Exhibit 10.1
FLORIDA BANKS, INC.
6,000 Capital Securities
Floating Rate Capital Securities
(Liquidation Amount $1,000.00 per Capital Security)
PLACEMENT AGREEMENT
____________________
December 4, 2001
First Tennessee Capital Markets
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Florida Banks, Inc., a Florida corporation (the "Company"), and its
financing subsidiary, Florida Banks Statutory Trust I, a Connecticut statutory
trust (the "Trust," and hereinafter together with the Company, the "Offerors"),
hereby confirm their agreement with you as placement agents (the "Placement
Agents"), as follows:
Section 1. Issuance and Sale of Securities.
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1.1. Introduction. The Offerors propose to issue and sell at the Closing
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(as defined in Section 2.3.1 hereof) 6,000 of the Trust's Floating Rate Capital
Securities, with a liquidation amount of $1,000.00 per capital security (the
"Capital Securities"), to Preferred Term Securities IV, Ltd., a company with
limited liability established under the laws of the Cayman Islands (the
"Purchaser") pursuant to the terms of a Subscription Agreement entered into, or
to be entered into on or prior to the Closing Date, between the Offerors and the
Purchaser (the "Subscription Agreement"), the form of which is attached hereto
as Exhibit A and incorporated herein by this reference.
1.2. Operative Agreements. The Capital Securities shall be fully and
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unconditionally guaranteed on a subordinated basis by the Company with respect
to distributions and amounts payable upon liquidation, redemption or repayment
(the "Guarantee") pursuant and subject to the Guarantee Agreement (the
"Guarantee Agreement"), to be dated as of the Closing Date and executed and
delivered by the Company and State Street Bank and Trust Company of Connecticut,
National Association ("State Street"), as trustee (the "Guarantee Trustee"), for
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the benefit from time to time of the holders of the Capital Securities. The
entire proceeds from the sale by the Trust to the holders of the Capital
Securities shall be combined with the entire proceeds from the sale by the Trust
to the Company of its common securities (the "Common Securities"), and shall be
used by the Trust to purchase $6,186,000 in principal amount of the Floating
Rate Junior Subordinated Deferrable Interest Debentures (the "Debentures") of
the Company. The Capital Securities and the Common Securities for the Trust
shall be issued pursuant to an Amended and Restated Declaration of Trust among
State Street, as institutional trustee (the "Institutional Trustee"), the
Administrators named therein, and the Company, to be dated as of the Closing
Date and in substantially the form heretofore delivered to the Placement Agents
(the "Trust Agreement"). The Debentures shall be issued pursuant to an Indenture
(the "Indenture"), to be dated as of the Closing Date, between the Company and
State Street, as indenture trustee (the "Indenture Trustee"). The documents
identified in this Section 1.2 and in Section 1.1 are referred to herein as the
"Operative Documents."
1.3. Rights of Purchaser. The Capital Securities shall be offered and sold
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by the Trust directly to the Purchaser without registration of any of the
Capital Securities, the Debentures or the Guarantee under the Securities Act of
1933, as amended (the "Securities Act"), or any other applicable securities laws
in reliance upon exemptions from the registration requirements of the Securities
Act and other applicable securities laws. The Offerors agree that this Agreement
shall be incorporated by reference into the Subscription Agreement and the
Purchaser shall be entitled to each of the benefits of the Placement Agents and
the Purchaser under this Agreement and shall be entitled to enforce obligations
of the Offerors under this Agreement as fully as if the Purchaser were a party
to this Agreement. The Offerors and the Placement Agents have entered into this
Agreement to set forth their understanding as to their relationship and their
respective rights, duties and obligations.
1.4. Legends. Upon original issuance thereof, and until such time as the
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same is no longer required under the applicable requirements of the Securities
Act, the Capital Securities and Debentures certificates shall each contain a
legend as required pursuant to any of the Operative Documents.
Section 2. Purchase of Capital Securities.
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2.1. Exclusive Rights; Purchase Price. From the date hereof until the
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Closing Date (which date may be extended by mutual agreement of the Offerors and
the Placement Agents), the Offerors hereby grant to the Placement Agents the
exclusive right to arrange for the sale of the Capital Securities to the
Purchaser at a purchase price of $1,000.00 per Capital Security.
2.2. Subscription Agreement. The Offerors hereby agree to evidence their
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acceptance of the subscription by countersigning a copy of the Subscription
Agreement and returning the same to the Placement Agents.
2.3. Closing and Delivery of Payment.
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2.3.1. Closing; Closing Date. The sale and purchase of the Capital
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Securities by the Offerors to the Purchaser shall take place at a closing (the
"Closing") at the offices of ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇.▇., at 10:00 a.m. (St.
Louis time) on December 18, 2001, or such other business day as may be agreed
upon by the Offerors and the Placement Agents (the "Closing Date"); provided,
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however, that in no event shall the Closing Date occur later than December 31,
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2001 unless consented to by the Purchaser. Payment by the Purchaser shall be
payable in the manner set forth in the Subscription Agreement and shall be made
prior to or on the Closing Date.
2.3.2. Delivery. The certificate for the Capital Securities shall be in
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definitive form, registered in the name of the Purchaser and in the aggregate
amount of the Capital Securities purchased by the Purchaser.
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2.3.3. Transfer Agent. The Offerors shall deposit the certificate
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representing the Capital Securities with the Institutional Trustee or other
appropriate party prior to the Closing Date.
2.4. Placement Agents' Fees and Expenses.
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2.4.1. Placement Agents' Compensation. Because the proceeds from the
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sale of the Capital Securities shall be used to purchase the Debentures from the
Company, the Company shall pay an aggregate of $30.00 for each $1,000.00 of
principal amount of Debentures sold to the Trust (excluding the Debentures
related to the Common Securities purchased by the Company). Of this amount,
$15.00 for each $1,000.00 of principal amount of Debentures shall be payable to
First Tennessee Capital Markets and $15.00 for each $1,000.00 of principal
amount of Debentures shall be payable to ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. Such
amount shall be delivered to the Trustee or such other person designated by the
Placement Agents on the Closing Date and shall be allocated between and paid to
the respective Placement Agents as directed by the Placement Agents.
2.4.2. Costs and Expenses. Whether or not this Agreement is terminated
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or the sale of the Capital Securities is consummated, the Company hereby
covenants and agrees that it shall pay or cause to be paid (directly or by
reimbursement) all reasonable costs and expenses incident to the performance of
the obligations of the Offerors under this Agreement, including all fees,
expenses and disbursements of counsel and accountants for the Offerors; the
reasonable costs and charges of any trustee, transfer agent or registrar and the
fees and disbursements of counsel to any trustee, transfer agent or registrar
attributable to the Debentures and the Capital Securities; all reasonable
expenses incurred by the Offerors incident to the preparation, execution and
delivery of the Trust Agreement, the Indenture, and the Guarantee; and all other
reasonable costs and expenses incident to the performance of the obligations of
the Company hereunder and under the Trust Agreement.
2.5. Failure to Close. If any of the conditions to the Closing specified in
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this Agreement shall not have been fulfilled to the satisfaction of the
Placement Agents or if the Closing shall not have occurred on or before 10:00
a.m. (St. Louis time) on December 31, 2001, then each party hereto,
notwithstanding anything to the contrary in this Agreement, shall be relieved of
all further obligations under this Agreement without thereby waiving any rights
it may have by reason of such nonfulfillment or failure; provided, however, that
the obligations of the parties under Sections 2.4.2 and 9 shall not be so
relieved and shall continue in full force and effect.
Section 3. Closing Conditions. The obligations of the Purchaser and the
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Placement Agents on the Closing Date shall be subject to the accuracy, at and as
of the Closing Date, of the representations and warranties of the Offerors
contained in this Agreement, to the accuracy, at and as of the Closing Date, of
the statements of the Offerors made in any certificates pursuant to this
Agreement, to the performance by the Offerors of their respective obligations
under this Agreement, to compliance, at and as of the Closing Date, by the
Offerors with their respective agreements herein contained, and to the following
further conditions:
3.1. Opinions of Counsel. On the Closing Date, the Placement Agents shall
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have received the following favorable opinions, each dated as of the Closing
Date: (a) from Akerman, Senterfitt & ▇▇▇▇▇▇, P.A., counsel for the Offerors and
addressed to the Purchaser and the Placement Agents in substantially the form
set forth on Exhibit B-1 attached hereto and incorporated herein by this
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reference, (b) from ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, special Connecticut counsel to the
Offerors and addressed to the Purchaser, the Placement Agents and the Offerors,
in substantially the form set forth on Exhibit B-2 attached hereto and
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incorporated herein by this reference and (c) from ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇.▇.,
special tax counsel to the Offerors, and addressed to the Placement Agents and
the Offerors, in substantially the form set forth on Exhibit B-3 attached hereto
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and incorporated herein by this reference, subject to the receipt by ▇▇▇▇▇, Rice
& ▇▇▇▇▇▇▇▇, ▇.▇. of a representation letter from the Company in the form set
forth in Exhibit B-3 completed in a manner reasonably satisfactory to ▇▇▇▇▇,
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Rice & ▇▇▇▇▇▇▇▇, ▇.▇. (collectively, the "Offerors' Counsel Opinions"). In
rendering the Offerors' Counsel Opinions, counsel to the Offerors may rely as to
factual matters upon certificates or other documents furnished by officers,
directors and trustees of the Offerors (copies of which shall be delivered to
the Placement Agents and the Purchaser) and by government officials, and upon
such other documents as counsel to the Offerors may, in their reasonable
opinion, deem appropriate as a basis for the Offerors' Counsel Opinions. Counsel
to the Offerors may specify the jurisdictions in which they are admitted to
practice and that they are not admitted to practice in any other jurisdiction
and are not experts in the law of any other jurisdiction. If the Offerors'
counsel is not admitted to practice in the State of New York, the opinion of
Offerors' counsel may assume, for purposes of the opinion, that the laws of the
State of New York are identical, in all respects material to the opinion, to the
internal laws of the state in which such counsel is admitted to practice. Such
Offerors' Counsel Opinion shall not state that they are to be governed or
qualified by, or that they are otherwise subject to, any treatise, written
policy or other document relating to legal opinions, including, without
limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).
3.2. Officer's Certificate. At the Closing Date, the Purchaser and the
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Placement Agents shall have received certificates from the Chief Executive
Officer of the Company, dated as of the Closing Date, stating that (i) the
representations and warranties of the Offerors set forth in Section 5 hereof are
true and correct as of the Closing Date and that the Offerors have complied with
all agreements and satisfied all conditions on their part to be performed or
satisfied at or prior to the Closing Date, (ii) since the date of this Agreement
the Offerors have not incurred any liability or obligation, direct or
contingent, or entered into any material transactions, other than in the
ordinary course of business, which is material to the Offerors, and (iii)
covering such other matters as the Placement Agents may reasonably request.
3.3. Administrator's Certificate. At the Closing Date, the Purchaser and
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the Placement Agents shall have received a certificate of one or more
Administrators of the Trust, dated as of the Closing Date, stating that the
representations and warranties of the Trust set forth in Section 5 are true and
correct as of the Closing Date and that the Trust has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to the Closing Date.
3.4. Purchase Permitted by Applicable Laws; Legal Investment. The purchase
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of and payment for the Capital Securities shall (a) not be prohibited by any
applicable law or governmental regulation, (b) not subject the Purchaser or the
Placement Agents to any penalty or, in the reasonable judgment of the Purchaser
and the Placement Agents, other onerous condition under or pursuant to any
applicable law or governmental regulation, and (c) be permitted by the laws and
regulations of the jurisdictions to which the Purchaser and the Placement Agents
are subject.
3.5. Consents and Permits. The Company and the Trust shall have received
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all consents, permits and other authorizations, and made all such filings and
declarations, as may be required from any person or entity pursuant to any law,
statute, regulation or rule (federal, state, local and foreign), or pursuant to
any agreement, order or decree to which the Company or the Trust is a party or
to which either is subject, in connection with the transactions contemplated by
this Agreement.
3.6. Sale of Purchaser Securities. The Purchaser shall have sold securities
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issued by the Purchaser in an amount such that the net proceeds of such sale
shall be (i) available on the Closing Date and (ii) in an amount sufficient to
purchase the Capital Securities and all other capital securities contemplated in
agreements similar to this Agreement and the Subscription Agreement.
3.7. Information. Prior to or on the Closing Date, the Offerors shall have
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furnished to the Placement Agents such further information, certificates,
opinions and documents addressed to the Purchaser and the Placement Agents,
which the Placement Agents may reasonably request, including, without
limitation, a complete set of the Operative Documents or any other documents or
certificates required by this Section 3; and all proceedings taken by the
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Offerors in connection with the issuance, offer and sale of the Capital
Securities as herein contemplated shall be reasonably satisfactory in form and
substance to the Placement Agents.
If any condition specified in this Section 3 shall not have been fulfilled
when and as required in this Agreement, or if any of the opinions or
certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Placement Agents, this
Agreement may be terminated by the Placement Agents by notice to the Offerors at
any time at or prior to the Closing Date. Notice of such termination shall be
given to the Offerors in writing or by telephone or facsimile confirmed in
writing.
Section 4. Conditions to the Offerors' Obligations. The obligations of
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the Offerors to sell the Capital Securities to the Purchaser and consummate the
transactions contemplated by this Agreement shall be subject to the accuracy, at
and as of the Closing Date, of the representations and warranties of the
Placement Agents contained in this Agreement and to the following further
conditions:
4.1. Executed Agreement. The Offerors shall have received from the
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Placement Agents an executed copy of this Agreement.
4.2. Fulfillment of Other Obligations. The Placement Agents shall have
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fulfilled all of their other obligations and duties required to be fulfilled
under this Agreement prior to or at the Closing.
Section 5. Representations and Warranties of the Offerors. The Offerors
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jointly and severally represent and warrant to the Placement Agents and the
Purchaser as of the date hereof and as of the Closing Date as follows:
5.1. Securities Law Matters.
(a) Neither the Company nor the Trust, nor any of their "Affiliates"
(as defined in Rule 501(b) of Regulation D under the Securities Act ("Regulation
D")), nor any person acting on any of their behalf has, directly or indirectly,
made offers or sales of any security, or solicited offers to buy any security,
under circumstances that would require the registration of any of the Capital
Securities, the Guarantee and the Debentures or any other securities to be
issued or which may be issued by the Purchaser (collectively, the "Securities")
under the Securities Act.
(b) Neither the Company nor the Trust, nor any of their Affiliates,
nor any person acting on its or their behalf has (i) other than the Placement
Agents, offered for sale or solicited offers to purchase the Securities, (ii)
engaged or will engage, in any "directed selling efforts" within the meaning of
Regulation S under the Securities Act ("Regulation S") with respect to the
Securities, or (iii) engaged in any form of offering, general solicitation or
general advertising (within the meaning of Regulation D) in connection with any
offer or sale of any of the Securities.
(c) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(d) Neither the Company nor the Trust is or, after giving effect to
the offering and sale of the Capital Securities and the consummation of the
transactions described in this Agreement, neither the Company nor the Trust will
be, an "investment company" or an entity "controlled" by an "investment
company," in each case within the meaning of Section 3(a) of the Investment
Company Act of 1940, as amended (the "Investment Company Act") without regard to
Section 3(c) of the Investment Company Act.
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(e) Neither the Company nor the Trust has paid or agreed to pay to any
person or entity (other than the Placement Agents) any compensation for
soliciting another to purchase any of the Securities.
5.2. Organization, Standing and Qualification of the Trust. The Trust has
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been duly created and is validly existing in good standing as a statutory trust
under the Connecticut Statutory Trust Act (the "Statutory Trust Act") with the
power and authority to own property and to conduct the business it transacts and
proposes to transact and to enter into and perform its obligations under the
Operative Documents. The Trust is duly qualified to transact business as a
foreign entity and is in good standing in each jurisdiction in which such
qualification is necessary, except where the failure to so qualify or be in good
standing would not have a material adverse effect on the Trust. The Trust is not
a party to or otherwise bound by any agreement other than the Operative
Documents. The Trust is and will, under current law, be classified for federal
income tax purposes as a grantor trust and not as an association taxable as a
corporation.
5.3. Trust Agreement. The Trust Agreement has been duly authorized by the
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Company and, on the Closing Date, will have been duly executed and delivered by
the Company and the Administrators of the Trust, and, assuming due
authorization, execution and delivery by the Institutional Trustee, will be a
valid and binding obligation of the Company and such Administrators, enforceable
against them in accordance with its terms, subject to (a) applicable bankruptcy,
insolvency, moratorium, receivership, reorganization, liquidation and other laws
relating to or affecting creditors' rights generally, and (b) general principles
of equity (regardless of whether considered and applied in a proceeding in
equity or at law) ("Bankruptcy and Equity"). Each of the Administrators of the
Trust is an employee or a director of the Company or of a financial institution
subsidiary of the Company and has been duly authorized by the Company to execute
and deliver the Trust Agreement.
5.4. Guarantee Agreement and the Indenture. Each of the Guarantee and the
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Indenture has been duly authorized by the Company and, on the Closing Date will
have been duly executed and delivered by the Company, and, assuming due
authorization, execution and delivery by the Guarantee Trustee, in the case of
the Guarantee, and by the Indenture Trustee, in the case of the Indenture, will
be a valid and binding obligation of the Company enforceable against it in
accordance with its terms, subject to Bankruptcy and Equity.
5.5. Capital Securities and Common Securities. The Capital Securities and
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the Common Securities have been duly authorized by the Trust Agreement and, when
issued and delivered against payment therefor on the Closing Date to the
Purchaser, in the case of the Capital Securities, and to the Company, in the
case of the Common Securities, will be validly issued and represent undivided
beneficial interests in the assets of the Trust. None of the Capital Securities
or the Common Securities is subject to preemptive or other similar rights. On
the Closing Date, all of the issued and outstanding Common Securities will be
directly owned by the Company free and clear of any pledge, security interest,
claim, lien or other encumbrance.
5.6. Debentures. The Debentures have been duly authorized by the Company
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and, at the Closing Date, will have been duly executed and delivered to the
Indenture Trustee for authentication in accordance with the Indenture, and, when
authenticated in the manner provided for in the Indenture and delivered against
payment therefor by the Trust, will constitute valid and binding obligations of
the Company entitled to the benefits of the Indenture enforceable against the
Company in accordance with their terms, subject to Bankruptcy and Equity.
5.7. Power and Authority. This Agreement has been duly authorized, executed
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and delivered by the Company and the Trust and constitutes the valid and binding
obligation of the Company and the Trust, enforceable against the Company and the
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Trust in accordance with its terms, subject to Bankruptcy and Equity.
5.8. No Defaults. The Trust is not in violation of the Trust Agreement or,
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to the knowledge of the Administrators, any provision of the Statutory Trust
Act. The execution, delivery and performance by the Company or the Trust of the
Operative Documents to which it is a party, and the consummation of the
transactions contemplated herein or therein and the use of the proceeds
therefrom, will not conflict with or constitute a breach of, or a default under,
or result in the creation or imposition of any lien, charge or other encumbrance
upon any property or assets of the Trust, the Company or any of the Company's
subsidiaries pursuant to any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which the Trust, the Company or any of its
subsidiaries is a party or by which it or any of them may be bound, or to which
any of the property or assets of any of them is subject, except for a conflict,
breach, default, lien, charge or encumbrance which could not reasonably be
expected to have a Material Adverse Effect nor will such action result in any
violation of the Trust Agreement or the Statutory Trust Act or require the
consent, approval, authorization or order of any court or governmental agency or
body. As used herein, the term "Material Adverse Effect" means any effect that
is material and adverse to the Offeror's ability to consummate the transactions
contemplated herein or in the Operative Documents or any effect that is material
and adverse to the condition (financial or otherwise), earnings, affairs,
business, prospects or results of operations of the Company and its subsidiaries
taken as whole, whether or not occurring in the ordinary course of business.
5.9. Organization, Standing and Qualification of the Company. The Company
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has been duly incorporated and is validly existing as a corporation in good
standing under the laws of Florida, with all requisite corporate power and
authority to own its properties and conduct the business it transacts and
proposes to transact, and is duly qualified to transact business and is in good
standing as a foreign corporation in each jurisdiction where the nature of its
activities requires such qualification, except where the failure of the Company
to be so qualified would not, singly or in the aggregate, have a Material
Adverse Effect.
5.10. Subsidiaries of the Company. Each of the Company's significant
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subsidiaries (as defined in Section 1-02 of Regulation S-X to the Securities Act
(the "Significant Subsidiaries")) is listed in Exhibit C attached hereto and
incorporated herein by this reference. Each Significant Subsidiary has been duly
organized and is validly existing and in good standing under the laws of the
jurisdiction in which it is chartered or organized, with all requisite power and
authority to own its properties and conduct the business it transacts and
proposes to transact, and is duly qualified to transact business and is in good
standing as a foreign entity in each jurisdiction where the nature of its
activities requires such qualification, except where the failure of any such
Significant Subsidiaries to be so qualified would not, singly or in the
aggregate, have a Material Adverse Effect.
5.11. Permits. The Company and each of its Significant Subsidiaries have
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all requisite power and authority, and all necessary authorizations, approvals,
orders, licenses, certificates and permits of and from regulatory or
governmental officials, bodies and tribunals, to own or lease their respective
properties and to conduct their respective businesses as now being conducted,
except such authorizations, approvals, orders, licenses, certificates and
permits which, if not obtained and maintained, would not have a Material Adverse
Effect, and neither the Company nor any of the Significant Subsidiaries has
received any notice of proceedings relating to the revocation or modification of
any such authorizations, approvals, orders, licenses, certificates or permits
which, singly or in the aggregate, if the failure to be so licensed or approved
is the subject of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect; and the Company and its Significant Subsidiaries are in
compliance with all applicable laws, rules, regulations and orders and consents,
the violation of which would have a Material Adverse Effect.
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5.12. Conflicts, Authorizations and Approvals. Except as previously
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disclosed to the Placement Agents in writing, neither the Company nor any of the
Significant Subsidiaries is in violation of its respective charter or by-laws or
similar organizational documents or in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which either the Company or any of the Significant Subsidiaries is
a party, or by which it or any of them may be bound or to which any of the
property or assets of the Company or any of the Significant Subsidiaries is
subject, the effect of which violation or default in performance or observance
would have a Material Adverse Effect.
5.13. Holding Company Registration and Deposit Insurance. The Company is
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duly registered (i) as a bank holding company or financial holding company under
the Bank Holding Company Act of 1956, as amended, and the regulations of the
Board of Governors of the Federal Reserve System or (ii) as a savings and loan
holding company under the Home Owners' Loan Act of 1933, as amended, and the
regulations of the Office of Thrift Supervision, and the deposit accounts of the
Company's subsidiary depository institutions are insured by the Federal Deposit
Insurance Corporation ("FDIC") to the fullest extent permitted by law and the
rules and regulations of the FDIC, and no proceedings for the termination of
such insurance are pending or threatened.
5.14. Financial Statements.
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(a) The consolidated balance sheets of the Company and all of its
subsidiaries as of December 31, 2000 and December 31, 1999 and related
consolidated income statements and statements of changes in shareholders' equity
for the 3 years ended December 31, 2000 together with the notes thereto, and the
consolidated balance sheets of the Company and all of its subsidiaries as of
June 30, 2001 and the related consolidated income statements and statements of
changes in shareholders' equity for the 6 months then ended, copies of each of
which have been provided to the Placement Agents (together, the "Financial
Statements"), have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis (except as may be disclosed
therein) and fairly present in all material respects the financial position and
the results of operations and changes in shareholders' equity of the Company and
all of its subsidiaries as of the dates and for the periods indicated (subject,
in the case of interim financial statements, to normal recurring year-end
adjustments, none of which shall be material). The books and records of the
Company and all of its subsidiaries have been, and are being, maintained in all
material respect in accordance with generally accepted accounting principles and
any other applicable legal and accounting requirements and reflect only actual
transactions.
(b) The information previously provided to the Placement Agents in
the Company's report on FRY-9C dated June 30, 2001 (the "FRY-9C") fairly
presents in all material respects the financial position of the Company and all
of its subsidiaries.
(c) Since the respective dates of the Financial Statements and the
FRY-9C, there has been no material adverse change or development with respect to
the financial condition or earnings of the Company and all of its subsidiaries,
taken as a whole.
(d) The accountants of the Company who certified the Financial
Statements are independent public accountants of the Company and its
subsidiaries within the meaning of the Securities Act and the rules and
regulations thereunder.
5.15. Regulatory Enforcement Matters. Except as previously disclosed to the
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Placement Agents in writing, neither the Company nor any of its subsidiaries is
subject or is party to, or has received any notice or advice that any of them
may become subject or party to, any investigation with respect to, any
cease-and-desist order, agreement, consent agreement, memorandum of
understanding or other regulatory enforcement action, proceeding or order with
or by, or is a party to any commitment letter or similar undertaking to, or is
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subject to any directive by, or has been since January 1, 1999, a recipient of
any supervisory letter from, or since January 1, 1999, has adopted any board
resolutions at the request of, any Regulatory Agency (as defined below) that
currently restricts in any material respect the conduct of their business or
that in any material manner relates to their capital adequacy, their credit
policies, their management or their business (each, a "Regulatory Agreement"),
nor has the Company or any of its subsidiaries been advised since January 1,
1999, by any Regulatory Agency that it is considering issuing or requesting any
such Regulatory Agreement. There is no material unresolved violation, criticism
or exception by any Regulatory Agency with respect to any report or statement
relating to any examinations of the Company or any of its subsidiaries. As used
herein, the term "Regulatory Agency" means any federal or state agency charged
with the supervision or regulation of depository institutions, bank, financial
or savings and loan holding companies, or engaged in the insurance of depository
institution deposits, or any court, administrative agency or commission or other
governmental agency, authority or instrumentality having supervisory or
regulatory authority with respect to the Company or any of its Significant
Subsidiaries.
5.16. No Material Change. Except as previously disclosed to the Placement
------------------
Agents in writing, since December 31, 2000, there has been no material adverse
change or development with respect to the condition (financial or otherwise),
earnings, affairs, business, prospects or results of operations of the Offerors
on a consolidated basis.
5.17. No Undisclosed Liabilities. Neither the Company nor any of its
----------------------------
subsidiaries has any material liability, whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become due,
including any liability for taxes (and there is no past or present fact,
situation, circumstance, condition or other basis for any present or future
action, suit, proceeding, hearing, charge, complaint, claim or demand against
the Company or its subsidiaries giving rise to any such liability), except (i)
for liabilities set forth in the Financial Statements, (ii) normal fluctuation
in the amount of the liabilities referred to in clause (i) above occurring in
the ordinary course of business of the Company and all of its subsidiaries since
the date of the most recent balance sheet included in the Financial Statements,
and (iii) as may be specifically disclosed in writing to the Placement Agents.
5.18. Litigation. Except as previously disclosed to the Placement Agents in
----------
writing, no charge, investigation, action, suit or proceeding is pending or, to
the knowledge of the Offerors, threatened, against or affecting the Offerors or
any of their respective properties before or by any courts or any regulatory,
administrative or governmental official, commission, board, agency or other
authority or body, or any arbitrator, wherein an unfavorable decision, ruling or
finding could have a Material Adverse Effect.
5.19. Deferral of Interest Payments on Debentures. The Company has no
-----------------------------------------------
present intention to exercise its option to defer payments of interest on the
Debentures as provided in the Indenture. The Company believes that the
likelihood that it would exercise its right to defer payments of interest on the
Debentures as provided in the Indenture at any time during which the Debentures
are outstanding is remote because of the restrictions that would be imposed on
the Company's ability to declare or pay dividends or distributions on, or to
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the Company's capital stock and on the Company's ability to make any payments of
principal, interest or premium on, or repay, repurchase or redeem, any of its
debt securities that rank pari passu in all respects with, or junior in interest
to, the Debentures.
Section 6. Representations and Warranties of the Placement Agents. Each
-------------------------------------------------------
Placement Agent represents and warrants to the Offerors as to itself (but not as
to the other Placement Agent) as follows:
9
6.1. Organization, Standing and Qualification.
----------------------------------------
(a) First Tennessee Capital Markets is a division of First Tennessee
Bank, N.A., a national banking association duly organized, validly existing and
in good standing under the laws of the United States, with full power and
authority to own, lease and operate its properties and conduct its business as
currently being conducted. First Tennessee Capital Markets is duly qualified to
transact business as a foreign corporation and is in good standing in each other
jurisdiction in which it owns or leases property or conducts its business so as
to require such qualification and in which the failure to so qualify would,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), earnings, business, prospects or results of
operations of First Tennessee Capital Markets.
(b) ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. is a corporation duly organized,
validly existing and in good standing under the laws of the State of New York,
with full power and authority to own, lease and operate its properties and
conduct its business as currently being conducted. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
is duly qualified to transact business as a foreign corporation and is in good
standing in each other jurisdiction in which it owns or leases property or
conducts its business so as to require such qualification and in which the
failure to so qualify would, individually or in the aggregate, have a material
adverse effect on the condition (financial or otherwise), earnings, business,
prospects or results of operations of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
6.2. Power and Authority. The Placement Agent has all requisite power and
-------------------
authority to enter into this Agreement, and this Agreement has been duly and
validly authorized, executed and delivered by the Placement Agent and
constitutes the legal, valid and binding agreement of the Placement Agent,
enforceable against the Placement Agent in accordance with its terms, subject to
Bankruptcy and Equity and except as any indemnification or contribution
provisions thereof may be limited under applicable securities laws.
6.3. General Solicitation. In the case of the offer and sale of the Capital
--------------------
Securities, no form of general solicitation or general advertising was used by
the Placement Agent or its representatives including, but not limited to,
advertisements, articles, notices or other communications published in any
newspaper, magazine or similar medium or broadcast over television or radio or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising. Neither the Placement Agent nor its
representatives have engaged or will engage in any "directed selling efforts"
within the meaning of Regulation S with respect to the Capital Securities.
6.4. Purchaser. The Placement Agent has made such reasonable inquiry as is
---------
necessary to determine that the Purchaser is acquiring the Capital Securities
for its own account, that the Purchaser does not intend to distribute the
Capital Securities in contravention of the Securities Act or any other
applicable securities laws, and that the Purchaser is not a "U.S. person" as
that term is defined under Rule 902 of the Securities Act.
6.5. Qualified Purchasers. The Placement Agent has not offered or sold and
--------------------
will not arrange for the offer or sale of the Capital Securities except (i) in
an offshore transaction complying with Rule 903 of Regulation S, or (ii) to
those the Placement Agent reasonably believes are "accredited investors" (as
defined in Rule 501 of Regulation D), or (iii) in any other manner that does not
require registration of the Capital Securities under the Securities Act. In
connection with each such sale, the Placement Agent has taken or will take
reasonable steps to ensure that (a) the Purchaser is aware that such sale is
being made in reliance on an exemption under the Securities Act and (b) future
transfers are subject to certain restrictions.
6.6. Offering Circulars. Neither the Placement Agent nor its
--------------------
representatives will include any non-public information about the Company, the
Trust or any of their affiliates in any registration statement, prospectus,
10
offering circular or private placement memorandum used in connection with any
purchase of Capital Securities without the prior written consent of the Trust
and the Company.
Section 7. Covenants of the Offerors. The Offerors covenant and agree
--------------------------
with the Placement Agents and the Purchaser as follows:
7.1. Compliance with Representations and Warranties. During the period from
----------------------------------------------
the date of this Agreement to the Closing Date, the Offerors shall use their
best efforts and take all action necessary or appropriate to cause their
representations and warranties contained in Section 5 hereof to be true as of
the Closing Date, after giving effect to the transactions contemplated by this
Agreement, as if made on and as of the Closing Date.
7.2. Sale and Registration of Securities. The Offerors and their Affiliates
-----------------------------------
shall not nor shall any of them permit any person acting on their behalf (other
than the Placement Agents), to directly or indirectly (i) sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security (as
defined in the Securities Act) that would or could be integrated with the sale
of the Capital Securities in a manner that would require the registration under
the Securities Act of the Capital Securities, the Debentures or the Guarantee or
(ii) make offers or sales of any such security, or solicit offers to buy any
such security, under circumstances that would require the registration of any of
such securities under the Securities Act.
7.3. Use of Proceeds. The Trust shall use the proceeds from the sale of the
---------------
Capital Securities to purchase the Debentures from the Company.
7.4. Investment Company. The Offerors shall not engage, or permit any
-------------------
subsidiary to engage, in any activity which would cause it or any subsidiary to
be an "investment company" under the provisions of the Investment Company Act.
7.5. Reimbursement of Expenses. If the sale of the Capital Securities
---------------------------
provided for herein is not consummated because any condition set forth in
Section 3 hereof is not satisfied, or because of any refusal, inability or
failure on the part of the Company or the Trust to perform any agreement herein
or comply with any provision hereof other than by reason of a breach by the
Placement Agents, the Company shall reimburse the Placement Agents upon demand
for all of their pro rata share of out-of-pocket expenses (including reasonable
fees and disbursements of counsel) in an amount not to exceed $50,000.00 that
shall have been incurred by them in connection with the proposed purchase and
sale of the Capital Securities. Notwithstanding the foregoing, the Company shall
have no obligation to reimburse the Placement Agents for their out-of-pocket
expenses if the sale of the Capital Securities fails to occur because the
condition set forth in Section 3.6 is not satisfied or because either of the
Placement Agents fails to fulfill a condition set forth in Section 4.
7.6. Directed Selling Efforts, Solicitation and Advertising. In connection
-------------------------------------------------------
with any offer or sale of any of the Securities, the Offerors shall not, nor
shall either of them permit any of their Affiliates or any person acting on
their behalf to, (i) engage in any "directed selling efforts" within the meaning
of Regulation S, or (ii) engage in any form of general solicitation or general
advertising (as defined in Regulation D).
7.7. Compliance with Rule 144A(d)(4) under the Securities Act. So long as
---------------------------------------------------------
any of the Securities are outstanding and are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, the Offerors will, during
any period in which they are not subject to and in compliance with Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
or the Offerors are not exempt from such reporting requirements pursuant to and
in compliance with Rule 12g3-2(b) under the Exchange Act, provide to each holder
of such restricted securities and to each prospective purchaser (as designated
11
by such holder) of such restricted securities, upon the request of such holder
or prospective purchaser in connection with any proposed transfer, any
information required to be provided by Rule 144A(d)(4) under the Securities Act,
if applicable. This covenant is intended to be for the benefit of the holders,
and the prospective purchasers designated by such holders, from time to time of
such restricted securities. The information provided by the Offerors pursuant to
this Section 7.7 will not, at the date thereof, contain any untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
7.8. Quarterly Reports. Within 50 days of the end of each calendar year
------------------
quarter and within 100 days of the end of each calendar year during which the
Debentures are issued and outstanding, the Offerors shall submit to The Bank of
New York a completed quarterly report in the form attached hereto as Exhibit D.
---------
The Offerors acknowledge and agree that The Bank of New York and its successors
and assigns is a third party beneficiary of this Section 7.8
Section 8. Covenants of the Placement Agents. The Placement Agents
-------------------------------------
covenant and agree with the Offerors that, during the period from the date of
this Agreement to the Closing Date, the Placement Agents shall use their best
efforts and take all action necessary or appropriate to cause their
representations and warranties contained in Section 6 to be true as of Closing
Date, after giving effect to the transactions contemplated by this Agreement, as
if made on and as of the Closing Date. The Placement Agents further covenant and
agree not to engage in hedging transactions with respect to the Capital
Securities unless such transactions are conducted in compliance with the
Securities Act.
Section 9. Indemnification.
---------------
9.1. Indemnification Obligation. The Offerors shall jointly and severally
---------------------------
indemnify and hold harmless the Placement Agents and the Purchaser and each of
their respective agents, employees, officers and directors and each person that
controls either of the Placement Agents or the Purchaser within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, and agents,
employees, officers and directors or any such controlling person of either of
the Placement Agents or the Purchaser (each such person or entity, an
"Indemnified Party") from and against any and all losses, claims, damages,
judgments, liabilities or expenses, joint or several, to which such Indemnified
Party may become subject under the Securities Act, the Exchange Act or other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of the Offerors), insofar as such losses, claims, damages,
judgments, liabilities or expenses (or actions in respect thereof) arise out of,
or are based upon, or relate to, in whole or in part, (a) any untrue statement
or alleged untrue statement of a material fact contained in any information
(whether written or oral) or documents executed in favor of, furnished or made
available to the Placement Agents or the Purchaser by the Offerors, or (b) any
omission or alleged omission to state in any information (whether written or
oral) or documents executed in favor of, furnished or made available to the
Placement Agents or the Purchaser by the Offerors a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
shall reimburse each Indemnified Party for any legal and other expenses as such
expenses are reasonably incurred by such Indemnified Party in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, judgments, liability, expense or action described in this Section 9.1.
In addition to their other obligations under this Section 9, the Offerors hereby
agree that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of, or based upon, or
related to the matters described above in this Section 9.1, they shall reimburse
each Indemnified Party on a quarterly basis for all reasonable legal or other
expenses incurred in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the absence
of a judicial determination as to the propriety and enforceability of the
possibility that such payments might later be held to have been improper by a
12
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, each Indemnified Party
shall promptly return such amounts to the Offerors together with interest,
determined on the basis of the prime rate (or other commercial lending rate for
borrowers of the highest credit standing) announced from time to time by First
Tennessee Bank, N.A. (the "Prime Rate"). Any such interim reimbursement payments
which are not made to an Indemnified Party within 30 days of a request for
reimbursement, shall bear interest at the Prime Rate from the date of such
request.
9.2. Conduct of Indemnification Proceedings. Promptly after receipt by an
---------------------------------------
Indemnified Party under this Section 9 of notice of the commencement of any
action, such Indemnified Party shall, if a claim in respect thereof is to be
made against the Offerors under this Section 9, notify the Offerors in writing
of the commencement thereof; but, subject to Section 9.4, the omission to so
notify the Offerors shall not relieve them from any liability pursuant to
Section 9.1 which the Offerors may have to any Indemnified Party unless and to
the extent that the Offerors did not otherwise learn of such action and such
failure by the Indemnified Party results in the forfeiture by the Offerors of
substantial rights and defenses. In case any such action is brought against any
Indemnified Party and such Indemnified Party seeks or intends to seek indemnity
from the Offerors, the Offerors shall be entitled to participate in, and, to the
extent that they may wish, to assume the defense thereof with counsel reasonably
satisfactory to such Indemnified Party; provided, however, if the defendants in
-------- -------
any such action include both the Indemnified Party and the Offerors and the
Indemnified Party shall have reasonably concluded that there may be a conflict
between the positions of the Offerors and the Indemnified Party in conducting
the defense of any such action or that there may be legal defenses available to
it and/or other Indemnified Parties which are different from or additional to
those available to the Offerors, the Indemnified Party shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such Indemnified Party.
Upon receipt of notice from the Offerors to such Indemnified Party of their
election to so assume the defense of such action and approval by the Indemnified
Party of counsel, the Offerors shall not be liable to such Indemnified Party
under this Section 9 for any legal or other expenses subsequently incurred by
such Indemnified Party in connection with the defense thereof unless (i) the
Indemnified Party shall have employed such counsel in connection with the
assumption of legal defenses in accordance with the proviso in the preceding
sentence (it being understood, however, that the Offerors shall not be liable
for the expenses of more than one separate counsel representing the Indemnified
Parties who are parties to such action), or (ii) the Offerors shall not have
employed counsel reasonably satisfactory to the Indemnified Party to represent
the Indemnified Party within a reasonable time after notice of commencement of
the action, in each of which cases the fees and expenses of counsel of such
Indemnified Party shall be at the expense of the Offerors.
9.3. Contribution. If the indemnification provided for in this Section 9 is
------------
required by its terms, but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an Indemnified Party under Section 9.1
in respect of any losses, claims, damages, liabilities or expenses referred to
herein or therein, then the Offerors shall contribute to the amount paid or
payable by such Indemnified Party as a result of any losses, claims, damages,
judgments, liabilities or expenses referred to herein (i) in such proportion as
is appropriate to reflect the relative benefits received by the Offerors, on the
one hand, and the Indemnified Party, on the other hand, from the offering of
such Capital Securities, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Offerors, on the one hand, and the Placement Agents,
on the other hand, in connection with the statements or omissions or
inaccuracies in the representations and warranties herein or other breaches
which resulted in such losses, claims, damages, judgments, liabilities or
expenses, as well as any other relevant equitable considerations. The respective
relative benefits received by the Offerors, on the one hand, and the Placement
Agents, on the other hand, shall be deemed to be in the same proportion, in the
case of the Offerors, as the total price paid to the Offerors for the Capital
Securities sold by the Offerors to the Purchaser (net of the compensation paid
13
to the Placement Agents hereunder, but before deducting expenses), and in the
case of the Placement Agents, as the compensation received by them, bears to the
total of such amounts paid to the Offerors and received by the Placement Agents
as compensation. The relative fault of the Offerors and the Placement Agents
shall be determined by reference to, among other things, whether the untrue
statement or alleged untrue statement of a material fact or the omission or
alleged omission of a material fact or the inaccurate or the alleged inaccurate
representation and/or warranty relates to information supplied by the Offerors
or the Placement Agents and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The provisions set forth in Section 9.2 with respect to notice of commencement
of any action shall apply if a claim for contribution is made under this Section
9.3; provided, however, that no additional notice shall be required with respect
to any action for which notice has been given under Section 9.2 for purposes of
indemnification. The Offerors and the Placement Agents agree that it would not
be just and equitable if contribution pursuant to this Section 9.3 were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in this Section
9.3. The amount paid or payable by an Indemnified Party, as a result of the
losses, claims, damages, judgments, liabilities or expenses referred to in this
Section 9.3 shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified
Party, in connection with investigating or defending any such action or claim.
In no event shall the liability of the Placement Agents hereunder be greater in
amount than the dollar amount of the compensation (net of payment of all
expenses) received by the Placement Agents upon the sale of the Capital
Securities giving rise to such obligation. No person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not found guilty of
such fraudulent misrepresentation.
9.4. Additional Remedies. The indemnity and contribution agreements
--------------------
contained in this Section 9 are in addition to any liability that the Offerors
may otherwise have to any Indemnified Party.
9.5. Additional Indemnification. The Company shall indemnify and hold
---------------------------
harmless the Trust against all loss, liability, claim, damage and expense
whatsoever, as due from the Trust under Sections 9.1 through 9.4 hereof.
Section 10. Rights and Responsibilities of Placement Agents.
-----------------------------------------------
10.1. Reliance. In performing their duties under this Agreement, the
--------
Placement Agents shall be entitled to rely upon any notice, signature or writing
which they shall in good faith believe to be genuine and to be signed or
presented by a proper party or parties. The Placement Agents may rely upon any
opinions or certificates or other documents delivered by the Offerors or their
counsel or designees to either the Placement Agents or the Purchaser.
10.2. Rights of Placement Agents. In connection with the performance of
---------------------------
their duties under this Agreement, the Placement Agents shall not be liable for
any error of judgment or any action taken or omitted to be taken unless the
Placement Agents were grossly negligent or engaged in willful misconduct in
connection with such performance or non-performance. No provision of this
Agreement shall require the Placement Agents to expend or risk their own funds
or otherwise incur any financial liability on behalf of the Purchaser in
connection with the performance of any of their duties hereunder. The Placement
Agents shall be under no obligation to exercise any of the rights or powers
vested in them by this Agreement.
Section 11. Miscellaneous.
-------------
11.1. Notices. Prior to the Closing, and thereafter with respect to matters
-------
pertaining to this Agreement only, all notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery,
14
first-class mail, telex, telecopier or overnight air courier guaranteeing next
day delivery:
if to the Placement Agents, to:
First Tennessee Capital Markets
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, General Counsel
with a copy to:
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇, Esq.
and
Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
if to the Offerors, to:
Florida Banks, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇ ▇▇▇▇▇▇▇
15
with a copy to:
Akerman, Senterfitt & Eidson, P.A.
SunTrust International Center
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier: 305-374-5095
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
All such notices and communications shall be deemed to have been duly given
(i) at the time delivered by hand, if personally delivered, (ii) five business
days after being deposited in the mail, postage prepaid, if mailed, (iii) when
answered back, if telexed, (iv) the next business day after being telecopied, or
(v) the next business day after timely delivery to a courier, if sent by
overnight air courier guaranteeing next day delivery. From and after the
Closing, the foregoing notice provisions shall be superseded by any notice
provisions of the Operative Documents under which notice is given. The Placement
Agents, the Company, and their respective counsel, may change their respective
notice addresses from time to time by written notice to all of the foregoing
persons.
11.2. Parties in Interest, Successors and Assigns. Except as expressly set
--------------------------------------------
forth herein, this Agreement is made solely for the benefit of the Placement
Agents, the Purchaser and the Offerors and any person controlling the Placement
Agents, the Purchaser or the Offerors and their respective successors and
assigns; and no other person shall acquire or have any right under or by virtue
of this Agreement. This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties.
11.3. Counterparts. This Agreement may be executed by the parties hereto in
------------
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
11.4. Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
11.5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
-------------
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAWS PERTAINING TO CONFLICTS OF
LAWS) OF THE STATE OF NEW YORK.
11.6. Entire Agreement. This Agreement, together with the other Operative
----------------
Documents and the other documents delivered in connection with the transactions
contemplated by this Agreement, is intended by the parties as a final expression
of their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement, together with the other Operative Documents, supersedes
all prior agreements and understandings between the parties with respect to such
subject matter.
11.7. Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected, it
being intended that all of the Placement Agents' and the Purchaser's rights and
privileges shall be enforceable to the fullest extent permitted by law.
16
11.8. Survival. The Placement Agents and the Offerors, respectively, agree
--------
that the representations, warranties and agreements made by each of them in this
Agreement and in any certificate or other instrument delivered pursuant hereto
shall remain in full force and effect and shall survive the delivery of, and
payment for, the Capital Securities.
signatures appear on the next page
17
If this Agreement is satisfactory to you, please so indicate by signing the
acceptance of this Agreement and deliver such counterpart to the Offerors
whereupon this Agreement will become binding between us in accordance with its
terms.
Very truly yours,
FLORIDA BANKS, INC.
By: _______________________
Name: _____________________
Title: ____________________
FLORIDA BANKS STATUTORY TRUST I
By: _______________________
Name: _____________________
Title: Administrator
CONFIRMED AND ACCEPTED,
as of the date first set forth above
FIRST TENNESSEE CAPITAL MARKETS,
a division of First Tennessee Bank, N.A.,
as a Placement Agent
By: _________________________
Name: _______________________
Title: ______________________
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
a New York corporation, as a Placement Agent
By: _________________________
Name: _______________________
Title: ______________________
18
EXHIBIT A
---------
FORM OF SUBSCRIPTION AGREEMENT
------------------------------
FLORIDA BANKS STATUTORY TRUST I
FLORIDA BANKS, INC.
SUBSCRIPTION AGREEMENT
December 18, 2001
THIS SUBSCRIPTION AGREEMENT (this "Agreement") made among Florida Banks
Statutory Trust I (the "Trust"), a statutory trust created under the Connecticut
Statutory Trust Act (Chapter 615 of Title 34 of the Connecticut General
Statutes, Section 500, et seq.), Florida Banks, Inc., a Florida corporation,
with its principal offices located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company" and, collectively with the Trust, the
"Offerors"), and Preferred Term Securities IV, Ltd. (the "Purchaser"). RECITALS:
A. The Trust desires to issue 6,000 of its Floating Rate Capital Securities
(the "Capital Securities"), liquidation amount $1,000.00 per Capital Security,
representing an undivided beneficial interest in the assets of the Trust (the
"Offering"), to be issued pursuant to an Amended and Restated Declaration of
Trust (the "Declaration") by and among the Company, State Street Bank and Trust
Company of Connecticut, National Association ("State Street"), the
administrators named therein, and the holders (as defined therein), which
Capital Securities are to be guaranteed by the Company with respect to
distributions and payments upon liquidation, redemption and otherwise pursuant
to the terms of a Guarantee Agreement between the Company and State Street, as
trustee (the "Guarantee"); and
B. The proceeds from the sale of the Capital Securities will be combined
with the proceeds from the sale by the Trust to the Company of its common
securities, and will be used by the Trust to purchase an equivalent amount of
Floating Rate Junior Subordinated Deferrable Interest Debentures of the Company
(the "Debentures") to be issued by the Company pursuant to an indenture to be
executed by the Company and State Street, as trustee (the "Indenture"); and
C. In consideration of the premises and the mutual representations and
covenants hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF CAPITAL SECURITIES
1.1. Upon the execution of this Subscription Agreement, the Purchaser
hereby agrees to purchase from the Trust 6,000 Capital Securities at a price
equal to $1,000.00 per Capital Security (the "Purchase Price") and the Trust
agrees to sell such Capital Securities to the Purchaser for said Purchase Price.
The rights and preferences of the Capital Securities are set forth in the
Declaration. The Purchase Price is payable in immediately available funds on
December 18, 2001, or such other business day as may be designated by the
Purchaser, but in no event later than December 31, 2001 (the "Closing Date").
A-1
The Offerors shall provide the Purchaser wire transfer instructions no later
than 1 day following the date hereof.
1.2. The certificate for the Capital Securities shall be delivered by the
Trust on the Closing Date to the Purchaser or its designee.
1.3. The Placement Agreement, dated December 4, 2001 (the "Placement
Agreement"), among the Offerors and the Placement Agents identified therein
includes certain representations and warranties, covenants and conditions to
closing and certain other matters governing the Offering. The Placement
Agreement is hereby incorporated by reference into this Agreement and the
Purchaser shall be entitled to each of the benefits of the Placement Agents and
the Purchaser under the Placement Agreement and shall be entitled to enforce the
obligations of the Offerors under such Placement Agreement as fully as if the
Purchaser were a party to such Placement Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PURCHASER
2.1. The Purchaser understands and acknowledges that neither the Capital
Securities, the Debentures nor the Guarantee have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or any other
applicable securities law, are being offered for sale by the Trust in
transactions not requiring registration under the Securities Act, and may not be
offered, sold, pledged or otherwise transferred by the Purchaser except in
compliance with the registration requirements of the Securities Act or any other
applicable securities laws, pursuant to an exemption therefrom or in a
transaction not subject thereto.
2.2. The Purchaser represents, warrants and certifies that (i) it is not a
"U.S. person" as such term is defined in Rule 902 under the Securities Act, (ii)
it is not acquiring the Capital Securities for the account or benefit of any
such U.S. person, (iii) the offer and sale of Capital Securities to the
Purchaser constitutes an "offshore transaction" under Regulation S of the
Securities Act, and (iv) it will not engage in hedging transactions with regard
to the Capital Securities unless such transactions are conducted in compliance
with the Securities Act and the Purchaser agrees to the legends and transfer
restrictions set forth on the Capital Securities certificate.
2.3. The Purchaser represents and warrants that it is purchasing the
Capital Securities for its own account, for investment, and not with a view to,
or for offer or sale in connection with, any distribution thereof in violation
of the Securities Act or other applicable securities laws, subject to any
requirement of law that the disposition of its property be at all times within
its control and subject to its ability to resell such Capital Securities
pursuant to an effective registration statement under the Securities Act or
under Rule 144A or any other exemption from registration available under the
Securities Act or any other applicable Securities law.
2.4. The Purchaser represents and warrants that it has full power and
authority to execute and deliver this Agreement, to make the representations and
warranties specified herein, and to consummate the transactions contemplated
herein and it has full right and power to subscribe for Capital Securities and
perform its obligations pursuant to this Agreement.
A-2
2.5. The Purchaser, a Cayman Islands Company whose business includes
issuance of certain notes and acquiring the Capital Securities and other similar
securities, represents and warrants that it has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of purchasing the Capital Securities and is aware that it may be required
to bear the economic risk of an investment in the Capital Securities.
2.6. The Purchaser represents and warrants that no filing with, or
authorization, approval, consent, license, order, registration, qualification or
decree of, any governmental body, agency or court having jurisdiction over the
Purchaser, other than those that have been made or obtained, is necessary or
required for the performance by the Purchaser of its obligations under this
Subscription Agreement or to consummate the transactions contemplated herein.
2.7. The Purchaser represents and warrants that this Subscription Agreement
has been duly authorized, executed and delivered by the Purchaser.
2.8. The Purchaser represents and warrants that (i) the Purchaser is not in
violation or default of any term of its Memorandum of Association or Articles of
Association, of any provision of any mortgage, indenture, contract, agreement,
instrument or contract to which it is a party or by which it is bound or of any
judgment, decree, order, writ or, to its knowledge, any statute, rule or
regulation applicable to the Purchaser which would prevent the Purchaser from
performing any material obligation set forth in this Subscription Agreement; and
(ii) the execution, delivery and performance of and compliance with this
Subscription Agreement, and the consummation of the transactions contemplated
herein, will not, with or without the passage of time or giving of notice,
result in any such material violation, or be in conflict with or constitute a
default under any such term, or the suspension, revocation, impairment,
forfeiture or non-renewal of any permit, license, authorization or approval
applicable to the Purchaser, its business or operations or any of its assets or
properties which would prevent the Purchaser from performing any material
obligations set forth in this Subscription Agreement.
2.9. The Purchaser represents and warrants that the Purchaser is an
exempted company with limited liability duly incorporated, validly existing and
in good standing under the laws of the jurisdiction where it is organized, with
full power and authority to perform its obligations under this Subscription
Agreement.
2.10. The Purchaser understands and acknowledges that the Company will rely
upon the truth and accuracy of the foregoing acknowledgments, representations,
warranties and agreements and agrees that, if any of the acknowledgments,
representations, warranties or agreements deemed to have been made by it by its
purchase of the Capital Securities are no longer accurate, it shall promptly
notify the Company.
2.11. The Purchaser understands that no public market exists for any of the
Capital Securities, and that it is unlikely that a public market will ever exist
for the Capital Securities.
A-3
ARTICLE III
MISCELLANEOUS
3.1. Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt requested, international courier or delivered by hand against written
receipt therefor, or by facsimile transmission and confirmed by telephone, to
the following addresses, or such other address as may be furnished to the other
parties as herein provided:
To the Offerors: Florida Banks, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
To the Purchaser: Preferred Term Securities IV, Ltd.
▇/▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇ House
South Church Street
▇▇▇▇▇▇ Town, Grand Cayman
Grand Cayman Islands, British West Indies
Attention: The Directors
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Unless otherwise expressly provided herein, notices shall be deemed to
have been given on the date of mailing, except notice of change of address,
which shall be deemed to have been given when received.
3.2. This Agreement shall not be changed, modified or amended except by a
writing signed by the parties to be charged, and this Agreement may not be
discharged except by performance in accordance with its terms or by a writing
signed by the party to be charged.
3.3. Upon the execution and delivery of this Agreement by the Purchaser,
this Agreement shall become a binding obligation of the Purchaser with respect
to the purchase of Capital Securities as herein provided.
3.4. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY
OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND
PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
3.5. The parties agree to execute and deliver all such further documents,
agreements and instruments and take such other and further action as may be
necessary or appropriate to carry out the purposes and intent of this Agreement.
3.6. This Agreement may be executed in one or more counterparts each of
which shall be deemed an original, but all of which shall together constitute
one and the same instrument.
A-4
Signatures appear on the next page
A-5
IN WITNESS WHEREOF, I have set my hand the day and year first written
above.
PREFERRED TERM SECURITIES IV, LTD.
By: ___________________________
Print Name: ___________________
Title: ________________________
IN WITNESS WHEREOF, this Subscription Agreement is agreed to and accepted
as of the day and year first written above.
FLORIDA BANKS, INC.
By: ___________________________
Name: _________________________
Title: ________________________
FLORIDA BANKS STATUTORY TRUST I
By: ___________________________
Name: _________________________
Title: Administrator
▇-▇
▇▇▇▇▇▇▇ ▇-▇
-----------
FORM OF COMPANY COUNSEL OPINION
-------------------------------
December 18, 2001
Preferred Term Securities IV, Ltd. First Tennessee Capital Markets
P. O. Box 1093 GT ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
South Church Street
▇▇▇▇▇▇ Town, Grand Cayman ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
Grand Cayman Islands ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ Indies ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as counsel to Florida Banks, Inc. (the "Company"), a Florida
corporation in connection with a certain Placement Agreement, dated December 4,
2001, (the "Placement Agreement"), between the Company and Florida Banks
Statutory Trust I (the "Trust"), on one hand, and First Tennessee Capital
Markets and ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. (the "Placement Agents"), on the other
hand. Pursuant to the Placement Agreement, and subject to the terms and
conditions stated therein, the Trust will issue and sell to Preferred Term
Securities IV, Ltd. (the "Purchaser"), $6,000,000 aggregate principal amount of
Floating Rate Capital Securities (liquidation amount $1,000.00 per capital
security) (the "Capital Securities").
Capitalized terms used herein and not otherwise defined shall have the same
meaning ascribed to them in the Placement Agreement.
The law covered by the opinions expressed herein is limited to the law of
the United States of America and of the State of Florida.
We have made such investigations of law as, in our judgment, were necessary
to render the following opinions. We have also reviewed (a) the Company's
Articles of Incorporation, as amended, and its By-Laws, as amended; and (b) such
corporate documents, records, information and certificates of the Company and
its subsidiaries, certificates of public officials or government authorities and
other documents as we have deemed necessary or appropriate as a basis for the
opinions hereinafter expressed. As to certain facts material to our opinions, we
have relied, with your permission, upon statements, certificates or
representations, including those delivered or made in connection with the
above-referenced transaction, of officers and other representatives of the
Company and its subsidiaries and the Trust.
Based upon and subject to the foregoing and the further qualifications set
forth below, we are of the opinion as of the date hereof that:
B-1-1
1. The Company has been duly incorporated and is validly existing
under the laws of the State of Florida and is duly registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended or as a savings
and loan holding company under the Home Owners' Loan Act of 1933, as amended.
Each of the Significant Subsidiaries is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization. Each of the
Company and the Significant Subsidiaries has full corporate power and authority
to own or lease its properties and to conduct its business as such business is
currently conducted in all material respects. To the best of our knowledge, all
outstanding shares of capital stock of the Significant Subsidiaries have been
duly authorized and validly issued, and are fully paid and nonassessable except
to the extent such shares may be deemed assessable under 12 U.S.C. Section 1831o
or 12 U.S.C. Section 55.
2. The issuance, sale and delivery of the Debentures in accordance
with the terms and conditions of the Placement Agreement and the Operative
Documents has been duly authorized by all necessary actions of the Company.
Other than for outstanding stock options and warrants issued by the Company with
respect to shares of common stock of the Company, there are no preemptive or
other rights to subscribe for or to purchase any shares of capital stock or
equity securities of the Company or the Significant Subsidiaries pursuant to the
corporate Articles of Incorporation or Charter, By-Laws or other governing
documents of the Company or the Significant Subsidiaries, or, to the best of our
knowledge, any agreement or other instrument to which either Company or the
Subsidiaries is a party or by which the Company or the Significant Subsidiaries
may be bound.
3. The Company has all requisite corporate power to enter into and
perform its obligations under the Placement Agreement and the Subscription
Agreement, and the Placement Agreement and the Subscription Agreement have been
duly and validly authorized, executed and delivered by the Company and
constitute the legal, valid and binding obligations of the Company enforceable
in accordance with their terms, except as the enforcement thereof may be limited
by general principles of equity and by bankruptcy or other laws affecting
creditors' rights generally, and except as the indemnification and contribution
provisions thereof may be limited under applicable laws and certain remedies may
not be available in the case of a non-material breach.
4. Each of the Indenture, the Trust Agreement and the Guarantee
Agreement has been duly authorized, executed and delivered by the Company, and
is a valid and legally binding obligation of the Company enforceable in
accordance with its terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other laws affecting the rights and
remedies of creditors generally and of general principles of equity.
5. The Debentures have been duly authorized, executed and
delivered by the Company, are entitled to the benefits of the Indenture and are
legal, valid and binding obligations of the Company enforceable against the
Company in accordance with their terms, subject to the effect of bankruptcy,
insolvency, reorganization, receivership, moratorium and other laws affecting
the rights and remedies of creditors generally and of general principles of
equity.
6. Neither the Company, the Trust, nor any other subsidiaries of
the Company is in breach or violation of, or default under, with or without
notice or lapse of time or both, its Articles of Incorporation or Charter,
B-1-2
By-Laws or other governing documents (including without limitation, the Trust
Agreement). The execution, delivery and performance of the Placement Agreement
and the Operative Documents and the consummation of the transactions
contemplated by the Placement Agreement and the Operative Documents do not and
will not conflict with, result in the creation or imposition of any material
lien, claim, charge, encumbrance or restriction upon any property or assets of
the Company or its subsidiaries pursuant to, or constitute a material breach or
violation of, or constitute a material default under, with or without notice or
lapse of time or both, any of the terms, provisions or conditions of the
Articles of Incorporation or Charter, By-Laws or other governing documents of
the Company or its subsidiaries, or to the best of our knowledge, any material
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease, franchise, license or any other agreement or instrument to which the
Company or its subsidiaries is a party or by which any of them or any of their
respective properties may be bound or any order, decree, judgment, franchise,
license, permit, rule or regulation of any court, arbitrator, government, or
governmental agency or instrumentality, domestic or foreign, known to us having
jurisdiction over the Company or its subsidiaries or any of their respective
properties which, in each case, is material to the Company and its subsidiaries
on a consolidated basis.
7. Except for filings, registrations or qualifications that may be
required by applicable securities laws, no authorization, approval, consent or
order of, or filing, registration or qualification with, any person (including,
without limitation, any court, governmental body or authority) is required under
the laws of the State of Florida in connection with the transactions
contemplated by the Placement Agreement and the Operative Documents in
connection with the offer and sale of the Capital Securities as contemplated by
the Placement Agreement and the Operative Documents.
8. To the best of our knowledge (i) no action, suit or proceeding
at law or in equity is pending or threatened to which the Offerors or its
subsidiaries is or may be a party, and (ii) no action, suit or proceeding is
pending or threatened against or affecting the Offerors or its subsidiaries or
any of their properties, before or by any court or governmental official,
commission, board or other administrative agency, authority or body, or any
arbitrator, wherein an unfavorable decision, ruling or finding could reasonably
be expected to have a material adverse effect on the consummation of the
transactions contemplated by the Placement Agreement and the Operative Documents
or the issuance and sale of the Capital Securities as contemplated therein or
the condition (financial or otherwise), earnings, affairs, business, or results
of operations of the Offerors and its subsidiaries on a consolidated basis.
9. It is not necessary in connection with the offering, sale and
delivery of the Capital Securities, the Debentures and the Guarantee Agreement
(or the Guarantee) to register the same under the Securities Act of 1933, as
amended, under the circumstances contemplated in the Placement Agreement and the
Subscription Agreement.
10. Neither the Company nor the Trust is or after giving effect to
the offering and sale of the Capital Securities and the consummation of the
transactions described in the Placement Agreement will be, an "investment
company" or an entity "controlled" by an "investment company," in each case
B-1-3
within the meaning of the Investment Company Act of 1940, as amended.
The opinion expressed in the first two sentences of numbered paragraph 1 of
this Opinion Letter is based solely upon certain certificates and confirmations
issued by the applicable governmental officer or authority with respect to each
of the Company and the Subsidiaries.
With respect to the foregoing opinions, since no member of this firm is
actively engaged in the practice of law in the States of Connecticut or New
York, we do not express any opinions as to the laws of such states and have (i)
relied, with your approval, upon the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP with respect to
matters of Connecticut law and (ii) assumed, with your approval and without
rendering any opinion to such effect, that the laws of the State of New York are
substantively identical to the laws of the State of Florida, without regard to
conflict of law provisions.
This opinion is rendered to you solely pursuant to Section 3.1(a) of the
Placement Agreement. As such, it may be relied upon by you only and may not be
used or relied upon by any other person for any purpose whatsoever without our
prior written consent.
Very truly yours,
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
-----------
FORM OF CONNECTICUT COUNSEL OPINION
-----------------------------------
TO THE PARTIES LISTED
ON SCHEDULE I HERETO
Ladies and Gentlemen:
We have acted as special counsel in the State of Connecticut (the "State")
for Florida Banks Statutory Trust I (the "Trust"), a Connecticut statutory trust
formed pursuant to the Amended and Restated Declaration of Trust (the "Trust
Agreement") dated as of the date hereof, among Florida Banks, Inc., a Florida
corporation (the "Sponsor"), State Street Bank and Trust Company of Connecticut,
National Association, a national banking association ("State Street"), in its
capacity as Institutional Trustee (the "Institutional Trustee"), and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇. and T. ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇., each, an individual, (each, an
"Administrator") in connection with the issuance by the Trust to the Holders (as
defined in the Trust Agreement) of its capital securities (the "Capital
Securities") pursuant to the Placement Agreement dated as of December 4, 2001
(the "Placement Agreement"), the issuance by the Trust to the Sponsor of its
Common Securities, pursuant to the Trust Agreement and the acquisition by the
Trust from the Sponsor of Debentures, issued pursuant to the Indenture dated as
of the date hereof (the "Indenture").
The Institutional Trustee has requested that we deliver this opinion to you
in accordance with Section 3.1(b) of the Placement Agreement. Capitalized terms
not otherwise defined herein shall have the meanings specified in, or defined by
reference in or set forth in the Operative Documents (as defined below).
Our representation of the Trust has been as special counsel for the limited
purposes stated above. As to all matters of fact (including factual conclusions
and characterizations and descriptions of purpose, intention or other state of
mind), we have relied, with your permission, entirely upon (i) the
representations and warranties of the parties set forth in the Operative
Documents and (ii) certificates delivered to us by the management of State
Street, and have assumed, with your permission, without independent inquiry, the
accuracy of those representations, warranties and certificates.
We have examined the following documents to which the Trust is a party,
each of which is dated the date hereof, unless otherwise noted:
(i) the Trust Agreement;
(ii) the Placement Agreement;
(iii) the Subscription Agreement;
(iv) the Certificate of Common Securities;
(v) the Certificate of Capital Securities;
(vi) the Guarantee Agreement;
(vii) the Certificate of Trust; and
B-2-1
(viii) a Certificate of Legal Existence for the Trust
obtained from the Secretary of State of the State
of Connecticut dated November 8, 2001 (the
"Certificate of Legal Existence").
The documents referenced in subparagraphs (i) through (vii) above are
hereinafter referred to collectively as the "Operative Documents."
We have also examined originals, or copies, certified or otherwise
identified to our satisfaction, of such other corporate and public records and
agreements, instruments, certificates and other documents as we have deemed
necessary or appropriate for the purposes of rendering this opinion. For
purposes of our opinion rendered in paragraph 1 below, with respect to the legal
existence of the Trust, our opinion relies entirely upon and is limited by the
Certificate of Legal Existence, which is attached hereto as Exhibit A.
We have assumed, with your permission, the genuineness of all signatures
(other than those on behalf of State Street, the Guarantee Trustee, Indenture
Trustee, Institutional Trustee and the Trust), the conformity of the originals
of all documents reviewed by us as copies, the authenticity and completeness of
all original documents reviewed by us in original or copy form and the legal
competence of each individual executing any document (other than those
individuals executing documents on behalf of State Street, the Guarantee
Trustee, Indenture Trustee, Institutional Trustee and the Trust).
When an opinion set forth below is given to the best of our knowledge, or
to our knowledge, or with reference to matters of which we are aware or which
are known to use, or with another similar qualification, the relevant knowledge
or awareness is limited to the actual knowledge or awareness of the individual
lawyers in the firm who have participated directly and substantively in the
specific transactions to which this opinion relates and without any special or
additional investigation undertaken for the purposes of this opinion except as
indicated herein.
For the purposes of this opinion we have made such examination of law as we
have deemed necessary. The opinions expressed below are limited solely to the
internal substantive laws of the State (as applied by courts located in the
State without regard to choice of law) and we express no opinion as to the laws
of any other jurisdiction. To the extent to which this opinion deals with
matters governed by or relating to the laws of any other state or jurisdiction,
we have assumed, with your permission, that the Operative Documents are governed
by the internal substantive laws of the State.
We express no opinion as to (i) the effect of suretyship defenses, or
defenses in the nature thereof, with respect to the obligations of any
applicable guarantor, joint obligor, surety, accommodation party, or other
secondary obligor or any provisions of the Trust Agreement with respect to
indemnification or contribution and (ii) the accuracy or completeness of any
exhibits or schedules to the Operative Documents. No opinion is given herein as
to the choice of law or internal substantive rules of law that any court or
other tribunal may apply to the transactions contemplated by the Operative
Documents. No opinion is expressed herein as to the application or effect of
federal securities laws or as to the securities or so-called "Blue Sky" laws of
Connecticut or of any other state or other jurisdiction.
Our opinion, with your permission, is further subject to the following
exceptions, qualifications and assumptions:
(a) We have assumed without any independent investigation that
(i) each party to the Operative Documents, other than State Street, the
Guarantee Trustee, Indenture Trustee, Institutional Trustee and the
Trust, as applicable, at all times relevant thereto, is validly
existing and in good standing under the laws of the jurisdiction in
B-2-2
which it is organized, and is qualified to do business and in good
standing under the laws of each jurisdiction where such qualification
is required generally or necessary in order for such party to enforce
its rights under such Operative Documents, (ii) each party to the
Operative Documents, at all times relevant thereto, had and has the
full power, authority and legal right under its certificate of
incorporation, partnership agreement, by-laws, and other governing
organizational documents, and the applicable corporate, partnership, or
other enterprise legislation and other applicable laws, as the case may
be (other than State Street, the Guarantee Trustee, Indenture Trustee,
Institutional Trustee or the Trust) to execute, deliver and to perform
its obligations under, the Operative Documents, and (iii) each party to
the Operative Documents other than State Street, the Guarantee Trustee,
Indenture Trustee, Institutional Trustee or the Trust has duly executed
and delivered each of such agreements and instruments to which it is a
party and that the execution and delivery of such agreements and
instruments and the transactions contemplated thereby have been duly
authorized by proper corporate or other organizational proceedings as
to each such party.
(b) We have assumed without any independent investigation (i)
that the Institutional Trustee, the Sponsor and the Administrators have
received the agreed to and stated consideration for the incurrence of
the obligations applicable to it under the Trust Agreement and each of
the other Operative Documents, (ii) that each of the Operative
Documents (other than the Trust Agreement) is a valid, binding and
enforceable obligation of each party thereto other than the Trust,
State Street and the Institutional Trustee, as applicable; and, for the
purposes of this opinion letter, we herein also assume that each of the
Operative Documents (other than the Trust Agreement) constitutes a
valid, binding and enforceable obligation of State Street, the
Guarantee Trustee and the Indenture Trustee, as applicable under
Connecticut and federal law (as to which such matters we are delivering
to you a separate opinion letter on this date, which is subject to the
assumptions, qualifications and limitations set forth therein).
(c) The enforcement of any obligations of State Street, the
Sponsor and the Administrators, as applicable, under the Trust
Agreement and the obligations of the Trust under the other Operative
Documents may be limited by the receivership, conservatorship and
supervisory powers of depository institution regulatory agencies
generally, as well as by bankruptcy, insolvency, reorganization,
moratorium, marshaling or other laws and rules of law affecting the
enforcement generally of creditors' rights and remedies (including such
as may deny giving effect to waivers of debtors' or guarantors'
rights); and we express no opinion as to the status under any
fraudulent conveyance laws or fraudulent transfer laws of any of the
obligations of State Street, the Sponsor, the Administrators or the
Trust under any of the Operative Documents.
(d) We express no opinion as to the enforceability of any
particular provision of the Trust Agreement or the other Operative
Documents relating to remedies after default.
(e) We express no opinion as the availability of any specific
or equitable relief of any kind.
B-2-3
(f) The enforcement of any rights may in all cases be subject
to an implied duty of good faith and fair dealing and to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
(g) We express no opinion as to the enforceability of any
particular provision of any of the Operative Documents relating to (i)
waivers of rights to object to jurisdiction or venue, or consents to
jurisdiction or venue, (ii) waivers of rights to (or methods of)
service of process, or rights to trial by jury, or other rights or
benefits bestowed by operation of law, (iii) waivers of any applicable
defenses, setoffs, recoupments, or counterclaims, (iv) waivers or
variations of provisions which are not capable of waiver or variation
under Sections 1-102(3), 9-501(3) or other provisions of the Uniform
Commercial Code ("UCC") of the State, (v) the grant of powers of
attorney to any person or entity, or (vi) exculpation or exoneration
clauses, indemnity clauses, and clauses relating to releases or waivers
of unmatured claims or rights.
(h) We express no opinion as to the effect of events
occurring, circumstances arising, or changes of law becoming effective
or occurring, after the date hereof on the matters addressed in this
opinion letter, and we assume no responsibility to inform you of
additional or changed facts, or changes in law, of which we may become
aware.
(i) We express no opinion as to any requirement that any party
to the Operative Documents (or any other persons or entities
purportedly entitled to the benefits thereof) qualify or register to do
business in any jurisdiction in order to be able to enforce its rights
thereunder or obtain the benefits thereof.
Based upon the foregoing and subject to the limitations and
qualifications set forth herein, we are of the opinion that:
1. The Trust has been duly formed and is validly existing as a
statutory trust under the Connecticut Statutory Trust Act, Chapter 615 of Title
34 of the Connecticut General Statutes, Section 500, et seq. (the "Act").
-- ---
2. The Trust Agreement constitutes a valid and binding obligation of
State Street and the Institutional Trustee enforceable against State Street and
the Institutional Trustee in accordance with the terms thereof.
3. The Trust Agreement constitutes a valid and binding obligation of
the Sponsor and the Administrators, enforceable against the Sponsor and the
Administrators in accordance with its terms.
4. The Trust has the requisite trust power and authority to (a) execute
and deliver, and to perform its obligations under, the Operative Documents, and
(b) perform its obligations under such Operative Documents.
5. Each of the Operative Documents to which the Trust is a party
constitutes a valid and binding obligation of the Trust, enforceable against the
Trust in accordance with the terms thereof.
B-2-4
6. The Capital Securities have been duly authorized by the Trust under
the Trust Agreement, and the Capital Securities, when duly executed and
delivered to the Holders in accordance with the Trust Agreement, the Placement
Agreement and the Subscription Agreement, will be validly issued, fully paid and
nonassessable and will evidence undivided beneficial interests in the assets of
the Trust and will be entitled to the benefits of the Trust Agreement.
7. The Common Securities have been duly authorized by the Trust
Agreement, and the Common Securities, when duly executed and delivered to the
Company in accordance with the Trust Agreement, the Placement Agreement and the
Subscription Agreement and delivered and paid for in accordance therewith, will
be validly issued, fully paid and nonassessable (subject to Section 9.1(b) of
the Trust Agreement which provides that the Holders of Common Securities are
liable for debts and obligations of the Trust to the extent such debts and
obligations are not satisfied out of the Trust's assets) and will evidence
undivided beneficial interests in the assets of the Trust and will be entitled
to the benefits of the Trust Agreement.
8. Neither the execution, delivery or performance by the Trust of the
Operative Documents, the consummation by the Trust of the transactions
contemplated thereby, nor compliance by the Trust with any of the terms and
provisions thereof, (a) violates the Trust Agreement, or, to the best of our
knowledge, contravenes or will contravene any provision of, or constitutes a
default under, or results in any breach of, or results in the creation of any
lien (other than as permitted under the Operative Documents) upon property of
the Trust under, any indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, bank loan or credit agreement, license or other
agreement or instrument, in each case known to us, to which it is a party or by
which it is bound or (b) violates any applicable Connecticut law governing the
Trust, or, to the best of our knowledge, any judgment or order of any court or
other tribunal, in each case known to us, applicable to or binding on it.
9. No consent, approval, order or authorization of, giving of notice
to, or registration with, or taking of any other action in respect of, any
Connecticut governmental authority regulating the Trust is required for the
execution, delivery, validity or performance of, or the carrying out by, the
Trust of any of the transactions contemplated by the Operative Documents, other
than any such consent, approval, order, authorization, registration, notice or
action as has been duly obtained, given or taken.
10. The Holders, as the beneficial holders of the Capital Securities,
will be entitled to the same limitation of personal liability extended to
shareholders of domestic corporations organized under the laws of the State.
11. Under the Trust Agreement, the issuance of the Capital Securities
is not subject to preemptive rights.
12. Assuming that the Trust will not be taxable as a corporation for
federal income tax purposes, but rather will be classified for such purposes as
a grantor trust, the Trust will not be subject to any tax, fee or other
government charge under the laws of the State of Connecticut or any political
subdivision thereof.
B-2-5
This opinion is rendered solely for the benefit of those institutions
listed on Schedule I hereto and their successors and assigns in connection with
the transactions contemplated by the Operative Documents and may not be used or
relied upon by any other person or for any other purpose.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇ LLP
B-2-6
SCHEDULE I
----------
State Street Bank and Trust Company of Connecticut, National Association
State Street Bank and Trust Company
First Tennessee Capital Markets
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
Preferred Term Securities IV, Ltd.
Preferred Term Securities IV, Inc.
▇▇▇▇▇, Rice & ▇▇▇▇▇▇▇▇, ▇.▇.
Florida Banks, Inc.
Akerman, Senterfitt & ▇▇▇▇▇▇, P.A.
B-2-7
EXHIBIT A TO EXHIBIT B-2
------------------------
CERTIFICATE OF LEGAL EXISTENCE
------------------------------
See attached
B-2-8
EXHIBIT B-3
-----------
FORM OF TAX COUNSEL OPINION
---------------------------
Florida Banks, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Florida Banks Statutory Trust I
c/o Florida Banks, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
First Tennessee Capital Markets
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as special tax counsel to Florida Banks, Inc. and to Florida
Banks Statutory Trust I in connection with the proposed issuance of (i) Floating
Rate Capital Securities, liquidation amount $1,000.00 per Capital Security (the
"Capital Securities") of Florida Banks Statutory Trust I, a statutory business
trust created under the laws of Connecticut (the "Trust"), pursuant to the terms
of the Amended and Restated Declaration of Trust dated as of the date hereof by
Florida Banks, Inc., a Florida corporation (the "Company"), State Street Bank
and Trust Company of Connecticut, National Association, as institutional
trustee, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. and T. ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇., as Administrators
(the "Trust Agreement"), (ii) Junior Subordinated Deferrable Interest Debentures
(the "Corresponding Debentures") of the Company issued pursuant to the terms of
an Indenture dated as of the date hereof from the Company to State Street Bank
and Trust Company of Connecticut, National Association, as trustee (the
"Indenture"), which Debentures are to be sold by the Company to the Trust, and
(iii) the Guarantee Agreement of the Company with respect to the Capital
Securities dated as of the date hereof (the "Guarantee") between the Company and
State Street Bank and Trust Company of Connecticut, National Association, as
guarantee trustee. The Capital Securities and the Corresponding Debentures are
to be issued as contemplated by the Offering Circular (the "Offering Circular")
dated [_______] prepared by Preferred Term Securities IV, Ltd., an entity formed
under the Companies Law of the Cayman Islands, and Preferred Term Securities IV,
Inc., a Delaware corporation.
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of documents, corporate records and other instruments as we
have deemed necessary or appropriate for purposes of this opinion including (i)
the Offering Circular, (ii) the Indenture, (iii) the form of the Corresponding
Debentures attached as an exhibit to the Indenture, (iv) the Trust Agreement,
(v) the Guarantee, and (vi) the form of Capital Securities Certificate attached
as an exhibit to the Trust Agreement (collectively the "Documents").
Furthermore, we have relied upon certain representations made by the Company and
B-3-1
upon the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP as to certain matters of Connecticut law.
In such examination, we have assumed the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies, the authenticity of the
originals of such latter documents, the genuineness of all signatures and the
correctness of all representations made therein. We have further assumed that
there are no agreements or understandings contemplated therein other than those
contained in the Documents.
Based upon the foregoing, and assuming (i) that the final Documents will be
substantially identical to the forms examined, (ii) full compliance with all the
terms of the final Documents, and (iii) the accuracy of representations made by
the Company and delivered to us, we are of the opinion that:
(a) The Corresponding Debentures will be classified as indebtedness for
U.S. federal income tax purposes.
(b) The Trust will be characterized as a grantor trust and not as an
association taxable as a corporation for U.S. federal income tax
purposes.
The opinions expressed above are based on existing provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), existing Treasury
regulations, published interpretations by the Internal Revenue Service of the
Code and such Treasury regulations, and existing court decisions, any of which
could be changed at any time. Any such changes may or may not be retroactively
applied, and may result in federal income tax consequences that differ from
those reflected in the opinions set forth above. We note that there is no
authority directly on point dealing with securities such as the Capital
Securities or with transactions of the type described herein, and that the
authorities on which this opinion is based are subject to various
interpretations. Further, you should be aware that opinions of counsel have no
official status and are not binding on the Internal Revenue Service or the
courts. Accordingly, we can provide no assurance that the interpretation of the
federal income tax laws set forth in our opinions will prevail if challenged by
the IRS in an administrative or judicial proceeding.
We have also assumed that each transaction contemplated herein will be
carried out strictly in accordance with the Documents. Any variance in the facts
may result in Federal income tax consequences that differ from those reflected
in the opinions set forth above.
Additionally, we undertake no obligation to update this opinion in the
event there is either a change in the legal authorities, in the facts (including
the taking of any action by any party to any of the transactions described in
the Documents relating to such transactions) or in the Documents on which this
opinion is based, or an inaccuracy in any of the representations upon which we
have relied in rendering this opinion.
We express no opinion with respect to any matter not specifically addressed
by the foregoing opinions, including state or local tax consequences, or any
federal, state, or local issue not specifically referred to and discussed above
including, without limitation, the effect on the matters covered by this opinion
of the laws of any other jurisdiction.
This letter is delivered for the benefit of the specified addressees and
may not be relied upon by any other person. No portion of this letter may be
quoted or otherwise referred to in any document or delivered to any other person
or entity without the express written consent of ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇.▇.
This opinion letter is rendered as of the date set forth above.
Very truly yours,
▇▇▇▇▇, RICE & ▇▇▇▇▇▇▇▇, ▇.▇.
B-3-2
▇▇▇▇▇, Rice & ▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Re: Representations Concerning the Issuance of Floating Rate Junior
Subordinated Deferrable Interest Debentures (the "Debentures")
to Florida Banks Statutory Trust I (the "Trust") and Sale of
Trust Securities (the "Trust Securities") of the Trust
Ladies and Gentlemen:
In accordance with your request, Florida Banks, Inc. (the "Company") hereby
makes the following representations in connection with the preparation of your
opinion letter as to the United States federal income tax consequences of the
issuance by the Company of the Debentures to the Trust and the sale of the Trust
Securities.
Company hereby represents that:
1. The sole assets of the Trust will be the Debentures, proceeds of
the Debentures, or both.
2. The Company intends to use the net proceeds from the sale of the
Debentures for general corporate purposes.
3. The Trust was not formed to conduct any trade or business and
is not authorized to conduct any trade or business. The Trust exists for the
exclusive purposes of (i) issuing and selling the Trust Securities, (ii) using
the proceeds from the sale of Trust Securities to acquire the Debentures, and
(iii) engaging only in activities necessary or incidental thereto.
4. The Trust was formed to facilitate direct investment in the
assets of the Trust, and the existence of multiple classes of ownership is
incidental to that purpose. There is no intent to provide holders of such
interests in the Trust with diverse interests in the assets of the Trust.
5. The Company intends to create a debtor-creditor relationship
between the Company, as debtor, and the Trust, as a creditor, upon the issuance
and sale of the Debentures to the Trust by the Company. The Company will (i)
record and at all times continue to reflect the Debentures as indebtedness on
its separate books and records for financial accounting purposes, and (ii) treat
the Debentures as indebtedness for all United States tax purposes.
6. During each year, the Trust's income will consist solely of
payments made by the Company with respect to the Debentures. Such payments will
not be derived from the active conduct of a financial business by the Trust.
Both the Company's obligation to make such payments and the measurement of the
amounts payable by the Company are defined by the terms of the Debentures.
Neither the Company's obligation to make such payments nor the measurement of
the amounts payable by the Company is dependent on income or profits of Company
or any affiliate of the Company.
7. The Company expects that it will be able to make, and will make,
timely payment of amounts identified by the Debentures as principal and interest
in accordance with the terms of the Debentures with available capital or
accumulated earnings.
8. The Company presently has no intention to defer interest payments
on the Debentures, and it considers the likelihood of such a deferral to be
remote because, if it were to exercise its right to defer payments of interest
with respect to the Debentures, it would not be permitted to declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any capital stock of the Company or any
affiliate of the Company (other than payments of dividends or distributions to
the Company) or make any payment of principal of or interest or premium, if any,
on or repay, repurchase, or redeem any debt securities of the Company or any
affiliate of the Company that rank pari passu in all respects with or junior in
interest to the Debentures, in each case subject to limited exceptions stated in
Section 2.11 of the Indenture to be entered into in connection with the issuance
of the Debentures.
9. Immediately after the issuance of the Debentures, the debt-to-
equity ratio of the Company (as determined for financial accounting purposes,
but excluding deposit liabilities from the Company's debt) will be within
standard depository institution industry norms and, in any event, will be no
higher than four to one (4 : 1).
10. To the best of our knowledge, the Company is currently in
compliance with all federal, state, and local capital requirements, except to
the extent that failure to comply with any such requirements would not have a
material adverse effect on the Company and its affiliates.
11. The Company will not issue any class of common stock or preferred stock
senior to the Debentures during their term.
12. The Internal Revenue Service has not challenged the interest deduction
on any class of the Company's subordinated debt in the last ten (10) years on
the basis that such debt constitutes equity for federal income tax purposes.
The above representations are accurate as of the date below and will
continue to be accurate through the issuance of the Trust Securities, unless you
are otherwise notified by us in writing. The undersigned understands that you
will rely on the foregoing in connection with rendering certain legal opinions,
and possesses the authority to make the representations set forth in this letter
on behalf of the Company.
Very truly yours,
FLORIDA BANKS, INC.
Date: _______________, 2001 By: ___________________________
Title: ___________________________
EXHIBIT C
---------
COMPANY SUBSIDIARIES
--------------------
Florida Bank, National Association
C-1
EXHIBIT D
---------
FORM OF QUARTERLY REPORT
------------------------
Preferred Term Securities IV, Ltd.
▇/▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
CDO Relationship Manager
BANK HOLDING COMPANY
As of [March 31, June 30, September 30 or December 31], 20__
Tier 1 to Risk Weighted Assets _________%
Ratio of Double Leverage _________%
Non-Performing Assets to Loans and OREO _________%
Ratio of Reserves to Non-Performing Loans _________%
Ratio of Net Charge-Offs to Loans _________%
Return on Average Assets (annualized)** _________%
Net Interest Margin (annualized)** _________%
Efficiency Ratio _________%
Ratio of Loans to Assets _________%
Ratio of Loans to Deposits _________%
Total Assets $_________
Year to Date Income $_________
___________________
*A table describing the quarterly report calculation procedures is provided on
page D-2
** To annualize Return on Average Assets and Net Interest Margin do the
following:
1st Quarter-multiply income statement item by 4, then divide by balance sheet
item(s)
2nd Quarter-multiply income statement item by 2,then divide by balance sheet
item(s)
3rd Quarter-divide income statement item by 3, then multiply by 4, then divide
by balance sheet item(s)
4th Quarter-should already be an annual number
D-1
NO ADJUSTMENT SHOULD BE MADE TO BALANCE SHEET ITEMS
D-2
Financial Definitions
--------------------------------------------------------------------------------------------------------------------------
Report Item |Corresponding FRY-9C or LP Line Items |
|with Line Item corresponding Schedules |Description of Calculation
--------------------------------------------------------------------------------------------------------------------------
"Tier 1 Capital" to |BHCK7206 |Tier 1 Risk Ratio: Core Capital (Tier 1)/Risk-
Risk Weighted Assets |Schedule HC-R |Adjusted Assets
--------------------------------------------------------------------------------------------------------------------------
Ratio of Double |(BHCP0365)/(BHCP3210) |Total equity investments in subsidiaries divided
Leverage |Schedule PC in the LP |by the total equity capital. This field is calculated
| |at the parent company level. "Subsidiaries" include
| |bank, bank holding company, and nonbank subsidiaries.
--------------------------------------------------------------------------------------------------------------------------
Non-Performing Assets |(BHCK5525-BHCK3506+BHCK5526- |Total Nonperforming Assets (NPLs+Foreclosed Real
to Loans and OREO |BHCK3507+BHCK2744)/(BHCK2122+BHCK2 |Estate+Other Nonaccrual & Repossessed Assets)/Total
|744) Schedules HC-C, HC-M & HC-N |Loans + Foreclosed Real Estate
--------------------------------------------------------------------------------------------------------------------------
Ratio of Reserves to |(BHCK3123+BHCK3128)/(BHCK5525- |Total Loan Loss and Allocated Transfer Risk Reserves/
Non-Performing Loans |BHCK3506+BHCK5526-BHCK3507) |Total Nonperforming Loans (Nonaccrual + Restructured)
|Schedules HC & HC-N |
--------------------------------------------------------------------------------------------------------------------------
Ratio of Net |(BHCK4635-BHCK4605)/(BHCK3516) |Net charge offs for the period as a percentage of
Charge-Offs to Loans |Schedules HI-B & HC-K |average loans.
--------------------------------------------------------------------------------------------------------------------------
Return on Assets |(BHCK4340/BHCK3368) |Net Income as a percentage of Assets.
| Schedules HI & HC-K |
--------------------------------------------------------------------------------------------------------------------------
Net Interest Margin |(BHCK4519)/(BHCK3515+BHCK3365+BHCK |(Net Interest Income Fully Taxable Equivalent, if
|3516+BHCK3401+BHCKB985) |available / Average Earning Assets)
|Schedules HI Memorandum and HC-K |
--------------------------------------------------------------------------------------------------------------------------
Efficiency Ratio |(BHCK4093)/(BHCK4519+BHCK4079) |(Noninterest Expense)/ (Net Interest Income Fully
|Schedule HI |Taxable Equivalent, if available, plus Noninterest
| |Income)
--------------------------------------------------------------------------------------------------------------------------
Ratio of Loans to |(BHCKB528+BHCK5369)/BHCK2170) |Total Loans & Leases (Net of Unearned Income & Gross
Assets |Schedule HC |of Reserve)/ Total Assets
--------------------------------------------------------------------------------------------------------------------------
Ratio of Loans to |(BHCKB528+BHCK5369)/(BHDM6631+BHD |Total Loans & Leases (Net of Unearned Income & Gross
Deposits |M6636+BHFN6631+BHFN6636 |of Reserve)/ Total Deposits (Includes Domestic and
|Schedule HC |Foreign Deposits)
--------------------------------------------------------------------------------------------------------------------------
Total Assets |(BHCK2170) |The sum of total assets. Includes cash and balances
|Schedule HC |due from depository institutions; securities; federal
| |funds sold and securities purchased under
| |agreements to resell; loans and lease financing
| |receivables; trading assets; premises and fixed
| |assets; other real estate owned; investments in
| |unconsolidated subsidiaries and associated companies;
| |customer's liability on acceptances outstanding;
| |intangible assets; and other assets.
--------------------------------------------------------------------------------------------------------------------------
Net Income | (BHCK4300) |The sum of income (loss) before extraordinary items
| Schedule HI |and other adjustments and extraordinary items; and
| |other adjustments, net of income taxes.
--------------------------------------------------------------------------------------------------------------------------
D-3