Exhibit 10.3
CAPITAL SECURITIES SUBSCRIPTION AGREEMENT
March 26, 2002
THIS CAPITAL SECURITIES SUBSCRIPTION AGREEMENT (this "Subscription
Agreement") is made among Florida Banks Capital Trust II (the "Trust"), Florida
Banks, Inc. (the "Company" and, collectively with the Trust, the "Offerors") and
MM Community Funding III, Ltd, a newly formed company with limited liability
established under the laws of the Cayman Islands (the "Purchaser").
RECITALS:
A. The Trust desires to issue $4,000,000 of its Floating Rate TRUPS(R) (the
"Capital Securities"), with a liquidation amount of $1,000 per Capital Security,
representing undivided beneficial interests in the assets of the Trust (the
"Offering"), to be issued pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), by the Company, as Sponsor, Wilmington Trust Company,
as Institutional Trustee and as Delaware Trustee, the Administrators named
therein, and the holders, from time to time, of the Capital Securities, which
Capital Securities are to be guaranteed by the Company with respect to
distributions and payments upon liquidation, redemption and otherwise to the
extent provided in and pursuant to the terms of a Guarantee Agreement between
the Company and Wilmington Trust Company as Guarantee Trustee (the "Guarantee");
and
B. The proceeds from the sale of the Capital Securities will be combined
with the proceeds from the sale of the Common Securities by the Trust to the
Company and will be used by the Trust to purchase an equivalent aggregate
principal amount of Floating Rate Junior Subordinated Debentures due April 22,
2032 of the Company (the "Debentures"), to be issued by the Company pursuant to
an Indenture to be executed by the Company, as Issuer, and Wilmington Trust
Company, as Debenture Trustee (the "Indenture"); and
C. The Purchaser intends to complete an offering of its notes (the "CBO
Offering") on or about April 10, 2002 or such other business day as may be
agreed upon (the "Closing Date") by the Offerors and the placement agent
("Placement Agent") identified in the Placement Agreement and to use the
proceeds of the CBO Offering to, among other things, acquire the Capital
Securities from the Trust and other subordinated debt and capital securities in
a quantity and with other particular characteristics, in the aggregate,
sufficient to permit the successful completion of the CBO Offering; and
D 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, subject to the
conditions precedent set forth in Section 1.5, the Purchaser hereby agrees to
purchase from the Trust 4,000 Capital Securities at a price equal to $1,000 per
Capital Security (the "Purchase Price") and the Trust agrees to sell such number
of Capital Securities with a liquidation amount of $1,000 per Capital Security
to the Purchaser for the Purchase Price. The rights and preferences of the
Capital Securities will be set forth in the Declaration in form and substance
reasonably acceptable to the Purchaser. The Purchase Price is payable by the
Purchaser in immediately available funds to the Trust's Account No. 456110913 at
Wilmington Trust Company on the Closing Date.
1.2 The certificate for the Capital Securities shall be delivered in
definitive form by the Trust on the Closing Date to the Purchaser or its
designee, and shall be registered in the name of the Purchaser and shall
represent the aggregate liquidation amount of the Capital Securities being
purchased by the Purchaser.
1.2.1 The Purchaser acknowledges and the Offerors agree that they will
not register any transfer of the Capital Securities not made in accordance with
Regulation S, pursuant to registration under the Securities Act of 1933, as
amended (the "Securities Act"), or pursuant to an available exemption from
registration.
1.3 The Placement Agreement, dated March 26, 2002 (the "Placement
Agreement"), among the Offerors and the Placement Agent identified therein
includes certain representations and warranties, covenants and conditions to
closing and certain other matters governing the issuance and sale of the Capital
Securities by the Trust to the Purchaser. Each of the provisions of the
Placement Agreement, including the definitions therein, are hereby incorporated
by reference into this Subscription Agreement. In addition, to the extent
provided for in the Placement Agreement, the Purchaser shall be entitled to the
benefits of the Placement Agreement and shall be entitled to enforce such
obligations of the Offerors under the Placement Agreement as fully as if the
Purchaser were a party to such Placement Agreement, it being agreed between the
parties that any and all representations made by the Offerors to the Placement
Agent in the Placement Agreement shall be deemed to have also been made to the
Purchaser.
1.4 If any condition specified herein or in the Placement Agreement shall
not have been fulfilled when and as required to be fulfilled by, on behalf of or
in respect of the Offerors or the Capital Securities, this Subscription
Agreement may be terminated by the Purchaser by notice to the Offerors at any
time at or prior to the Closing Date, and such termination shall be without
liability of any party to any other party except as provided in Section 7 of the
Placement Agreement and except that Sections 1 and 8 of the Placement Agreement
shall survive any such termination and remain in full force and effect.
1.5 If the CBO Offering is not successfully completed for any reason,
including, without limitation, as a result of the inability of the Purchaser to
acquire sufficient subordinated debt and capital securities from the Trust and
other issuers and sellers in a quantity and with other particular
characteristics, in the aggregate, sufficient to satisfy rating agency criteria
with
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respect to expected ratings on the notes to be issued by the Purchaser and other
criteria deemed necessary or advisable by the Purchaser, all obligations of the
Purchaser hereunder shall terminate and be extinguished.
1.6 Notwithstanding any other provision of this Subscription Agreement, the
obligations of the Purchaser hereunder are limited recourse obligations of the
Purchaser, payable solely from the proceeds of the CBO Offering, and if the CBO
Offering is not completed or the proceeds of the CBO Offering are insufficient
to satisfy the obligations of the Purchaser, any claims hereunder shall be
extinguished. The Trust, Wilmington Trust Company (on behalf of the Trust) and
the Company further agree (i) not to take any action in respect of any claims
hereunder against any subscriber, officer, director, employee or administrator
of the Purchaser and (ii) not to institute against the Purchaser any insolvency,
bankruptcy, reorganization, liquidation or similar proceedings in any
jurisdiction until one year and one day or, if longer, the applicable preference
period then in effect, shall have elapsed since the final payments to the
holders of the notes issued by the Purchaser in connection with the CBO
Offering.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PURCHASER
2.1 The Purchaser understands and acknowledges that none of the Capital
Securities, the Debentures or the Guarantee have been registered under the
Securities Act, or any other applicable securities laws, and are being offered
for sale by the Offerors in a transaction not requiring registration under the
Securities Act, and the Capital Securities 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.
2.1.1 The Purchaser represents and warrants and certifies that it is
not a "U.S. person" (as such term is defined in Rule 902 under the Securities
Act), that it is not acquiring the securities for the account or benefit of any
U.S. person, and that the offer and sale of Capital Securities to the Purchaser
constitutes an "offshore transaction" under Regulation S under the Securities
Act.
2.2 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
under the Securities Act or any other exemption from registration available
under the Securities Act, and the Purchaser agrees to the legends and transfer
restrictions applicable to the Capital Securities contained in the Declaration.
2.2.1 The Purchaser represents and warrants that until one year after
the Closing Date, it will not offer, sell, pledge or otherwise transfer the
Capital Securities within the
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United States or to, or for the account or benefit of, any U.S. Person (as
defined in Regulation S under the Securities Act).
2.2.2 The Purchaser represents and warrants that it will not engage in
hedging transactions with regard to the Capital Securities unless in compliance
with the Securities Act.
2.3 The Purchaser has full power and authority to execute and deliver this
Subscription 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 the Capital Securities and perform its
obligations pursuant to this Subscription Agreement.
2.4 The Purchaser, a Cayman Islands company whose business includes the
issuance of certain notes and acquiring the Capital Securities and other similar
securities, has had the opportunity to ask questions of, and receive answers and
request additional information from, the Offerors and is aware that it may be
required to bear the economic risk of an investment in the Capital Securities.
2.5 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.
2.6 This Subscription Agreement has been duly authorized, executed and
delivered by the Purchaser.
2.7 The Purchaser is not in violation of or default under 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. 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.
2.8 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.
2.9 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
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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.
2.10 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.
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.
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Attention: T. Xxxxx Xxxxxxx, Xx., Chief Financial
Officer
Telephone: (000) 000-0000
Fax: (000) 000-0000
To the Purchaser: MM Community Funding III, Ltd
x/x XXXX Xxxxxxx
X.X. Xxx 0000 XX
Xxxxxxxxxx House
South Church Street
Xxxxxx Town, Grand Cayman
Cayman Islands
Attention: Directors
Telephone: 000-000-0000
Fax: 000-000-0000
Unless otherwise expressly provided herein, notices shall be deemed to have
been given when received.
3.2 This Subscription Agreement shall not be changed, modified or amended
except by a writing signed by the parties to be charged.
3.3 Upon the execution and delivery of this Subscription Agreement by the
parties hereto, this Subscription Agreement shall become a binding obligation of
each such party with respect to the matters covered herein, including those
incorporated by reference from the Placement Agreement.
3.4 NOTWITHSTANDING THE PLACE WHERE THIS SUBSCRIPTION AGREEMENT MAY BE
EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES
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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. EACH OF THE
TRUST, PURCHASER AND THE COMPANY, ON BEHALF OF ITSELF AND ITS SUBSIDIARIES
(INCLUDING, WITHOUT 6 LIMITATION, THE TRUST), HEREBY IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE
CITY OF NEW YORK IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING RELATED TO
THIS SUBSCRIPTION AGREEMENT OR ANY OF THE MATTERS CONTEMPLATED HEREBY,
IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF PERSONAL JURISDICTION AND IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN ANY SUCH COURT. EACH OF THE TRUST, PURCHASER AND THE COMPANY,
ON BEHALF OF ITSELF AND ITS SUBSIDIARIES (INCLUDING, WITHOUT LIMITATION, THE
TRUST), IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND
ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
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
Subscription Agreement.
3.6 This Subscription 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.
Signatures appear on the following page
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IN WITNESS WHEREOF, this Subscription Agreement is agreed to and accepted
as of the day and year first written above.
FLORIDA BANKS, INC.
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
--------------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
Title: President and CEO
FLORIDA BANKS CAPITAL TRUST II
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
--------------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
Title: Administrator
Capital Securities Subscription Agreement
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IN WITNESS WHEREOF, I have set my hand the day and year first written
above.
MM COMMUNITY FUNDING III, LTD
By: /s/ Xxxx Parchment
---------------------------
Print Name: Xxxx Parchment
Title: Director
Capital Securities Subscription Agreement
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