As filed with the Securities and Exchange Commission on December 20, 1999.
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BANKATLANTIC BANCORP, INC.
(Exact name of registrant is specified in its charter)
FLORIDA 65-05070804
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification Number)
1750 EAST SUNRISE BOULEVARD
FORT LAUDERDALE, FLORIDA 33304
TELEPHONE (954) 760-5000
(Address, including Zip Code, and telephone number, including
area code, of registrant's and co-registrant's principal executive
offices)
ALAN B. LEVAN
BANKATLANTIC BANCORP, INC.
1750 EAST SUNRISE BOULEVARD
FORT LAUDERDALE, FLORIDA 33304
TELEPHONE (954) 760-5000
(Name, address, including Zip Code, and telephone number,
including area code, of agent for service)
Please send copies of all communications to:
ALISON W. MILLER, ESQ.
STEARNS WEAVER MILLER WEISSLER
ALHADEFF & SITTERSON, P.A.
150 WEST FLAGLER STREET, SUITE 2400
MIAMI, FLORIDA 33130
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after this Registration Statement becomes effective, as determined
in light of market and other conditions.
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 number of the earlier effective
registration statement for the same offering |_|.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering |_|.
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box |_|.
CALCULATION OF REGISTRATION FEE
<PAGE>
<TABLE>
<CAPTION>
Title of each class Proposed maxi- Amount of
of securities to be Amount to be Proposed maximum mum aggregate registration
registered registered offering price per unit(1) offering price(1) fee
- ----------------------------- -------------- ------------------- ------------------ -----------------
<S> <C> <C> <C> <C>
Subordinated Investment Notes $150,000,000 100% $150,000,000 $39,600
============================= ============== =================== ================== =================
</TABLE>
(1) Estimated solely for the purposes of determining the registration fee
pursuant to Rule 457(o) under the Securities Act.
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 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED DECEMBER 20, 1999
PROSPECTUS
BANKATLANTIC BANCORP, INC. [LOGO]
$150,000,000
SUBORDINATED INVESTMENT NOTES
This prospectus covers investment notes that we may issue from time
to time. We will provide the specific terms of these securities in supplements
to this prospectus. You should read this prospectus and the accompanying
supplement carefully before you invest.
TERMS OF SUBORDINATED INVESTMENT NOTES
- -------------------------------------------------------------------------------
Annual Interest Rate Fixed at the rate indicated upon
issuance.
- -------------------------------------------------------------------------------
Payment of Interest Monthly, quarterly,
semi-annually, annually, or at
maturity at your election.
- -------------------------------------------------------------------------------
Redemption Upon Request of Holder Upon death or total permanent
disability for investment notes
with remaining maturities
greater than one year.
- -------------------------------------------------------------------------------
Redemption at Company's Option Redeemable at prices indicated
upon issuance.
- -------------------------------------------------------------------------------
Maturity The period indicated upon
issuance subject to renewal or
extension.
- -------------------------------------------------------------------------------
Transferability Only with our prior written
consent.
- -------------------------------------------------------------------------------
No minimum amount of investment notes must be sold in this offering.
If we sell all of the investment notes offered, we will receive proceeds of
approximately $___ million after paying expenses estimated to be approximately
$_____ million. We do not presently intend to use registered broker-dealers to
assist with the sale of these securities. If we elect to use broker-dealers on a
best efforts basis in connection with future sales of the investment notes, we
anticipate that we will pay commissions of up to 10% of the sales price to those
brokers and we may reimburse those brokers for some of their costs and
expenses. If we use brokers, expenses of the offering will increase and the
proceeds we receive will be less than currently estimated.
The investment notes are non-negotiable, which means that you may
not transfer them without our consent. There is no public trading market for
these securities and it is unlikely that a trading market will develop.
These investment notes are unsecured obligations, which are
subordinated to our senior indebtedness. YOU SHOULD CONSIDER CAREFULLY THE RISK
FACTORS BEGINNING ON PAGE ____ IN THIS PROSPECTUS.
<PAGE>
These investment notes are not savings or deposit accounts and the
payment of principal and interest on these securities is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency, private insurance fund or other entity.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved these securities or passed
upon the adequacy or accuracy of this prospectus or any accompanying prospectus
supplement. Any representation to the contrary is a criminal offense.
The date of this prospectus is ________________, 1999.
<PAGE>
TABLE OF CONTENTS
PAGE
Summary ..................................................................
Selected Consolidated Financial Data of BankAtlantic
Bancorp, Inc. and Subsidiaries .........................................
Risk Factors .............................................................
Use of Proceeds ..........................................................
Forward-Looking Statements ...............................................
Description of the Investment Notes Offered and Indenture ................
Plan of Distribution .....................................................
Legal Matters ............................................................
Experts ..................................................................
Where You Can Find More Information ......................................
<PAGE>
SUMMARY
This summary provides a brief overview of BankAtlantic Bancorp and
the most significant terms of the investment notes covered by this prospectus.
It does not contain all the information that you need to consider in making your
investment decision. For a more complete understanding of these securities you
should carefully read:
o this prospectus,
o the accompanying prospectus supplement, which describes the specific terms
of the investment notes being offered and which may update and change
information in this prospectus, and
o the documents referred to in "Where You Can Find More Information" for
information on BankAtlantic Bancorp, including its financial statements.
BANKATLANTIC BANCORP
We are a Florida-based savings bank holding company which owns
BankAtlantic. BankAtlantic:
o is a federally-chartered, federally-insured savings bank organized
in 1952,
o provides traditional retail banking services and a full range of
commercial banking products and related financial services,
including the following activities:
o attracting checking and savings deposits from the public and
general business customers,
o originating commercial real estate and business loans,
residential real estate loans and consumer loans,
o purchasing wholesale residential loans from third parties, and
o making other permitted investments such as investments in
mortgage-backed securities, tax certificates and other
investment securities,
o currently operates through 68 branch offices located primarily in
Miami-Dade, Broward, Hillsborough and Palm Beach Counties in South
Florida, and
o is regulated and examined by the Office of Thrift Supervision and
the FDIC.
Although our primary activities relate to the activities of our
wholly-owned subsidiary, BankAtlantic, our other activities include:
o providing investment banking services and capital raising and
advisory services to the financial services industry through our
wholly-owned subsidiary, Ryan Beck. Ryan Beck:
o was acquired by us during 1998, and
o is an investment banking firm whose activities include
underwriting, distributing and trading tax-exempt securities,
and
o engaging in real estate development and investment activities
through BankAtlantic's wholly-owned subsidiary, BankAtlantic
Development Corporation. BankAtlantic Development Corporation:
o owns St. Lucie West Holding Corp., the developer of a master
planned residential, commercial and industrial community in
St. Lucie County, Florida,
o has several investments in real estate development projects in
South Florida, and
o plans to acquire Levitt Corporation, a developer of
single-family home communities and condominium and rental
apartment complexes, in December 1999.
At September 30, 1999, on a consolidated basis we had:
o total assets of $4.0 billion,
o total deposits of $2.1 billion,
o total stockholders' equity of $237.0 million, and
o net income for the nine months of $26.9 million.
-1-
<PAGE>
Our principal executive offices are located at 1750 East Sunrise
Boulevard, Fort Lauderdale, Florida 33304. Our telephone number is (954)
760-5000.
THE OFFERING
Offering Amount................... We are offering up to $150 million of
investment notes. No minimum amount of
investment notes must be sold in the
offering. We may withdraw or cancel the
offering at any time. In the event of a
withdrawal or cancellation, the
investment notes previously sold will
remain outstanding until maturity or
redemption and pending orders will be
irrevocable. See "Plan of
Distribution."
Orders ...................... Your order will be irrevocable upon
receipt by us. We may reject your order
in whole or in part, for any reason. If
we do not accept your order, we will
promptly refund the funds you paid with
your order without deducting any costs
and without interest. Upon acceptance
of an order, we will issue a
transaction statement reflecting
ownership to each purchaser. This
statement is not a negotiable
instrument, and no rights of ownership
in the security may be transferred by
the endorsement and delivery of the
statement by the purchaser. See "Plan
of Distribution."
Use of Proceeds................... We will use the net proceeds from the
offering of the investment notes for
general corporate purposes, including
repurchases of our common stock,
redemptions or repurchases of our
outstanding debt securities and
acquisitions by us or our subsidiaries.
Minimum Initial Purchases and
Additional Purchases. .......... Minimum purchase amounts will be
indicated in a prospectus supplement.
Interest Rate..................... The interest rate will be the rate
fixed upon issuance as indicated in a
prospectus supplement.
Payment of Interest............... We will pay simple interest on
investment notes either monthly,
quarterly, semi-annually, annually or
at maturity, at your election.
Maturity.......................... The maturity date will be the period
indicated in a prospectus supplement.
Automatic Extension............... The investment notes will be
automatically extended for a period
equal to the original term unless:
o we notify the holder at least
seven days prior to the maturity
date that an extension will not
be provided,
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<PAGE>
o the holder elects within sixty
days prior to the maturity date
to have his or her investment
notes repaid at maturity, or
o we have previously extended the
maturity date for an additional
year as described in the next
sentence.
In addition, we may elect at our
discretion on one occasion to
automatically extend the maturity date
of your investment note for an
additional one year period even if you
have elected to have your investment
note repaid at the maturity date.
Book Entry/Transferability. ...... We will issue the investment notes in
book-entry form only. The investment
notes will be non-negotiable and may
not be transferred without our prior
written consent.
Optional Redemption by
the Company.................... We may redeem the investment notes at
our option, in whole or in part, from
and after the dates and at the fixed
redemption prices specified in the
prospectus supplement relating to the
particular investment notes we are
offering.
Redemption Upon Request in
the Event of Death of Total
Disability..................... Notes with maturities of one year or
greater will be redeemed at the option
of the holder following his or her
total permanent disability, or by his
or her estate after death, at the
principal amount plus accrued interest.
A holder will have no other right to
cause redemption prior to maturity.
Unsecured Obligations............. The investment notes are not guaranteed
or secured by any lien on any of our
assets. We will not be required to
contribute funds to a separate fund,
such as a sinking fund, to provide
funds to repay the investment notes
upon maturity.
Subordinated Obligations.......... The investment notes are junior in
right of repayment, or subordinated, to
our existing and future senior
indebtedness. At September 30, 1999, we
had no senior indebtedness outstanding.
There is no limitation on the amount of
senior indebtedness we may incur. See
"Description of the Investment Notes
Offered and the Indenture" for a
description of what constitutes senior
indebtedness.
At September 30, 1999 we had $172.2
million of indebtedness which will rank
equally in right of payment with the
investment notes. Since we are a
holding company, our obligations under
the investment notes will be
structurally subordinated to all
existing and future liabilities and
obligations of our subsidiaries,
including deposits of BankAtlantic. See
"Description of the Investment Notes
Offered and the Indenture."
-3-
<PAGE>
Certain Restrictions.............. The indenture restricts us from paying
dividends or distributions on, or
purchasing or redeeming our capital
stock if, at the time of the dividend
declaration or the date of the
redemption, purchase, payment or
distribution, we are in default. We may
not consolidate or merge with another
entity unless:
o if the other entity survives the
consolidation or merger, it
assumes our obligations under the
indenture and, immediately after
the transaction, is not in
default under the indenture, or
o we survive the consolidation or
merger, and immediately after the
transaction we are not in default
under the indenture.
Events of Default................. An event of default under the indenture
occurs if we:
o fail to pay principal or any
premium on the investment notes
at maturity or upon redemption,
o fail to pay interest on the
investment notes and the failure
continues for a 30-day period,
o breach any of the provisions of
the indenture and the breach
continues after 60 days' notice,
or
o reorganize or become bankrupt or
insolvent in certain events.
We may be required as a result of
certain events of default to accelerate
our payment of principal and interest
on the investment notes.
Periodic Statements............... We will mail to each holder no later
than the tenth business day following
the end of each quarter a statement
detailing the current balance on each
note and any accrued interest.
RISK FACTORS
Your investment in the investment notes will involve risk. Before
making an investment decision, you should consider all of the information
contained in this prospectus and a supplementary prospectus. In particular, you
should carefully evaluate the risks discussed under "Risk Factors" before
deciding whether an investment in these investments notes is suitable for you.
FINANCIAL HIGHLIGHTS
(In thousands)
<TABLE>
<CAPTION>
AT OR FOR THE NINE
MONTHS ENDED
SEPTEMBER 30, AT OR FOR THE YEARS ENDED DECEMBER 31,
----------------------------------------------------------------------
1999 1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Income from Continuing Operations $ 25,691 $ 10,186 $ 23,658 $ 17,639 $ 16,264 $ 16,059
Total Stockholders Equity 236,967 240,440 207,171 147,704 120,561 105,520
Total Assets 3,970,629 3,788,975 3,064,480 2,605,527 1,750,689 1,539,653
</TABLE>
-4-
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
OF BANKATLANTIC BANCORP, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
AT OR FOR THE NINE
MONTHS ENDED
SEPTEMBER 30, AT OR FOR THE YEARS ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ---------- ----------
OPERATING RESULTS: (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Net interest income $ 87,960 $ 78,274 $ 102,285 $ 94,530 $ 76,266 $ 63,921 $ 56,555
Provision for loan losses 19,056 9,811 21,788 11,268 5,844 4,182 2,299
Net interest income after provision
for loan losses 68,904 68,463 80,497 83,262 70,422 59,739 54,256
Non-interest income 74,542 38,684 56,880 33,366 26,818 13,974 10,683
Non-interest expenses 101,133 83,250 120,665 77,722 68,221 48,785 39,706
Income before income taxes and
discontinued operations 42,313 23,897 16,712 38,906 29,019 24,928 25,233
Provision for income taxes 16,622 9,388 6,526 15,248 11,380 8,664 9,174
Income from continuing operations 25,691 14,509 10,186 23,658 17,639 16,264 16,059
Income (loss) from discontinued
operations (less applicable
income taxes (benefit) 1,174 (12,406) (18,220) 4,111 1,372 2,155 776
Net income 26,865 2,103 (8,034) 27,769 19,011 18,419 16,835
Total dividends on non-cumulative
preferred stock 0 0 0 0 0 2,030 880
Net income available for common
shares $ 26,865 $ 2,103 $ (8,034) $ 27,769 $ 19,011 $ 16,389 $ 15,955
CLASS A COMMON SHARES
Diluted earnings per share from
continuing operations $ 0.51 $ 0.36 $ 0.25 $ 0.58 $ 0.47 $N/A $ N/A
Diluted earnings (loss) per share
from discontinued operations 0.02 (0.31) (0.45) 0.09 0.03 N/A N/A
Diluted earnings (loss) per share $ 0.53 $ 0.05 $ (0.20) $ 0.67 $ 0.50 $N/A $ N/A
CLASS B COMMON SHARES
Diluted earnings per share from
continuing operations $ 0.49 $ 0.33 $ 0.23 $ 0.59 $ 0.56 $ 0.47 $ 0.51
Diluted earnings (loss) per share
from discontinued operations 0.02 (0.28) (0.41) 0.09 0.03 0.07 0.03
Diluted earnings (loss) per share $ 0.51 $ 0.05 $ (0.18) $ 0.68 $ 0.59 $ 0.54 $ 0.54
AT OR FOR THE NINE
MONTHS ENDED
SEPTEMBER 30, AT OR FOR THE YEARS ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ---------- ----------
BALANCE SHEET DATA: (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Total assets $3,970,629 $3,682,624 $3,788,975 $3,064,480 $2,605,527 $1,750,689 $1,539,653
Loans receivable-net (1) 2,567,905 2,546,173 2,635,369 2,072,825 1,824,856 828,630 546,396
Mortgage-backed securities held
to maturity 0 0 0 0 0 0 573,913
Securities available for sale 872,149 609,115 599,435 607,490 439,345 691,803 53,969
Investment and trading securities, net 105,966 78,976 79,901 60,280 54,511 49,856 211,776
Mortgage servicing rights 897 51,651 44,315 38,789 25,002 20,738 20,584
Cost over fair value of net assets
acquired and other intangibles 54,729 56,368 55,493 26,327 29,008 11,521 0
Deposits 2,140,096 1,883,229 1,925,772 1,763,733 1,832,780 1,300,377 1,085,782
Guaranteed preferred beneficial
interests in the Company's
Junior Subordinated Debentures 74,750 74,750 74,750 74,750 0 0 0
Subordinated debentures, capital notes
and notes payable 186,544 178,334 177,114 179,600 78,500 21,001 0
Advances from FHLB, federal funds
purchased and securities sold under
agreements to repurchase 1,259,545 1,157,580 1,225,165 758,923 486,288 269,222 311,879
TOTAL STOCKHOLDERS' EQUITY 236,967 247,321 240,440 207,171 147,704 120,561 105,520
- ----------------------------------------------------
(1) Includes $19.2 million, $3.3 million, $9.7 million, $160.1 million and
$207,000 of banker's acceptances at September 30, 1999 and 1998, and at
December 31, 1998, 1997, and 1996, respectively.
-5-
<PAGE>
AT OR FOR THE NINE
MONTHS ENDED
SEPTEMBER 30, AT OR FOR THE YEARS ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ---------- ----------
OTHER DATA: (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Loan Fundings: (1)
Residential real estate loans $ 104,241 $ 109,138 $ 144,586 $ 68,513 $ 133,184 $ 111,361 $ 40,706
Commercial loans 656,504 546,788 753,992 550,318 461,519 412,632 282,243
Small business loans 24,942 101,762 135,239 20,467 0 0 0
Consumer loans (2) 72,391 125,593 165,927 161,154 154,940 114,607 45,159
Lease financing 24,363 13,620 19,214 0 0 0 0
Purchases:
Residential real estate loans 230,902 1,071,747 1,256,185 524,498 465,942 9,930 0
Commercial loans 126,613 8,792 37,314 0 0 0 0
Lease financing 0 3,519 6,054 0 0 0 0
Loan Sales 116,852 236,832 279,034 273,901 59,408 34,153 38,168
Net interest spread (during
period) (3) 2.89% 2.86% 2.83% 3.41% 3.77% 3.57% 3.97%
Interest rate margin (during
period) (3) 3.17% 3.18% 3.12% 3.72% 4.12% 4.01% 4.28%
AT OR FOR THE NINE
MONTHS ENDED
SEPTEMBER 30, AT OR FOR THE YEARS ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ---------- ----------
FINANCIAL RATIOS:
Return on average equity (4) 14.15% 8.51% 4.39% 14.85% 13.07% 14.16% 16.28%
Return on average assets (4) 0.85 0.55 0.28 0.86 0.88 0.94 1.12
Efficiency ratio from continuing
operations(3) 62.21 71.18 75.81 60.77 66.12 62.63 59.05
Average equity to average assets 6.03 6.41 6.48 5.77 6.70 6.66 6.86
Net loan charge-offs as a percent
of average outstanding loans
--annualized 0.80 0.42 0.51 0.44 0.47 0.45 0.59
Non-performing assets as a percent of:
Total loans, tax certificates
and real estate owned 1.25 1.15 1.27 1.36 1.26 2.37 3.66
Total assets 0.85 0.83 0.92 0.96 0.93 1.23 1.51
Loan loss allowance as a percent
of non-performing loans 143.00 140.97 142.95 156.18 167.37 149.49 134.87
Ratio of earnings to fixed charges:
Including interest on deposits 1.33 1.21 1.11 1.33 1.37 1.37 1.59
EXCLUDING INTEREST ON DEPOSITS 1.61 1.37 1.19 1.80 2.26 2.22 3.33
</TABLE>
- ------------------------------------------------------
(1) Does not include banker's acceptances.
(2) Includes second mortgage loans.
(3) Restated for continuing operations.
(4) ROA and ROE excluding the $7.2 million SAIF one-time special assessment
would have been 1.09% and 16.33%, respectively, for the year ended
December 31, 1996.
-6-
<PAGE>
RISK FACTORS
An investment in the investment notes involves various risks,
including those described below. You should carefully consider these factors,
together with the other information contained or incorporated by reference in
this prospectus and in the prospectus supplement provided with this prospectus
before you decide to purchase any securities we are offering.
RISKS ASSOCIATED WITH US
CHANGES IN INTEREST RATES COULD ADVERSELY AFFECT OUR NET INTEREST INCOME AND
PROFITABILITY
The majority of our assets and liabilities are monetary in nature
and subject us to significant risk from changes in interest rates. Changes in
interest rates can impact our net interest income as well as the valuation of
our assets and liabilities.
CHANGES IN INTEREST RATES WILL IMPACT THE DIFFERENCE BETWEEN OUR INTEREST INCOME
AND INTEREST EXPENSE
Our profitability is dependent to a large extent on our net interest
income. Net interest income is the difference between:
o interest income on interest-earning assets, such as loans, and
o interest expense on interest-bearing liabilities, such as
deposits.
Changes in market interest rates, changes in the relationships between
short-term and long-term market interest rates, or changes in the relationships
between different interest rate indices, can affect the interest rates charged
on interest-earning assets differently than the interest rates paid on
interest-bearing liabilities. This difference could result in an increase in
interest expense relative to interest income. While we have attempted to
structure our asset and liability management strategies to mitigate the impact
on net interest income of changes in market interest rates, we cannot assure you
that we will be successful.
DECLINING INTEREST RATES RESULT IN ACCELERATED LOAN PREPAYMENTS WHICH IMPACT OUR
NET INTEREST INCOME AND PROFITABILITY
Loan prepayments accelerate as interest rates fall. We experienced a
high volume of loan prepayments in our mortgage portfolio and our servicing
portfolio during 1998 due to historically low interest rates. Prepayments in a
declining interest rate environment reduce our net interest income and adversely
affect our earnings because:
o we amortize premiums on acquired loans that are prepaid and
amortize mortgage servicing rights associated with prepaid
loans that we service; and
o the yields we earn on the investment of funds that we receive
from prepaid loans are generally less than the yields we
earned on the prepaid loans.
While we have exited the mortgage servicing business and sold the mortgage
servicing rights that we owned, significant loan prepayments in our mortgage
portfolio in the future could have a similar adverse effect on our earnings. At
September 30, 1999, we held $1.2 billion of purchased residential loans, which
includes $10.6 million of net premiums on those loans.
-7-
<PAGE>
OUR NON-INTEREST EXPENSES HAVE INCREASED AS WE HAVE ENTERED INTO NEW BUSINESS
UNITS AND THESE BUSINESS UNITS MAY NOT GENERATE SUFFICIENT REVENUES TO COVER
EXPENSES
During the last four years we have grown rapidly and significantly.
o Our total assets have increased from $1.75 billion at December
31, 1995 to $3.97 billion at September 30, 1999.
o Our loan portfolio increased from $828.6 million at December
31, 1995 to $2.57 billion at September 30, 1999.
We initiated several new business units during 1998, hired
additional personnel, acquired Ryan Beck and expanded our real estate
development and investment business. In addition, we established an internet
banking division during 1999. This growth is intended to support our expanded
operations and increase our non-interest revenue. However, this growth and
expansion of operations has resulted in a significant increase in non-interest
expenses. Noninterest expenses increased from $68.2 million in 1996 to $77.7
million in 1997 to $120.7 million in 1998 and were $101.1 million for the nine
months ended September 30, 1999.
We implemented various restructuring initiatives at BankAtlantic in
the fourth quarter of 1998 with a view to streamlining its operations and
improving efficiencies. However, at the same time Ryan Beck significantly
expanded and hired additional personnel as it diversified into the healthcare,
consumer and technology industries and expanded its research and investment
banking operations. Ryan Beck's non-interest expenses were $17.5 million for the
six month period after we acquired it to December 31, 1998 and were $35.5
million for the nine month period ended September 30, 1999. Our total
non-interest expenses, including Ryan Beck, for the nine months ended September
30, 1999 were $101.1 million. Expenses associated with past growth have had, and
expenses associated with additional future growth will likely have, an adverse
impact on earnings if we are unable to generate sufficient revenues to cover
this growth.
OUR CONSUMER AND SMALL BUSINESS LOAN PORTFOLIO SUBJECTS US TO GREATER CREDIT
RISK AND WE HAVE EXPERIENCED HIGH LEVELS OF CHARGE-OFFS
During the past several years, we have experienced significant
growth in our consumer and small business loan portfolio. Consumer loans,
excluding second mortgages, increased to $178.1 million at September 30, 1999
from $133.5 million at December 31, 1995. A significant amount of these loans
are indirect automobile loans. Indirect automobile loans are loans which are
funded through automobile dealers rather than funded directly to our retail
customers. At September 30, 1999, $140.3 million of our consumer loan portfolio
consisted of indirect loans, primarily automobile loans.
Consumer loans, especially indirect automobile loans, present more
credit risk than other types of loans such as home equity or residential real
estate loans. They generally result in a higher level of charge-offs than other
loans. Charge-offs are amounts written off as uncollected. Our consumer loan net
charge-offs were $8.9 million in 1998 and $7.5 million for the nine months ended
September 30, 1999. Our net charge-offs attributable to indirect automobile
loans were $8.0 million in 1998 and $6.5 million for the nine months ended
September 30, 1999. During the fourth quarter of 1998, we discontinued the
origination of indirect automobile loans. However, we may re-enter this market
in the future. We may also experience additional losses in our current consumer
loan portfolio.
We began originating small business loans during the fourth quarter
of 1997. We had $118.8 million of small business loans at December 31, 1998 and
$119.7 million at September 30, 1999. We experienced high levels of
delinquencies and charge-offs in our small business loan portfolio during the
fourth quarter of 1998 and the nine months ended September 30, 1999. Our small
business loan net charge-offs were $2.0 million in 1998, including $1.5 million
during the 1998 fourth quarter, and $7.9 million during the period ended
September 30, 1999. Further, our small business loan net charge-offs were $3.0
million for the three month period ended September 30, 1999. While we have
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implemented personnel and operating changes in our small business lending
operations which are intended to address these issues, we may experience
additional significant charge-offs in this portfolio in the future.
A DECLINE IN THE REAL ESTATE MARKET OR IN THE ECONOMY IN GENERAL MAY RESULT IN
ADDITIONAL LOSSES IN OUR BANKING ACTIVITIES
Our loans receivable increased by approximately $1.7 billion or 210%
from December 31, 1995 to September 30, 1999. Balances for all loan categories
increased primarily due to:
o $395.0 million of loans acquired in the Bank of North America
acquisition, and
o wholesale residential loan purchases of $465.9 million in
1996, $524.5 million in 1997, $1.3 billion in 1998, and $105.1
million in the nine months ended September 30, 1999.
Our commercial real estate and construction and development loans
were $969.3 million at September 30, 1999. The real estate underlying many of
those commercial real estate and construction and development loans is
concentrated in Broward, Miami-Dade and Palm Beach Counties, Florida and may be
in the early stages of development. Our competitors over the last several years
have also increased their funding availability for commercial real estate
projects. These increases could result in over-building and a decline in real
estate values.
The real estate securing the wholesale residential loans that we
purchased is generally located outside South Florida. These loans are subject to
additional risks associated with the economy where the collateral is located as
well as collection risks.
Declines in real estate values or in the economy generally could
have a material adverse impact on our results of operations based not only on
the nature of our assets and the composition of our loan portfolio, but also on
our real estate development activities.
WE HAVE BROAD AUTHORITY TO MAKE ACQUISITIONS AND INVESTMENTS IN BUSINESSES NOT
ENGAGED IN TRADITIONAL BANKING ACTIVITIES WHICH WILL SUBJECT US TO THE RISKS OF
THOSE BUSINESSES
We generally have broad authority under applicable law to engage in
various types of business activities, including investments in real estate, real
estate development and real estate related businesses. We have historically made
acquisitions and investments as a means of diversifying our sources of
non-interest income and to increase non-interest revenues. Our acquisitions and
investments include:
o REAL ESTATE - we acquired St. Lucie West Holding Corp. in
October 1997 for approximately $20 million. St. Lucie West
Holding Corp. is the developer of St. Lucie West, a master
planned residential, commercial and industrial community
located in St. Lucie County, Florida. We have also made joint
venture investments in real estate development projects
located in South Florida. In addition, we have entered into an
agreement to acquire Levitt Corporation, a homebuilder in
South Florida, for approximately $25 million. We expect to
complete the acquisition in December 1999.
o EQUIPMENT LEASING - in March 1998 we acquired Leasing
Technology, Inc., an equipment leasing and finance company
located in South Florida, in a stock for stock exchange valued
at approximately $6.2 million. Leasing Technology is now
operated as a subsidiary of BankAtlantic.
o INVESTMENT BANKING AND BROKERAGE SERVICES - in June 1998 we
acquired Ryan Beck, in a stock for stock exchange valued at
approximately $38 million. Ryan Beck is operated as an
independent, autonomous subsidiary under the direction of its
prior management.
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These acquisitions and investments in businesses not engaged in
traditional banking activities subject us to the risks inherent in each of the
business activities.
WE ENGAGE IN REAL ESTATE DEVELOPMENT AND INVESTMENT ACTIVITIES WHICH ARE
SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK
We currently engage in real estate development and investment
activities through BankAtlantic Development Corporation. BankAtlantic
Development Corporation owns the developer of a master planned community in St.
Lucie County, Florida, has made several joint venture investments in real estate
development projects in South Florida, and plans to acquire Levitt Corporation,
a home builder in South Florida. The real estate industry is highly cyclical by
nature and future market conditions are uncertain. Factors which adversely
affect the real estate and home building industries include:
o the availability and cost of financing,
o decreases in demand or over-building,
o unfavorable interest rates,
o changes in general economic conditions,
o a surplus of available real estate and related projects, and
o the significant volatility and fluctuations in underlying real
estate values.
In addition, St. Lucie West Holding Corp. incurred operating
expenses of approximately $5.2 million during 1998 and $4.3 million during the
nine months ended September 30, 1999. Periodic sales of properties may be
insufficient to ensure profitability of St. Lucie West Holding Corp. Further, if
sales are not adequate to cover operating expenses we will be required to seek a
source of additional operating funds.
Declines in real estate values or in the economy generally could
have a material adverse impact on our results of operations based not only on
our real estate development activities, but also on the nature of our assets and
the composition of our loan portfolio.
OUR ACTIVITIES ARE REGULATED BY THE OFFICE OF THRIFT SUPERVISION, THE
FDIC AND OTHER REGULATORS WHO POSSESS DISCRETION IN THEIR SUPERVISORY AND
ENFORCEMENT ACTIVITIES
The banking industry is one of this country's most heavily regulated
industries. The Office of Thrift Supervision:
o is BankAtlantic's chartering authority and its primary federal
regulator,
o regulates, supervises and examines BankAtlantic, and
o regulates and oversees us, as the holding company of
BankAtlantic.
In addition to the Office of Thrift Supervision, the FDIC also
regulates, supervises and examines BankAtlantic by virtue of insuring its
deposits up to applicable limits. Furthermore, BankAtlantic is a member of the
Federal Home Loan Bank of Atlanta and, consequently, is subject to certain
limited regulation by the Federal Reserve Board. The regulation and supervision
of financial institutions is intended primarily for the protection of the FDIC
insurance funds and depositors. Regulatory authorities possess extensive
discretion in connection with their supervisory and enforcement activities. As
an example, banking regulators have in the past implemented regulations which
have increased capital requirements, insurance premiums and administrative,
professional and compensation expenses for the institutions which they regulate.
Any change in the existing regulatory structure or the laws or regulations
applicable to us could significantly affect our powers, authority and operations
and our business could be adversely affected.
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WE HAVE MANY COMPETITORS WHO MAY HAVE GREATER FINANCIAL RESOURCES OR OPERATE
UNDER FEWER REGULATORY CONSTRAINTS
Our competitors include:
o other savings institutions,
o investment firms,
o commercial banks,
o finance companies,
o mortgage banking companies,
o money market funds,
o financial consultants,
o credit unions, and
o real estate developers, operators and investors.
We compete not only with financial institutions headquartered in the
State of Florida but also with a growing number of financial institutions
headquartered outside of Florida who are active in the State. In addition, the
Gramm- Leach-Bliley Act was recently enacted into law. This law, which repeals
the Glass Steagall Act,
o permits bank holding companies to engage in a substantially
wider range of non-banking activities than they were
previously permitted, such as insurance and investment
banking, and
o enables insurers and other financial service companies to
acquire banks.
This new legislation may significantly increase the number of entities that we
compete with. Many of our competitors have substantially greater financial
resources than we have and, in some cases, operate under fewer regulatory
constraints.
THE YEAR 2000 PROBLEM COULD DISRUPT OUR BUSINESS
Many existing computer programs use only two digits to identify a
year in the date field. These programs were designed and developed without
considering the impact of the upcoming change in the century. If not corrected,
many computer applications could fail or create erroneous results by or at the
year 2000. The consequences of incomplete or untimely resolution of year 2000
issues represent an uncertainty that could affect future financial results.
The year 2000 problem poses the following principal risks to our
business:
o disruption of our business due to our failure to achieve year
2000 readiness,
o disruption of our business due to failure of third parties to
achieve year 2000 readiness,
o disruption in our loan operations due to failure of our
borrowers to achieve year 2000 readiness, and
o litigation due to year 2000 noncompliance from customers,
borrowers and suppliers as a result of both internal and third
party system failures.
We have undertaken various initiatives intended to ensure that
computer applications will function properly with respect to dates in the year
2000 and thereafter and have established a year 2000 action plan based on the
guidelines outlined in the Federal Financial Institutions Examination Council's
"The Effect of 2000 on Computer Systems".
However, we cannot assure you that our initiatives and action plan
have identified all costs, risks or possible losses which we may experience
associated with year 2000 issues. Due to the general uncertainty inherent in the
year 2000 problem, resulting in part from the uncertainty of the year 2000
readiness of third party suppliers, borrowers and customers, we are unable to
determine whether the consequences of year 2000 failures will have a material
impact on our results of operations, liquidity or financial condition.
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RISKS ASSOCIATED WITH THE INVESTMENT NOTES
OUR DEPENDENCE ON DIVIDENDS FROM OUR SUBSIDIARIES FOR A SIGNIFICANT PORTION OF
OUR REVENUE AND REGULATORY RESTRICTIONS ON DIVIDENDS FROM BANKATLANTIC MAY LIMIT
OUR ABILITY TO PAY PRINCIPAL OR INTEREST ON THE INVESTMENT NOTES
We own 100% of BankAtlantic's outstanding capital stock and depend
upon dividends from BankAtlantic for a significant portion of our revenues.
BankAtlantic's ability to pay dividends or make other capital distributions to
us is governed by Office of Thrift Supervision regulations, which focus
primarily on BankAtlantic's regulatory capital levels and net income. Office of
Thrift Supervision regulations define "capital distributions" as
o cash dividends,
o payments by a savings association or savings bank holding
company to repurchase or otherwise acquire its shares,
o payments to shareholders of another entity in a cash-out
merger, and
o other distributions charged against capital.
If an institution has regulatory capital that is at least equal to
its capital requirements both before and after giving effect to the
distribution, and has not been notified that it "is in need of more than normal
supervision," the Office of Thrift Supervision deems it a "Tier 1 association."
BankAtlantic currently qualifies as a Tier 1 association under applicable Office
of Thrift Supervision regulations. The Office of Thrift Supervision permits a
Tier 1 association to make capital distributions during a calendar year of up to
the greater of:
o 100% of net income for the current calendar year, plus 50% of
its capital surplus, or
o 75% of its net income over the most recent four quarters.
Capital surplus is the amount of capital in excess of an association's
regulatory capital requirements. However, the association seeking to pay the
capital distribution must first notify the Office of Thrift Supervision of its
intention and the Office of Thrift Supervision must not raise any objection to
the distribution. Any additional capital distributions would require prior
regulatory approval. Additionally, all capital distributions of BankAtlantic are
subject to the Office of Thrift Supervision' right to object to a distribution
on safety and soundness grounds. We cannot assure you that BankAtlantic will
remain a Tier 1 association or that it will be in a position to make capital
distributions to us in an amount sufficient for us to satisfy our obligations.
Our ability to pay interest on the investment notes will be
significantly dependent on the ability of our subsidiaries, especially
BankAtlantic, to pay dividends or distributions to us in amounts sufficient to
service our obligations. Our obligations at September 30, 1999 include:
o 9% Subordinated Debentures due 2005 - $21.0 million
outstanding principal amount,
o 6 3/4% Convertible Subordinated Debentures due 2000 - $51.2
million outstanding principal amount,
o 55/8% Convertible Subordinated Debentures due 2007 - $100.0
million outstanding principal amount, and
o 9 1/2% Junior Subordinated Debenture due 2027 - $74.8 million
outstanding principal amount
We may also become obligated to make other payments on securities
which we issue in the future which are on a parity with or have a preference
over the investment notes with respect to the payment of principal or interest.
HOLDERS OF OUR SENIOR INDEBTEDNESS AND CREDITORS OF OUR SUBSIDIARIES HAVE
PRIORITY OVER THE PAYMENTS TO BE PAID UNDER THE INVESTMENT NOTES
The investment notes are subordinated to all of our current or
future senior indebtedness or liabilities which are not expressly by their terms
made subordinate or equal in right of payment to the investment notes. Since we
are a holding
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company, the investment notes will be effectively subordinated to all existing
and future liabilities of our subsidiaries, including the rights of the
depositors of BankAtlantic. As of September 30, 1999, we had:
o $172.2 million of indebtedness ranking equally with the
investment notes,
o $74.8 million of indebtedness ranking junior in right of
payment to the investment notes, and
o no senior indebtedness.
Further, at September 30, 1999 our subsidiaries had liabilities of $3.5 billion,
which includes $2.1 billion of deposits at BankAtlantic. The indenture relating
to the investment notes does not limit our ability to incur additional
indebtedness, including senior indebtedness, or additional indebtedness by
BankAtlantic or our other subsidiaries.
INVESTMENT NOTES ARE NOT INSURED
The investment notes are not insured by the Bank Insurance Fund or
the Savings Association Insurance Fund of the FDIC or by any other governmental
agency or private insurer.
THE COVENANTS IN THE INDENTURE ARE LIMITED AND DO NOT PROVIDE YOU WITH
SIGNIFICANT PROTECTION
The covenants in the indenture are limited and do not protect
holders of investment notes in the event of a material adverse change in our
financial condition or results of operations. In addition, payment of principal
of and interest on the investment notes can only be accelerated if we:
o fail to pay principal of or any premium on the investment
notes at maturity or upon redemption,
o fail to pay interest on any of the investment notes and the
failure continues for a 30-day period,
o breach any of the provisions of the indenture and the breach
continues for a 60-day period after receipt of notice, or
o reorganize or become bankrupt or insolvent in certain events.
The indenture does not require us to:
o adhere to any financial ratios or specified levels of
liquidity, or
o repurchase, redeem or modify the terms of the investment notes
upon a change in control or other events involving us which
may adversely affect the creditworthiness of the investment
notes.
Therefore, neither the covenants nor the other provisions of the indenture
should be a significant factor in evaluating our obligations under the
investment notes. See "Description of the Investment Notes Offered and
Indenture."
TRANSFER RESTRICTIONS AND THE LACK OF A TRADING MARKET WILL LIMIT YOUR ABILITY
TO LIQUIDATE YOUR INVESTMENT
The investment notes are non-negotiable, which means they may not be
transferred without our prior written consent. There is no established trading
market for the investment notes and it is unlikely that one will develop.
Accordingly, even if we permitted a transfer, you may be unable to liquidate
your investment. See "Description of the Investment Notes Offered and the
Indenture."
WE MAY EXTEND THE MATURITY OF THE INVESTMENT NOTES IN OUR SOLE DISCRETION
Even if the investment notes mature by their terms and you have
indicated that you do not want to renew the term of the investment notes, we
can, in our sole discretion, extend their maturity for an additional one-year
period. In the event that we make this election, the principal amount of the
investment notes will not be repaid on the anticipated maturity date and you
will continue to receive interest at the same rate until the expiration of that
one-year period.
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USE OF PROCEEDS
We intend to use the net proceeds resulting from the sale of the
investment notes (estimated to be approximately $___ million net of estimated
offering expenses if all of the investment notes being offered through this
prospectus are sold) for general corporate purposes, including:
o repurchases of our common stock,
o redemptions or repurchases of our outstanding debt securities,
and
o acquisitions by us or our subsidiaries.
The precise amounts and timing of the application of such proceeds
depends upon many factors, including, but not limited to, the amount of any such
proceeds and actual funding requirements. Until the proceeds are used, we may
invest the proceeds, depending on our cash flow requirements, in short and
long-term investments, including, but not limited to:
o treasury bills,
o commercial paper,
o certificates of deposit,
o securities issued by U.S. government agencies,
o money market funds, and
o repurchase agreements.
FORWARD-LOOKING STATEMENTS
Some of the statements contained or incorporated by reference in
this prospectus include forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, and Section 21E of the Securities Exchange
Act of 1934. Some of the forward-looking statements can be identified by the use
of words such as "anticipate", "believe", "estimate", "may", "intend", "expect",
"will", "should", "seeks" and similar expressions. Forward-looking statements
are based largely on our expectations and involve inherent risks and
uncertainties. A number of important factors could cause actual results to
differ materially from those in the forward-looking statements. Some factors
include:
o the potential adverse impact on BankAtlantic's operations and
profitability of changes in interest rates and future
legislation,
o economic conditions, both generally and particularly in areas
where we or our subsidiaries, including BankAtlantic, operate
or hold assets,
o interest rate and credit risk associated with BankAtlantic's
loan portfolio,
o BankAtlantic's recent rapid growth and increased operating
expenses and its announced restructuring which may not prove
to be successful,
o uncertainty relating to the realization of benefits from our
restructuring initiatives and expense reductions,
o our ability to manage new banking and non-banking initiatives
and investments,
o regulatory limitations on BankAtlantic's ability to pay
dividends, and
o the highly competitive nature of our businesses.
Many of these factors are beyond our control and beyond the control of
BankAtlantic. For a discussion of factors that could cause actual results to
differ, please see the discussion under "Risk Factors" contained in this
prospectus and in other information contained in our publicly available SEC
filings.
DESCRIPTION OF THE INVESTMENT NOTES OFFERED AND THE INDENTURE
The investment notes will be issued under an indenture between us
and U.S. Bank Trust National Association, as trustee. The terms and provisions
of the investment notes include those stated in the indenture and those made
part of the
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indenture by reference to the Trust Indenture Act of 1939 as in effect on the
date of the indenture. The following briefly summarizes the material terms of
the indenture and the investment notes, other than maturity, pricing and other
related terms disclosed in the accompanying prospectus supplement. This summary
is not complete and is qualified in its entirety by reference to the indenture,
including the definitions in the indenture of certain terms used below. You
should read the entire indenture and the Trust Indenture Act of 1939 for a
complete understanding of the terms of the indenture and the investment notes.
GENERAL
The investment notes:
o are general obligations and are limited to $150 million in
aggregate principal amount,
o are not secured by our assets or otherwise,
o do not have the benefit of a sinking fund for the retirement
of principal,
o rank equal to all of our subordinated indebtedness,
o are subordinated in right of payment to all of our future
Senior Indebtedness (as we define this term below in "--
Subordination") or liabilities which are not expressly by
their terms subordinate or equal in right of payment to the
investment notes, and
o are not savings accounts or deposits and are not insured by
the FDIC or any other governmental agency.
We, or any of our subsidiaries, may incur additional indebtedness
constituting Senior Indebtedness or indebtedness that ranks equal or junior to
the investment notes. The indenture does not limit the total indebtedness that
either we or any of our subsidiaries may incur. At September 30, 1999 we had no
Senior Indebtedness, $172.2 million of indebtedness ranking equal to the
investment notes and $74.8 million of indebtedness ranking junior to the
investment notes.
Because we are a holding company, our primary source of funds for
the payment of our obligations, including the payment of principal and interest
on the investment notes, is dividends and distributions from our subsidiaries,
especially BankAtlantic. Our subsidiaries are separate and distinct legal
entities and have no obligation to pay any amounts due with respect to the
investment notes or to make funds available for those payments. Further, from
time to time while the investment notes are outstanding, BankAtlantic and our
other subsidiaries may be subject to regulatory or contractual constraints that
restrict their ability to pay dividends to us. See "Risk Factors--Our Dependence
on Dividends from Our Subsidiaries for a Significant Portion of our Revenue and
Regulatory Restrictions on Dividends from BankAtlantic May Limit Our Ability to
Pay Principal or Interest on the Investment Notes."
The investment notes will be effectively subordinated to all
existing and future liabilities, including deposits, of our subsidiaries. At
September 30, 1999, our subsidiaries had liabilities of $3.5 billion, which
includes $2.1 billion of deposits at BankAtlantic. Our right to participate in
any distribution of assets of our subsidiaries upon any liquidation or
reorganization or otherwise of those subsidiaries is subject to the prior claims
of creditors of the subsidiary, including depositors in BankAtlantic, except to
the extent that we may be recognized as a creditor of the subsidiary. Thus, the
ability of holders of the investment notes to benefit indirectly from such
distribution is affected by those creditor claims.
Investment notes of a single series may be issued at various times
with different maturity dates, different optional redemption provisions and
different interest rates. We reserve the right to vary from time to time in our
discretion interest rates, redemption terms or maturity dates based on our
fundraising objectives, circumstances in the financial markets and the economy,
the attraction of new investors in particular regions and other factors.
Once determined, the rate of interest payable on an investment note
will remain fixed for its term. Interest on the investment notes will be paid in
arrears either monthly, quarterly, semi-annually, annually or at maturity, at
the election of the purchaser. Unless otherwise provided in a prospectus
supplement, we will compute interest on the investment notes as simple interest
on the basis of a 360-day year of twelve 30-day months. We will pay the
principal and interest on the investment notes when due by check mailed to the
person entitled to payment.
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The investment notes will be in U.S. dollars and payments of
principal and interest on the investment notes will be in U.S. dollars.
AUTOMATIC EXTENSION OF MATURITY DATE
We may elect at any time prior to maturity to automatically extend
the maturity date of an investment note for an additional one year period by
providing written notice of our election to a holder within seven days after
such election has been made. After extension, the investment note will continue
with terms identical to those fixed upon issuance. If we elect to extend the
maturity date for an additional one year, a holder will have no right to cause
the investment note to be repaid prior to the maturity date as extended.
However, we may elect to extend the maturity date of an investment note for an
additional year only once; and after the election has been made, the investment
note will not be subject to any further extensions or renewals.
In addition, the maturity of an investment note will be
automatically extended for a term identical to the original term of the
investment note unless:
o we notify the holders at least seven days prior to the
maturity date of our intention not to extend the maturity date
of the investment note;
o the holder elects within sixty days prior to the maturity date
to have his or her investment note repaid at maturity; or
o we have previously exercised our right to extend the maturity
date of the investment note for an additional year.
The investment notes will continue to renew in this manner until termination or
redemption under the indenture and the investment notes. Interest shall continue
to accrue from the first day of such renewed term. Each renewed investment note
will continue with identical terms, including provisions relating to interest
rate and payment. If we notify you of our intention to repay an investment note
at maturity, no interest will accrue after the date of maturity. As a courtesy,
we will provide a request for repayment form approximately sixty days prior to
the maturity date of an investment note. However, a written request for
repayment will be valid and use of this specific form by a holder will not be
required.
REDEMPTION OF INVESTMENT NOTES AT OUR OPTION
Our right, if any, to redeem the Investment Notes will be set forth
in a prospectus supplement. Investment notes which are redeemable at our option
will be redeemable, in whole or in part, at any time, on not less than 30 days
notice, but not more than 60 days prior to the redemption date. The redemption
price payable will be expressed as a percentage of principal amount and will be
set forth in a prospectus supplement covering the particular investment notes
offered.
REDEMPTION AT REQUEST OF HOLDER UPON DEATH OR TOTAL PERMANENT DISABILITY.
Except for investment notes with remaining maturities of less than
12 months, an investment note will be redeemed by us at the election of the
holder following his or her total permanent disability, as established to our
satisfaction, or by his or her estate following his or her death. The redemption
price, in the event of a death or total permanent disability, will be the
principal amount of the investment note, plus interest accrued and not
previously paid, to the date of redemption. If the investment note is held
jointly, the election to redeem will apply when either record owner dies or
becomes subject to a total permanent disability. The holder has no other right
to require us to prepay his or her investment note prior to its maturity date as
originally stated or as it may be extended.
We may in the future modify this policy on redemption after death or
total permanent disability. However, no modification will adversely affect the
right of redemption applicable to any outstanding investment note.
For the purpose of determining the right of a holder to demand early
repayment of an investment note, total permanent disability shall mean a
determination by a physician chosen by us that the holder, who was gainfully
employed
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on a full time basis at the time of purchase, is unable to work on a full time
basis, defined as working at least forty hours per week during the succeeding
twenty-four months.
SUBORDINATION
The principal, interest and any premium on the investment notes are
subordinate and junior in right of payment to the prior payment in full of all
of our Senior Indebtedness. The indenture does not limit the amount of Senior
Indebtedness or other indebtedness, secured or unsecured, that we or any of our
subsidiaries may incur. If our payments on Senior Indebtedness are accelerated,
we will be prohibited from making any payment of principal, premium or interest
on the investment notes until payments of the Senior Indebtedness are made or
provided for. If we dissolve, wind up, liquidate or reorganize and our assets
are distributed, payment of principal, premium or interest on the investment
notes will be subordinated, to the prior payment in full of Senior Indebtedness,
which means that all Senior Indebtedness must be paid in full before any payment
may be made to any holders of investment notes. If our assets are distributed in
any such proceeding, some of our general creditors may recover more,
proportionately, than holders of the investment notes by reason of such
subordination.
"Indebtedness" means:
o all of our obligations for borrowed money, whether or not the
recourse of the lender is to the whole of our assets or only
to a portion of such assets,
o all of our indebtedness which is evidenced by a note,
debenture, bond or other similar instrument, including lease
obligations that we incur with respect to any property
acquired or leased and used in our business that is required
to be recorded as a capitalized lease,
o all of our indebtedness representing the unpaid balance of the
purchase price of any goods or other property or balance owed
for any services rendered,
o all of our indebtedness, including capitalized lease
obligations, incurred, assumed or given in an acquisition,
whether by way of purchase, merger or otherwise, of any
business, real property or other assets,
o any indebtedness of others described in the preceding four
bullet points that we have guaranteed or for which we are
otherwise liable, and
o any amendment, renewal, extension, deferral, modification,
restructuring or refunding of any such indebtedness,
obligation or guarantee.
"Senior Indebtedness" means any and all of our Indebtedness, except
for any particular Indebtedness for which the instrument creating or evidencing
it or pursuant to which it is outstanding expressly provides that it is
subordinate or shall rank equal in right of payment to the investment notes.
CERTAIN COVENANTS
The indenture contains certain customary covenants found in
indentures under the Trust Indenture Act, including covenants with respect to:
o paying principal and interest,
o maintaining an office or agency for administering the
investment notes,
o holding funds for payments on the investment notes in trust,
o paying taxes and other claims,
o maintaining our properties and our corporate existence, and
o delivering annual certifications to the trustee.
However, the indenture does not require us to
o adhere to any financial ratios or specified levels of
liquidity, or
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o repurchase, redeem or modify the terms of the investment notes
upon a change in control or other events involving us which
may adversely affect the creditworthiness of the investment
notes.
RESTRICTIONS ON DIVIDENDS
The indenture provides that we cannot:
o declare or pay dividends on, or purchase, redeem or acquire
for value any of our capital stock,
o return any capital to holders of our capital stock, or
o make any distribution of assets to holders of our capital
stock
unless at the time we declare the dividend or the date on which we make the
purchase, redemption, payment or distribution described above, we are not in
default in the payment of interest on the investment notes or an event of
default has not occurred.
The indenture does not prohibit or restrict us from selling
additional shares of our capital stock or other debt securities nor from
pledging shares of capital stock in our subsidiaries. Further, neither we nor
any of our subsidiaries is restricted from issuing any shares of capital stock
or debt securities.
DEFAULTS AND REMEDIES
As provided in the indenture, an event of default results if we:
o fail to pay principal of or premium, if any, on the investment
notes at maturity or upon redemption, whether or not the
payment is prohibited by the subordination provisions,
o fail to pay interest on any of the investment notes when due
and such failure continues for a period of 30 days, whether or
not the payment is prohibited by the subordination provisions,
o fail to comply with any of our other material agreements or
covenants in the indenture and the default continues for a
period of 60 days after the trustee or the holders of at least
25% in principal amount of the outstanding investment notes
notify us in writing of the default, or
o reorganize or become bankrupt or insolvent in certain events.
The notice referred to in the third bullet point above must specify the default,
demand that it be remedied and state that the notice is a "Notice of Default."
The trustee must give the notice if requested to do so in writing by the holders
of at least 25% in principal amount of the investment notes then outstanding.
The trustee must deliver any notice which it is required to deliver to us
promptly after it becomes aware of the default or is requested by the holders to
deliver the notice. An event of default for a particular series of investment
notes will constitute an event of default for all other series of investment
notes under the indenture.
The indenture provides that the trustee will, within 90 days after
the occurrence of any default known to it which has not been cured, mail to the
holders of the investment notes notice of the default. If we default in paying
principal of or interest on any of the investment notes, the trustee will be
protected from withholding the notice if it in good faith determines that
withholding the notice is in the interest of the holders of the investment
notes.
The indenture permits the acceleration of payment of principal of
the investment notes only upon an event of default resulting from our failure to
pay principal or interest on the investment notes or if we reorganize or become
bankrupt or insolvent in certain events. If an event of default of this kind is
continuing, the indenture provides that the trustee or holders of not less than
30% in aggregate principal amount of the investment notes then outstanding, by
notice in writing to us (and to the trustee if given by the holders), may
declare all unpaid principal of all the investment notes to be immediately due
and payable. Holders of a majority in principal amount of the investment notes
then outstanding may rescind an acceleration and
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<PAGE>
its consequences and may waive past defaults upon conditions provided in the
indenture. No holder of investment notes may pursue any remedy under the
indenture unless:
o the holder has previously given to the trustee written notice
of a continuing event of default,
o the holders of at least 30% in principal amount of the
investment notes then outstanding
o have requested the trustee in writing to pursue the
remedy, and
o have offered the trustee satisfactory indemnity against
loss, liability and expense incurred by pursuing the
remedy, and
o the trustee has failed to act within 60 days after receipt of
the request.
The indenture requires us to file periodic reports with the trustee
as to the absence of defaults.
CONSOLIDATION, MERGER OR SALE
The indenture provides that the Company may not merge or consolidate
with or sell all or substantially all of its assets to, any entity unless
o we are the surviving or successor entity in the transaction
and we are not immediately thereafter in default under the
indenture, or
o if we are not the surviving or successor entity, the successor
entity expressly assumes our obligations under the indenture
and, immediately after the transaction is not in default under
the indenture.
Any successor entity must expressly assume all of our obligations
under the investment notes and the indenture and it shall succeed to, be
substituted for, and may exercise all of our rights and powers under the
indenture.
BOOK ENTRY; NON-NEGOTIABLE
The investment notes are non-negotiable debt instruments and,
subject to certain exceptions, will be issued only in book-entry form. Upon
acceptance of an order, we will credit our book-entry registration and transfer
system to the account of the purchaser of the investment note the principal
amount of the investment note owned of record by the purchaser. Upon acceptance
of your order, you will receive a transaction statement which will indicate our
acceptance of the order. The Company may deliver the transaction statement to
the trustee who will accept the transaction statement on your behalf and
promptly deliver the transaction statement to you. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of these securities in definitive form. These legal requirements may
impair the ability to transfer the record ownership of the investment notes. The
transaction statement is not a negotiable instrument, and no rights of record
ownership can be transferred without our prior written consent.
The record owners of investment notes issued in this book-entry
interest form will not receive or be entitled to receive physical delivery of a
note or other certificate evidencing such indebtedness. The registered owners of
the accounts we establish upon the purchase or transfer of investment notes will
be the owners of the investment notes under the indenture. The person holding a
book-entry interest in the investment notes must rely upon the procedures
established by the trustee to exercise any rights of a holder of investment
notes under the indenture. We will provide the trustee with information
regarding the establishment of new accounts and the transfer of existing
accounts on a monthly basis.
We will also provide the trustee with information, as requested,
regarding the total amount of any principal and/or interest due to book-entry
owners with regard to the investment notes on any interest payment date or upon
redemption.
Ownership of investment notes may be transferred on our register
only by written notice to us signed by the owner(s) or such owner's duly
authorized representative on a form to be supplied by us and with our written
consent. We may also, in our discretion, require an opinion from such holder's
counsel that the proposed transfer will not violate any applicable
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<PAGE>
securities laws and/or a signature guarantee in connection with a transfer. Upon
transfer of an investment note, we will provide the new owner of such security
with a transaction statement which will evidence the transfer of the account on
our records.
Book-entry interests in the accounts evidencing ownership of the
investment notes are exchangeable for fully registered notes in those names as
we direct only if: (i) we, at our option, advise the trustee in writing of our
election to terminate the book-entry system, or (ii) after the occurrence of an
event of default under the indenture, holders of investment notes aggregating
more than 50% of the aggregate outstanding amount of the investment notes advise
the trustee in writing that the continuation of a book-entry system is no longer
in the best interests of the holders of investment notes and the trustee
notifies all registered holders of these securities, of the occurrence of any
such event and the availability of definitive notes to holders of these
securities requesting such notes. Subject to the exceptions described above, the
book-entry interests in these securities shall not otherwise be exchangeable for
fully registered notes.
MODIFICATION OF THE INDENTURE
The indenture provides that we and the trustee may, without the
consent of any holders of investment notes, enter into supplemental indentures
for purposes, among other things, of:
o establishing the form or terms of investment notes,
o evidencing the succession of another person to us and the
assumption by any such successor of our covenants, or
o curing any ambiguity, defect or inconsistency.
as long as any of the foregoing will not adversely affect the interest of any
holder in any material respect.
Most of the terms of the indenture and the investment notes may be
modified with the consent of the holders of not less than two-thirds of the
principal amount of investment notes then outstanding. However, all holders must
agree to any change which would:
o extend the maturity date of his or her investment notes,
o reduce the principal amount or the rate of interest on his or
her investment notes,
o reduce any applicable redemption premium on his or her
investment notes, or
o reduce the two-thirds percentage required for modification.
We may omit in any particular instance to comply with any covenant
or condition in the indenture if before the time for compliance with the
covenant or condition, two-thirds of the holders of the principal amount of
investment notes then outstanding shall either waive such compliance in such
instance or generally waive compliance. No waiver will extend to or affect a
covenant or condition except to the extent so expressly waived. Until the waiver
has become effective, our obligation and the duties of the trustee in respect of
any such covenant will remain in full force and effect. No supplemental
indenture will affect the seniority rights of the holders of Senior Indebtedness
without the consent of those holders.
REGARDING THE TRUSTEE
We and our subsidiaries may maintain deposit accounts and other
banking transactions with the trustee in the ordinary course of business.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of ours,
shall have any liability for any obligations of ours under the investment notes,
the indenture or for any claim relating to these obligations or their creation.
Each holder of the investment notes waives and releases these persons from any
liability. The waiver and release are part of the consideration
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<PAGE>
for issuance of the investment notes. We have been advised that the waiver may
not be effective to waive liabilities under the federal securities laws and it
is the view of the SEC that such a waiver is against public policy.
SERVICE CHARGES
We reserve the right to assess service charges for replacing lost or
stolen investment notes (for which an affidavit from the holder will be
required), changing the registration of any investment note to reflect a change
in name of the holder, or a transfer (whether by operation of law or otherwise)
of an investment note by the holder to another person.
INTEREST WITHHOLDING
We reserve the right to withhold 31% of any interest paid to a
holder who does not provide us with a fully executed Form W-8 or Form W-9.
Otherwise, no interest will be withheld, except on investment notes held by
foreign business entities. It is our policy that no sale will be made to anyone
refusing to provide a fully executed Form W-8 or Form W-9.
ADDITIONAL SECURITIES
We may offer from time to time additional classes of securities with
terms and conditions different from the investment notes being offered. We will
amend or supplement this prospectus if and when we decide to offer to the public
any additional class of security under this prospectus.
VARIATIONS BY STATE
We reserve the right to offer different securities and to vary the
terms and conditions of the offer (including, but not limited to, additional
interest payments and service charges for all notes) depending upon the state
where the purchaser resides.
PLAN OF DISTRIBUTION
We currently intend to sell the investment notes directly to
investors. We do not currently intend to use a broker-dealer or agent to assist
in the sales of these securities. However, we may retain the services of an NASD
member broker-dealer in the future to assist in the sales of investment notes on
a "best efforts" or agency basis. If an agreement concerning the use of the
services of any broker-dealer is reached, we may pay any broker dealer a
commission which we estimate will range from 0.5% to 10% of the sale price of
any notes sold through the broker-dealer, depending on numerous factors. We may
also agree to indemnify the broker-dealer against certain liabilities, including
liabilities under the Securities Act and to reimburse the broker-dealer for its
costs and expenses, up to a maximum to be determined, based upon the total
dollar value of the securities sold. We will otherwise offer the investment
notes through our employees in accordance with Rule 3a 4-1 under the Exchange
Act.
We reserve the right to reject any order, in whole or in part, for
any reason. Your order will be irrevocable upon receipt by us. In the event that
your order is not accepted, we will promptly refund your funds, without
deduction of any costs and without interest. We expect that orders will be
refunded within 48 hours after receipt. Once your order has been accepted, your
funds will be promptly deposited in our account. We will send a receipt to you
as soon as practicable after acceptance of your order. No minimum number of
notes must be sold in the offering. You will not know at the time of the order
whether we will be successful in completing the sale of all of the notes being
offered. We reserve the right to withdraw or cancel the offering at any time. In
the event of a withdrawal or cancellation of the offering, orders previously
received will be irrevocable and no funds will be refunded.
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<PAGE>
LEGAL MATTERS
The validity of the investment notes will be passed upon for us by
Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., Miami, Florida.
EXPERTS
The consolidated financial statements of BankAtlantic Bancorp, Inc.
as of December 31, 1998 and 1997, and for each of the years in the three-year
period ended December 31, 1998, have been incorporated by reference herein and
in the registration statement on Form S-3 in reliance upon the report of KPMG
LLP, independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements, and other information with the
SEC. You can read and copy these reports, proxy statements, and other
information concerning BankAtlantic Bancorp at the SEC's Public Reference Room
at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the Public Reference Room. The SEC
maintains an internet site at http://www.sec.gov that contains reports, proxy
and information statements and other information regarding issuers that file
electronically with the SEC, including BankAtlantic Bancorp. Our Class A common
stock is quoted on the New York Stock Exchange and our Class B common stock is
quoted on the Nasdaq Stock Market's National Market System. These reports, proxy
statements and other information are also available for inspection at the
offices of the New York Stock Exchange, 20 Broad Street, New York City, New York
10005, and the National Association of Securities Dealers, Inc., Report Section,
1735 K Street N.W., Washington, D.C. 20006.
We have filed a registration statement on Form S-3 with the SEC
covering the investment notes offered by this prospectus. This prospectus, which
forms a part of the registration statement, does not contain all of the
information included in the registration statement. For further information
about us and the investment notes you should refer to the registration statement
and its exhibits. You can obtain the full registration statement from the SEC as
indicated above, or from us.
The SEC allows us to "incorporate by reference" the information we
file with the SEC. This permits us to disclose important information to you by
referring to these filed documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference:
o our Annual Report on Form 10-K for the year ended December 31, 1998, filed
with the SEC on March 26, 1999,
o our Amendment to Annual Report on Form 10-K/A for the year ended December
31, 1998, filed with the SEC on April 30, 1999,
o our Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999,
June 30, 1999 and September 30, 1999, filed with the SEC on May 12, 1999,
August 12, 1999 and November 15, 1999, respectively, and
o any future filings made with the SEC under Sections 13(a), 13(c), 14 or
15(d) under the Securities Exchange Act of 1934 until we sell all of the
investment notes.
You may request a copy of these filings at no cost by writing or
telephoning us at the following address:
Corporate Communications
BankAtlantic Bancorp
1750 East Sunrise Boulevard
Fort Lauderdale, Florida 33304
(954) 760-5000
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<PAGE>
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of the investment notes in any state where the offer is not permitted. You
should not assume that the information in this or any prospectus supplement is
accurate as of any date other than the date on the front of those documents.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses to be paid by BankAtlantic
Bancorp, Inc. (the "Registrant") in connection with the offering. All of the
amounts shown are estimates except the SEC registration fee.
SEC Registration Fee ............................... $39,600
Legal Fees and Expenses ............................
Trustee Fees and Expenses ..........................
Accounting Fees and Expenses .......................
Printing and Mailing Expenses ......................
Blue Sky Fees and Expense ..........................
Marketing Expenses .................................
Miscellaneous Expenses .............................
--------
TOTAL FEES AND EXPENSES .................... $
--------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 607.0850 of the Florida Business Corporation Act and the
Articles of Incorporation and Bylaws of the Registrant provide for
indemnification of the Registrant's directors and officers against claims,
liabilities, amounts paid in settlement and expenses in a variety of
circumstances, which may include liabilities under the Securities Act of 1933,
as amended (the "Securities Act"). In addition, the Registrant carries insurance
permitted by the laws of the State of Florida on behalf of directors, officers,
employees or agents which may cover liabilities under the Securities Act.
ITEM 16. EXHIBITS
The following exhibits either are filed herewith or incorporated by
reference to documents previously filed or will be filed by amendment, as
indicated below:
EXHIBITS DESCRIPTION
4 Form of Indenture with respect to the Registrant's Subordinated Investment
Notes.
5 Opinion of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.
12 Statement regarding computation of earnings to fixed charges.
23.1 Consent of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.
(included in Exhibit 5).
23.2 Consent of KPMG LLP.
24 Power of Attorney (included with signature pages to this Registration
Statement).
25.1 Form T-1: Statement of Eligibility of Trustee.
99 Form of Advertising Materials and Order Form*
- -------------------------------
* To be filed by amendment.
II-1
<PAGE>
ITEM 17. UNDERTAKINGS
(1) The undersigned Registrant hereby undertakes:
(a) 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;
(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 and of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Securities and Exchange Commission (the
"Commission") pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in
the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective Registration Statement;
(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)(i) and (a)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") that
are incorporated by reference in the Registration Statement.
(b) That, for the purpose of determining any liability under the
Securities Act, 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.
(c) 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.
(2) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) 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.
(3) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions under Item 15, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act 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 their 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 and will be governed by
the final adjudication of such issue.
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<PAGE>
(4) The undersigned Registrant hereby undertakes that:
(a) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(b) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fort Lauderdale, State of Florida, on the 20th day of
December, 1999.
BANKATLANTIC BANCORP, INC.
By: /S/ ALAN B. LEVAN
Alan B. Levan,
Chairman of the Board of Directors,
Chief Executive Officer and President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Alan B. Levan and Frank V. Grieco and each of
them acting alone, his true and lawful attorneys-in-fact and agents, each with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments, including
post-effective 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, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that each said attorneys-in-fact and agents or any of them, or their or his
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 by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/S/ ALAN B. LEVAN Chairman of the Board December 20, 1999
- ----------------------------- Chief Executive Officer
Alan B. Levan and President
/S/ JOHN E. ABDO Vice-Chairman of the December 20, 1999
- ----------------------------- Board
John E. Abdo
/S/ FRANK V. GRIECO Senior Executive Vice December 20, 1999
- ----------------------------- President and Principal Financial
Frank V. Grieco and Accounting Officer
/S/ STEVEN M. COLDREN Director December 20, 1999
- -----------------------------
Steven M. Coldren
/S/ BRUNO DIGIULIAN Director December 20, 1999
- -----------------------------
Bruno DiGiulian
/S/ MARY E. GINESTRA Director December 20, 1999
- -----------------------------
Mary E. Ginestra
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<PAGE>
SIGNATURE TITLE DATE
/S/ JARETT S. LEVAN Director December 20, 1999
- -----------------------------
Jarett S. Levan
/S/ BEN A. PLOTKIN Director December 20, 1999
- -----------------------------
Ben A. Plotkin
/S/ IRA SIEGEL Director December 20, 1999
- -----------------------------
Ira Siegel
/S/ CHARLIE C. WINNINGHAM, II Director December 20, 1999
- -----------------------------
Charlie C. Winningham, II
</TABLE>
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<PAGE>
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION
4 Form of Indenture, with respect to the Registrant's Subordinated
Investment Notes.
5 Opinion of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.
12 Statement regarding computation of earnings to fixed charges.
23.1 Consent of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.
(included in Exhibit 5)
23.2 Consent of KPMG LLP.
24 Power of Attorney (included with signature pages to this Registration
Statement).
25.1 Form T-1: Statement of Eligibility of Trustee.
EXHIBIT 4
BANKATLANTIC BANCORP, INC.
AND
U.S. BANK TRUST NATIONAL ASSOCIATION,
Trustee
INDENTURE
Dated as of December __, 1999
$150,000,000
Subordinated Investment Notes
<PAGE>
BankAtlantic Bancorp, Inc.
Reconciliation and tie between Trust Indenture Act of
1939 and Indenture, dated as of December ___ , 1999
Trust Indenture
Act Section Indenture Section
ss. 310(a)(1) ........................................... 6.8
(a)(2) ........................................... 6.8
(a)(3) ........................................... N/A
(a)(4) ........................................... N/A
(b) .............................................. 6.8, 6.9
(c) .............................................. N/A
ss. 311(a) .............................................. 6.12
(b) .............................................. 6.12
(c) .............................................. N/A
ss. 312(a) .............................................. 4.1, 4.2
(b) .............................................. 4.2
(c) .............................................. 4.2
ss.313(a) ............................................... 4.3
(b)(1) ........................................... N/A
(b)(2) ........................................... N/A
(c) .............................................. 4.3
(d) .............................................. 4.3
ss.314(a) ............................................... 4.4
(b) .............................................. N/A
(c) .............................................. 2.2
(d) .............................................. N/A
(e) .............................................. 1.3
(f) .............................................. N/A
ss.315(a) ............................................... 6.1(a)
(b) .............................................. 6.2
(c) .............................................. 6.1(b)
(d) .............................................. 6.1(c)
(e) .............................................. 5.14
ss. 316(a)(1)(A) ........................................ 5.12
(a)(1)(B) ........................................ 5.13
(a)(2) ........................................... N/A
(b) .............................................. 5.8
ss. 317(a)(1) ........................................... 5.3
(a)(2) ........................................... 5.4
(b) .............................................. 4.3
ss.318(a) ............................................... 1.7
- --------------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
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........................................6
SECTION 1.4 Action by Holders.............................................................6
SECTION 1.5 Notices, etc., to Trustee and Company.........................................8
SECTION 1.6 Notices to Holders; Waiver....................................................8
SECTION 1.7 Conflict with Trust Indenture Act.............................................8
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.........................................................9
SECTION 1.12 Legal Holidays................................................................9
SECTION 1.13 Governing Law.................................................................9
ARTICLE II The Investment Notes..................................................................................9
SECTION 2.1 General Terms of Investment Notes.............................................9
SECTION 2.2 Transaction Statement........................................................11
SECTION 2.3 Registrar and Paying Agent...................................................11
SECTION 2.4 Transfer and Exchange........................................................12
SECTION 2.5 Payment of Interest and Principal; Interest and Principal
Rights Preserved.........................................................12
SECTION 2.6 Defaulted Interest...........................................................13
SECTION 2.7 Book-Entry Registration......................................................13
SECTION 2.8 Periodic Statements..........................................................14
SECTION 2.9 Mutilated, Destroyed, Lost and Stolen Investment Notes.......................14
SECTION 2.10 Holder Lists.................................................................15
SECTION 2.11 Cancellation.................................................................15
SECTION 2.12 Execution, Authentication and Delivery.......................................15
ARTICLE III Covenants...........................................................................................16
SECTION 3.1 Payment of Principal and Interest............................................16
SECTION 3.2 Maintenance of Office or Agency..............................................16
SECTION 3.3 Money for Investment Note Payments to be Held in Trust.......................16
SECTION 3.4 Payment of Taxes and Other Claims............................................17
SECTION 3.5 Maintenance of Properties....................................................17
SECTION 3.6 Statement as to Compliance...................................................18
SECTION 3.7 Corporate Existence..........................................................18
SECTION 3.8 Restrictions on Dividends, Redemptions and Other Payments....................18
ARTICLE IV Holders' Lists and Reports by the Trustee and the Company............................................19
SECTION 4.1 Company to Furnish Trustee Names and Addresses of Holders....................19
SECTION 4.2 Preservation of Information; Communications to Holders......................19
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SECTION 4.3 Reports by Trustee...........................................................19
SECTION 4.4 Reports by Company...........................................................19
ARTICLE V Remedies..............................................................................................20
SECTION 5.1 Events of Default............................................................20
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment...........................21
SECTION 5.3 Suits for Enforcement by Trustee.............................................21
SECTION 5.4 Trustee May File Proofs of Claim.............................................22
SECTION 5.5 Trustee May Enforce Claims Without Possession of
Investment Notes.........................................................22
SECTION 5.6 Application of Money Collected...............................................22
SECTION 5.7 Limitation on Suits..........................................................23
SECTION 5.8 Unconditional Right of Holders to Receive Principal
and Interest.............................................................23
SECTION 5.9 Restoration of Rights and Remedies...........................................24
SECTION 5.10 Rights and Remedies Cumulative...............................................24
SECTION 5.11 Delay or Omission Not A Waiver...............................................24
SECTION 5.12 Control by Holders...........................................................24
SECTION 5.13 Waiver of Past Defaults......................................................24
SECTION 5.14 Undertaking for Costs........................................................25
SECTION 5.15 Waiver of Stay or Extension Laws.............................................25
ARTICLE VI The Trustee..........................................................................................25
SECTION 6.1 Certain Duties and Responsibilities..........................................25
SECTION 6.2 Notice of Defaults...........................................................26
SECTION 6.3 Certain Rights of Trustee....................................................27
SECTION 6.4 Not Responsible for Recitals or Issuance of Investment Notes.................27
SECTION 6.5 May Hold Investment Notes....................................................28
SECTION 6.6 Money Held in Trust..........................................................28
SECTION 6.7 Compensation and Reimbursement...............................................28
SECTION 6.8 Corporate Trustee Required; Eligibility; Disqualification....................28
SECTION 6.9 Resignation and Removal; Appointment of Successor............................29
SECTION 6.10 Acceptance of Appointment by Successor.......................................30
SECTION 6.11 Merger, Conversion, Consolidation or Succession to
Business of Trustee......................................................30
SECTION 6.12 Preferential Collection of Claims against Company............................30
ARTICLE VII Supplemental Indentures.............................................................................31
SECTION 7.1 Supplemental Indentures Without Consent of Holders...........................31
SECTION 7.2 Supplemental Indentures With Consent of Holders..............................31
SECTION 7.3 Execution of Supplemental Indentures.........................................32
SECTION 7.4 Effect of Supplemental Indentures............................................33
SECTION 7.5 Conformity with Trust Indenture Act..........................................33
SECTION 7.6 Notation on or Exchange of Investment Notes..................................33
SECTION 7.7 Subordination Unimpaired.....................................................33
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ARTICLE VIII Consolidation, Merger, Conveyance, Transfer or Lease...............................................33
SECTION 8.1 Company May Consolidate, etc., Only on Certain Terms.........................33
SECTION 8.2 Successor Corporation Substituted............................................34
SECTION 8.3 Limitation on Lease of Properties as Entirety................................34
ARTICLE IX Discharge of Indenture...............................................................................34
SECTION 9.1 Termination of Company's Obligations.........................................34
SECTION 9.2 Application of Trust Money...................................................35
SECTION 9.3 Repayment to Company.........................................................35
SECTION 9.4 Reinstatement................................................................36
ARTICLE X Subordination of Investment Notes.....................................................................36
SECTION 10.1 Subordination.........................................................................36
SECTION 10.2 Distribution of Assets, etc...........................................................36
SECTION 10.3 Subrogation...........................................................................37
SECTION 10.4 Obligation of the Company Unconditional...............................................38
SECTION 10.5 Payments on Investment Notes Permitted................................................38
SECTION 10.6 Effectuation of Subordination by Trustee..............................................38
SECTION 10.7 Knowledge of Trustee..................................................................38
SECTION 10.8 Trustee May Hold Senior Indebtedness..................................................39
SECTION 10.9 Rights of Holders of Senior Indebtedness Not Impaired.................................39
SECTION 10.10 Alteration of Senior Indebtedness.....................................................39
SECTION 10.11 Article Applicable to Paying Agents...................................................39
SECTION 10.12 Trustee Not Fiduciary for Holders of Senior Indebtedness..............................39
ARTICLE XI Redemption...........................................................................................40
SECTION 11.1 Redemption at the Company's Option....................................................40
SECTION 11.2 Notices to Trustee....................................................................40
SECTION 11.3 Selection of Investment Notes to be Redeemed..........................................40
SECTION 11.4 Notice of Redemption..................................................................40
SECTION 11.5 Effect of Notice of Redemption........................................................41
SECTION 11.6 Deposit of Redemption Price...........................................................41
SECTION 11.7 Investment Notes Redeemed in Part.....................................................41
SECTION 11.8 Repurchasing of Investment Notes......................................................41
SECTION 11.9 Redemption at the Election of Holder upon Death or Total
Permanent Disability.....................................................42
ARTICLE XII Immunity of Directors, Officers, Employees and Stockholders.........................................42
SECTION 12.1 Exemption from Individual Liability...................................................42
ARTICLE XIII Investment Notes in Definitive Form................................................................43
SECTION 13.1 Forms Generally.......................................................................43
</TABLE>
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THIS INDENTURE, dated as of ___________, 1999, by and between
BankAtlantic Bancorp, Inc., a corporation duly organized and existing under the
laws of the State of Florida ("the Company"), and U.S. Bank Trust National
Association, a national banking association, as trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation, execution and delivery of
its Subordinated Investment Notes (the "Investment Notes"), the amount and terms
of which are as hereinafter provided; and, to provide the terms and conditions
upon which the Investment Notes are to be issued and delivered, the Company has
duly authorized the execution and delivery of this Indenture.
All acts and things necessary to make the Investment Notes, when issued
and delivered 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 Investment
Notes 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 Investment Notes.
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 Holders of Investment Notes:
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 designated
"Articles", "Sections" and other subdivisions are to the designated
Articles, Sections and other subdivisions of this instrument as
originally executed; the words "herein", "hereof" and "hereunder" and
other words of
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similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision;
"Account" means the record of beneficial ownership of an Investment
Note maintained by the Company.
"Act" when used with respect to any Holder has the meaning specified in
Section 1.4.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. 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, 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.
"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 State of Florida are authorized
by law or required by executive order to close.
"Capital Stock" means any and all shares, interests, participation
rights or other equivalents (however designated) of corporate stock.
"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.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, 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.
"Company" means BankAtlantic Bancorp, Inc. until a successor
corporation shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Company" shall mean such successor corporation.
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"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.
"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 2.6.
"Event of Default" has the meaning specified in Section 5.1.
"Holder" means a Person in whose name an Investment Note is registered
in the Register.
"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 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 Accrual Date" means with respect to any Investment Note, the
date the Company accepts funds for the purchase of the Investment Note if such
funds are received by 3:00 p.m. (EDT) on a Business Day, or if such funds are
not so received, on the next Business Day.
"Interest Payment Date" means such date as determined by the Holder and
the Company or, if such day is not a Business Day, the Business Day immediately
following such day.
"Investment Notes" means the subordinated investment notes issued and
delivered under this Indenture.
"Maturity Date" when used with respect to any Investment Note means the
date specified in such Investment Note as the fixed date on which the principal
of such Investment Note is due and payable, as such Maturity Date may be
extended or renewed as provided herein.
"Maturity Record Date" means, with respect to an Investment Note,
fifteen (15) days prior to the Maturity Date or Redemption Date applicable to
such Investment Note.
"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 Treasurer,
an Assistant Treasurer, the Controller, an Assistant Controller, the Secretary
or an Assistant Secretary of the Company, and delivered to the Trustee.
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"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 the Investment Notes means, as
of the date of determination, the outstanding balances of all Accounts
representing the Investment Notes maintained by the Registrar (or, if Accounts
are exchanged for fully registered notes in definitive form pursuant to Section
2.7(b) hereof, then all Investment Notes theretofore authenticated and delivered
under this Indenture) except:
(i) Investment Notes the principal amount of which is considered
paid under Section 3.1 hereof; and
(ii) Investment Notes 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 Investment Notes;
provided, however, that in determining whether the Holders of the requisite
principal amount of Investment Notes Outstanding have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Investment Notes
owned by the Company or any other obligor upon the Investment Notes 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 Investment Notes which the Trustee knows to be
so owned shall be so disregarded.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Investment Notes 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.
"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.
"Redemption Price" means, with respect to any Investment Note to be
redeemed, the principal amount of such Investment Note plus any premium thereon
plus the interest accrued but unpaid to the date of such redemption.
"Register" or "Registrar" shall mean the definition specified in
Section 2.3.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the close of business on the date fifteen (15) days prior to such
Interest Payment Date.
"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
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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
Treasurer, the Controller or the Secretary of the Company.
"Senior Indebtedness" means any and all Indebtedness of the Company,
except the Company's currently outstanding 9% Subordinated Indentures due 2005,
6 3/4% Convertible Subordinated Debentures due 2006 and 55/8% Convertible
Subordinated Debentures due 2007 (each of which rank pari passu in right of
payment to the Investment Notes); the Company's currently outstanding 9 1/2 %
Junior Subordinated Debentures due 2027 (which rank junior in right of payment
to the Investment Notes) and 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 Investment Notes.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 2.6.
"Subsidiary" means, with respect to the Company, any corporation,
association or other business entity of which more than 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.
"Total Permanent Disability" means a determination by a physician
chosen by the Company that the Holder of an Investment Note, who was gainfully
employed on a full-time basis at the date of issuance of such Investment Note is
unable to work on a full time basis during the succeeding twenty-four (24)
months. For purposes of this definition, "working on a full-time basis" shall
mean working at least forty (40) hours per week.
"Transaction Statement" has the meaning specified in Section 2.2.
"Trustee" means U.S. Bank Trust National Association, a national
banking association, 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 7.5.
"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.
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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 at the Trustee's request 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 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; and
(b) 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 HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by (i) one or more instruments of
substantially similar tenor signed by such Holders 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
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embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Holders 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 6.1 and
6.3) 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 Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
(c) The ownership of Investment Notes shall be proved by the Register
or by a certificate of the 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 Investment Notes 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 Investment Notes. Except as
aforesaid, any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Investment Note shall be conclusive
and binding upon such Holder and upon all future Holders of such Investment Note
and of every Investment Note 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 Investment Note. Any action
taken by the Holders of the percentage in aggregate principal amount of the
Investment Notes 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 Investment Notes.
(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 Investment Notes have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other
action, and for that purpose the Outstanding Investment Notes 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 (6) months after the record date.
SECTION 1.5 NOTICES, ETC., TO TRUSTEE AND COMPANY.
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Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders 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 Holder 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 101 East Fifth Street, St. Paul, Minnesota
55101-1860, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder if in writing and mailed,
first-class, postage prepaid, to the Company addressed to it at 1750
East Sunrise Boulevard, Ft. Lauderdale, Florida 33304, to the attention
of the Corporate Secretary, or at any other address furnished in
writing to the Trustee by the Company with a copy to Stearns Weaver
Miller Weissler Alhadeff & Sitterson, P.A., attention: Alison W.
Miller.
SECTION 1.6 NOTICES TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders 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 Holder affected
by such event, at his address as it appears on the 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 Holders is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. 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 Holders 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 Holders
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 subject to the TIA and if any provision hereof
limits, qualifies or conflicts with another provision hereof which is required
to be included in this Indenture by any of the provisions of TIA, such required
provision shall control.
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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 Investment Notes
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 1.11 BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Investment Notes, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, the holders of Senior Indebtedness and the Holders of
Investment Notes, 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 Maturity
Date of any Investment Note shall not be a Business Day, then (notwithstanding
any other provision of the Investment Notes or this Indenture) payment of the
principal of, or interest on, any Investment Notes 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
Maturity Date.
SECTION 1.13 GOVERNING LAW.
This Indenture and the Investment Notes 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
THE INVESTMENT NOTES
SECTION 2.1 GENERAL TERMS OF INVESTMENT NOTES.
(a) The outstanding aggregate principal amount of Investment Notes
outstanding at any time is limited to $150 million, provided, however, that the
Company and the Trustee may, without the consent of any Holder, increase such
aggregate principal amount of Investment Notes which may be outstanding at any
time. The Investment Notes may be subject to notations, legends or endorsements
required by law, stock exchange rule, agreements to which the Company is subject
or usage.
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(b) The Investment Notes (i) shall not be evidenced by a promissory
note, (ii) are non-negotiable debt instruments and (iii) absent an exchange for
fully registered notes in definitive form pursuant to Section 2.10(b) hereof,
shall only be issued in book-entry form. The record of beneficial ownership of
the Investment Notes shall be maintained and updated by the Company through the
establishment and maintenance of Accounts. Each Investment Note shall be in such
denominations as may be designated from time to time by the Company. The Company
may from time to time in its discretion, set minimum denomination requirements
on investments and purchase amounts.
(c) The Company shall designate, from time to time upon issuance of
Investment Notes, the term, maturity date, redemption provisions and interest
rate of a series of Investment Notes and the term, maturity date, redemption
provisions and interest rate of each Investment Note shall be indicated in the
Transaction Statement. The Company, without affecting the terms of any
Outstanding Investment Notes, reserves the right to vary the term, maturity
date, redemption provisions and interest rate of Investment Notes subsequently
issued to any such Outstanding Investment Notes.
(d) An Investment Note shall be extended automatically for the same
term, and shall be deemed to have been renewed by the Holder thereof as of the
Maturity Date unless (i) within sixty (60) days prior to the Maturity Date of
such Investment Note the Holder has demanded repayment of the Investment Note,
(ii) the Company has noticed its intention to repay such Investment Note at
least seven (7) days prior to the Maturity Date or (iii) the Company has
previously exercised its right pursuant to Section 2.1(e) below to automatically
extend the Maturity Date of the Investment Note for an additional one (1) year
period. An Investment Note will continue to renew, as described herein, absent
some permitted action by either the Holder or the Company. Interest shall
continue to accrue from the first day of such renewed term. Such Investment
Note, as renewed, will continue in all its provisions, including provisions
relating to payment of interest and redemption, and shall retain the same
interest and redemption rate fixed for its original term.
The Company shall give each Holder (existing as of the applicable
Maturity Record Date) a written notice at least sixty (60) days prior to the
Maturity Date of the Investment Note held by such Holder reminding such Holder
(i) of the pending maturity of the Investment Note and (ii) that the automatic
extension provision described in the preceding paragraph will take effect unless
the Holder requests payment or the Company elects to repay the Investment Note
(as described in the preceding paragraph). If the Company gives notice to a
Holder of the Company's intention to repay an Investment Note at maturity, no
interest will accrue after the Maturity Date for such Investment Note.
(e) Notwithstanding, the automatic renewal provision above and the
election of a Holder to demand repayment of his or her Investment Note prior to
the Maturity Date, the Company may elect, in its discretion, at any time prior
to the Maturity Date of an Investment Note, to extend the Maturity Date of such
Investment Note for an additional one (1) year period by providing the Holder
written notice of such election within seven (7) days after the election has
been made. The Company's right to automatically extend the Maturity Date of an
Investment Note for an additional one (1) year period may be exercised only
once, and after the Maturity Date of an Investment Note has been extended for an
additional one (1) year period by the Company pursuant to this provision, such
Investment Note shall not be subject to any additional extensions or renewals of
its Maturity Date, including the automatic renewal provisions of Section 2.1(d)
hereof.
(f) At its option, the Company may redeem the Investment Notes in whole
or in part, from and after the dates and at the fixed redemption prices
specified in such Investment Note. Investment Notes with a remaining duration of
greater than one (1) year are subject to early
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repayment at the election (i) of the Holder upon the occurrence of a Total
Permanent Disability of such Holder (or if such Investment Note is held jointly,
upon the Total Permanent Disability of one of such record Holders), (ii) of a
Holder's estate after a Holder's death or (iii) if such Investment Note is held
jointly, of a Holder upon the death of the other joint Holder. Otherwise,
Holders will have no right to demand early repayment. The Company may modify its
policy on redemptions after death or Total Permanent Disability provided that
any change in such policy shall not affect any Outstanding Investment Note.
(g) The Investment Notes are junior in right of payment to the
Company's existing and future Senior Indebtedness.
(h) The Investment Notes are not guaranteed or secured by any lien on
any of the Company's assets. The Company will not be required to contribute, as
a means of repaying the investment Notes upon the Maturity Date, funds to a
separate fund, such as a sinking fund.
(i) The terms and provisions contained in the Investment Notes shall
constitute, and are hereby expressly made, a part of this Indenture and to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, and the Holders by accepting the Investment Notes, expressly
agree to such terms and provisions and to be bound thereby. In case of a
conflict, the provisions of this Indenture shall control.
SECTION 2.2 TRANSACTION STATEMENT.
An Investment Note shall not be validly issued until a transaction
statement (a "Transaction Statement") executed by a duly authorized officer of
the Company is delivered to the purchaser or transferee thereof and an Account
is established by the Company in the name of such purchaser or transferee. The
Company, the Trustee and the Holders (by accepting the Investment Notes) hereby
agree that, upon execution of a Transaction Statement, the Company may deliver
the Transaction Statement to the Trustee who shall accept and hold such
Transaction Statement on behalf of and for the benefit of the Holder. The
Trustee agrees that it shall promptly deliver any Transaction Statement that it
receives on behalf of a Holder to such Holder at the address contained in the
Register.
SECTION 2.3 REGISTRAR AND PAYING AGENT.
The Company shall maintain (i) an office or agency where Investment
Notes may be presented for registration of transfer or for exchange
("Registrar") and (ii) an office or agency where Investment Notes may be
presented for payment ("Paying Agent"). The Registrar shall keep a register (the
"Register") of the Investment Notes and of their transfer and exchange. The
Register shall contain a list of all of the Accounts reflecting the beneficial
ownership of the Investment Notes. The Company may appoint one or more
co-registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar, and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar without prior
notice to any Holder; provided that the Company shall promptly notify the
Holders of the name and address of any Agent not a party to this Indenture. The
Company may act as Paying Agent and/or Registrar. In the event the Company uses
any Agent other than the Company or the Trustee, the Company shall enter into an
appropriate agency agreement with such Agent, which agreement shall incorporate
the provisions of the TIA. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Company shall notify the Trustee of the
name and address of any such Agent. If the Company fails to maintain a Registrar
or Paying Agent, or fails to give the foregoing notice,
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the Trustee shall act as such, and shall be entitled to appropriate compensation
in accordance with Section 6.7 hereof.
The Company shall be the initial Registrar and Paying Agent. The
Company initially appoints the Trustee as agent for service of notices and
demands in connection with the Investment Notes. The Company shall act as
Registrar and Paying Agent until such time as the Company gives the Trustee
written notice to the Company.
SECTION 2.4 TRANSFER AND EXCHANGE.
(a) The Investment Notes are non-negotiable instruments and cannot be
transferred without the prior written consent of the Company (which consent
shall not be unreasonably withheld). Requests to the Company for the transfer of
the Accounts maintained for the benefit of the Holders of the Investment Notes
shall be:
(i) duly executed by the current holder of the Account, as
reflected on the Register as of the date of receipt of such transfer request, or
his attorney duly authorized in writing;
(ii) accompanied by the written consent of the Company to the
transfer; and
(iii) if requested by the Company, an opinion of Holder's
counsel (which counsel shall be reasonably acceptable to the Company) that the
transfer does not violate any applicable securities laws and/or a signature
guarantee.
Upon transfer of an Investment Note, the Company will provide the new registered
owner of the Investment Note with a Transaction Statement which will evidence
the transfer of the Account on the Company's records.
(b) The Company may assess service charges to a Holder for any
registration of transfer or exchange, and the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith.
(c) The Company shall treat the individual or entity listed on each
Account maintained by the Company as the absolute owner of the Investment Note
represented thereby for purposes of receiving payments thereon and for all other
purposes whatsoever.
SECTION 2.5 PAYMENT OF INTEREST AND PRINCIPAL; INTEREST AND
PRINCIPAL RIGHTS PRESERVED.
(a) Each Investment Note shall bear interest from and commencing on its
Interest Accrual Date at such rate of interest as the Company shall determine
from time to time; provided, however, that the interest rate will be fixed for
the term of the Investment Notes upon issuance and shall be specified in the
relevant Transaction Statement. The Holder of an Investment Note may elect to
have interest paid monthly, on the fifteenth day of each calendar month,
quarterly, on January 15, April 15, July 15 and October 15, semi-annually, on
January 15 and July 15, annually, on January 15, or upon maturity. To the extent
any applicable interest payment date is not a Business Day, then interest shall
be paid instead on the next succeeding Business Day.
(b) Each Investment Note shall accrue interest at the rate specified
for such Investment Note and such interest shall be payable on each Interest
Payment Date following the Issue Date for such Investment Note, until the
principal thereof becomes due and payable. Any installment of interest payable
on an Investment Note that is caused to be punctually paid or duly provided for
by
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the Company on the applicable Payment Date shall be paid to the Holder in whose
name such Investment Note is registered in the Register on the applicable
Regular Record Date with respect to the Investment Notes outstanding, by check
mailed to such Holder's address as it appears in the Register on such Regular
Record Date. The payment of any interest payable in connection with the payment
of any principal payable with respect to such Investment Note on a Maturity Date
or Redemption Date shall be payable as provided below. Any installment of
interest not punctually paid or duly provided for shall be payable in the manner
and to the Holders specified in Section 2.6.
(c) Each of the Investment Notes shall have a Maturity Date of
principal as shall be indicated in each such Investment Note. The principal of
each Investment Note shall be paid in full no later than the Maturity Date
thereof unless the term of such Investment Note is extended pursuant to Section
2.1(d) or (e) hereof or such Investment Note becomes due and payable at an
earlier date by acceleration, redemption or otherwise.
(d) The principal payment made on any Investment Note on any Maturity
Date (or the Redemption Price of any Investment Note required to be redeemed),
and any accrued interest thereon, shall be payable on or after the Maturity Date
or Redemption Date therefor at the office or agency of the Company maintained by
it for such purpose or at the office of any Paying Agent for such Investment
Note.
(e) Notwithstanding any of the foregoing provisions with respect to
payments of principal of and interest on the Investment Notes, if the Investment
Notes have become or been declared due and payable following an Event of
Default, then payments of principal of and interest on the Investment Notes
shall be made in accordance with Article Five hereof.
(f) All computations of interest due with respect to any Investment
Note shall, unless otherwise specified in the Investment Note, be computed as
simple interest on the basis of a 360-day year of twelve 30-day months.
SECTION 2.6 DEFAULTED INTEREST.
If the Company defaults in a payment of interest on any Investment
Note, it shall pay the defaulted interest plus, to the extent lawful, any
interest payable on the defaulted interest, to the Holder of such Investment
Note on a subsequent Special Record Date, which date shall be at the earliest
practicable date but in all events at least five (5) Business Days prior to the
payment date, in each case at the rate provided in the Investment Note. The
Company shall, with written notification to the Trustee, fix or cause to be
fixed each such Special Record Date and payment date. At least fifteen (15) days
before any such Special Record Date, the Company (or the Trustee, in the name of
and at the expense of the Company) shall mail to Holders a notice that states
(i) the Special Record Date, (ii) the related payment date and (iii) the amount
of such interest to be paid.
SECTION 2.7 BOOK-ENTRY REGISTRATION.
(a) The Registrar shall maintain a book-entry registration and transfer
system through the establishment of Accounts for the benefit of Holders of
Investment Notes as the sole method of recording the ownership and transfer of
ownership interests in such Investment Notes. The registered owners of the
Accounts established by the Company in connection with the purchase or transfer
of the Investment Notes shall be deemed to be the Holders of the Investment
Notes outstanding for all purposes under this Indenture. The Company shall
promptly notify the Registrar (if the Registrar is other than the Company) of
the acceptance of a subscriber's order to purchase an Investment Note and the
Company shall credit its book-entry registration and transfer system to the
Account of each
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Investment Note purchaser, the principal amount of such Investment Note owned of
record by the purchaser. The total amount of any principal and/or interest due
and payable to book-entry owners of the Accounts maintained by the Company as
provided in this Indenture shall be credited to such Accounts by the Company
within the time frames provided in this Indenture.
The Company shall notify the Trustee no less frequently than monthly of
the establishment of new Accounts and the transfer of existing Accounts.
(b) Book-entry interest in the Accounts evidencing ownership of the
Investment Notes are exchangeable for fully registered notes in definitive form
in those names as the Company directs only if:
(1) the Company, at its option, advises the Trustee in
writing of the Company's election to terminate the book-entry system; or
(2) after the occurrence of an Event of Default under the
Indenture: (i) Holders aggregating more than a majority of the Outstanding
amount of the Investment Notes advise the Trustee in writing that the
continuation of a book-entry system is no longer in the best interests of such
Holders of the Investment Notes and (ii) the Trustee notifies all Holders of the
occurrence of any such Event of Default and the availability of definitive notes
to Holders of these securities requesting such notes in definitive form.
(c) Subject to the exception described above in Section 2.7(b) hereof,
the book-entry interests in the Investment Notes shall not otherwise be
exchangeable for fully registered notes in definitive form.
SECTION 2.8 PERIODIC STATEMENTS.
The Company shall send each Holder of an Investment Note via U.S. mail
no later than the tenth (10) Business Day after each quarter end in which such
Holder had an Outstanding balance in such Holder's Account, a statement which
indicates as of the calendar month end preceding the mailing: (i) the balance of
such Account of each Investment Note and (ii) any accrued interest.
SECTION 2.9 MUTILATED, DESTROYED, LOST AND STOLEN INVESTMENT NOTES.
(a) In the event that Investment Notes have been issued in definitive
form pursuant to Section 2.7(b) hereof, and if (i) any mutilated Investment Note
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
Investment Note, 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
Investment Note 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
Investment Note, a new Investment Note of like tenor and principal amount,
bearing a number not contemporaneously outstanding.
(b) In case any such mutilated, destroyed, lost or stolen Investment
Note has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Investment Note, pay or authorize the
payment of such Investment Note (without surrender thereof except in the case of
a mutilated Investment Note) if the applicant for such payment shall furnish to
the Company such security or indemnity as it may require to save it harmless
and, in the case of
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destruction, loss or theft, evidence to the satisfaction of the Company of the
destruction, loss or theft of such Investment Note and of the ownership thereof.
(c) Upon the issuance of any new Investment Note under this Section
2.9, 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.
(d) 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 Investment Notes.
SECTION 2.10 HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders of the Investment Notes and shall otherwise comply with TIA
ss.312(a).
SECTION 2.11 CANCELLATION.
At any time, the Company may notify the Trustee of the cancellation of
Investment Notes and, in the event fully registered notes in definitive form
have been issued pursuant to Section 2.7(b) hereof, the Company may deliver
Investment Notes to the Trustee for cancellation. The Registrar and the Paying
Agent shall forward to the Trustee any Investment Notes in definitive form
surrendered to them for registration of transfer, exchange or payment. The
Trustee shall cancel all Investment Notes surrendered for transfer, exchange,
payment, replacement or cancellation and shall destroy such canceled Investment
Notes (subject to the record retention requirement of the Exchange Act) and
deliver a certificate of such destruction to the Company, unless the Company
otherwise directs.
SECTION 2.12 EXECUTION, AUTHENTICATION AND DELIVERY.
Investment Notes issued in definitive form pursuant to Section 2.7(b)
hereof, 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 Investment Notes or did
not hold such offices at the date of such Investment Notes. At any time and from
time to time after the execution and delivery of this Indenture and subject to
Section 2.7(b), the Company may deliver such notes executed by the Company to
the Trustee for authentication, together with a Company Order of the
authentication and delivery of such Investment Notes; and the Trustee shall
authenticate and deliver such Investment Notes as in this Indenture provided and
not otherwise. All Investment Notes shall be dated the date of their
authentication. No Investment Note in definitive form shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose, unless
there appears on such Investment Note a certificate of authentication executed
by the Trustee; and such certificate upon any Investment Note in definitive form
shall be conclusive evidence, and the only evidence, that such has been duly
authenticated and delivered hereunder.
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ARTICLE III
COVENANTS
SECTION 3.1 PAYMENT OF PRINCIPAL AND INTEREST.
The Company will duly and punctually pay the principal of and interest
on the Investment Notes in accordance with the terms of the Investment Notes and
this Indenture.
SECTION 3.2 MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain an office or agency in the Place of Payment
where notices and demands to or upon the Company in respect of the Investment
Notes and this Indenture may be served and where Investment Notes may be
surrendered for payment and for registration of transfer or for exchange. 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, notices and demands may be
made or served at the Principal Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such notices,
demands, presentations and surrenders.
SECTION 3.3 MONEY FOR INVESTMENT NOTE PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of or interest on any of the
Investment Notes, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal or interest 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 shall have one or more Paying Agents, it will,
prior to each due date of the principal of or interest on any of the Investment
Notes, deposit with a Paying Agent a sum sufficient to pay the principal or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such 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 each Paying Agent 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 on the Investment Notes 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 Investment Notes) in the making of any
payment of principal or interest; 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.
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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 any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same terms 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.
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 on any
Investment Note and remaining unclaimed for two (2) years after such principal
or interest 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 Investment Note 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,
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, 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 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 3.4 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 3.5 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 Holders.
SECTION 3.6 STATEMENT AS TO COMPLIANCE.
The Company will deliver to the Trustee, within one hundred twenty
(120) days after the end of each fiscal year of the Company, a written statement
signed by 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:
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(1) a review of the activities of the Company during such
year and of performance under this Indenture has been made under his or
her 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 the
signatory and the nature and status thereof.
The Company will, so long as any of the Investment Notes 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 3.7 CORPORATE EXISTENCE.
Subject to Article Eight, 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 it
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
Holders.
SECTION 3.8 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 Investment Notes 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, on the date of any such dividend declaration (a
"Declaration Date") or the date of any such purchase, redemption, payment or
distribution specified above the Company is not in default in the payment of
interest on the Investment Note and no Event of Default has occurred or is
continuing.
ARTICLE IV
HOLDERS' LISTS AND REPORTS BY THE
TRUSTEE AND THE COMPANY
SECTION 4.1 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company shall furnish or cause to be furnished to the Trustee,
within ten (10) days after the end of each quarter during the term of this
Indenture and as of such other times as the Trustee may request in writing, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders of Investment Notes and the aggregate principal amount
outstanding as of such quarter end; provided, however, that the Company shall
not be required to furnish the Trustee the names and addresses of the Holders of
Investment Notes if the Trustee receives such names and addresses in its
capacity as Registrar. The Company shall otherwise comply with TIA ss.312(a).
SECTION 4.2 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
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(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of Investment Notes contained in
the most recent list furnished to the Trustee as provided in Section 4.1 and the
names and addresses of Holders of Investment Notes received by the Trustee at
any time that it is acting as Registrar (if so acting). The Trustee may destroy
any list furnished to it as provided in Section 4.1 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 4.3 REPORTS BY TRUSTEE.
(a) So long as the Investment Notes 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
Holders, as their names and addresses appear in the 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 Holders, be filed by the Trustee with each securities
exchange upon which the Investment Notes are listed, and also with the
Commission. The Company will notify the Trustee when the Investment Notes are
listed on any securities exchange.
SECTION 4.4 REPORTS BY COMPANY.
The Company will:
(1) file with the Trustee, within fifteen (15) days after the Company
is required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such portions
of any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934; or, if the Company is not required to file information, documents
or reports pursuant to either of said 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 be required pursuant to Section 13
of the Securities Exchange Act of 1934 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 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; and
(3) transmit by mail to all Holders as their names and
addresses appear in the 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.
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ARTICLE V
REMEDIES
SECTION 5.1 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
Investment Note 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
Investment Note at its Maturity Date; 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 Investment Notes 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
insolvent, or approving as properly filed a petition seeking
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, or 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
(5) the institution by the Company of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under the Federal Bankruptcy Act or any other similar
applicable Federal or State law, or the consent by it to the filing of
any such petition or 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.
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SECTION 5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default described in paragraphs (1), (2), (4) or (5) of
Section 5.1 occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than thirty percent (30%) in aggregate principal amount
of the Investment Notes then Outstanding may declare the principal of all the
Investment Notes to be due and payable immediately, by a notice in writing to
the Company (and to the Trustee if given by the Holders), 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 Investment Notes 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 Investment Notes;
(b) the principal of any Investment Notes which have
become due otherwise than by such declaration of acceleration
and interest thereon at the rate borne by the Investment
Notes; 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 Investment Notes which have become due solely by such
acceleration, have been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 5.3 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
Holders by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement 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 5.4 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
Investment Notes or the property of the Company or of such other obligor or
their creditors, the Trustee (irrespective of whether the principal of the
Investment Notes 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,
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(1) to file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of the Investment
Notes 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 Holders
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 Holder 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 Holders, 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 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Investment
Notes or the rights of any Holder thereof, or to authorize the Trustee to vote
in respect of the claim of any in any such proceeding.
SECTION 5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF INVESTMENT NOTES.
All rights of action and claims under this Indenture or the Investment
Notes may be prosecuted and enforced by the Trustee. The Trustee will retain
such enforcement rights without the possession of any of the Investment Notes or
the production thereof in any proceeding relating thereto. 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 Investment Notes in respect of which such judgment has been recovered.
SECTION 5.6 APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall,
subject to Article Ten, be applied in the following order, at the date or dates
fixed by the Trustee:
First: To the Trustee for amounts due under Section 6.7;
Second: To the Holders for amounts then due and unpaid upon the
Investment Notes 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
Investment Notes for principal and interest, respectively; and
Third: To the Company.
SECTION 5.7 LIMITATION ON SUITS.
No Holder of any Investment Note 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:
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(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 Investment Notes 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 Investment
Notes;
it being understood and intended that no one or more Holders of Investment Notes
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
Investment Notes.
SECTION 5.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of
any Investment Note shall have the right which is absolute and unconditional to
receive payment of the principal of and interest on such Investment Note on the
Maturity Date expressed in such Investment Note, as such Maturity Date may be
extended or renewed in accordance with this Indenture, 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 5.9 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder 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 Holder, then and in every such case the Company, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Investment Notes in Section 2.9 hereof,
no right or remedy herein conferred upon or reserved to the Trustee or to the
Holders 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
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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 5.11 DELAY OR OMISSION NOT A WAIVER.
No delay or omission of the Trustee or of any Holder 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 Holders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders, as the case may be.
SECTION 5.12 CONTROL BY HOLDERS.
The Holders of a majority in principal amount of the Outstanding
Investment Notes 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 5.13 WAIVER OF PAST DEFAULTS.
The Holders of a majority in principal amount of the Outstanding
Investment Notes may, on behalf of the Holders of all the Investment Notes,
waive any past default hereunder and its consequences, except a default:
(1) in the payment of the principal of or interest on any
Investment Note; or
(2) in respect of a covenant or provision hereof which under
Article Seven cannot be modified or amended without the consent of the
Holders of each Outstanding Investment Note 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.
SECTION 5.14 UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Investment
Note 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 action
taken or omitted by it 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 Holder, or group of Holders, holding in
the aggregate more than ten percent (10%) in principal amount of the Outstanding
Investment Notes, or to any suit instituted by any Holder for the
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enforcement of the payment of the principal of, or interest on, any Investment
Note on or after the Maturity Date expressed in such Investment Note.
SECTION 5.15 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 VI
THE TRUSTEE
SECTION 6.1 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 man would exercise or use under the circumstances in the conduct of his
own affairs.
(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 wilful 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 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
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a majority in principal amount of the Outstanding Investment Notes
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 6.2 NOTICE OF DEFAULTS.
Within ninety (90) days after the occurrence of any default hereunder,
the Trustee shall transmit by mail to all Holders, as their names and addresses
appear in the 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 5.1(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 Holders; and provided,
further, that in the case of any default of the character specified in Section
5.1(3), no such notice to Holders 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 6.3 CERTAIN RIGHTS OF TRUSTEE.
Except as otherwise provided in Section 6.1:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, Transaction Statement, Investment Note or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(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;
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(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 Holders pursuant to this Indenture, unless
such Holders 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, Transaction Statement, Investment Note 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) the Trustee shall have no duty to inquire as to the
performance of the Company's covenants in Article Three hereof. In
addition, the Trustee shall not be deemed to have knowledge of any
Event of Default except any Event of Default of which the Trustee shall
have received written notification or obtained actual knowledge.
SECTION 6.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF INVESTMENT NOTES.
The recitals contained herein and in any Investment Notes issued in
definitive form pursuant to Section 2.7(b) hereof, 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, the
Transaction Statements or of the Investment Notes. The Trustee shall not be
accountable for the use or application by the Company of Investment Notes or the
proceeds thereof.
SECTION 6.5 MAY HOLD INVESTMENT NOTES.
The Trustee, any Paying Agent, Registrar or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Investment Notes and, subject to Sections 6.8 and 6.12, if operative,
may otherwise deal with the Company with the same rights it would have if it
were not Trustee, Paying Agent, Registrar or such other agent.
SECTION 6.6 MONEY HELD IN TRUST.
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 upon Company Request.
SECTION 6.7 COMPENSATION AND REIMBURSEMENT.
The Company agrees:
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(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.
SECTION 6.8 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 $50,000,000, 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.
SECTION 6.9 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 6.10.
(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 Investment Notes, delivered to
the Trustee and to the Company.
(d) If at any time:
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(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 Holder who has been a bona fide
Holder of an Investment Note or Investment Notes 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 Holder; 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 5.14, any Holder who has been a bona fide Holder of an Investment Note
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 Investment Notes
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
Holders and accepted appointment in the manner hereinafter provided, any Holder
who has been a bona fide Holder of an Investment Note 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 prepaid, to the Holders of
Investment Notes as their names and addresses appear in the Register. Each
notice shall indicate the name of the successor Trustee and the address of its
Principal Corporate Trust Office.
SECTION 6.10 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 6.7. Upon request
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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 Six.
SECTION 6.11 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 Six, without the execution or filing of any paper or any further act on
the part of any of the parties hereto.
SECTION 6.12 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 VII
SUPPLEMENTAL INDENTURES
SECTION 7.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of the Holders of any Investment Notes, 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:
(1) to establish the form or terms of the Investment
Notes not inconsistent with the terms of this Indenture; or
(2) 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 Investment Notes contained; or
(3) to add to the covenants of the Company, for the benefit
of the Holders of the Investment Notes, or to surrender any right or
power herein conferred upon the Company; or
(4) 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 Investment Notes;
or
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(5) 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
(6) 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 Investment Notes 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
7.1 may be executed by the Company and the Trustee without the consent of the
Holders of any of the Investment Notes at the time Outstanding, notwithstanding
any of the provisions of Section 7.2.
SECTION 7.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than two-thirds in
principal amount of the Outstanding Investment Notes, 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 Investment
Notes 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 Investment Notes under this Indenture; provided, however,
that no such amendment or supplemental indenture shall, without the consent of
the Holders of each Outstanding Investment Note affected thereby:
(1) change the Maturity Date of the principal of, or interest
on, any Investment Note, or reduce the principal amount thereof or the
rate of interest thereon or change any Place of Payment where, or the
coin or currency in which, any Investment Notes or the interest thereon
is payable, or impair the right to institute suit for the enforcement
of any such payment on or after the Maturity Date thereof; or
(2) make any change in Section 5.8; or
(3) reduce the percentage in principal amount of the
Outstanding Investment Notes, 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
(4) modify any of the provisions of this Section or Section
5.13, 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 Investment Note affected thereby.
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It shall not be necessary for any Act of Holders 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.
After an amendment or waiver under this Section becomes effective, the
Company shall mail to the Holders of each Investment Note affected thereby a
notice briefly describing the amendment or waiver. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture or waiver.
SECTION 7.3 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 6.1) 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 7.4 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 Investment Notes 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 Investment Notes theretofore or thereafter issued and delivered thereunder
shall be bound thereby.
SECTION 7.5 CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the TIA as then in effect.
SECTION 7.6 NOTATION ON OR EXCHANGE OF INVESTMENT NOTES.
The Company or the Trustee may place an appropriate notation about an
amendment or waiver on any Investment Note, if certificated, or any Account
statement. Failure to make any such notation or issue a new note shall not
affect the validity and effect of such amendment or waiver.
SECTION 7.7 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 Investment Notes.
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ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1 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 Investment Notes 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 and an Opinion of Counsel each stating that such
consolidation, merger, conveyance or transfer and such supplemental
indenture comply with this Article Eight and that all conditions
precedent herein provided for relating to such transaction have been
complied with.
SECTION 8.2 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 8.1, 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 8.3 LIMITATION ON LEASE OF PROPERTIES AS ENTIRETY.
The Company shall not lease its properties and assets substantially as
an entirety to any Person.
ARTICLE IX
DISCHARGE OF INDENTURE
SECTION 9.1 TERMINATION OF COMPANY'S OBLIGATIONS.
This Indenture shall cease to be of further effect (except that the
Company's obligations under Section 6.7 and 9.4, and the Company's, Trustee's
and Paying Agent's obligations under Section 9.3 shall survive) when all
outstanding Investment Notes have been paid in full and the Company has
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paid all sums payable by the Company hereunder. In addition, the Company may
terminate all of its obligations under this Indenture if:
(1) the Company irrevocably deposits in trust with the Trustee or at
the option of the Trustee, with a trustee reasonably satisfactory to the Trustee
and the Company under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee, money or U.S. Government Obligations
sufficient (as certified by an independent public accountant designated by the
Company) to pay principal and interest and premium, if any, on the Investment
Notes to maturity or redemption, as the case may be, and to pay all other sums
payable by it hereunder, provided that (i) the trustee of the irrevocable trust
shall have been irrevocably instructed to pay such money or the proceeds of such
U.S. Government Obligations to the Trustee and (ii) the Trustee shall have been
irrevocably instructed to apply such money or the proceeds of such U.S.
Government Obligations to the payment of said principal and interest and
premium, if any, with respect to the Investment Notes;
(2) the Company delivers to the Trustee an Officers' Certificate
stating that all conditions precedent to satisfaction and discharge of this
Indenture have been complied with;
(3) no Event of Default or event (including such deposit) which, with
notice or lapse of time, or both, would become an Event of Default with respect
to the Investment Notes shall have occurred and be continuing on the date of
such deposit; and
(4) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that Holders of the Investment Notes 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 9.1 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.
Then, this Indenture shall cease to be of further effect (except as provided in
this paragraph), and the Trustee, on demand of the Company, shall execute proper
instruments acknowledging confirmation of and discharge under this Indenture.
The Company may make the deposit only if Article X hereof does not prohibit such
payment. However, the Company's obligations in Sections 2.3, 2.4, 2.5, 2.10,
3.1, 3.2, 3.3, 6.7, 6.9, 9.3 and 9.4 and the Trustee's and Paying Agent's
obligations in Section 9.3 shall survive until the Investment Notes are no
longer outstanding. Thereafter, only the Company's obligations in Section 6.7
and 9.4 and the Company's, Trustee's and Paying Agent's obligations in Section
9.3 shall survive.
After such irrevocable deposit made pursuant to this Section 9.1 and
satisfaction of the other conditions set forth herein, the Trustee upon written
request shall acknowledge in writing the discharge of the Company's obligations
under this Indenture except for those surviving obligations specified above.
In order to have money available on a payment date to pay principal or
interest or premium, if any, on the Investment Notes, the U.S. Government
Obligations shall be payable as to principal or interest at least one (1)
Business Day before such payment date in such amounts as will provide the
necessary money. U.S. Government Obligations shall not be callable at the
issuer's option.
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SECTION 9.2 APPLICATION OF TRUST MONEY.
The Trustee or a trustee satisfactory to the Trustee and the Company
shall hold in trust money or U.S. Government Obligations deposited with it
pursuant to Section 9.1. It shall apply the deposited money and the money from
U.S. Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal and interest on the Investment Notes.
SECTION 9.3 REPAYMENT TO COMPANY.
The Trustee and the Paying Agent shall promptly pay to the Company upon
written request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon written
request any money held by them for the payment of principal or interest or
premium, if any, that remains unclaimed for two (2) years after the date upon
which such payment shall have become due; provided, however, that the Company
shall have either caused notice of such payment to be mailed to each Holder
entitled thereto no less than thirty (30) days prior to such repayment or within
such period shall have published such notice in an Authorized Newspaper. After
payment to the Company, Holders entitled to the money must look to the Company
for payment as general creditors unless an applicable abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
SECTION 9.4 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 9.2 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Investment Notes shall be
revived and reinstated as though no deposit had occurred pursuant to Section 9.1
until such time as the Trustee or Paying Agent is permitted to apply all such
money or U.S. Government Obligations in accordance with Section 9.2; provided,
however, that if the Company has made any payment of interest or premium, if
any, on or principal of any Investment Note because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Investment Notes to receive such payment, as long as no money is owed to
the Trustee by the Company, from the money or U.S. Government Obligations held
by the Trustee or Paying Agent.
ARTICLE X
SUBORDINATION OF INVESTMENT NOTES
SECTION 10.1 SUBORDINATION.
The Company covenants and agrees, and each Holder of Investment Notes,
by his acceptance thereof, likewise covenants and agrees, that the indebtedness
represented by the Investment Notes and the payment of the principal of and
interest on each and all of the Investment Notes 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 10.2 DISTRIBUTION OF ASSETS, ETC.
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No payment on account of principal of or interest or premium, if any,
on the Investment Notes shall be made, and no Investment Notes shall be
purchased or otherwise acquired, and no funds shall be set aside for the
purchase of any Investment Notes, 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 marshaling of the
assets and liabilities of the Company, or otherwise,
(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 or premium, if any, on any Investment Note, 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 Holders 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 Holders or to the Trustee.
If the payment of principal of and any interest on the Investment Notes
is accelerated because of an Event of Default, no payment on account of
principal of or interest on the Investment Notes 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
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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 10.3 SUBROGATION.
Subject to the payment in full of all Senior Indebtedness, the Holders
shall be subrogated (equally and ratably with the holders of all indebtedness of
the Company which, by its express terms, ranks on a parity with the Investment
Notes 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 Investment Notes shall be paid in full, and, as
between the Company, its creditors other than holders of Senior Indebtedness,
and the Holders, 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 Holders, 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
Holders, on the one hand, and the holders of the Senior Indebtedness, on the
other hand.
SECTION 10.4 OBLIGATION OF THE COMPANY UNCONDITIONAL.
Nothing contained in this Article or elsewhere in this Indenture or in
the Investment Notes is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders the principal of and interest and premium, if any, on the Investment
Notes as and when the same shall become due and payable in accordance with their
terms, or affect the relative rights of the Holders and creditors of the Company
other than the holders of Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or any Holder 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 Holders 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 6.1, and the Holders 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 Holders 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 10.5 PAYMENTS ON INVESTMENT NOTES PERMITTED.
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Nothing contained in this Article or elsewhere in this Indenture or in
any of the Investment Notes shall affect the obligation of the Company to make,
or prevent the Company from making, payment of the principal of or interest or
premium, if any, on the Investment Notes in accordance with the provisions
hereof, except as otherwise provided in this Article.
SECTION 10.6 EFFECTUATION OF SUBORDINATION BY TRUSTEE.
Each Holder of Investment Notes, by his acceptance thereof, authorizes
and directs the Trustee in 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.
SECTION 10.7 KNOWLEDGE OF TRUSTEE.
Notwithstanding the provisions of this Article or any other provisions
of this Indenture, but subject to the provisions of Section 6.1, 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 Ten, unless and until the
Trustee shall have received written notice thereof, in the manner required by
Section 1.5, from the Company, any Holder, any Paying Agent, any Registrar or
the holder or representative of any class of Senior Indebtedness.
SECTION 10.8 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
6.12 or elsewhere in this Indenture shall deprive the Trustee of any of its
rights as such holder.
SECTION 10.9 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 10.10 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 Holders and without affecting
the liabilities and obligations of the Company, the Trustee or the Holders under
this Indenture or the Investment Notes.
SECTION 10.11 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
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in this Article in addition to or in place of the Trustee, provided, however,
that Sections 10.7, 10.8, and 10.10 shall not apply to the Company if it acts as
Paying Agent.
SECTION 10.12 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
Investment Notes 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 Ten or otherwise.
ARTICLE XI
REDEMPTION
SECTION 11.1 REDEMPTION AT THE COMPANY'S OPTION.
The Company may redeem, in whole or in part, any Investment Note prior
to the scheduled Maturity Date of such Investment Note, in accordance with any
notice requirement provided in Sections 11.2 and 11.4 hereof and at the
Redemption Prices determined from time to time by the Company; provided that the
Redemption Prices shall be fixed for an Investment Note upon issuance. The
Redemption Price will be expressed as a percentage of the principal amount of
such Investment Note.
SECTION 11.2 NOTICES TO TRUSTEE.
If the Company elects to redeem Investment Notes pursuant to Section
11.1 hereof, it shall furnish to the Trustee, at least thirty (30) days but not
more than sixty (60) days before a redemption date, an Officers' Certificate
setting forth the redemption date, the principal amount of Investment Notes to
be redeemed and the redemption price.
SECTION 11.3 SELECTION OF INVESTMENT NOTES TO BE REDEEMED.
If less than all of the Investment Notes are to be redeemed, the
Trustee shall select the Investment Notes to be redeemed among the Holders of
the Investment Notes 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). In the event of partial
redemption by lot, the particular Investment Notes 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 Investment Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the
Investment Notes selected for redemption and, in the case of any Investment Note
selected for partial redemption, the principal amount thereof to be redeemed.
SECTION 11.4 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 Investment Notes are to be redeemed.
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The notice shall identify the Investment Notes to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) if any Investment Note is being redeemed in part, the
portion of the principal amount of such Investment Note to be redeemed and that,
after the redemption date, an appropriate adjustment will be made to such
Holder's Account or, if such Investment Note was in definitive form, upon
surrender of such Investment Note, a new Investment Note or Investment Notes in
principal amount equal to the unredeemed portion will be issued;
(4) the name and address of the Paying Agent;
(5) any Investment Notes in definitive form that were called
for redemption must be surrendered to the Paying Agent to collect the redemption
price; and
(6) that interest on Investment Notes 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 thiry-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 11.5 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Investment Notes called for
redemption become due and payable on the redemption date at the redemption
price.
SECTION 11.6 DEPOSIT OF REDEMPTION PRICE.
One (1) Business Date 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 Investment Notes 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
Investment Notes to be redeemed will cease to accrue on the applicable
redemption date. If any Investment Note 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 Investment Notes and in Section 2.5 hereof.
SECTION 11.7 INVESTMENT NOTES REDEEMED IN PART.
An appropriate adjustment will be made to the Account of a Holder when
an Investment Note was redeemed in part. In the case of definitive Investment
Notes redeemed in part, upon surrender of such Investment Note, the Company
shall issue and the Trustee shall authenticate for the Holder
-40-
<PAGE>
at the expense of the Company a new Investment Note equal in principal amount to
the unredeemed portion of the Investment Note surrendered.
SECTION 11.8 REPURCHASING OF INVESTMENT NOTES.
Nothing herein shall prohibit the Company from repurchasing from time
to time all or any portion of the Investment Notes in privately negotiated
transactions.
SECTION 11.9 REDEMPTION AT THE ELECTION OF HOLDER UPON DEATH OR TOTAL
PERMANENT DISABILITY.
Except as set forth in this Section 11.9, a Holder shall have no right
to cause the Company to redeem an Investment Note prior to the Maturity Date of
such Investment Note. However, upon the death or Total Permanent Disability of a
Holder of an Investment Note, the estate of such Holder (in the event of death),
such Holder (in the event of Total Permanent Disability) or may require the
Company to redeem, in whole and not in part, the Investment Note held by such
Holder provided that such Investment Note has a remaining maturity of greater
than twelve (12) months at the time of such death or disability by delivering to
the Company an irrevocable election (a "Redemption Election") requiring the
Company to make such redemption. In the event an Investment Note is held jointly
by two or more Persons, such Investment Note shall be subject to the elective
redemption provisions of this Article Eleven upon the death or Total Permanent
Disability of either joint Holder. Upon receipt of a Redemption Election, the
Company shall designate the redemption date for such Investment Note, which
redemption date shall be no more than fifteen (15) days after the Company's
receipt of the Redemption Election, and shall pay the Redemption Price to the
estate of the Holder or the Holder, as the case may be. The Redemption Price
payable with respect to a redemption pursuant to their Section 11.9 shall be the
principal amount of such redeemed Investment Note plus the interest accrued but
unpaid to the date of the redemption. No interest shall accrue on an Investment
Note to be redeemed under this Article Eleven for any period of time after the
redemption date for such Investment Note and after the Company has tendered the
Redemption Price to the Estate of the Holder or to the Holder, as the case may
be, and the Investment Note shall become due and payable on the redemption date.
ARTICLE XII
IMMUNITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
SECTION 12.1 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 Investment Note or this Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. Each
Holder by accepting an Investment Note hereby expressly waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Investment Notes.
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.
-41-
<PAGE>
ARTICLE XIII
INVESTMENT NOTES IN DEFINITIVE FORM
SECTION 13.1 FORMS GENERALLY.
The Investment notes are non-negotiable debt instruments and shall be
issued only in book-entry form. However, in the event of an exchange of the
Investment Notes for fully registered notes in definitive form pursuant to
Section 2.7(b) hereof, the Investment Notes shall be in such form and contain
the terms of such Investment Notes, including without limitation those terms set
forth in Article Two hereof, and any other provisions 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 Investment
Notes, as evidenced by their execution of the Investment Notes. Any such
Investment Notes in definitive form shall contain a certificate of
authentication in such form as the Trustee and the Company shall determine. Any
portion of the text of any Investment Note may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the Investment
Note. The definitive Investment Notes 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 Investment Notes as evidenced by their
execution of such Investment Notes.
-42-
EXHIBIT 5
December , 1999
Mr. Alan B. Levan
Chief Executive Officer
BankAtlantic Bancorp, Inc.
1750 East Sunrise Boulevard
Fort Lauderdale, Florida 33304
Re: BANKATLANTIC BANCORP, INC.-$150,000,000 OF SUBORDINATED
INVESTMENT NOTES
Dear Mr. Levan:
We have acted as counsel for BankAtlantic Bancorp, Inc. (the "Company")
in connection with the offer and sale by the Company of up to $150,000,000 in
principal amount of subordinated investment notes (the "Investment Notes"). With
respect to such offering of the Investment Notes, the Company has filed a
Registration Statement on Form S-3 (the "Registration Statement") with the
Securities and Exchange Commission (the "Commission"), under the Securities Act
of 1933, as amended (the "Act"). The Investment Notes will be issued pursuant to
an Indenture to be entered into between the Company and U.S. Bank Trust National
Association, a national banking association, as trustee (the "Indenture").
In connection with this opinion, we have examined the executed
originals or photostatic copies of (i) the Articles of Incorporation and Bylaws
of the Company, (ii) the Registration Statement, including the prospectus
contained therein (the "Prospectus"), (iii) the form of Indenture filed as an
exhibit to the Registration Statement and (iv) such other reports, records,
documents and proceedings as we have considered necessary to render this
opinion.
<PAGE>
Mr. Alan B. Levan
BankAtlantic Bancorp, Inc.
December 20, 1999
Page 2
We have assumed, without independent investigation, the (i)
authenticity of all documents submitted to us as originals, (ii) conformity to
authentic original documents of all documents submitted to us as certified,
conformed or photostatic copies and (iii) genuineness of all signatures.
Further, with regard to questions of fact material to this opinion, we have
relied upon certificates of public officials, corporate agents of the Company
and such other certificates as we deemed relevant. We have also assumed that the
Indenture will be in the form filed as an exhibit to the Registration Statement
and will have been duly executed and delivered by the Company and U.S. Bank
Trust National Association, as trustee.
We are qualified to practice law only in the State of Florida and we do
not purport to be experts on, or to express any opinion herein concerning, any
law other than the law of the State of Florida and the federal law of the United
States.
This opinion is limited to the matters expressly stated herein, and no
opinion is implied or may be inferred beyond the matters expressly stated
herein. The opinions expressed herein may be affected by new developments in
court decisions, changes in legislation or changes in facts, assumptions or
other information upon which our opinion is based.
Based upon and subject to the foregoing, we are of the opinion that the
Investment Notes that are being offered and sold by the Company pursuant to the
Registration Statement, when issued by the Company as contemplated by the
Registration Statement and in accordance with the Indenture, will be binding
obligations of the Company.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference of this firm under the heading
"Legal Matters" in the Prospectus constituting part of the Registration
Statement.
Very truly yours,
STEARNS WEAVER MILLER WEISSLER
ALHADEFF & SITTERSON, P.A.
EXHIBIT 12
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
FOR THE NINE
MONTHS ENDED
SEPTEMBER 30, FOR THE YEARS ENDED DECEMBER 31,
--------------------- -----------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
-------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings (loss) from continuing operations
before income taxes and extraordinary items $ 42,313 $ 23,897 $ 16,712 $ 38,906 $ 29,019 $ 24,928 $ 25,233
Fixed interest charges ...................... 126,800 115,068 153,930 117,048 77,637 67,087 42,491
-------- -------- -------- -------- -------- -------- --------
Earnings (loss):
Including fixed interest charges .......... 169,113 138,965 170,642 155,954 106,656 92,015 67,724
Excluding interest expense on deposits .... 111,468 89,285 103,928 87,723 52,010 45,369 36,078
Fixed interest charges excluding interest
expense on deposits ....................... 69,155 65,388 87,216 48,817 22,991 20,441 10,845
Ratios:
Earnings including fixed interest changes to
fixed interest charges .................... 1.33 1.21 1.11 1.33 1.37 1.37 1.59
Earnings to fixed interest excluding interest
on deposits ............................... 1.61 1.37 1.19 1.80 2.26 2.22 3.33
Dollar deficiency of earnings to fixed
interest charges ......................... $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00
======== ======== ======== ======== ======== ======== ========
</TABLE>
Accountants' Consent
The Board of Directors
BankAtlantic Bancorp, Inc.:
We consent to the use of our reports incorporated herein by reference herein and
to the reference to our firm under the heading "Experts" in the prospectus.
KPMG LLP
Ft. Lauderdale, Florida
December 20, 1999
EXHIBT 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM T-1
Statement of Eligibility Under the
Trust Indenture Act of 1939 of a Corporation
Designated to Act as Trustee
U.S. BANK TRUST NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
United States 41-0257700
(State of Incorporation) (I.R.S. Employer
Identification No.)
U.S. Bank Trust Center
180 East Fifth Street
St. Paul, Minnesota 55101
(Address of Principal Executive Offices) (Zip Code)
BANKATLANTIC BANCORP, INC.
(Exact name of Registrant as specified in its charter)
Florida 65-05070804
(State of Incorporation) (I.R.S. Employer
Identification No.)
1750 East Sunrise Boulevard
Fort Lauderdale, Florida 33304
(Address of Principal Executive Offices) (Zip Code)
SUBORDINATED INVESTMENT NOTES
(Title of the Indenture Securities)
<PAGE>
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. Authorization of the Trustee to exercise corporate trust powers
(included in Exhibits 1 and 2; no separate instrument).*
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 is incorporated by reference to Registration
Number 333-70709.
* Incorporated by reference to Registration Number 22-27000.
<PAGE>
NOTE
The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligors 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 obligors, or affiliates, are based
upon information furnished to the Trustee by the obligors. 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 Trust Indenture Act of 1939, 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 its seal to be hereunto affixed and attested, all
in the City of Saint Paul and State of Minnesota on the 20th day of December,
1999.
U.S. BANK TRUST NATIONAL ASSOCIATION
/S/ LAURIE HOWARD
Laurie Howard
Vice President
/S/ HARRY H. HALL, JR.
Harry H. Hall, Jr.
Assistant Secretary
<PAGE>
EXHIBIT 6
CONSENT
In accordance with Section 321(b) of the Trust Indenture Act of 1939,
the undersigned, U.S. BANK TRUST NATIONAL ASSOCITION 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: December 20, 1999
U.S. BANK TRUST NATIONAL ASSOCIATION
/s/ Laurie Howard
------------------------------------
Laurie Howard
Vice President
