
the Debentures and enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the rights
of the Holders of the Debentures under this Indenture; provided, however, that
no such amendment or supplemental indenture shall, without the consent of the
Holders of each Outstanding Debenture affected thereby:
(1) change the Stated Maturity of the principal of, or interest on, any
Debenture, or reduce the principal amount thereof, the rate of interest
or premium, if any, thereon or change any Place of Payment where, or
the coin or currency in which, any Debentures or the interest or
premium, if any, thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Stated
Maturity thereof; or
(2) except as otherwise permitted or contemplated in Article Thirteen,
increase the Conversion Price of any Debenture; or
(3) make any change in Section 6.8; or
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(4) reduce the percentage in principal amount of the Outstanding
Debentures, the consent of whose Holders is required for any such
supplemental indenture or the consent of whose Holders is required for
any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture; or
(5) modify any of the provisions of this Section or Section 6.13,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Debenture affected thereby.
It shall not be necessary for any Act of Debentureholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 8.3. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 7.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 8.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and the respective
rights, limitations of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Company and the Holders of Debentures shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and such supplemental indenture
shall form a part of this Indenture for any and all purposes; and every Holder
of Debentures theretofore or thereafter authenticated and delivered thereunder
shall be bound thereby.
SECTION 8.5. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall be
prepared as if subject to the requirements of the TIA as then in effect.
SECTION 8.6. Reference in Debentures to Supplemental Indentures.
Debentures authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Debentures so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any such supplemental indenture, may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Debentures.
SECTION 8.7. Subordination Unimpaired.
No supplemental indenture executed pursuant to this Article shall
affect the superior position of the holders of Senior Indebtedness with respect
to such Debentures.
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ARTICLE IX
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 9.1. Company May Consolidate, etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other
corporation or convey or transfer its property and assets substantially as an
entirety to any Person, unless:
(1) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or
transfer the properties and assets of the Company substantially as an
entirety shall be a corporation organized and existing under the laws
of the United States of America or any State or the District of
Columbia, and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to
the Trustee, the due and punctual payment of the principal of and
interest on all the Debentures and the performance of every covenant of
this Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have happened and be
continuing; and
(3) the Company shall have delivered to the Trustee an Officers'
Certificate stating that such consolidation, merger, conveyance or
transfer and such supplemental indenture comply with this Article and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
SECTION 9.2. Successor Corporation Substituted.
Upon any consolidation or merger of the Company into another entity, or
any conveyance or transfer of the properties and assets of the Company
substantially as an entirety in accordance with Section 9.1, the successor
corporation formed by such consolidation or into which the Company is merged or
to which such conveyance or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor corporation had been
named as the Company herein.
SECTION 9.3. Limitation on Lease of Properties as Entirety.
The Company shall not lease its properties and assets substantially as
an entirety to any Person.
ARTICLE X
SATISFACTION, DISCHARGE AND DEFEASANCE
SECTION 10.1. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange or conversion of
Debentures herein expressly provided for), and the Trustee, on demand
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of and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(1) either:
(a) all Debentures theretofore authenticated and delivered
(other than (i) Debentures which have been destroyed, lost or
stolen and which have been replaced or paid as provided in
Section 3.6 and (ii) Debentures for whose payment money has
theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 4.3) have
been delivered to the Trustee cancelled or for cancellation at
any time after the Distribution Date; or
(b) all such Debentures not theretofore delivered to the
Trustee cancelled or for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one (1) year,
and the Company, in the case of (i) or (ii) above, has
deposited or caused to be deposited with the Trustee, as trust
funds in trust for the purpose, an amount in money or
noncallable U.S. Government Obligations sufficient to pay and
discharge the entire indebtedness on such Debentures not
theretofore delivered to the Trustee cancelled or for
cancellation, for principal and interest to the date of such
deposit (in the case of Debentures which have become due and
payable) or to the date of redemption or the Stated Maturity;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
However, the obligations in Article Thirteen shall survive until the
Debentures are no longer outstanding. Thereafter, notwithstanding the
satisfaction and discharge of this Indenture, the obligations of the Company to
the Trustee under Section 7.7 shall survive.
SECTION 10.2. Application of Trust Money.
All money deposited with the Trustee pursuant to Section 10.1 shall be
held in trust and applied by it, in accordance with the provisions of the
Debentures and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent), as the
Trustee may determine, to the Persons entitled thereto, of the principal and
interest for whose payment such money has been deposited with the Trustee. Money
held by the Trustee in trust hereunder shall be held in a separate interest
bearing account and such funds shall at all times be segregated from all other
funds and assets owned or held by the Trustee. Any interest on any money
received by the Trustee hereunder shall be for the benefit of the Company and
shall be paid to the Company on Company Request.
Any money deposited with the Trustee in trust for the payment of the
principal of and interest on any Debenture pursuant to Section 10.1 and
remaining unclaimed for two (2) years after such principal or interest has
become due and payable, shall be paid to the Company on Company Request; and the
Holder of such Debenture shall thereafter, as an unsecured general creditor,
look to the Company for payment thereof, and all
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liability of the Trustee with respect to such trust money and any interest
accrued thereon shall thereupon cease; provided, however, that the Trustee,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in an Authorized Newspaper in the Place of
Payment, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than thirty (30) days from the date
of such publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
The Trustee shall promptly pay to the Company upon Company Request any
excess money or securities held by it at any time.
SECTION 10.3. Satisfaction, Discharge and Defeasance of Debentures.
(a) The Company will be deemed to have been Discharged (as defined
below) from its obligations with respect to the Debentures; or
(b) The Company will cease to be under any obligation to comply with
any term, provision or condition set forth in (i) Article Nine or (ii)
the terms, provisions or conditions of the Debentures (provided,
however, that the Company may not cease to comply with any obligations
as to which it may not be Discharged pursuant to the definition of
"Discharged"), if, in the case of (a) and (b), with respect to the
Debentures on the 91st day after the applicable conditions set forth
below in (x) and (y) have been satisfied:
(x)(1) the Company has paid or caused to be paid all other sums payable
with respect to the Outstanding Debentures (in addition to any required
under (y)); and
(2) the Company has delivered to the Trustee an Officers'
Certificate stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of the entire indebtedness
on all Outstanding Debentures have been complied with;
(y)(l) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as a trust fund specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of
the Debentures (i) an amount in the coin or currency of the United
States of America as at the time of such deposit is legal tender for
the payment of public and private debts or (ii) non-callable U.S.
Government Obligations which through the payment of interest and
principal in respect thereof in accordance with their terms will
provide, not later than the due date of any payment of principal and
interest under the Debentures, money in an amount or (iii) a
combination of (i) and (ii) sufficient (in the opinion with respect to
(ii) and (iii) of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee) to pay and discharge each installment of principal of, and
interest on, the outstanding Debentures on the dates such installments
of interest or principal are due;
(2)(i) no Event of Default or event (including such deposit) which
with notice or lapse of time or both would become an Event of Default
shall have occurred and be continuing on the date of such deposit, (ii)
no Event of Default as defined in clause (4) or (5) of Section 6.1, or
event which with notice or lapse of time or both would become an Event
of Default under either such clause, shall have occurred within ninety
(90) days after the date of such deposit and (iii) such deposit and the
related intended consequence under (a) or (b) will not result in any
default or event of default under any material indenture, agreement or
other instrument binding upon the Company or any Subsidiary or any of
their properties; and
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(3) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that Holders of the Debentures will not recognize
income, gain or loss for Federal income tax purposes as a result of the
Company's exercise of its option under this Section 10.3 and will be
subject to Federal income tax in the same amount, in the same manner
and at the same times as would have been the case if such option had
not been exercised.
Any deposits with the Trustee referred to in clause (y)(1) above will
be made under the terms of an escrow trust agreement in form and substance
satisfactory to the Trustee and the Company.
"Discharged" means that the Company will be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Debentures and to have satisfied all the obligations under this Indenture
relating to the Debentures (and the Trustee, at the expense of the Company, will
execute proper instruments acknowledging the same), except (A) the rights of
Holders thereof to receive, from the trust fund described in clause (y)(1)
above, payments of the principal of and the interest on the Debentures when such
payments are due, (B) the Company's obligations with respect to the Debentures
under Sections 3.5, 3.6., 10.2, 4.2, 4.3 (penultimate paragraph only) and
Article Thirteen and the Company's obligations to the Trustee under Sections 7.7
and 7.9, and (C) the rights, powers, trusts, duties and immunities of the
Trustee hereunder, will survive such discharge. The Company will reimburse the
trust fund for any loss suffered by it as a result of any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations or
any principal, premium or interest paid on such U.S. Government Obligations,
and, subject to the provisions of Section 7.7, will indemnify the Trustee
against any claims made against the Trustee in connection with any such loss.
ARTICLE XI
SUBORDINATION OF DEBENTURES
SECTION 11.1. Subordination.
The Company covenants and agrees, and each Holder of Debentures, by his
acceptance thereof, likewise covenants and agrees, that the indebtedness
represented by the Debentures and the payment of the principal of, interest and
premium, if any, on each and all of the Debentures is expressly subordinated, to
the extent and in the manner hereinafter set forth, in right of payment to the
prior payment in full of all Senior Indebtedness, and that the subordination is
for the benefit of the holders of Senior Indebtedness.
SECTION 11.2. Distribution of Assets, etc.
No payment on account of principal of or interest on the Debentures
shall be made, and no Debentures shall be purchased or otherwise acquired, and
no funds shall be set aside for the purchase of any Debentures, either directly
or indirectly, by the Company, if a default in the payment of the principal of
or premium, if any, or interest on any Senior Indebtedness shall have occurred
and continued beyond any applicable period of grace so as to entitle the holder
of such Senior Indebtedness to accelerate its maturity, unless and until such
default shall have been cured or waived or shall have ceased to exist or moneys
for the payment thereof shall have been duly set aside.
In the event of any distribution of assets of the Company upon any
dissolution, winding up, total or partial liquidation, or reorganization of the
Company, whether in bankruptcy, insolvency or receivership proceedings, or upon
any assignment for the benefit of creditors or any other marshalling of the
assets and liabilities of the Company, or otherwise,
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(1) all of the principal of and premium, if any, and interest on all
Senior Indebtedness shall first be paid in full or moneys for the full
payment thereof shall have been duly set aside before any payment is
made upon the principal of or interest on any Debenture, and
(2) any payment or distribution of assets or securities of the Company
of any kind or character, whether in cash, property or securities
(other than securities of the Company as reorganized or readjusted, or
securities of the Company or of any other corporation provided for by a
plan of reorganization or readjustment, the payment of which is
subordinated to the payment of all principal of and premium, if any,
and interest on such Senior Indebtedness as may at the time be
outstanding and to any securities issued in respect thereof under any
such plan of reorganization or readjustment, provided that the
obligations represented by all notes or other evidences of Senior
Indebtedness are assumed by the new corporation, if any, resulting from
any such reorganization or readjustment and provided further that the
rights of the holders of Senior Indebtedness are not, without the
consent of such holders, altered by such reorganization or
readjustment), to which the Debentureholders would be entitled except
for the provisions of this Article, shall be paid by the liquidating
trustee or agent or other Person making such payment or distribution,
whether a trustee in bankruptcy, a receiver or liquidating trustee or
otherwise, to the holders of Senior Indebtedness (pro rata to each such
holder on the basis of the respective amounts of Senior Indebtedness
held by such holder) or their representatives, to the extent necessary
to pay the principal of and premium, if any, and interest on all Senior
Indebtedness in full, after giving effect to any concurrent payment or
distribution to the holders of Senior Indebtedness, before any payment
or distribution is made to the Debentureholders or to the Trustee.
If the payment of principal of and any interest on the Debentures is
accelerated because of an Event of Default, no payment on account of principal
of or interest on the Debentures shall be made until all of the principal of and
premium, if any, and interest on all Senior Indebtedness has been paid in full
or due provision has been made for such payment.
In the event that, notwithstanding the foregoing, any payment or
distribution of any character or any security, whether in cash, securities or
other property (other than securities of the Company as reorganized or
readjusted, or securities of the Company or of any other corporation provided
for by a plan of reorganization or readjustment, the payment of which is
subordinated to the payment of all principal of and premium, if any, and
interest on such Senior Indebtedness as may at the time be outstanding and to
any securities issued in respect thereof under any such plan of reorganization
or readjustment provided that the obligations represented by all notes or other
evidences of Senior Indebtedness are assumed by the new corporation, if any,
resulting from any such reorganization or readjustment and provided further that
the rights of the holders of Senior Indebtedness are not, without the consent of
such holders, altered by such reorganization or readjustment), shall be received
by the Trustee or any Holder in contravention of any of the terms hereof, such
payment or distribution or security shall be received in trust for the benefit
of, and shall be paid over or delivered and transferred to, the holders of the
Senior Indebtedness at the time outstanding in accordance with priorities then
existing among such holders for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay all such Senior
Indebtedness in full. In the event of the failure of the Trustees or any Holder
to endorse or assign any such payment, distribution or security, each holder of
Senior Indebtedness is hereby irrevocably authorized to endorse or assign the
same.
SECTION 11.3. Subrogation.
Subject to the payment in full of all Senior Indebtedness, the
Debentureholders shall be subrogated (equally and ratably with the holders of
all other indebtedness of the Company which, by its express terms,
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ranks on a parity with the Debentures and is entitled to like rights of
subrogation) to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until all amounts owing on the Debentures
shall be paid in full, and, as between the Company, its creditors other than
holders of Senior Indebtedness, and the Debentureholders, no such payment or
distribution made to the holders of Senior Indebtedness by virtue of this
Article which otherwise would have been made to the Debentureholders, shall be
deemed to be a payment by the Company on account of the Senior Indebtedness, it
being understood that the provisions of this Article are and are intended solely
for the purpose of defining the relative rights of the Debentureholders, on the
one hand, and the holders of the Senior Indebtedness, on the other hand.
SECTION 11.4. Obligation of the Company Unconditional.
Nothing contained in this Article or elsewhere in this Indenture or in
the Debentures is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the
Debentureholders, the obligation of the Company, which is absolute and
unconditional, to pay to the Debentureholders the principal of and interest on
the Debentures as and when the same shall become due and payable in accordance
with their terms, or affect the relative rights of the Debentureholders and
creditors of the Company other than the holders of Senior Indebtedness, nor
shall anything herein or therein prevent the Trustee or any Debentureholder from
exercising all remedies otherwise permitted by applicable law upon an Event of
Default under this Indenture, subject to the rights, if any, under this Article
of the holders of Senior Indebtedness in respect of cash, property or securities
of the Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee and the Debentureholders shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction in which
any such dissolution, winding up, liquidation or reorganization proceeding
affecting the affairs of the Company is pending and the Trustee, subject to the
provisions of Section 7.1, and the Debentureholders shall be entitled to rely
upon a certificate of the liquidating trustee or agent or other person making
any payment or distribution to the Trustee or to the Debentureholders for the
purpose of ascertaining the persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other indebtedness of the
Company, the amount thereof or payable thereon, the amount paid or distributed
thereon, and all other facts pertinent thereto or to this Article.
SECTION 11.5. Payments on Debentures Permitted.
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Debentures shall affect the obligation of the Company to make, or
prevent the Company from making, payment of the principal of or interest on the
Debentures in accordance with the provisions hereof, except as otherwise
provided in this Article.
SECTION 11.6. Effectuation of Subordination by Trustee.
Each Holder of Debentures, by his acceptance thereof, authorizes and
directs the Trustee on his behalf to take such action at the request of the
Company as may be necessary or appropriate to effectuate the subordination
provided in this Article and appoints the Trustee his attorney-in-fact for any
and all such purposes.
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SECTION 11.7. Knowledge of Trustee.
Notwithstanding the provisions of this Article or any other provisions
of this Indenture, but subject to the provisions of Section 7.1, the Trustee
shall not be charged with knowledge of the existence of any facts which would
prohibit the making of any payment of moneys to or by the Trustee, or the taking
of any other action by the Trustee under this Article Eleven, unless and until
the Trustee shall have received written notice thereof, in the manner required
by Section 1.5, from the Company, any Debentureholder, any Paying Agent, any
Debenture Registrar, or the holder or representative of any class of Senior
Indebtedness.
SECTION 11.8. Trustee May Hold Senior Indebtedness.
The Trustee shall be entitled to all the rights set forth in this
Article with respect to any Senior Indebtedness at the time held by it, to the
same extent as any other holder of Senior Indebtedness, and nothing in Section
7.12 or elsewhere in this Indenture shall deprive the Trustee of any of its
rights as such holder.
SECTION 11.9. Rights of Holders of Senior Indebtedness Not Impaired.
No right of any present or future holder of any Senior Indebtedness to
enforce the subordination herein shall at any time or in any way be prejudiced
or impaired by any act or failure to act on the part of the Company or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holders may have or be
otherwise charged with.
SECTION 11.10. Alteration of Senior Indebtedness.
The Holders of any Senior Indebtedness may extend, renew, modify or
amend the terms of such Senior Indebtedness or any security therefor and may
release, sell or exchange such security and otherwise deal freely with the
Company, all without notice to or consent of the Debentureholders and without
affecting the liabilities and obligations of the Company, the Trustee or the
Debentureholders under this Indenture or the Debentures.
SECTION 11.11. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within its
meaning as fully for all intents and purposes as if such Paying Agent were named
in this Article in addition to or in place of the Trustee, provided, however,
that Sections 11.7, 11.8, and 11.10 shall not apply to the Company if it acts as
Paying Agent.
SECTION 11.12. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if
the Trustee shall in good faith mistakenly pay over or distribute to Holders of
Debentures or to the Company or to any other person cash, property or securities
to which any holders of Senior Indebtedness shall be entitled by virtue of this
Article Eleven or otherwise.
SECTION 11.13. Subordinated Junior Term Debt.
The Junior Term Debt provides by its terms that it is and shall at all
times be subordinated as to principal and interest to the payment of all
principal of and interest on the Debentures, among other Indebtedness.
Notwithstanding those subordination provisions, however, the Company may call
and pay, in whole or from time to time in part, the Indebtedness represented by
the Junior Term Debt provided (A) there
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has not occurred and is continuing (i) any default in the payment of any
interest upon any Debenture when it becomes due and payable, or (ii) any default
in the payment of the principal of any Debenture at its Maturity, or (iii) any
default in the performance, or breach, of any material covenant or warranty of
the Company in this Indenture (other than a covenant or warranty a default in
the performance or the breach of which is elsewhere in this Section specifically
dealt with), or (B) the has not been and is continuing (i) the entry of a decree
or order by a court having jurisdiction in the premises adjudging the Company a
bankrupt, or approving as properly filed a petition seeking liquidation,
reorganization, arrangement, adjustment or composition of or in respect of the
Company under the Federal Bankruptcy Act or any other applicable Federal or
State law, and the continuance of any such decree or order unstayed and in
effect for any period of time, or the institution by the Company of proceedings
to be adjudicated a bankrupt, or the consent by it to the institution of
bankruptcy proceedings against it, or the filing by it of a petition or answer
or consent seeking liquidation, reorganization or relief under the Federal
Bankruptcy Act or any other similar applicable Federal or State law, or the
taking of corporate action by the Company in furtherance of any such action, or
(ii) the entry of a decree or order by a court having jurisdiction in the
premises appointing a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for any period of
time, or the consent by the Company to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of the
Company or of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any such action.
ARTICLE XII
REDEMPTION
SECTION 12.1. Mandatory Redemption.
The Company shall have no mandatory redemption or sinking fund
obligations with respect to the Debentures.
SECTION 12.2. Optional Redemption.
The Company may redeem all or any portion of the Debentures at any time
and from time to time under the circumstances, upon the terms, and at the
redemption prices, set forth in the form of Debenture included in Section 2.3.
Any redemption pursuant to this Section 12.2 shall be made pursuant to the
provisions of Sections 12.3 through 12.8. Notwithstanding the other provisions
hereof, the Company may not redeem all or any portion of the Debentures unless
the Debenture Registration Statement shall have been declared effective, except
under the circumstances contemplated by Section 15.6.
SECTION 12.3. Notices to Trustee.
If the Company elects to redeem Debentures pursuant to the optional
redemption provisions of Section 12.2, it shall furnish to the Trustee, at least
thirty-five (35) days but not more than sixty (60) days before a redemption
date, an Officers' Certificate setting forth the redemption date, the principal
amount of Debentures to be redeemed, the redemption price, and that any
condition to such redemption set forth in Section 12.2 has been satisfied or
waived, or is inapplicable.
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SECTION 12.4. Selection of Debentures to be Redeemed.
If less than all of the Debentures are to be redeemed, the Trustee
shall select the Debentures to be redeemed among the Holders of the Debentures
pro rata or in accordance with a method the Trustee considers fair and
appropriate (and in such manner as complies with applicable legal and stock
exchange requirements, if any), including by lot. In the event of partial
redemption by lot, the particular Debentures to be redeemed shall be selected,
unless otherwise provided herein, not less than thirty (30) nor more than sixty
(60) days prior to the redemption date by the Trustee from the outstanding
Debentures not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the
Debentures selected for redemption and, in the case of any Debenture selected
for partial redemption, the principal amount thereof to be redeemed. Debentures
and portions of them selected shall be in amounts of $5,000 or whole multiples
of $5,000; except that if all of the Debentures of a Holder are to be redeemed,
the entire outstanding amount of Debentures held by such Holder shall be
redeemed. Except as provided in the preceding sentence, provisions of this
Indenture that apply to Debentures called for redemption also apply to portions
of Debentures called for redemption.
SECTION 12.5. Notice of Redemption.
At least thirty (30) days but not more than sixty (60) days before a
redemption date, the Company shall mail a notice of redemption to each Holder
whose Debentures are to be redeemed.
The notice shall identify the Debentures to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) if any Debenture is being redeemed in part, the portion of the
principal amount of such Debenture to be redeemed and that, after the
redemption date, upon surrender of such Debenture, a new Debenture or
Debentures in principal amount equal to the unredeemed portion will be
issued;
(4) the name and address of the Paying Agent;
(5) that Debentures called for redemption must be surrendered to the
Paying Agent to collect the redemption price; and
(6) that interest on Debentures called for redemption ceases to accrue
on and after the redemption date.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall deliver to the Trustee, at least thirty-five (35) days prior to
the redemption date, an Officers' Certificate requesting that the Trustee give
such notice and setting forth the information to be stated in such notice as
provided in the preceding paragraph.
SECTION 12.6. Effect of Notice of Redemption.
Once notice of redemption is mailed, Debentures called for redemption
and not converted into Common Stock pursuant to Article Thirteen become due and
payable on the redemption date at the redemption price.
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SECTION 12.7. Deposit of Redemption Price.
At least five (5) Business Days (if by check) and one (1) Business Day
(if by wire transfer) prior to the redemption date, the Company shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued interest on all Debentures to be redeemed on that date. The
Trustee or the Paying Agent shall return to the Company any money not required
for that purpose.
If the Company complies with the preceding paragraph, interest on the
Debentures to be redeemed will cease to accrue on the applicable redemption
date, whether or not such Debentures are presented for payment. If any Debenture
called for redemption shall not be so paid upon surrender for redemption because
of the failure of the Company to comply with the preceding paragraph, interest
will be paid on the unpaid principal, from the redemption date until such
principal is paid, and on any interest not paid on such unpaid principal, in
each case at the rate provided in the Debentures and in Section 4.1.
SECTION 12.8. Debentures Redeemed in Part.
Upon surrender of a Debenture that is redeemed in part, the Company
shall issue and the Trustee shall authenticate for the Holder at the expense of
the Company a new Debenture equal in principal amount to the unredeemed portion
of the Debenture surrendered.
SECTION 12.9. Repurchasing of Debentures.
Nothing herein shall prohibit the Company from repurchasing from time
to time all or any portion of the Debentures in the open market or in privately
negotiated transactions.
ARTICLE XIII
CONVERSION OF DEBENTURES
SECTION 13.1. Conversion Privilege.
Subject to and upon compliance with the provisions of this Article
Thirteen and the terms of the form of Debenture set forth in Section 2.3, at the
option of the Holder, any Debenture or any portion of the principal amount
thereof which is $5,000 or a whole multiple thereof, may, at any time on or
before October 1, 2014, or in case such Debenture or some portion thereof shall
be called for redemption prior to such date, then, with respect to such
Debenture or portion thereof, until and including, but not after, the close of
business on the third (3rd) business day next preceding the date fixed for such
redemption, be converted at the principal amount thereof into Common Stock at
the Conversion Price in effect at the date of conversion.
SECTION 13.2. Manner of Exercise of Conversion Privilege.
To exercise the conversion privilege, the Holder shall surrender such
Debenture to the Debenture Registrar, together with a duly executed conversion
notice in the form provided on the Debenture, and the Debenture shall also be
accompanied by proper assignments thereof to the Company or in blank for
transfer and any requisite Federal and state transfer tax stamps. The Debenture
Registrar will immediately notify the Company of this conversion election.
Debentures surrendered for conversion during the period from the close of
business on the record date preceding an Interest Payment Date to the opening of
business on such Interest Payment Date shall (unless any such Debenture or the
portion thereof being converted shall have been called for redemption) also be
accompanied by payment in funds in cash or by certified bank cashier's check of
an
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amount equal to the interest payable on such Interest Payment Date on the
principal amount of such Debenture then being converted. As promptly as
practicable after the surrender of Debenture for conversion, the Company shall
issue and shall deliver to the Debenture Registrar for delivery to such Holder,
or his designee, a certificate or certificates for the number of full shares of
Common Stock issuable upon the conversion of such Debenture or portion thereof
and a check or cash in respect of any fraction of a share of Common Stock
issuable upon such conversion, all as provided in this Section 13.2, together
with a Debenture or Debentures in principal amount equal to the unconverted and
unredeemed portion, if any, of the Debenture so converted. Conversion shall be
deemed to have been effected on the date on which notice (and payment, if
required) shall have been received at the Debenture Registrar's office and such
Debenture shall have been surrendered to the Debenture Registrar, and at that
time the rights of the holder as a Holder shall cease as to that portion of the
Debenture converted, and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become on said date the holder or
holders of record of the shares represented thereby; provided, however, that in
the event any such conversion occurs on any date when the stock transfer books
of the Company are closed, the person or persons in whose name or names the
certificates for shares of Common Stock are to be issued will be deemed the
record holder or holders thereof for all purposes on the next succeeding day on
which such stock transfer books are open, and the conversion shall be at the
Conversion Price in effect on such next succeeding day on which such transfer
books are open. Subject to the foregoing, no adjustment shall be made for
interest accrued on any Debenture that shall be converted (unless any such
Debenture or the portion thereof being converted shall have been called for
redemption) or for dividends on any Common Stock that shall be issued upon the
conversion of such Debenture.
SECTION 13.3. Cash Adjustment Upon Conversion.
The Company shall not be required to issue fractions of shares of
Common Stock upon conversion of Debentures. If more than one Debenture shall be
surrendered for conversion at any time by the same holder, the number of full
shares of Common Stock which shall be issuable upon conversion thereof shall be
computed on the basis of the aggregate principal amount of the Debentures so
surrendered. If any fractional interest in a share of Common Stock would be
deliverable upon the conversion of any Debenture or Debentures, the Company
shall make an adjustment therefor in cash equal to the current market value of
such fractional interest computed to the nearest thousandth of a share at the
closing price on the Nasdaq National Market or, if then traded on a national
securities exchange, the closing price on such exchange or the highest bid
quotation on an automated quotation system on the last business day prior to the
date of conversion, or if the Common Stock shall not then be listed on the
Nasdaq National Market or on an exchange or included on an automated quotation
system, as reported by the National Quotation Bureau, Inc. or similar reporting
service.
SECTION 13.4. Conversion Price.
The Conversion Price shall be as specified in the form of Debenture set
forth in Section 2.3 or, after adjustment as provided in this Section 13, the
Conversion Price as so adjusted.
SECTION 13.5. Adjustment of Conversion Price.
The Conversion Price shall be adjusted from time to time as follows:
(a) In case the Company shall, at any time or from time to time while
any of the Debentures are outstanding, (i) issue any shares of its
capital stock as a dividend (or other distribution) on its Common
Stock; (ii) subdivide its outstanding shares of Common Stock into a
greater number of shares; (iii) combine its outstanding shares of
Common Stock into a smaller number of shares, or (iv)
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issue by reclassification of its Common Stock any shares of stock of
the Company, the Conversion Price in effect immediately prior thereto
shall be adjusted so that any Debentureholder who thereafter converts
his Debenture shall be entitled to receive the number of shares of
capital stock of the Company which he would have owned or have been
entitled to receive after the happening of any of the events described
above, had such Debenture been converted immediately prior to the
happening of such event. Any adjustment made pursuant to this
subdivision (a) shall become effective, in the case of a dividend, on
the payment date retroactively to immediately after the opening of
business on the day following the record date for the determination of
shareholders entitled to receive such dividend, subject to the
provisions of subdivision (f) of this Section 13.5, and shall become
effective in the case of a subdivision, combination or reclassification
immediately after the opening of business on the day following the day
when such subdivision, combination or reclassification, as the case may
be, becomes effective.
(b) In case the Company shall, at any time or from time to time while
any of the Debentures are outstanding, issue rights or warrants
entitling anyone to subscribe for or purchase shares of Common Stock at
a price per share less than the then current market price per share of
Common Stock (as defined in subdivision (d) below) at the Measurement
Date (as defined below), the Conversion Price in effect immediately
prior to the issuance of such rights or warrants shall be adjusted as
follows: the number of shares of Common Stock into which each $1,000
principal amount of each authorized $5,000 denomination of Debentures
was theretofore convertible shall be multiplied by a fraction, the
numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issuance plus the number of
additional shares of Common Stock offered for subscription or purchase,
and the denominator of which shall be the number of shares of Common
Stock outstanding immediately prior to such issuance plus the number of
shares which the aggregate offering price of the total number of shares
so offered would purchase at such current market price; and the
Conversion Price shall be adjusted by dividing $1,000 by the new number
of shares into which each $1,000 principal amount of each authorized
$5,000 denomination of Debentures shall be convertible as aforesaid.
The term "Measurement Date" shall mean, with respect to determining
current market price in connection with the issuance of rights or
warrants to purchase Common Stock, the earlier of (i) the date upon
which the Company enters into a bona fide and binding agreement for the
issuance of such rights or warrants and (ii) the issuance or grant
thereof. Such adjustment shall become effective on the date of such
issuance, all as determined by the independent certified public
accountants then regularly auditing the accounts of the Company, whose
determination shall be conclusive, subject to the provisions of
subdivision (f) of this Section 13.5.
(c) In case the Company shall, at any time or from time to time while
any of the Debentures are outstanding, distribute to all holders of
shares of Common Stock evidences of its indebtedness or securities or
assets (excluding cash dividends or cash distributions payable out of
retained earnings, or distributions payable in shares of Common Stock)
or rights to subscribe for same (excluding those referred to in
subdivision (b) above), the Conversion Price in effect immediately
prior to such distribution shall be adjusted as follows: the number of
shares of Common Stock into which each $1,000 principal amount of each
authorized $5,000 denomination of Debentures was theretofore
convertible shall be multiplied by a fraction, the numerator of which
shall be the current market price per share of Common Stock (as defined
in subdivision (d) below) on the record date for such distribution, and
the denominator of which shall be such current market price per share
of the Common Stock, less the then fair market value (as determined by
the Board of Directors of the Company, whose determination shall be
conclusive) of the portion of the assets or Securities or evidences of
indebtedness so distributed or of such subscription rights applicable
to one share of Common Stock; and the Conversion Price shall be
adjusted by dividing $1,000 by the new number of shares into which each
$1,000 principal amount of each authorized $5,000 denomination of
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Debentures shall be convertible as aforesaid. Such adjustment shall
become effective on the date of such distribution retroactively to
immediately after the opening of business on the day following the
record date for the determination of shareholders entitled to receive
such distribution, subject to the provisions of subdivision (f) of this
Section 13.5. For the purposes of this subdivision (c), retained
earnings shall be computed by adding thereto all charges against
retained earnings on account of dividends paid in shares of Common
Stock in respect of which the Conversion Price has been adjusted, all
as determined by the independent certified public accountants then
regularly auditing the accounts of the Company, whose determination
shall be conclusive.
(d) For the purpose of any computation under subdivision (b) and (c)
above, the current market price per share of Common Stock at any date
shall be deemed to be the average of the market values of the Common
Stock for the ten (10) consecutive business days immediately preceding
the day in question. The market value of the Common Stock for each day
shall be determined as provided in Section 13.3.
(e) Except as herein otherwise provided, no adjustment in the
Conversion Price shall be made by reason of the issuance in exchange
for cash, property or services, of shares of Common Stock, or any
securities convertible into or exchangeable for shares of Common Stock,
or carrying the right to purchase any of the foregoing.
(f) If the Company shall take a record of the holders of Common Stock
for the purpose of entitling them to receive any dividend, for any
subscription or purchase rights or any distribution and shall,
thereafter and before the distribution to stockholders of any such
dividend, subscription or purchase rights or distribution, abandons its
plan to pay or deliver such dividend, subscription or purchase rights
or distribution, then no adjustment of the Conversion Price shall be
required by reason of the taking of such record.
(g) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least one
percent (1%) in such price; provided, however, that any adjustments
which by reason of this subdivision (g) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 13.5 shall be made to
the nearest cent or to the nearest one-thousandth of a share, as the
case may be.
(h) Whenever the Conversion Price is adjusted as herein provided, the
Company shall (i) forthwith place on file at the corporate trust office
of the Trustee and the Debenture Registrar a statement signed by the
Chairman of the Board, the President or an Executive Vice President of
the Company, and by its Chief Financial Officer, Treasurer or an
Assistant Treasurer showing in detail the facts requiring such
adjustment and the Conversion Price after such adjustment and the
statement of the Company's independent certified public accountants
confirming the Conversion Price after such adjustment, and the Trustee
and Debenture Registrar shall exhibit the same from time to time to any
Holder desiring to inspect such statements during normal business
hours, and (ii) cause a notice stating that such adjustment has been
effective and the adjusted Conversion Price to be mailed to the Holders
of Debentures at their last addresses as they shall appear on the books
of the Debenture Registrar. The Trustee shall have no responsibility
for calculating any adjustment to the Conversion Price, and may rely
conclusively on the foregoing statements.
SECTION 13.6. Effect of Reclassifications, Consolidations, Mergers or Sales on
Conversion Privileges.
In case of any reclassification or change of outstanding shares of
Common Stock issuable upon conversion of the Debentures (other than a change in
par value, or from par value to no par value, or from no par value to par value,
or as a result of a subdivision or combination), or in case of any consolidation
of the
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Company with one or more other corporations (other than a consolidation in which
the Company is the continuing corporation and which does not result in any
reclassification or change of outstanding shares of Common Stock issuable upon
conversion of the Debentures), or in case of the merger of the Company into
another corporation, or in case of any sale or conveyance to another corporation
of the property of the Company as an entirety or substantially as an entirety,
the Company, or such successor or purchasing corporation, as the case may be,
shall execute with the Trustee a supplemental indenture which shall be prepared
as if subject to the TIA as then in effect, providing that each Holder shall
have the right to convert their outstanding Debenture into the kind and amount
of shares of stock and other securities and property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a holder
of the number of shares of Common Stock into which such Debenture might have
been converted immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance. Such supplemental indenture shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article Thirteen and any
such adjustments which shall be approved by the Board of Directors and set forth
in such supplemental indenture shall be conclusive for all purposes of this
Section 13.6, and the Trustee shall not be under any responsibility to determine
the correctness of any provision contained in such supplemental indenture
relating to either the kind or amount of shares of stock or securities or
property receivable by Debentureholders upon the conversion of their Debentures
after any such reclassification, change, consolidation, merger, sale or
conveyance.
The above provisions of this Section 13.6 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, sales and
conveyances.
SECTION 13.7. Taxes on Conversions.
The issue of stock certificates on conversion of Debentures shall be
made without charge to the converting Debentureholder for any issue tax in
respect of the issue thereof. The Company shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issue
and delivery of shares of Common Stock (or other security) in any name other
than that of the Holder of any Debenture converted, and the Company shall be not
required to issue or deliver any such stock certificate unless and until the
person or persons requesting the issue thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
SECTION 13.8. Company to Reserve Stock.
The Company shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock, for the purpose of effecting the
conversion of the Debentures, such number of its duly authorized shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding Debentures.
The Company covenants that all shares of Common Stock which may be
issuable upon conversion of Debentures shall upon issue be fully paid and
non-assessable and free from all taxes, liens and charges with respect to the
issue thereof.
SECTION 13.9. Disclaimer by Trustee of Responsibility for Certain Matters.
Neither the Trustee nor any conversion agent shall at any time be under
any duty or responsibility to any Holder to determine whether any facts exist
which may require any adjustment of the Conversion Price, or with respect to the
nature or extent of any such adjustment when made, or with respect to the method
employed, or provided to be employed, herein or in any supplemental indenture in
making such adjustment. Neither the Trustee nor any conversion agent shall be
accountable with respect to the validity or value (or the
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kind or amount) of any shares of Common Stock, or of any securities or property,
which may at any time be issued or delivered upon the conversion of any
Debenture; and neither the Trustee nor any conversion agent makes any
representation with respect thereto. Neither the Trustee nor any conversion
agent shall be responsible for any failure of the Company to make any cash
payment or to issue, register the transfer of or deliver any shares of Common
Stock or stock certificates or other securities or property upon the surrender
of any Debenture for the purpose of conversion or to comply with any of the
covenants of the Company contained in this Article Thirteen.
SECTION 13.10. Company to Give Notice of Certain Events.
In the event that the Company shall:
(1) pay any dividend or make any distribution to the holders of Common
Stock otherwise than in cash out of its retained earnings; or
(2) offer for subscription, pro rata, to the holders of Common Stock
any additional shares of stock of any class or any other right; or
(3) effect any reclassification or change of outstanding shares of
Common Stock issuable upon the conversion of the Debentures (other than
a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or
combination), or any consolidation of the Company with, or merger of
the Company into, another corporation (other than a consolidation in
which the Company is the continuing corporation and which does not
result in any reclassification or change of outstanding shares of
Common Stock issuable upon conversion of the Debentures), or any sale
or conveyance to another corporation of the property of the Company as
an entirety or substantially as an entirety; then, and in any one or
more of such events, the Company will give a Responsible Officer of the
Trustee and the Debenture Registrar written notice thereof at least two
(2) business days prior to (i) the record date fixed with respect to
any of the events specified in (1) and (2) above, and (ii) the
effective date of any of the events specified in (3) above; and shall
mail a copy of such notice to Holders at their last addressees, as they
appear upon the books of the Debenture Registrar.
ARTICLE XIV
IMMUNITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
SECTION 14.1. Exemption from Individual Liability.
No Affiliate, officer, director, employee or stockholder, as such, of
the Company, or its Subsidiaries, shall have any liability for any obligations
of the Company under the Debenture or this Indenture, or for any claim based on,
in respect of or by reason of such obligations or their creation. Each
Debentureholder by accepting a Debenture hereby expressly waives and releases
all such liability. The waiver and release are part of the consideration for the
issue of the Debentures.
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ARTICLE XV
REGISTRATION UNDER SECURITIES ACT
SECTION 15.1. Debentures Entitled to Registration.
The Debentures and the shares of Common Stock issued or issuable upon
conversion of the Debentures shall be entitled to the registration rights set
forth in this Article 15.
SECTION 15.2. Debenture Registration Statement.
The Company shall, at its expense, cause a registration statement on
the appropriate form to be filed with the Commission covering the registration
of the Debentures and the shares of Common Stock issued or issuable upon
conversion of the Debentures (the "Debenture Registration Statement") within the
time required by Section 15.3. Upon and after any such filing, the Company shall
take all reasonable steps necessary to promptly cause the Debenture Registration
Statement to be declared effective by the Commission. The Company shall give
prompt written notice of the declaration of effectiveness of the Debenture
Registration Statement to each Debentureholder whose securities are included
therein, and thereafter shall supply at its expense such reasonable number of
copies of the applicable prospectus as may be requested in writing by such
Debentureholders. The Trustee shall have no obligation to file the Debenture
Registration Statement.
SECTION 15.3. Timing of Filing Debenture Registration Statement.
(a) Unless the Debenture Registration Statement shall have earlier been
declared effective under the circumstances contemplated by Section
15.3(b), the Debenture Registration Statement shall be filed with the
Commission on the earlier of the first filing after the date of this
Indenture of a registration statement with the Commission by the
Company for any other purpose, or December 31, 2000.
(b) Unless the Debenture Registration Statement shall have earlier been
declared effective under either of the two circumstances contemplated
by Section 15.3(a), the Company shall not redeem all or any portion of
the Debentures unless the Debenture Registration Statement shall have
been declared effective or unless Section 15.6 shall be applicable.
SECTION 15.4. Period of Effectiveness; State Law Requirements.
Following the effectiveness of the Debenture Registration Statement,
the Company shall use its best efforts to keep it continuously effective and
current until the expiration of one (1) year following the commencement of the
first holding period under the Commission's Rule 144 with respect to the
Debentures and the underlying shares of Common Stock. The Company shall
contemporaneously take at its expense those steps necessary to assist Holders in
their compliance with state securities laws' registration or qualification
requirements that may be applicable to re-sales of the Debentures and such
shares of Common Stock in jurisdictions where the Debentures were originally
offered and sold by the Company.
SECTION 15.5. Debentureholder to Supply Information.
Each Holder, by acceptance of a Debenture or the Common Stock issued on
conversion thereof, shall be deemed to have agreed to provide the Company with
all information regarding the Holder, including the nature and amount of
beneficial ownership by the Holder of Debentures and Common Stock, that the
Company may reasonably request to include the Holder's Debentures and related
shares of Common Stock in the Debenture Registration Statement. The request from
the Company shall be sent to each Debentureholder
57
<PAGE> 64
at his address as it appears on the Debenture Register. The requested
information shall be mailed by the Debentureholders to the Company at its
address set forth herein or pursuant hereto within not more than five (5)
Business Days of the Debentureholders' receipt of the request from the Company.
SECTION 15.6. Exception to Requirements.
Notwithstanding the other provisions hereof, the Company shall not be
required to file and pursue the effectiveness of the Debenture Registration
Statement if at the applicable time the Company shall reasonably believe the
Debentures and the underlying shares of Common Stock are no longer subject to
restriction on transfer under applicable securities laws as a result of the
issuance of those securities in a transaction under Section 4(2) of the
Securities Act or Rule 506 of Regulation D thereunder. In this event, the
Company shall, at its expense, promptly take all reasonable steps necessary to
remove legends from each certificate representing the securities and to remove
all stop transfer instructions that may have been issued to the Debenture
Registrar or any transfer agent for the Common Stock.
* * * * *
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.
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed
and attested, all as of the day and year first above written.
Attest: REPUBLIC BANCSHARES, INC.
By: /s/ CHRISTOPHER M. HUNTER By: /s/ WILLIAM R. FALZONE
---------------------------------- --------------------------------
Christopher M. Hunter, William R. Falzone, Executive Vice
Corporate Secretary President and Chief Financial
Officer
Attest: U.S. BANK TRUST NATIONAL ASSOCIATION
By: /s/ SCOTT A. SCHUHLE
---------------------------------
Authorized Officer Scott A. Schuhle,
Vice President
58
<PAGE> 1
EXHIBIT 5.1
[LETTERHEAD OF HOLLAND & KNIGHT LLP]
November 16, 1999
Board of Directors
Republic Bancshares, Inc.
Suite 300
111 Second Avenue, N.E.
St. Petersburg, Florida 33701
Re: Republic Bancshares, Inc. Registration Statement on
Form S-3 $15,000,000 of 7% Convertible Subordinated
Debentures and 1,042,182 Shares of Common Stock
Ladies and Gentlemen:
We have acted as special counsel to Republic Bancshares, Inc., a
Florida corporation (the "Company"), in connection with the preparation and
filing with the Securities and Exchange Commission under the Securities Act of
1933, as amended (the "Act"), of a Registration Statement on Form S-3 (the
"Registration Statement") relating to the registration by Republic of an
aggregate of $15,000,000 of the Company's 7% Convertible Subordinated Debentures
and 1,042,182 shares of the Company's Common Stock, $2.00 par value per share
(the "Securities").
In connection with the offering of the Securities, we have examined,
among other things, such state laws and executed originals and/or photostatic
copies, certified or otherwise identified to our satisfaction as being true
copies of such documents, certificates and records as we deemed necessary and
appropriate for the purpose of preparing this opinion letter. As to various
questions of fact material to this opinion letter, where relevant facts were not
independently established, we have relied upon statements of officers of
Republic.
We have assumed the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents submitted to us
as certified or photostatic copies, and the authenticity of the originals of
such copies. We have assumed that all signatories were and are legally competent
to execute and deliver the documents executed by each of them.
Based upon and subject to the foregoing, and in reliance thereon, and
subject to the qualifications hereinafter expressed, we are of the opinion that
the Securities are duly authorized, validly issued, fully paid, and
nonassessable.
We hereby consent to the inclusion of this opinion letter as part of
the Registration Statement. In giving this consent, we do not thereby admit that
we come within the category of persons whose consent is required under Section 7
of the Act, or the rules and regulations of the Securities and Exchange
Commission promulgated thereunder.
<PAGE> 2
We are members of the Bar of the District of Columbia and the State of
Florida and do not herein express any opinion as to matters governed by the laws
of any jurisdiction other than the internal laws of the District of Columbia and
the State of Florida (without reference to the choice-of-law or conflict-of-law
provisions, principles or decisions under District of Columbia and Florida law,
or under any other state, Federal or foreign law); and we have assumed
compliance with all other laws, including, without limitation, Federal, foreign
and other states' laws.
Our opinions are limited to the specific issues addressed and are
limited in all respects to laws and facts existing on the date hereof. By
rendering our opinion letter, we do not undertake to advise you of any changes
in such laws or facts which may occur or come to our attention after the date
hereof.
The foregoing opinions are furnished to you at your request, are solely
for your benefit and may not be relied upon by any other party without the prior
written consent of a shareholder of this law firm.
Sincerely yours,
/s/ HOLLAND & KNIGHT LLP
HOLLAND & KNIGHT LLP
<PAGE> 1
EXHIBIT 12.1
REPUBLIC BANCSHARES, INC.
STATEMENT REGARDING COMPUTATION OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Nine Months Ended
September 30, Years Ended December 31,
----------------- -------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
------- ------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net income before
income taxes &
minority interest $16,349 $15,732 $(17,336) $15,327 $ 7,075 $ 9,096 $ 5,771
Interest expense 73,253 64,305 89,609 60,742 51,245 47,232 31,364
Non-cumulative
Preferred stock
Dividends 198 198 264 264 264 264 264
------- ------- -------- ------- ------- ------- -------
Earnings including
interest on deposits 89,800 80,235 72,537 76,333 58,584 56,592 37,399
RATIO OF EARNINGS TO
FIXED CHARGES
(INCLUDING INTEREST
ON DEPOSITS) 1.23 1.25 0.81 1.26 1.14 1.20 1.19
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
March 19, 1999, included in Republic Bancshares, Inc.'s Form 10-K for the year
ended December 31, 1998, and to all references to our firm included in this
registration statement.
/s/ ARTHUR ANDERSEN LLP
Tampa, Florida
November 16, 1999
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM T-1
Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939, as amended by
Trust Indenture Reform Act of 1990 ("TIRA") of a Corporation
Designated to Act as Trustee
------------------------
U.S. BANK TRUST NATIONAL ASSOCIATION
---------------------------------------------------
(Exact name of trustee as specified in its charter)
36-4281572
------------------------------------
(I.R.S. employer Identification No.)
3384 Peachtree Road NE, Suite 200
Atlanta, Georgia 30326
-----------------------------------------------------
(Address of principal executive offices and zip code)
------------------------
Republic Bancshares, Inc.
---------------------------------------------------
(Exact name of obligor as specified in its charter)
Florida 59-6000825
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. employer
Incorporation or organization) Identification No.)
1111 Second Avenue NE
Suite 300
St. Petersburg, Florida 33701
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip code)
------------------------
7% Convertible Subordinated Debentures Due 2014
(Title of the indenture securities)
<PAGE> 2
GENERAL
1. GENERAL INFORMATION Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising authority to which it
is subject.
Comptroller of the Currency
Washington D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes
2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS If the obligor or any
underwriter for the obligor is an affiliate of the trustee, describe each
such affiliation.
None
See Note following Item 16.
Items 3-15 are not applicable because to the best of the Trustee's
knowledge the obligor is not in default under any Indenture for which the
Trustee acts as Trustee.
16. LIST OF EXHIBITS List below all exhibits filed as a part of this statement
of eligibility and qualification.
1. Copy of Articles of Association
2. Copy of Certificate of Authority to Commence Business
3. Copy of Trust Permit authorizing the exercise of corporate trust powers
4. Copy of existing By-Laws
5. Copy of each Indenture referred to in item 4. - N/A
6. The consents of the trustee required by Section 321(b) of the Act
7. Copy of the latest report of condition of the trustee published pursuant
to law or the requirements of its supervising or examining authority
as filed on Form 10-Q on November 12, 1999, is hereby incorporated by
reference.
<PAGE> 3
NOTE
The answers to this statement insofar as such answers relate to what persons
have been underwriters for any securities of the obligor within three years
prior to the date of filing this statement, or what persons are owners of 10%
or more of the voting securities of the obligor, or affiliates, are based upon
information furnished to the trustee by the obligor. While the trustee has no
reason to doubt the accuracy of any such information, it cannot accept any
responsibility therefor.
SIGNATURE
Pursuant to the requirements of the TIRA, the Trustee, U.S. Bank Trust National
Association, an Association organized and existing under the laws of the United
States, has duly caused this statement of eligibility and qualification to be
signed on its behalf by the undersigned, thereunto duly authorized and
attested, all in the City of Fort Lauderdale and State of Florida on the 12th
day of November, 1999.
U.S. BANK TRUST NATIONAL ASSOCIATION
By: /s/ Scott A. Schuhle
--------------------
Scott A. Schuhle
Vice President
By: /s/ Michael J. Marra
--------------------
Michael J. Marra
Vice President
<PAGE> 4
EXHIBIT 1
U.S. BANK TRUST NATIONAL ASSOCIATION
ARTICLES OF ASSOCIATION
For the purpose of organizing an association to perform any lawful
activities of national banks, the undersigned do enter into the following
Articles of Association:
FIRST. The title of this Association shall be "U.S. Bank Trust
National Association."
SECOND. The main office of this Association shall be in the City of
Atlanta, County of Fulton and State of Georgia. The business of this
Association will be limited to that of a national trust bank, and to support
activities incidental thereto. This Association will not amend these Articles
of Association to expand the scope of or alter its business beyond that stated
in this Article Second without the prior approval of the Comptroller of the
Currency. Prior to the transfer of any stock of the Association, the
Association will seek the prior approval of the appropriate federal depository
institution regulatory agency.
THIRD. The board of directors of the Association shall consist of
not less than five nor more than 25 persons, the exact number to be fixed and
determined from time to time by resolution of a majority of the shareholders at
any annual or special meeting thereof. A majority of the board of directors
shall be necessary to constitute a quorum for the transaction of business at
any directors' meeting. Each director shall own common or preferred stock of
this Association with an aggregate par, fair market, or equity value of not
less than $1,000.00, as of either (i) the date of purchase, (ii) the date the
person became a director, whichever is more recent. Any combination of common
or preferred stock of this Association or U.S. Bancorp may be used.
Any vacancy in the board of directors may be filled by action of a
majority of the remaining directors between meetings of shareholders. The board
of directors may not increase the number of directors between meetings of
shareholders to a number that (1) exceeds by more than two the number of
directors last elected by shareholders where the number was fifteen or less;
and (2) exceeds by more than four the number of directors last elected by
shareholders where the number was sixteen or more, but in no event shall the
number of directors exceed twenty-five.
Terms of directors, including directors selected to fill vacancies,
shall expire at the next regular meeting of shareholders at which directors are
elected, unless the directors resign or are removed from office.
Despite the expiration of a director's term, the director shall
continue to serve until his or her successor is elected and qualifies or until
there is a decrease in the number of directors and his or her position is
eliminated.
Honorary or advisory members of the board of directors, without
voting power or power of final decision in matters concerning the business of
this Association, may be appointed by resolution of a majority of the full
board of directors, or by resolution
- 1 -
<PAGE> 5
of shareholders at any annual or special meeting. Honorary or advisory
directors shall not be counted for purposes of determining the number of
directors of this Association or the presence of a quorum in connection with
any board action, and shall not be required to own qualifying shares.
FOURTH. There shall be an annual meeting of the shareholders to
elect directors and transact whatever other business may be brought before the
meeting. It shall be held at the main office or any other convenient place the
board of directors may designate, on the day of each year specified therefore
in the bylaws, or if that day falls on a legal holiday in the State in which
this Association is located, on the next following banking day. If no election
is held on the day fixed, or in event of a legal holiday, an election may be
held on any subsequent day within sixty days of the day fixed, to be designated
by the board of directors, or, if the directors fail to fix the day, by
shareholders representing two-thirds of the shares issued and outstanding. In
all cases at least ten-days advance notice of the meeting shall be given to the
shareholders by first class mail.
A director may resign at any time by delivering written or oral
notice to the board of directors, its chairperson, or to this Association,
which resignation shall be effective when the notice is delivered unless the
notice specifies a later effective date.
A director may be removed by shareholders at a meeting called to
remove him or her, when notice of the meeting stating that the purpose or one
of the purposes is to remove him or her is provided, if there is a failure to
fulfill one of the affirmative requirements for qualification, or for cause;
provided, however, that a director may not be removed if the number of votes
sufficient to elect him or her under cumulative voting is voted against his or
her removal.
FIFTH. The authorized amount of capital stock of this Association
shall be 10,000 shares of common stock of the par value of one-hundred dollars
($100.00) each; but said capital stock may be increased or decreased from time
to time, according to the provisions of the laws of the United States.
No holder of shares of the capital stock of any class of this
Association shall have any preemptive or preferential right of subscription to
any shares of any class of stock of this Association, whether now or hereafter
authorized, or to any obligations convertible into stock of this Association,
issued, or sold, nor any right of subscription to any thereof other than such,
if any, as the board of directors, in its discretion may from time to time
determine and at such price as the board of directors may from time to time
fix.
Unless otherwise specified in these Articles of Association or
required by law, (1) all matters requiring shareholder action, including
amendments to the articles of Association must be approved by shareholders
owning a majority voting interest in the outstanding voting stock, and (2) each
shareholder shall be entitled to one vote per share.
Unless otherwise provided in the bylaws, the record date for
determining shareholders entitled to notice of and to vote at any meeting is
the close of business on the day before the first notice is mailed or otherwise
sent to the shareholders, provided that in no event may a record date be more
than seventy days before the meeting.
- 2 -
<PAGE> 6
SIXTH. The board of directors shall appoint one of its members
president of this Association and one of its members chairperson of the board.
The board of directors shall also have the power to appoint one or more vice
presidents, a secretary who shall keep minutes of the directors' and
shareholders' meetings and be responsible for authenticating the records of
this Association, and such other officers and employees as may be required to
transact the business of this Association. A duly appointed officer may appoint
one or more officers or assistant officers if authorized by the board of
directors in accordance with the bylaws.
The board of directors shall have the power to:
(1) Define the duties of the officers, employees, and agents of
this Association.
(2) Delegate the performance of its duties, but not the
responsibility for its duties, to the officers, employees, and
agents of this Association.
(3) Fix the compensation and enter into employment contracts with
its officers and employees upon reasonable terms and
conditions, consistent with applicable law.
(4) Dismiss officers and employees.
(5) Require bonds from officers and employees and to fix the
penalty thereof.
(6) Ratify written policies authorized by this Association's
management or committees of the board.
(7) Regulate the manner in which any increase or decrease of the
capital of this Association shall be made; provided, however,
that nothing herein shall restrict the power of shareholders
to increase or decrease the capital of this Association in
accordance with law, and nothing shall raise or lower from
two-thirds the percentage required for shareholder approval to
increase or reduce the capital.
(8) Manage and administer the business and affairs of this
Association.
(9) Adopt bylaws, not inconsistent with law or these Articles of
Association, for managing the business and regulating the
affairs of this Association.
(10) Amend or repeal bylaws, except to the extent that the articles
of Association reserve this power in whole or in part to
shareholders.
- 3 -
<PAGE> 7
(11) Make contracts.
(12) Generally to perform all acts that are legal for a board of
directors to perform.
SEVENTH. The board of directors shall have the power to change the
location of the main office to any other place within the limits of the City of
Atlanta without the approval of the shareholders, and shall have the power to
establish or change the location of any branch or branches of this Association
to any other location permitted under applicable law, without the approval of
the shareholders, subject to approval by the Comptroller of the Currency.
EIGHTH. The corporate existence of this Association shall continue
until terminated according to the laws of the United States.
NINTH. The board of directors of this Association, or any three
(3) or more shareholders owning, in the aggregate, not less than twenty-five
percent (25%) of the stock of this Association, may call a special meeting of
shareholders at any time. Unless otherwise provided by the bylaws or the laws
of the United States, or waived by shareholders, a notice of the time, place,
and purpose of every annual and special meeting of the shareholders shall be
given by first-class mail, postage prepaid, mailed at least ten, and no more
than sixty, days prior to the date of the meeting to each shareholder of record
at his/her address as shown upon the books of this Association. Unless
otherwise provided by these Articles of Association or the bylaws, any action
requiring approval of shareholders must be effected at a duly called annual or
special meeting.
TENTH. Any action required to be taken at a meeting of the
shareholders or directors or any action that may be taken at a meeting of the
shareholders or directors may be taken without a meeting if consent in writing,
setting forth the action as taken shall be signed by all the shareholders or
directors entitled to vote with respect to the matter thereof. Such action
shall be effective on the date on which the last signature is placed on the
writing, or such earlier date as is set forth therein.
ELEVENTH. Meetings of the board of directors or shareholders,
regular or special, may be held by means of conference telephone or similar
communication equipment by means of which all persons participating in the
meeting can simultaneously hear each other, and participation in such meeting
by such aforementioned means shall constitute presence in person at such
meeting.
TWELFTH. These Articles of Association may be amended at any
regular or special meeting of the shareholders by the affirmative vote of the
holders of a majority of the stock of this Association, unless the vote of the
holders of a greater amount of stock is required by law, and in that case by
the vote of the holders of such greater amount. This Association's board of
directors may propose one or more amendments to these Articles of Association
for submission to the shareholders.
***
- 4 -
<PAGE> 8
(LOGO) EXHIBIT 2 RECEIVED MAR 22 1999
- --------------------------------------------------------------------------------
Comptroller of the Currency
Administrator of National Banks
- --------------------------------------------------------------------------------
Midwestern District Office
2345 Grand Blvd., Suite 700
Kansas City, Missouri 64108-2625
March 17, 1999
Ms. Karen J. Canon
Corporate Counsel
U.S. Bancorp.
U.S. Bank Place 601 Second Avenue South
Minneapolis, Minnesota 55402-4302
Re: U.S. Bank Trust National Association, Atlanta, Georgia
Dear Ms. Canon:
The Comptroller of the Currency (OCC) has found that you have met all
requirements it imposed and completed all steps necessary to commence the
business of banking.
You are authorized to open U.S. Bank Trust National Association, Atlanta,
Georgia on March 16, 1999. A Charter Certificate will be sent under separate
cover.
You are reminded that several of the standard requirements contained in the
preliminary approval letter dated March 11, 1999 will continue to apply once
the bank opens and by opening, you agree to subject your association to these
conditions of operation. Some of the requirements bear reiteration here:
1. Regardless of the association's FDIC insurance status, the association is
subject to the Change in Bank Control Act (12 U.S.C. 1817(j)) by virtue of
its national bank charter.
2. The board of directors is responsible for regular review and update of
policies and procedures and for assuring ongoing compliance with them. This
includes maintaining an internal control system that ensures compliance with
the currency reporting and recordkeeping requirements of the Bank Secrecy Act
(BSA). The board must train its personnel in BSA procedures and designate one
person or a group to monitor day-to-day compliance.
3. The bank will not engage in full commercial powers authorized to national
banks without the OCC's prior approval.
<PAGE> 9
Page 2
Following the commencement of operations, bank management is urged to become
familiar with the requirements of the Securities Exchange Act of 1934 and Part
II of the Comptroller's regulations relative to the registration of the bank's
equity securities and related periodic reports. These requirements will be
applicable to your bank when the number of shareholders of record is maintained
at 500 or more. Such registration may be subsequently terminated pursuant to
the act, only when the number of shareholders of record is reduced to fewer
than 300.
On behalf of the OCC, welcome to the national banking system. Should you have
any questions, please contact Examiner-in-Charge Thomas Smith at (612) 973-2086
who will be responsible for the ongoing supervision of your institution.
Sincerely,
By: /s/ Michael E. Copeland
----------------------------
Michael E. Copeland
Acting Licensing Manager
Enclosures
<PAGE> 10
(LOGO)
- --------------------------------------------------------------------------------
Comptroller of the Currency
Administrator of National Banks
- --------------------------------------------------------------------------------
Washington, D.C. 20219
CERTIFICATE OF FIDUCIARY POWERS
I, John D. Hawke, Jr., Comptroller of the Currency, do hereby certify that:
1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq.,
as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and
control of all records pertaining to the chartering of all National Banking
Associations.
2. "U.S. Bank Trust National Association," Atlanta, Georgia, (Charter No.
23863), was granted, under the hand and seal of the Comptroller, the right to
act in all fiduciary capacities authorized under the provisions of the Act of
Congress approved September 28, 1962, 76 Stat. 668, 12 U.S.C. 92a, and that the
authority so granted remains in full force and effect on the date of this
Certificate.
IN TESTIMONY WHEREOF, I have hereunto
[ S E A L ] subscribed my name and caused my seal
of office to be affixed to these
presents at the Treasury Department in
the City of Washington and District of
Columbia, this 6th day of May, 1999.
By: /s/ John D. Hawke, Jr.
---------------------------
John D. Hawke, Jr.
Comptroller of the Currency
<PAGE> 11
CERTIFICATE
I am Assistant Secretary of U.S. Bank Trust National Association, with its
principal office in Atlanta, Georgia, and hereby certify that the following is
a true and exact extract from the Bylaws of U.S. Bank Trust National
Association, a national banking association organized under the laws of the
United States.
U.S. BANK TRUST NATIONAL ASSOCIATION
BYLAWS, ARTICLE VII
Miscellaneous Provisions
Section 7.1. Execution of Instruments. All agreements, checks, drafts, orders,
indentures, notes, mortgages, deeds, conveyances, transfers, endorsements,
assignments, certificates, declarations, receipts, discharges, releases,
satisfactions, settlements, petitions, schedules, accounts, affidavits, bonds,
undertakings, guarantees, proxies and other instruments or documents may be
signed, countersigned, executed, acknowledged, endorsed, verified, delivered or
accepted on behalf of the Association, whether in a fiduciary capacity or
otherwise, by any officer of the Association, or such employee or agent as may
be designated from time to time by the board by resolution, or by the Chairman
or the President by written instrument, which resolution or instrument shall be
certified as in effect by the Secretary or an Assistant Secretary of the
Association. The provisions of this section are supplementary to any other
provision of the Articles of Association or Bylaws.
<TABLE>
<CAPTION>
<S> <C>
Cynthia B. Clement, Trust Officer Donna K. Painter, Trust Officer
Eric D. Dell, Asst. Vice President Melissa A. Ragsdale, Asst. Vice President
Barton A. Donaldson, Vice President Mary R. Ross, Trust Officer
Betty H. Gilcrease, Trust Officer Scott A. Schuhle, Vice President
Teresita Glasgow, Asst. Vice President Paul Williams, Vice President
Richard M. Jaegle, Jr., Vice President Mary A. Willis, Asst. Vice President
Michael J. Marra, Jr., Vice President Cherie White, Trust Officer
Sandra J. Moyers, Trust Officer
</TABLE>
I further certify that each of the above-listed officers is also an Assistant
Secretary of the Association and Richard M. Jaegle, Jr. is the Secretary of the
Association.
IN WITNESS WHEREOF, I have set my hand this ________ day of June, 1999.
(no corporate seal)
By: /s/ Elizabeth Becker
-----------------------------------------
Elizabeth Becker, Assistant Secretary
U.S. Bank Trust National Association
<PAGE> 12
EXHIBIT 4
U.S. BANK TRUST NATIONAL ASSOCIATION
BYLAWS
ARTICLE I
Meetings of Shareholders
Section 1.1. Annual Meeting. The annual meeting of the shareholders,
for the election of directors and the transaction of other business, shall be
held at a time and place as the Chairman or President may designate. Notice of
such meeting shall be given at least ten days prior to the date thereof, to
each shareholder of the Association. If, for any reason, an election of
directors is not made on the designated day, the election shall be held on some
subsequent day, as soon thereafter as practicable, with prior notice thereof.
Section 1.2. Special Meetings. Except as otherwise specially provided
by law, special meetings of the shareholders may be called for any purpose, at
any time by a majority of the board of directors, or by any shareholder or
group of shareholders owning at least ten percent of the outstanding stock.
Every such special meeting, unless otherwise provided by law, shall be called
upon not less than ten days prior notice stating the purpose of the meeting.
Section 1.3. Nominations for Directors. Nominations for election to
the board of directors may be made by the board of directors or by any
shareholder.
Section 1.4. Proxies. Shareholders may vote at any meeting of the
shareholders by proxies duly authorized in writing. Proxies shall be valid only
for one meeting and any adjournments of such meeting and shall be filed with
the records of the meeting.
Section 1.5. Quorum. A majority of the outstanding capital stock,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders, unless otherwise provided by law. A majority of the votes cast
shall decide every question or matter submitted to the shareholders at any
meeting, unless otherwise provided by law or by the Articles of Association.
ARTICLE II
Directors
Section 2.1. Board of Directors. The board of directors (hereinafter
referred to as the "board"), shall have power to manage and administer the
business and affairs of the Association. All authorized corporate powers of the
Association shall be vested in and may be exercised by the board.
Section 2.2. Powers. In addition to the foregoing, the board of
directors shall have and may exercise all of the powers granted to or conferred
upon it by the Articles of Association, the Bylaws and by law.
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Section 2.3. Number. The board shall consist of a number of members to
be fixed and determined from time to time by resolution of the board or the
shareholders at any meeting thereof, in accordance with the Articles of
Association.
Section 2.4. Organization Meeting. The newly elected board shall meet
for the purpose of organizing the new board and electing and appointing such
officers of the Association as may be appropriate. Such meeting shall be held
on the day of the election or as soon thereafter as practicable, and, in any
event, within thirty days thereafter. If, at the time fixed for such meeting,
there shall not be a quorum present, the directors present may adjourn the
meeting until a quorum is obtained.
Section 2.5. Regular Meetings. The regular meetings of the board shall
be held, without notice, as the Chairman or President may designate and deem
suitable.
Section 2.6. Special Meetings. Special meetings of the board may be
called by the Chairman or the President of the Association, or at the request
of two or more directors. Each member of the board shall be given notice
stating the time and place of each such meeting.
Section 2.7. Quorum. A majority of the directors shall constitute a
quorum at any meeting, except when otherwise provided by law; but fewer may
adjourn any meeting. Unless otherwise provided, once a quorum is established,
any act by a majority of those constituting the quorum shall be the act of the
board.
Section 2.8. Vacancies. When any vacancy occurs among the directors,
the remaining members of the board may appoint a director to fill such vacancy
at any regular meeting of the board, or at a special meeting called for that
purpose.
ARTICLE III
Committees
Section 3.1. Advisory Board of Directors. The board may appoint
persons, who need not be directors, to serve as advisory directors on an
advisory board of directors established with respect to the business affairs of
either this Association alone or the business affairs of a group of affiliated
organizations of which this Association is one. Advisory directors shall have
such powers and duties as may be determined by the board, provided, that the
board's responsibility for the business and affairs of this Association shall
in no respect be delegated or diminished.
Section 3.2. Audit Committee. The board shall appoint an Audit
Committee which shall consist of at least two Directors of the Association or
of an affiliate of the Association. If legally permissible, the board may
determine to name itself as the Audit Committee. The Audit Committee shall
direct and review audits of the Association's fiduciary activities.
The members of the Audit Committee shall be appointed each year and
shall continue to act until their successors are named. The Audit Committee
shall have power to adopt its own rules and procedures and to do those things
which in the judgment of such Committee are necessary or helpful with respect
to the exercise of its functions or the satisfaction of its responsibilities.
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Section 3.3. Executive Committee. The board may appoint an Executive
Committee which shall consist of at least three directors and which shall have,
and may exercise, all the powers of the board between meetings of the board or
otherwise when the board is not meeting.
Section 3.4. Other Committees. The board may appoint, from time to
time, committees of one or more persons who need not be directors, for such
purposes and with such powers as the board may determine. In addition, either
the Chairman or the President may appoint, from time to time, committees of one
or more officers, employees, agents or other persons, for such purposes and
with such powers as either the Chairman or the President deems appropriate and
proper.
Whether appointed by the board, the Chairman, or the President, any
such Committee shall at all times be subject to the direction and control of the
board.
Section 3.5. Meeting Minutes and Rules. An advisory board of directors
and/or committee shall meet as necessary in consideration of the purpose of the
advisory board of directors or committee, and shall maintain minutes in
sufficient detail to indicate actions taken or recommendations made; unless
required by the members, discussions, votes or other specific details need not
be reported. An advisory board of directors or a committee may, in
consideration of its purpose, adopt its own rules for the exercise of any of
its functions or authority.
ARTICLE IV
Officers and Employees
Section 4.1. Chairman of the Board. The board may appoint one of its
members to be Chairman of the board to serve at the pleasure of the board. The
Chairman shall supervise the carrying out of the policies adopted or approved
by the board; shall have general executive powers, as well as the specific
powers conferred by these Bylaws; shall also have and may exercise such powers
and duties as from time to time may be conferred upon or assigned by the board.
Section 4.2. President. The board may appoint one of its members to be
President of the Association. In the absence of the Chairman, the President
shall preside at any meeting of the board. The President shall have general
executive powers, and shall have and may exercise any and all other powers and
duties pertaining by law, regulation or practice, to the Office of President,
or imposed by these Bylaws. The President shall also have and may exercise such
powers and duties as from time to time may be conferred or assigned by the
board.
Section 4.3. Vice President. The board may appoint one or more Vice
Presidents who shall have such powers and duties as may be assigned by the
board and to perform the duties of the President on those occasions when the
President is absent, including presiding at any meeting of the board in the
absence of both the Chairman and President.
Section 4.4. Secretary. The board shall appoint a Secretary, or other
designated officer who shall be Secretary of the board and of the Association,
and shall keep accurate minutes of all meetings. The Secretary shall attend to
the giving of all notices required by
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these Bylaws to be given; shall be custodian of the corporate seal, records,
document and papers of the Association; shall provide for the keeping of proper
records of all transactions of the Association; shall have and may exercise any
and all other powers and duties pertaining by law, regulation or practice, to
the Secretary, or imposed by these Bylaws; and shall also perform such other
duties as may be assigned from time to time by the board.
Section 4.5. Other Officers. The board may appoint, and may authorize
the Chairman or the President to appoint, any officer as from time to time may
appear to the board, the Chairman or the President to be required or desirable
to transact the business of the Association. Such officers shall exercise such
powers and perform such duties as pertain to their several offices, or as may
be conferred upon or assigned to them by these Bylaws, the board, the Chairman
or the President.
Section 4.6. Tenure of Office. The Chairman or the President and all
other officers shall hold office for the current year for which the board was
elected, unless they shall resign, become disqualified, or be removed. Any
vacancy occurring in the Office of Chairman or President shall be filled
promptly by the board.
Any officer elected by the board or appointed by the Chairman or the
President may be removed at any time, with or without cause, by the affirmative
vote of a majority of the board or, if such officer was appointed by the
Chairman or the President, by the Chairman or the President, respectively.
ARTICLE V
Stock
Section 5.1. Shares of stock shall be transferable on the books of the
Association, and a transfer book shall be kept in which all transfers of stock
shall be recorded. Every person becoming a shareholder by such transfer shall,
in proportion to such person's shares, succeed to all rights of the prior
holder of such shares. Each certificate of stock shall recite on its face that
the stock represented thereby is transferable only upon the books of the
Association properly endorsed.
ARTICLE VI
Corporate Seal
Section 6.1. The Association shall have no corporate seal; provided,
however, that if the use of a seal is required by, or is otherwise convenient
or advisable pursuant to, the laws or regulations of any jurisdiction, the
following seal may be used, and the Chairman, the President, the Secretary and
any Assistant Secretary shall have the authority to affix such seal:
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ARTICLE VII
Miscellaneous Provisions
Section 7.1. Execution of Instruments. All agreements, checks, drafts,
orders, indentures, notes, mortgages, deeds, conveyances, transfers,
endorsements, assignments, certificates, declarations, receipts, discharges,
releases, satisfactions, settlements, petitions, schedules, accounts,
affidavits, bonds, undertakings, guarantees, proxies and other instruments or
documents may be signed, countersigned, executed, acknowledged, endorsed,
verified, delivered or accepted on behalf of the Association, whether in a
fiduciary capacity or otherwise, by any officer of the Association, or such
employee or agent as may be designated from time to time by the board by
resolution, or by the Chairman or the President by written instrument, which
resolution or instrument shall be certified as in effect by the Secretary or an
Assistant Secretary of the Association. The provisions of this section are
supplementary to any other provision of the Articles of Association or Bylaws.
Section 7.2. Records. The Articles of Association, the Bylaws and the
proceedings of all meetings of the shareholders, the board, and standing
committees of the board, shall be recorded in appropriate minute books provided
for the purpose. The minutes or each meeting shall be signed by the Secretary,
or other officer appointed to act as Secretary of the meeting.
Section 7.3. Trust Files. There shall be maintained in the Association
files all fiduciary records necessary to assure that its fiduciary
responsibilities have been properly undertaken and discharged.
Section 7.4. Trust Investments. Funds held in a fiduciary capacity
shall be invested according to the instrument establishing the fiduciary
relationship and according to law. Where such instrument does not specify the
character and class of investments to be made and does not vest in the
Association a discretion in the matter, funds held pursuant to such instrument
shall be invested in investments in which corporate fiduciaries may invest
under law.
Section 7.5. Notice. Whenever notice is required by the Articles of
Association, the Bylaws or law, such notice shall be by mail, postage prepaid,
telegram, in person, or by any other means by which such notice can reasonably
be expected to be received, using the address of the person to receive such
notice, or such other personal data, as may appear on the records of the
Association. Prior notice shall be proper if given not more than 30 days nor
less than 10 days prior to the event for which notice is given.
ARTICLE VIII
Indemnification
Section 8.1. The Association shall indemnify such persons for such
liabilities in such manner under such circumstances and to such extent as
permitted by Section 145 of the Delaware General Corporation Law, as now
enacted or hereafter amended. The board of directors may authorize the purchase
and maintenance of insurance and/or the execution of individual agreements for
the purpose of such indemnification to the extent consistent with 12 CFR
7.2014(b)(2), and the Association shall advance all reasonable costs and
expenses (including attorneys' fees) incurred in defending any action, suit or
proceeding to
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all persons entitled to indemnification under this Section 8.1, all in the
manner, under the circumstances and to the extent permitted by Section 145 of
the Delaware General Corporation Law, as now enacted or hereafter amended.
Section 8.2. Notwithstanding Section 8.1, however, (a) any
indemnification payments to an institution-affiliated party, as defined at 12
USC 1813(u), for an administrative proceeding or civil action initiated by a
federal banking agency, shall be reasonable and consistent with the
requirements of 12 USC 1828(k) and the implementing regulations thereunder; and
(b) any indemnification payments and advancement of costs and expenses to an
institution-affiliated party, as defined at 12 USC 1813(u), in cases involving
an administrative proceeding or civil action not initiated by a federal banking
agency, shall be consistent with safe and sound banking practices.
ARTICLE IX
Interpretation and Amendment
Section 9.1. These Bylaws shall be interpreted in accordance with and
subject to appropriate provisions of law, and may be amended, altered or
repealed, at any regular or special meeting of the board.
Section 9.2. A copy of the Bylaws, with all amendments, shall at all
times be kept in a convenient place at the main office of the Association, and
shall be open for inspection to all shareholders during Association hours.
***
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EXHIBIT 6
CONSENT
In accordance with Section 321(b) of the TIRA, the undersigned, U.S. Bank Trust
National Association, hereby consents that reports of examination of the
undersigned by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
its request therefor.
Dated: 12 November 1999
U.S. BANK TRUST NATIONAL ASSOCIATION
By: /s/ Scott A. Schuhle
--------------------------------
Scott A. Schuhle
Vice President
<PAGE> 19
EXHIBIT 3
U.S. BANK TRUST NATIONAL ASSOCIATION
FIDUCIARY POWERS
I, Elizabeth Becker, Assistant Secretary of U.S. Bank Trust National
Association, hereby certify that the attached Certification of Fiduciary
Powers, dated May 6, 1999, issued by the Comptroller of the Currency, is a
full, true and complete copy of the original. I further certify that such
fiduciary powers have not been revoked and remain in full force and effect.
IN WITNESS WHEREOF, I have hereunto set my hand to be affixed hereto this 30 of
June, 1999.
(No Corporate Seal) By: /s/ Elizabeth Becker, Assistant Secretary
------------------------------------------
Elizabeth Becker, Assistant Secretary
U.S. Bank Trust National Association
By: /s/ Jeanne M. Escobedo
----------------------
Jeanne M. Escobedo
Notary Public
JEANNE M. ESCOBEDO
NOTARY PUBLIC - MINNESOTA
[SEAL] RAMSEY COUNTY
My Commission Expires Jan. 31, 2000
