DECLARATION OF TRUST
REPUBLIC CAPITAL TRUST
Dated as of February 5, 1997
DECLARATION OF TRUST
OF
REPUBLIC CAPITAL TRUST
February 5, 1997
DECLARATION OF TRUST ("Declaration") dated and effective as of February 5,
1997, by the Trustees (as defined herein), the Sponsor (as defined herein) and
by the holders, from time to time, of undivided beneficial interests in the
Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor hereby wish to establish Republic
Capital Trust (the "Trust"), a trust under the Business Trust Act pursuant to
this Declaration and the filing of a Certificate of Trust with the Secretary of
State of the State of Delaware, for the sole purpose of issuing and selling
certain securities representing undivided beneficial interests in the assets of
the Trust and investing the proceeds thereof in certain Subordinated Debt
Securities of the Debt Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have been issued;
NOW, THEREFORE, it being the intention of the parties hereto to establish
the Trust as a business trust under the Business Trust Act and that this
Declaration constitutes the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 DEFINITIONS.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to this
Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and Exhibits to
this Declaration unless otherwise specified;
(e) a reference to the singular includes the plural and vice versa.
"AFFILIATE" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.
"AUTHORIZED OFFICER" of a Person means any Person that is authorized to
bind such Person.
"BUSINESS DAY" means any day other than a day on which federal or state
banking institutions in the City of Louisville, Kentucky, are authorized or
obligated by law, executive order or regulation to close.
"BUSINESS TRUST ACT" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code Section 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"CERTIFICATES" shall mean the certificates representing the Common
Securities and the Preferred Securities.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON SECURITIES" has the meaning specified in Section 6.1(a).
"COMMON SECURITIES GUARANTY" means the guarantee agreement to be dated as
of February 5, 1997 of the Sponsor in respect of the Common Securities.
"COMMON SECURITY CERTIFICATE" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"COMPANY INDEMNIFIED PERSON" means (a) any Republic Trustee or Property
Trustee or Conversion Agent; (b) any Affiliate of any Republic Trustee or
Property Trustee or Conversion Agent; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Republic Trustee
or Property Trustee or Conversion Agent; or (d) any officer, employee or agent
of the Trust or its Affiliates.
"COVERED PERSON" means: (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
"DEBT" means the Subordinated Debt Securities to be issued by the Debt
Issuer from time to time pursuant to the Indenture.
"DEBT EVENT OF DEFAULT" means an Event of Default as defined in the
Indenture.
"DEBT ISSUER" means Republic Bancorp, Inc., a Kentucky corporation, in its
capacity as issuer of the Debt under the Indenture, and any successor entity in
a merger, consolidation or amalgamation.
"DELAWARE TRUSTEE" has the meaning set forth in Section 4.2.
2
"DISSOLUTION EVENT" has the meaning set forth in Annex I hereto.
"DISTRIBUTION" means a distribution payable to Holders of Securities in
accordance with Section 5.1.
"EVENT OF DEFAULT" in respect of the Securities means a Debt Event of
Default has occurred and is continuing in respect of the Debt.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"FIDUCIARY INDEMNIFIED PERSON" has the meaning set forth in Section 9.4(b).
"HOLDER" means a Person in whose name a Certificate representing a Security
is registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"INDEMNIFIED PERSON" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"INDENTURE" means the Indenture between the Debt Issuer and Steven Trager
as Indenture Trustee, dated February 5, 1997, pursuant to which the Debt is to
be issued.
"INITIAL CLOSING DATE" means the "INITIAL CLOSING DATE" under the Purchase
Agreement.
"INTEREST" means any interest due on the Debt including any Compounded
Interest, and Additional Interest (as such terms are defined in the Indenture).
"INVESTMENT COMPANY" means an investment company as defined in the
Investment Company Act.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"LEGAL ACTION" has the meaning set forth in Section 2.6(g).
"MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
provided in the terms of the Preferred Securities, Holder(s) of outstanding
Securities voting together as a single class or, as the context may require,
Holders of outstanding Preferred Securities or Holders of outstanding Common
Securities voting separately as a class, who are the record owners of more than
50% of the aggregate liquidation amount (including the stated amount that would
be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities of the relevant class.
"MINISTERIAL ACTION" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated
3
association, or government or any agency or political subdivision thereof, or
any other entity of whatever nature.
"PREFERRED SECURITIES" means the Preferred Securities referred to in
Section 6.1 hereof.
"PREFERRED SECURITIES GUARANTY" means the guarantee agreement to be dated
as of February 5, 1997, of the Sponsor in respect of the Preferred Securities.
"PREFERRED SECURITY CERTIFICATE" means a definitive certificate in fully
registered form representing a Preferred Security substantially in the form of
Exhibit A-1.
"PROPERTY TRUSTEE" means the Trustee as set forth in Section 2.12.
"PURCHASE AGREEMENTS" means the Subscription Agreements for the offering
and sale of Preferred Securities in the form of Exhibit C.
"QUORUM" means a majority of the Republic Trustees or, if there are only
two Republic Trustees, both of them.
"RELATED PARTY" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.
"REPUBLIC COMMON STOCK" means the Class A Common Stock of Republic Bancorp,
Inc.
"RESPONSIBLE OFFICER" means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"SECURITIES" means the Common Securities and the Preferred Securities.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time to
time or any successor legislation.
"SECURITIES GUARANTIES" means the Common Securities Guaranty and the
Preferred Securities Guaranty.
"SPONSOR" means the Debt Issuer or any successor entity in a merger,
consolidation or amalgamation, in its capacity as sponsor of the Trust.
"SUBORDINATED DEBT SECURITIES" means the 8.5% Convertible Subordinated
Debentures to be issued by the Debt Issuer under the Indenture and to be held by
the Property Trustee.
"TAX EVENT" has the meaning set forth in Annex I hereto.
"TREASURY REGULATIONS" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such
4
regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).
"TRUSTEE" or "TRUSTEES" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance with
the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
ARTICLE II
ORGANIZATION
SECTION 2.1 NAME. The Trust is named "Republic Capital Trust," as such
name may be modified from time to time by the Republic Trustees following
written notice to the Holders of Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Republic Trustees.
SECTION 2.2 OFFICE. The address of the principal office of the Trust is 601
WEST MARKET STREET, Louisville, Kentucky 40202. On ten Business Days' written
notice to the Holders of Securities, the Republic Trustees may designate another
principal office.
SECTION 2.3 PURPOSE. The exclusive purposes and functions of the Trust are
(a) to issue and sell Securities representing undivided beneficial interests in
the assets of the Trust, (b) investing the gross proceeds from such sale to
acquire the Debt and (c) except as otherwise limited herein, to engage in only
those other activities necessary or incidental thereto. The Trust shall not
borrow money, issue debt or reinvest proceeds derived from investments, pledge
any of its assets, or otherwise undertake (or permit to be undertaken) any
activity that would cause the Trust not to be classified for United States
federal income tax purposes as a grantor trust.
SECTION 2.4 AUTHORITY. Subject to the limitations provided in this
Declaration, the Republic Trustees shall have exclusive and complete authority
to carry out the purposes of the Trust. An action taken by the Republic
Trustees in accordance with their powers shall constitute the act of and serve
to bind the Trust. In dealing with the Trustees acting on behalf of the Trust,
no person shall be required to inquire into the authority of the Trustees to
bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
SECTION 2.5 TITLE TO PROPERTY OF THE TRUST. Except as otherwise provided
in this Declaration, legal title to all assets of the Trust shall be vested in
the Trust. The Holders shall not have legal title to any part of the assets of
the Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 2.6 POWERS AND DUTIES OF THE REPUBLIC TRUSTEES. The Republic
Trustees shall have the exclusive power, duty and authority to cause the Trust
to engage in the following activities:
5
(a) to issue and sell the Preferred Securities and the Common Securities
in accordance with this Declaration; PROVIDED, HOWEVER, that the Trust may issue
no more than one series of Preferred Securities and no more than one series of
Common Securities, and, PROVIDED, FURTHER, that there shall be no interests in
the Trust other than the Securities;
(b) in connection with the issue and sale of the Preferred Securities, at
the direction of the Sponsor, to execute and enter into the Purchase Agreements
and other related agreements providing for the sale of the Preferred Securities;
(c) to acquire the Debt with the proceeds of the sale of the Preferred
Securities and the Common Securities;
(d) to give the Sponsor prompt written notice of the occurrence of a Tax
Event or Dissolution Event; PROVIDED, that the Republic Trustees shall consult
with the Sponsor before taking or refraining from taking any Ministerial Action
in relation to a Tax Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, and to issue relevant
notices to the Holders of Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of the
Republic Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action");
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to incur expenses that are necessary or incidental to carry out any of
the purposes of the Trust;
(j) to give prompt written notice to the Holders of the Securities of any
notice received from the Debt Issuer of its election to defer payments of
interest on the Debt by extending the interest payment period under the
Indenture;
(k) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(l) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
6
(m) to take any action, not inconsistent with this Declaration or with
applicable law, that the Republic Trustees determine in their discretion to be
necessary or desirable in carrying out the activities of the Trust as set out in
this Section, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Debt Issuer to ensure that the Debt
will be treated as indebtedness of the Debt Issuer for United States federal
income tax purposes, provided, that such action does not adversely affect the
interests of Holders; and
(n) to take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the Trust
to be duly prepared and filed by the Republic Trustees, on behalf of the Trust.
The Republic Trustees must exercise the powers set forth in this Section in
a manner that is consistent with the purposes and functions of the Trust set out
herein, and the Republic Trustees shall not take any action that is inconsistent
with the purposes and functions of the Trust set forth herein.
Any expenses incurred by the Republic Trustees pursuant to this Section
shall be reimbursed by the Debt Issuer.
SECTION 2.7 PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES. (a) The
Trust shall not, and the Trustees on behalf of the Trust shall not, engage in
any activity other than as required or authorized by this Declaration. In
particular, the Trust shall not, and, the Trustees shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the Debt,
but shall distribute all such proceeds to Holders of Securities pursuant to the
terms of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debt;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
7
(vii) other than as provided in this Declaration (including Annex 1),
(A) waive any past default that is waivable under the Indenture, (B) exercise
any right to rescind or annul any declaration that the principal of all the Debt
shall be due and payable, or (C) consent to any amendment, modification or
termination of the Indenture or the Debt where such consent shall be required
unless the Trust shall have received an opinion of counsel to the effect that
such modification will not cause more than an insubstantial risk that for United
States federal income tax purposes the Trust will not be classified as a grantor
trust.
SECTION 2.8 EXECUTION OF DOCUMENTS. Unless otherwise determined by the
Republic Trustees, and except as otherwise required by the Business Trust Act,
any one Republic Trustee is authorized to execute on behalf of the Trust any
documents that the Republic Trustees have the power and authority to execute
pursuant to Section 2.6.
SECTION 2.9 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The
recitals contained in this Declaration and the Securities shall be taken as the
statements of the Sponsor, and the Trustees do not assume any responsibility for
their correctness. The Trustees make no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustees make
no representations as to the validity or sufficiency of this Declaration or the
Securities.
SECTION 2.10 DURATION OF TRUST. The Trust, unless terminated pursuant to
the provisions of Article VII hereof, shall have existence for fifty-five (55)
years from the Initial Closing Date.
SECTION 2.11 MERGERS. (a) The Trust may not consolidate, amalgamate, merge
with or into, or be replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to any corporation or other body, except as
described in Section (b) and (c) below.
(b) The Trust may, with the consent of the Republic Trustees or, if there
are more than two, a majority of the Republic Trustees and without the consent
of the Holders of the Securities or the Delaware Trustee, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as such
under the laws of any State; provided that:
(i) such successor entity (the "SUCCESSOR ENTITY") either:
(A) expressly assumes all of the obligations of the Trust under
the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Preferred Securities (the "SUCCESSOR
SECURITIES") so long as the Successor Securities rank the same as the
Preferred Securities rank with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of the
Securities (including any Successor Securities) in any material respect (other
than with respect to any dilution of such Holders' interests in the Successor
Entity as a result of such merger, consolidation, amalgamation or replacement);
8
(iii) such Successor Entity has a purpose identical to that of the
Trust;
(iv) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of independent counsel to the
Trust experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of the Holders
of the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of the Holders' interest
in the Successor Entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be required to
register as an Investment Company;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(v) the Sponsor guarantees the obligations of such Successor Entity
under the Successor Securities at least to the extent provided by the Preferred
Securities Guaranty.
(c) Notwithstanding (b) above, the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger or replacement would cause the Trust or
Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes.
SECTION 2.12 PROPERTY TRUSTEE. (a) The legal title to the Debt shall be
owned by and held of record in the name of the Property Trustee in trust for the
benefit of the Holders of the Securities. The right, title and interest of the
Property Trustee to the Debt shall vest automatically in each Person who may
hereafter be appointed as Property Trustee in accordance with Section 4.6. Such
vesting and cessation of title shall be effective whether or not conveyancing
documents with regard to the Debt have been executed and delivered.
(b) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account in the name of and under the exclusive control of the Property Trustee
on behalf of the Holders of the Securities and, upon the receipt of payments of
funds made in respect of the Debt held by the Property Trustee, deposit such
funds into such account and make payments to the Holders of the Preferred
Securities and Holders of the Common Securities from the account in accordance
with Section 5.1;
(ii) engage in such ministerial activities as so directed and as
shall be necessary or appropriate to effect the redemption of the Preferred
Securities and the Common
9
Securities to the extent the Debt is redeemed or matures, or for the
conversion of Securities to the extent Securities are converted into Republic
Common Stock; and
(iii) upon written notice of distribution issued by the Republic
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as so directed as shall be necessary or appropriate to
effect the distribution of the Debt to Holders of Securities upon the occurrence
of a Dissolution Event or Tax Event.
(d) The Property Trustee shall take all actions and perform such duties as
may be specifically required of the Property Trustee pursuant to the terms of
the Securities.
(e) The Property Trustee shall have the legal power to exercise all of the
rights, powers and privileges of a holder of Debt under the Indenture and, if an
Event of Default occurs and is continuing, the Property Trustee shall, for the
benefit of Holders of the Securities, but subject to the rights of the Holders
pursuant to the terms of such Securities, enforce its rights as holder of the
Debt, including the right to take any Legal Action which arises out of or in
connection with such an Event of Default.
ARTICLE III
SPONSOR
SECTION 3.1 SPONSOR'S PURCHASE OF COMMON SECURITIES. The Sponsor will
purchase all of the Common Securities issued by the Trust, in an amount at least
equal to 3.0% of the capital of the Trust, at the same time as the Preferred
Securities are first sold.
SECTION 3.2 RESPONSIBILITIES OF THE SPONSOR. In connection with the issue
and sale of the Preferred Securities, the Sponsor shall have the exclusive right
and responsibility to negotiate the terms of the Purchase Agreements and other
related agreements providing for the sale of the Preferred Securities.
SECTION 3.3 OBLIGATIONS AS GUARANTOR. The Sponsor hereby guarantees
payment of all amounts payable with respect to the Securities to the extent and
on the terms and conditions set out in the Securities Guaranties, which are
incorporated herein by reference.
ARTICLE IV
TRUSTEES
SECTION 4.1 NUMBER OF TRUSTEES. The number of Trustees initially shall be
four (4), and:
(a) at any time before the issuance of any Securities, the Sponsor may, by
written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holders of a majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities; PROVIDED, HOWEVER, that, the number of Trustees shall in
no event be less than two (2); PROVIDED, FURTHER, that (1) there
10
shall be a Delaware Trustee if required by Section 4.2; and (2) there shall
be at least one Trustee who is an employee or officer of, or is affiliated
with the Sponsor (a "Republic Trustee"). One of the Republic Trustees shall
serve as the Property Trustee. The initial Property Trustee shall be Steven
E. Trager.
SECTION 4.2 DELAWARE TRUSTEE. If required by the Business Trust Act, one
Trustee (the "DELAWARE TRUSTEE") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the requirements of
applicable law.
SECTION 4.3 CERTAIN QUALIFICATIONS OF REPUBLIC TRUSTEES AND DELAWARE
TRUSTEE GENERALLY. Each Republic Trustee and the Delaware Trustee shall be
either a natural person who is at least 21 years of age or a legal entity that
shall act through one or more Authorized Officers.
SECTION 4.4 REPUBLIC TRUSTEES. The initial Republic Trustees shall be:
A. Scott Trager
Steven E. Trager
L. Lee Kinsolving, Jr.
Except where a requirement for action by a specific number of Republic
Trustees is expressly set forth in this Declaration and except with respect to
any action the taking of which is the subject of a meeting of the Republic
Trustees, any action required or permitted to be taken by the Republic Trustees
may be taken by, and any power of the Republic Trustees may be exercised by, or
with the consent of, any one such Republic Trustee.
SECTION 4.5 DELAWARE TRUSTEE. The initial Delaware Trustee shall be:
Wilmington Trust Company
SECTION 4.6 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES. (a) Subject
to Section 4.6(b), Trustees may be appointed or removed without cause at any
time except during an Event of Default:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by the Holders of a
Majority in liquidation amount of the Common Securities voting as a class at a
meeting of the Holders of the Common Securities.
(b) The Trustee that acts as Delaware Trustee shall not be removed in
accordance with Section 4.6(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 4.2 and 4.3 (A
"SUCCESSOR DELAWARE TRUSTEE") has been appointed and
11
has accepted such appointment by written instrument executed by such
Successor Delaware Trustee and delivered to the Republic Trustees and the
Sponsor.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation. Any
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing signed by the Trustee and delivered to the Sponsor
and the Trust, which resignation shall take effect upon such delivery or upon
such later date as is specified therein; PROVIDED, HOWEVER, that no such
resignation of the Trustee that acts as the Delaware Trustee shall be effective
until a Successor Delaware Trustee has been appointed and has accepted such
appointment by instrument executed by such Successor Delaware Trustee and
delivered to the Trust, the Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best efforts to
promptly appoint a Successor Delaware Trustee if the Delaware Trustee delivers
an instrument of resignation in accordance with this Section 4.6.
(e) If no Successor Delaware Trustee shall have been appointed and
accepted appointment as provided in this Section 4.6 within 60 days after
delivery of an instrument of resignation or removal, the Delaware Trustee
resigning or being removed, as applicable, may petition any court of competent
jurisdiction for appointment of a Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper, appoint
a Successor Delaware Trustee.
(f) No Delaware Trustee shall be liable for the acts or omissions to act
of any Successor Delaware Trustee.
SECTION 4.7 VACANCIES AMONG TRUSTEES. If a Trustee ceases to hold office
for any reason and the number of Trustees is not reduced pursuant to Section
4.1, or if the number of Trustees is increased pursuant to Section 4.1, a
vacancy shall occur. A resolution certifying the existence of such vacancy by
the Republic Trustees or, if there are more than two, a majority of the Republic
Trustees shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with Section 4.6.
SECTION 4.8 EFFECT OF VACANCIES. The death, resignation, retirement,
removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to
perform the duties of a Trustee shall not operate to annul the Trust. Whenever
a vacancy in the number of Republic Trustees shall occur, until such vacancy is
filled by the appointment of a Republic Trustee in accordance with Section 4.6,
the Republic Trustees in office, regardless of their number, shall have all the
powers granted to the Republic Trustees and shall discharge all the duties
imposed upon the Republic Trustees by this Declaration.
SECTION 4.9 MEETINGS. If there is more than one Republic Trustee, meetings
of the Republic Trustees shall be held from time to time upon the call of any
Republic Trustee. Regular meetings of the Republic Trustees may be held at a
time and place fixed by resolution of the Republic Trustees. Notice of any
in-person meetings of the Republic Trustees shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 48 hours before such meeting. Notice of any telephonic
meetings of the
12
Republic Trustees or any committee thereof shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before a meeting. Notices shall
contain a brief statement of the time, place and anticipated purposes of the
meeting. The presence (whether in person or by telephone) of a Republic
Trustee at a meeting shall constitute a waiver of notice of such meeting
except where a Republic Trustee attends a meeting for the express purpose of
objecting to the transaction of any activity on the grounds that the meeting
has not been lawfully called or convened. Unless provided otherwise in this
Declaration, any action of the Republic Trustees may be taken at a meeting by
vote of a majority of the Republic Trustees present (whether in person or by
telephone) and eligible to vote with respect to such matter, provided that a
Quorum is present, or without a meeting by the unanimous written consent of
the Republic Trustees. In the event there is only one Republic Trustee, any
and all action of such Republic Trustee shall be evidenced by a written
consent of such Republic Trustee.
SECTION 4.10 DELEGATION OF POWER. (a) Any Republic Trustee may, by power of
attorney consistent with applicable law, delegate to any other natural person
over the age of 21 his or her power for the purpose of executing any documents
contemplated in Section 2.6, including making any governmental filing; and
(b) the Republic Trustees shall have power to delegate from time to time
to such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Republic Trustees or otherwise as the Republic Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
SECTION 4.11 CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. Any
corporation into which the Delaware Trustee may be merged or converted or with
which either may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Delaware Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Delaware Trustee shall be the successor of the Delaware Trustee
hereunder, provided such corporation shall be otherwise qualified and eligible
under this Article, without the execution or filing of any paper or any further
act on the part of any of the parties hereto.
ARTICLE V
DISTRIBUTIONS
SECTION 5.1 DISTRIBUTIONS. Holders shall receive Distributions (as defined
herein) in accordance with the applicable terms of the relevant Holder's
Securities. Distributions shall be made on the Preferred Securities and the
Common Securities in accordance with the preferences set forth in their
respective terms. If and to the extent that the Debt Issuer makes a payment of
interest (including Compounded Interest (as defined in the Indenture) and
Additional Interest (as defined in the Indenture)), premium and/or principal on
the Debt (the amount of any such payment being a "Payment Amount"), the Property
Trustee shall, to the extent funds are available for that purpose, make a
distribution (a "Distribution") of the Payment Amount to Holders.
13
ARTICLE VI
ISSUANCE OF SECURITIES
SECTION 6.1 GENERAL PROVISIONS REGARDING SECURITIES. (a) The Republic
Trustees shall on behalf of the Trust issue one class of preferred securities
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I (the "Preferred Securities") and one
class of common securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the "Common
Securities"). The Trust shall issue no securities or other interests in the
assets of the Trust other than the Preferred Securities and the Common
Securities and the aggregate liquidation amount of all series of Securities
issued by the Trust and outstanding at any time shall not exceed $10,000,000.
(b) The Certificates shall be signed on behalf of the Trust by a Republic
Trustee. Such signature shall be the manual signature of any present or any
future Republic Trustee. In case any Republic Trustee of the Trust who shall
have signed any of the Securities shall cease to be such Republic Trustee before
the Certificates so signed shall be delivered by the Trust, such Certificates
nevertheless may be delivered as though the person who signed such Certificates
had not ceased to be such Republic Trustee; and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of such
Security, shall be the Republic Trustees of the Trust, although at the date of
the execution and delivery of the Declaration any such person was not such a
Republic Trustee. Such signature shall be conclusive evidence that the
Preferred Security has been authenticated under this Declaration.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(e) Every Person, by virtue of having become a Holder in accordance with
the terms of this Declaration, shall be deemed to have expressly assented and
agreed to the terms of, and shall be bound by, this Declaration.
SECTION 6.3 FORM AND DATING. The Preferred Securities shall be
substantially in the form of Exhibit A-1 and the Common Securities shall be
substantially in the form of Exhibit A-2, each of which is hereby incorporated
in and expressly made a part of this Declaration. Certificates may be printed
or may be produced in any other manner as is reasonably acceptable to the
Republic Trustees, as conclusively evidenced by their execution thereof. The
Securities may have letters, numbers, notations or other marks of identification
or designation and such legends or endorsements required by law, agreements to
which the Trust is subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Trust). The terms and
provisions of the Securities set forth in Annex I and the forms of Securities
set forth in Exhibits A-1 and A-2 are part of the terms of this Declaration and
to the extent applicable, the Sponsor, by its execution and delivery of this
Declaration, expressly agrees to such terms and provisions and to be bound
thereby and to execute as guarantor under the Securities Guaranties each
Certificate.
14
SECTION 6.4 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If: (a) any
mutilated Certificates should be surrendered to the Republic Trustees, or if the
Republic Trustees shall receive evidence to their satisfaction of the
destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Republic Trustees such security or
indemnity as may be required by them to keep each of them harmless; then, in the
absence of notice that such Certificate shall have been acquired by a bona fide
purchaser, any Republic Trustee on behalf of the Trust shall execute and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like denomination. In connection with
the issuance of any new Certificate under this Section, the Republic Trustees
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
SECTION 6.5 CANCELLATION.
The Trust shall promptly cancel all Securities surrendered for registration
of transfer, payment, replacement or cancellation and shall dispose of canceled
Securities as the Trust directs. The Trust may not issue new Securities to
replace Securities that it has paid.
ARTICLE VII
DISSOLUTION AND TERMINATION OF TRUST
SECTION 7.1 DISSOLUTION AND TERMINATION OF TRUST. (a) The Trust shall
dissolve:
(i) upon the bankruptcy of the Sponsor or the Debt Issuer;
(ii) upon the filing of a certificate of dissolution or its equivalent
with respect to the Sponsor or the Debt Issuer, upon the consent of a Majority
in liquidation amount of the Securities voting together as a single class to
file a certificate of cancellation with respect to the Trust or the revocation
of the charter of the Sponsor or the Debt Issuer and the expiration of 90 days
after the date of revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor, the Trust or the Debt Issuer;
(iv) when all of the Securities shall have been called for redemption
and the amounts necessary for redemption thereof shall have been paid to the
Holders in accordance with the terms of the Securities;
(v) with the consent of the Holders of all of the Common Securities,
upon the occurrence and continuation of a Dissolution Event or a Tax Event
pursuant to which the Trust shall be dissolved in accordance with the terms of
the securities and the Debt shall, subject to the terms of the Securities, be
distributed to the Holders of Securities in exchange for the Securities;
15
(vi) after the distribution of the Republic Common Stock to all
Holders upon conversion of all outstanding Securities;
(vii) before the issuance of any Securities, with the consent of
all of the Republic Trustees and the Sponsor; or
(viii) the expiration of the term of the Trust as set forth in
Section 2.10.
(b) As soon as is practicable after the occurrence of an event referred to
in Section 7.1 (a), and following the winding up and liquidation of the Trust in
accordance with the terms of this Declaration and the Securities, the Trustees
shall terminate the Trust by filing a certificate of cancellation with the
Secretary of State of the State of Delaware.
ARTICLE VIII
TRANSFER OF INTERESTS
SECTION 8.1 GENERAL. (a) Where Preferred Securities are presented to the
Trust with a request to register a transfer or to exchange them for an equal
number of Preferred Securities represented by different certificates, the Trust
shall register the transfer or make the exchange if its requirements for such
transactions are met.
(b) Securities may only be transferred, in whole or in part, in accordance
with, the terms and conditions set forth in this Declaration and in the terms of
the Securities PROVIDED, HOWEVER, the Sponsor may not transfer the Common
Securities except to a Related Party, provided that any such transfer is subject
to the condition precedent that the transferor obtain the written opinion of
independent counsel that such transfer would not cause more than an
insubstantial risk that the Trust would not be classified for United States
federal income tax purposes as a grantor trust or that the Trust would be an
Investment Company or the transferee would become an Investment Company. Any
transfer or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.
(c) The Republic Trustees shall provide for the registration of Securities
and of transfers of Securities, which will be effected without charge but only
upon payment (with such indemnity as the Republic Trustees may require) in
respect of any tax or other governmental charges that may be imposed in relation
to it. Upon surrender for registration of transfer of any Securities, the
Republic Trustees shall cause one or more new Securities to be issued in the
name of the designated transferee. Every Security surrendered for registration
of transfer shall be accompanied by a written instrument of transfer in form
satisfactory to the Republic Trustees duly executed by the Holder or such
Holder's attorney duly authorized in writing. Each Security surrendered for
registration of transfer shall be canceled by the Republic Trustees. A
transferee of a Security shall be entitled to the rights and subject to the
obligations of a Holder hereunder upon the receipt by such transferee of a
Security. By acceptance of a Security, each transferee shall be deemed to have
agreed to be bound by this Declaration.
SECTION 8.2 TRANSFER PROCEDURES AND RESTRICTIONS. If Preferred Securities
are issued upon the transfer, exchange or replacement of Preferred Securities
bearing the Restricted
16
Securities Legend set forth in Exhibit A-1 hereto, or if a request is made to
remove such Restricted Securities Legend on Preferred Securities, the
Preferred Securities so issued shall bear the Restricted Securities Legend,
or the Restricted Securities Legend shall not be removed, as the case may be,
unless there is delivered to the Trust such satisfactory evidence, which may
include an opinion of counsel, as may be reasonably required by the Trust,
that neither the legend nor the restrictions on transfer set forth therein
are required under the Purchase Agreements or otherwise to ensure that
transfers thereof comply with the provisions of the Rules under the
Securities Act or, with respect to Restricted Securities, that such
Securities are not "restricted" within the meaning of Rule 144 under the
Securities Act. Upon provision of such satisfactory evidence, the Trust
shall authenticate and deliver Preferred Securities that do not bear the
legend.
SECTION 8.2 DEEMED SECURITY HOLDERS. The Trustees may treat the Person in
whose name any Certificate shall be registered on the books and records of the
Trust as the sole holder of such Certificate and of the Securities represented
by such Certificate for purposes of receiving Distributions and for all other
purposes whatsoever and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such Certificate or in the Securities
represented by such Certificate on the part of any Person, whether or not the
Trust shall have actual or other notice thereof.
ARTICLE IX
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 9.1 LIABILITY. (a) Except as expressly set forth in this
Declaration, the Securities Guaranties and the terms of the Securities, the
Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities which
shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) Pursuant to Section 3803(a) of the Business Trust Act, the Holder of
the Common Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware; provided, however,
that the Holder of the Common Securities shall be liable for all of the debts
and obligations of the Trust (other than with respect to the Securities) to the
extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders of
the Preferred Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
17
SECTION 9.2 EXCULPATION. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Trust or any Covered
Person for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of the
Trust and in a manner such Indemnified Person reasonably believed to be within
the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's gross
negligence or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 9.3 FIDUCIARY DUTY. (a) To the extent that, at law or in equity, an
Indemnified Person has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall not be liable to the Trust or to any
other Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise existing
at law or in equity, are agreed by the parties hereto to replace such other
duties and liabilities of the Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a manner that
is, or provides terms that are, fair and reasonable to the Trust or any Holder
of Securities, the Indemnified Person shall resolve such conflict of interest,
take such action or provide such terms, considering in each case the relative
interest of each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and factors as
it desires, including its own interests, and
18
shall have no duty or obligation to give any consideration to any interest of
or factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or by
applicable law.
SECTION 9.4 INDEMNIFICATION. (a) (i) The Debt Issuer shall indemnify, to
the full extent permitted by law, any Company Indemnified Person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by reason
of the fact that he is or was a Company Indemnified Person against expenses
(including attorneys' fees and expenses), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the Company Indemnified Person did not act in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(ii) The Debt Issuer shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the Trust to procure a judgment in its favor by reason of the fact that
he is or was a Company Indemnified Person against expenses (including attorneys'
fees and expenses) actually and reasonably incurred by him in connection with
the defense or settlement of such action or suit if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests
of the Trust and except that no such indemnification shall be made in respect of
any claim, issue or matter as to which such Company Indemnified Person shall
have been adjudged to be liable to the Trust unless and only to the extent that
the Court of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such Court
of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action without
prejudice or the settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 9.4 (a), or in defense of any claim, issue or matter therein, he
shall be indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this Section
9.4(a) (unless ordered by a court) shall be made by the Debt Issuer only as
authorized in the specific case upon a determination that indemnification of the
Company Indemnified Person is proper in the circumstances because he has met the
applicable standard of conduct set forth in paragraphs (i)
19
and (ii). Such determination shall be made (1) by the Republic Trustees by a
majority vote of a quorum consisting of such Republic Trustees who were not
parties to such action, suit or proceeding, (2) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested Republic
Trustees so directs, by independent legal counsel in a written opinion, or
(3) by the Common Securities Holder of the Trust.
(v) Expenses (including attorneys' fees and expenses) incurred by a
Company Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 9.4 (a) shall be paid by the Debt Issuer in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of such Company Indemnified Person to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the Debt
Issuer as authorized in this Section 9.4 (a). Notwithstanding the foregoing, no
advance shall be made by the Debt Issuer if a determination is reasonably and
promptly made (i) by the Republic Trustees by a majority vote of a quorum of
disinterested Republic Trustees, (ii) if such a quorum is not obtainable, or,
even if obtainable, if a quorum of disinterested Republic Trustees so directs,
by independent legal counsel in a written opinion or (iii) the Common Securities
Holder of the Trust, that, based upon the facts known to the Republic Trustees,
counsel or the Common Securities Holder at the time such determination is made,
such Company Indemnified Person acted in bad faith or in a manner that such
Person did not believe to be in or not opposed to the best interests of the
Trust, or, with respect to any criminal proceeding, that such Company
Indemnified Person believed or had reasonable cause to believe his conduct was
unlawful. In no event shall any advance be made in instances where the Republic
Trustees, independent legal counsel or the Common Securities Holder reasonably
determine that such person deliberately breached his duty to the Trust or its
Common or Preferred Securities Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 9.4 (a) shall not be
deemed exclusive of any other rights to which those seeking indemnification and
advancement of expenses may be entitled under any agreement, vote of
stockholders or disinterested directors of the Debt Issuer or Preferred
Securities Holders of the Trust or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office. All
rights to indemnification under this Section 9.4(a) shall be deemed to be
provided by a contract between the Debt Issuer and each Company Indemnified
Person who serves in such capacity at any time while this Section 9.4(a) is in
effect. Any repeal or modification of this Section 9.4(a) shall not affect any
rights or obligations then existing.
(vii) The Debt Issuer or the Trust may purchase and maintain
insurance on behalf of any Person who is or was a Company Indemnified Person
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the Debt Issuer
would have the power to indemnify him against such liability under the
provisions of this Section 9.4(a).
(viii) For purposes of this Section 9.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in a
consolidation or merger, so that any Person who is or was a director, trustee,
officer or employee of such constituent entity, or is or was serving at the
request of such constituent entity as a director, trustee, officer, employee or
agent of another entity, shall stand in
20
the same position under the provisions of this Section 9.4 (a) with respect
to the resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 9.4(a) shall, unless otherwise provided when
authorized or ratified, continue as to a Person who has ceased to be a Company
Indemnified Person and shall inure to the benefit of the heirs, executors and
administrators of such a Person.
(b) The Debt Issuer agrees to indemnify the (i) the Delaware Trustee,
(ii) any Affiliate of the Delaware Trustee, and (iii) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Delaware Trustee (each of the Persons in (i) through
(iv) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense including taxes (other than taxes based on the income
of such Fiduciary Indemnified Person) incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or
administration or the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against or investigating any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 9.4(b) shall survive the satisfaction and
discharge of this Declaration.
SECTION 9.5 OUTSIDE BUSINESSES. Any Covered Person, the Sponsor, and the
Delaware Trustee may engage in or possess an interest in other business ventures
of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, or the
Delaware Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, and the Delaware Trustee shall have the right to take for its own
account (individually or as a partner or fiduciary) or to recommend to others
any such particular investment or other opportunity. Any Covered Person or the
Delaware Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act as
depositary for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE X
ACCOUNTING
SECTION 10.1 FISCAL YEAR. The fiscal year ("Fiscal Year") of the Trust
shall be the calendar year, or such other year as is required by the Code.
SECTION 10.2 CERTAIN ACCOUNTING MATTERS. (a) At all times during the
existence of the Trust, the Republic Trustees shall keep, or cause to be kept,
full books of account, records and supporting documents, which shall reflect in
reasonable detail each transaction of the Trust. The
21
books of account shall be maintained on the accrual method of accounting, in
accordance with generally accepted accounting principles, consistently
applied. The books of account and the records of the Trust shall be examined
by and reported upon as of the end of each Fiscal Year of the Trust by a firm
of independent certified public accountants selected by the Republic Trustees.
(b) The Republic Trustees shall cause to be prepared and delivered to each
of the Holders of Securities, within 90 days after the end of each Fiscal Year
of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss.
(c) The Republic Trustees shall cause to be duly prepared and delivered to
each of the Holders of Securities any annual United States federal income tax
information statement required by the Code, containing such information with
regard to the Securities held by each holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Republic Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.
(d) The Republic Trustees shall cause to be duly prepared and filed an
annual United States federal income tax return on a Form 1041 or such other form
required by United States federal income tax law, and any other annual income
tax returns required to be filed by the Republic Trustees on behalf of the Trust
with any state or local taxing authority.
SECTION 10.3 BANKING. The Trust shall maintain one or more bank accounts
in the name and for the sole benefit of the Trust. The sole signatories for
such accounts shall be designated by the Republic Trustees.
SECTION 10.4 WITHHOLDING. The Trust and the Republic Trustees shall comply
with all withholding requirements under United States federal, state and local
law. The Trust shall request, and the Holders shall provide to the Trust, such
forms or certificates as are necessary to establish an exemption from
withholding with respect to each Holder, and any representations and forms as
shall reasonably be requested by the Trust to assist it in determining the
extent of, and in fulfilling, its withholding obligations. The Republic
Trustees shall file required forms with applicable jurisdictions and, unless an
exemption from withholding is properly established by a Holder, shall remit
amounts withheld with respect to the Holder to applicable jurisdictions. To the
extent that the Trust is required to withhold and pay over any amounts to any
authority with respect to distributions or allocations to any Holder, the amount
withheld shall be deemed to be a Distribution in the amount of the withholding
to the Holder. In the event of any claimed over withholding, Holders shall be
limited to an action against the applicable jurisdiction. If the amount
required to be withheld was not withheld from actual Distributions made, the
Trust may reduce subsequent Distributions by the amount of such withholding.
22
ARTICLE XI
AMENDMENTS AND MEETINGS
SECTION 11.1 AMENDMENTS. (a) Except as otherwise provided in this
Declaration or by any applicable terms of the Securities, this Declaration may
only be amended by a written instrument approved and executed by
(i) the Republic Trustees (or, if there are more than two Republic
Trustees, a majority of the Republic Trustees); and
(ii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Delaware Trustee, the Delaware Trustee.
(b) Notwithstanding any other provision of this Article XI, no amendment
shall be made, and any such purported amendment shall be void and ineffective to
the extent the result of such amendment would be to:
(i) cause the trust to fail to continue to be classified for purposes
of United States federal income taxation as a grantor trust; or
(ii) cause the Trust to be deemed to be an Investment Company required
to be registered under the Investment Company Act.
(c) At such time after the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities.
(d) Section 7.1(b) and this Section 11.1 shall not be amended without the
consent of all of the Holders of the Securities.
(e) Article III shall not be amended without the consent of the Holders of
a majority in liquidation amount of the Common Securities.
(f) The rights of the Holders of the Common Securities under Article IV to
increase or decrease the number of, and appoint and remove, Trustees shall not
be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities.
(g) Notwithstanding Section 11.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that may
be defective or inconsistent with any other provision of this Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
23
(iv) modify, eliminate and add to any provision of this Declaration to
such extent as may be necessary; provided, however, that no such amendment shall
adversely affect the powers, preferences or special rights of Holders of
Securities.
SECTION 11.2 MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY WRITTEN
CONSENT. (a) Meetings of the Holders of any class of Securities may be called at
any time by the Republic Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration or the terms
of the Securities. The Republic Trustees shall call a meeting of the Holders of
such class if directed to do so by the Holders of at least 10% in liquidation
amount of such class of Securities. Such direction shall be given by delivering
to the Republic Trustees one or more calls in a writing stating that the signing
Holders of Securities wish to call a meeting and indicating the general or
specific purpose for which the meeting is to be called. Any Holders of
Securities calling a meeting shall specify in writing the Certificates held by
the Holders of Securities exercising the right to call a meeting and only those
Securities represented by such Certificates shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat at least 7 days and not
more than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration, such vote, consent or approval may be given at a meeting of the
Holders of Securities. Any action that may be taken at a meeting of the Holders
of Securities may be taken without a meeting if a consent in writing setting
forth the action so taken is signed by the Holders of Securities owning not less
than the minimum amount of Securities in liquidation amount that would be
necessary to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the Holders
of Securities entitled to vote who have not consented in writing. The Republic
Trustees may specify that any written ballot submitted to the Securities Holder
for the purpose of taking any action without a meeting shall be returned to the
Trust within the time specified by the Republic Trustees;
(ii) each Holder of a Security may authorize any Person to act for it
by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or participating
at a meeting. No proxy shall be valid after the expiration of 11 months from
the date thereof unless otherwise provided in the proxy. Every proxy shall be
revocable at the pleasure of the Holder of Securities executing it. Except as
otherwise provided herein, all matters relating to the giving, voting or
validity of proxies shall be governed by the General Corporation Law of the
State of Delaware relating to proxies, and judicial interpretations thereunder,
as if the Trust were a Delaware corporation and the Holders of the Securities
were stockholders of a Delaware corporation; each meeting of the Holders of the
Securities shall be conducted by the Republic Trustees or by such other Person
that the Republic Trustees may designate; and
24
(iii) unless the Business Trust Act, this Declaration, or the
terms of the Securities otherwise provides, the Republic Trustees, in their sole
discretion, shall establish all other provisions relating to meetings of Holders
of Securities, including notice of the time, place or purpose of any meeting at
which any matter is to be voted on by any Holders of Securities, waiver of any
such notice, action by consent without a meeting, the establishment of a record
date, quorum requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XII
REPRESENTATIONS OF DELAWARE TRUSTEE
SECTION 12.1 REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE. The
Trustee that acts as initial Delaware Trustee represents and warrants to the
Trust and to the Sponsor at the date of this Declaration, and each Successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee, that:
(a) The Delaware Trustee is duly organized, validly existing and in good
standing under the laws of the State of Delaware, with trust power and authority
to execute and deliver, and to carry out and perform its obligations under the
terms of, this Declaration.
(b) The Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and this Declaration. This Declaration under
Delaware law constitutes a legal, valid and binding obligation of the Delaware
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other similar
laws affecting creditors' rights generally and to general principles of equity
(regardless of whether considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with or
notice to, any federal banking authority is required for the execution, delivery
or performance by the Delaware Trustee of this Declaration.
(d) The Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 NOTICES. All notices provided for in this Declaration shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Republic Trustees at the Trust's
mailing address set forth below (or such other address as the Trust may give
notice of to the Holders of the Securities:
25
Republic Capital Trust
601 West Market Street
Louisville, Kentucky 40202
Attention: Steven E. Trager
Telecopy: 502/561-7188
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as Delaware Trustee may give notice of to the
Holders of the Securities):
Wilmington Trust Company
Rodney Square North
1100 N. Market Street
Wilmington, Delaware 19890-0001
Attention: Emmett R. Harmon
Telecopy: 302-651-1576
(c) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice of to the Trust):
Republic Bancorp, Inc.
601 West Market Street
Louisville, Kentucky 40202
Attention: Steven E. Trager
(d) if given to any other Holder, at the address set forth on the books
and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 13.2 GOVERNING LAW. This Declaration and the rights of the parties
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware and all rights and remedies shall be governed by such laws
without regard to the principles of conflict of laws of the State of Delaware or
any other jurisdiction that would call for the application of the law of any
jurisdiction other than the State of Delaware; provided, however, that there
shall not be applicable to the Trust, the Trustees or this Declaration any
provision of the laws (statutory or common) of the State of Delaware pertaining
to trusts that relate to or regulate, in a manner inconsistent with the terms
hereof (a) the filing with any court or governmental body or agency of trustee
accounts or schedules of trustee fees and charges, (b) affirmative requirements
to post bonds for trustees, officers, agents or employees of a trust, (c) the
necessity for obtaining court or other governmental approval concerning the
acquisition, holding or disposition of real or personal property, (d) fees or
other sums payable to trustees, officers, agents or employees of a trust, (e)
the allocation of receipts and expenditures to income or principal, (f)
restrictions or limitations on the permissible nature, amount or concentration
of trust investments or requirements
26
relating to the titling, storage or other manner of holding or investing
trust assets or (g) the establishment of fiduciary or other standards of
responsibility or limitations on the acts or powers of trustees that are
inconsistent with the limitations or liabilities or authorities and powers of
the Trustees as set forth or referenced in this Declaration. Section 3540 of
Title 12 of the Delaware Code shall not apply to the Trust.
SECTION 13.3 INTENTION OF THE PARTIES. It is the intention of the parties
hereto that the Trust be classified for United States federal income tax
purposes as a grantor trust. The provisions of this Declaration shall be
interpreted to further this intention of the parties.
SECTION 13.4 HEADINGS. Headings contained in this Declaration are inserted
for convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 13.5 SUCCESSORS AND ASSIGNS. Whenever in this Declaration any of
the parties hereto is named or referred to, the successors and assigns of such
party shall be deemed to be included, and all covenants and agreements in this
Declaration by the Sponsor and the Trustees shall bind and inure to the benefit
of their respective successors and assigns, whether or not so expressed.
SECTION 13.6 PARTIAL ENFORCEABILITY. If any provision of this Declaration,
or the application of such provision to any Person or circumstance, shall be
held invalid, the remainder of this Declaration, or the application of such
provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
SECTION 13.7 COUNTERPARTS. This Declaration may contain more than one
counterpart of the signature page and this Declaration may be executed by the
affixing of the signature of each of the Trustees to any of such counterpart
signature pages. All of such counterpart signature pages shall be read as
though one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
27
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
/S/ STEVEN E. TRAGER
---------------------------------------
Steven E. Trager, as Republic
Trustee and Property Trustee
/S/ L. LEE KINSOLVING, JR.
---------------------------------------
L. Lee Kinsolving, Jr., as Republic
Trustee
/S/ A. SCOTT TRAGER
---------------------------------------
A. Scott Trager, as Republic
Trustee
WILMINGTON TRUST COMPANY
as Delaware Trustee
By: /S/ PATRICIA A. EVANS
----------------------------------
Name: Patricia A. Evans
Title: Financial Services
REPUBLIC BANCORP, INC.
as Sponsor
By: /S/ STEVEN E. TRAGER
----------------------------------
Name: Steven E. Trager
Title: President
28
ANNEX I
TERMS OF QUARTERLY INCOME PREFERRED SECURITIES
Pursuant to Section 6.1 of the Declaration of Trust, dated as of
February 5, 1997 (as amended from time to time, the "Declaration"), the
designation, rights, privileges, restrictions, preferences and other terms
and provisions of the Preferred Securities and the Common Securities are set
out below (each capitalized term used but not defined herein has the meaning
set forth in the Declaration):
1. DESIGNATION AND NUMBER. (a) Preferred Securities. Quarterly Income
Preferred Securities of the Trust, with an aggregate stated liquidation amount
with respect to the assets of the Trust of Nine Million Seven Hundred Thousand
Dollars ($9,700,000) and a stated liquidation amount with respect to the assets
of the Trust of $100 per Preferred Security, are hereby designated for the
purposes of identification only as "Quarterly Income Preferred Securities" (the
"Preferred Securities"). The Preferred Security Certificates evidencing the
Preferred Securities shall be substantially in the form of Exhibit A-I to the
Declaration, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice.
(b) Common Securities. Common Securities of the Trust, with an aggregate
stated liquidation amount with respect to the assets of the Trust of Three
Hundred Thousand Dollars ($300,000) and a stated liquidation amount with respect
to the assets of the Trust of $100 per Common Security, are hereby designated
for the purposes of identification only as "Common Securities" (the "Common
Securities"). The Common Security Certificates evidencing the Common Securities
shall be substantially in the form of Exhibit A-2 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
2. DISTRIBUTIONS. (a) Distributions payable on each Security will be
fixed at a rate per annum of 8.5% (the "Coupon Rate") of the stated liquidation
amount of $100 per Security, such rate being the rate of interest payable on the
Debt to be held by the Trust. Except as set forth below in respect of an
Extension Period, Distributions in arrears for more than one quarterly period
will bear interest thereon compounded quarterly at the Coupon Rate (to the
extent permitted by applicable law). The term "Distributions" as used herein
includes cash distributions and any such compounded distributions plus any
Additional Interest paid on the Debt unless otherwise stated. A Distribution is
payable only to the extent that payments are made in respect of the Debt held by
the Trust and to the extent the Trust has funds available therefor. The amount
of Distributions payable for any period will be computed for any full quarterly
period on the basis of a 360-day year of twelve 30-day months.
(b) Distributions on the Securities will be cumulative, will accrue from
the date of issuance, and will be payable quarterly in arrears on January 1,
April 1, July 1, and October 1 of each year, commencing on April 1, 1997, except
as otherwise described below. The Debt Issuer has the right under the Indenture
to defer payments of interest by extending the interest payment period at any
time and from time to time on the Debt for a period not exceeding 20 consecutive
quarterly periods (each an "Extension Period"), during which Extension Period no
interest shall be due and payable on the Debt, PROVIDED, that no Extension
Period shall be initiated while accrued
29
interest with respect to prior, completed Extension Periods is unpaid, or
extend beyond the maturity of the Debt; and, PROVIDED, further, that no
Extension Period shall extend beyond the date of maturity of the Debt. In
the event that the Debt Issuer exercises this right, then during any
Extension Period (a) the Debt Issuer shall not declare or pay dividends on,
make a distribution with respect to, or redeem, purchase or acquire, or make
a liquidation payment with respect to, any of its capital stock or rights to
acquire such capital stock (other than (i) purchases or acquisitions of
shares of any such capital stock or rights to acquire such capital stock in
connection with the satisfaction by the Debt Issuer of its obligations under
any employee benefit plans, (ii) as a result of a reclassification of the
Debt Issuer's capital stock or rights to acquire such capital stock or the
exchange or conversion of one class or series of the Debt Issuer's capital
stock or rights to acquire such capital stock for another class or series of
the Debt Issuer's capital stock or rights to acquire such capital stock,
(iii) the purchase of fractional interests in shares of the Debt Issuer's
capital stock pursuant to the conversion or exchange provisions of such
capital stock or the security being converted or exchanged or (iv) dividends
and distributions made on the Debt Issuer's capital stock or rights to
acquire such capital stock with the Debt Issuer's capital stock or rights to
acquire such capital stock), (b) the Debt Issuer shall not make any payment
of interest, principal or premium, if any, on or repay, repurchase or redeem
any debt securities issued by the Debt Issuer that rank pari passu with or
junior to such Debt and (c) the Debt Issuer shall not make any guarantee
payments with respect to the foregoing (other than pursuant to the Securities
Guaranties). Prior to the termination of any such Extension Period in
respect of the Debt, the Debt Issuer may further extend the interest payment
period; provided that each such Extension Period in respect of the Debt,
together with all such previous and further extensions thereof, may not
exceed 20 consecutive quarterly periods or extend beyond the maturity of the
Debt. Upon the termination of any Extension Period and the payment of all
amounts then due, the Debt Issuer may commence a new Extension Period,
subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders thereof
as they appear on the books and records of the Trust on the relevant record
dates. The relevant record dates for the Securities shall be 15 Business Days
prior to the relevant payment date. Distributions payable on any Securities
that are not punctually paid on any Distribution payment date, as a result of
the Debt Issuer having failed to make a payment under the Debt, as the case may
be, when due (taking into account any Extension Period), will cease to be
payable to the Person in whose name such Securities are registered on the
relevant record date, and such a Distribution will instead be payable to the
Person in whose name such Securities are registered on the special record date
or other specified date determined in accordance with the Indenture. If any
date on which Distributions are payable on the Securities is not a Business Day,
then payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
(d) In the event that there is any money or other property held by or for
the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. In the event of any
voluntary or involuntary dissolution of the Trust, the Holders of the Securities
on the date of the dissolution will be entitled to receive out of the assets of
the Trust available for distribution to Holders of Securities
30
after paying or making reasonable provision to pay all claims and obligations
of the Trust in accordance with Section 3808(e) of the Business Trust Act an
amount equal to the aggregate of the stated liquidation amount of $100 per
Security plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"), unless such dissolution
occurs in connection with a Dissolution Event or a Tax Event in which, in
accordance with Section 4(c), Debt in an aggregate stated principal amount
equal to the aggregate stated liquidation amount of such Securities, with an
interest rate equal to the Coupon Rate of, and bearing accrued and unpaid
interest in an amount equal to the accrued and unpaid Distributions on, such
Securities, shall, after paying or making reasonable provision to pay all
claims and obligations of the Trust in accordance with Section 3808(e) of the
Business Trust Act, be distributed on a Pro Rata basis to the Holders of the
Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis, except that if an
Event of Default has occurred and is continuing, the Preferred Securities shall
have a preference over the Common Securities with regard to such amounts.
4. REDEMPTION AND DISTRIBUTION. (a) The Debt is not redeemable prior to
April 1, 2002, except that the Debt Issuer has the right, at its option, to
redeem the Debt in certain circumstances upon the occurrence of a Tax Event or
Dissolution Event (as described below). Upon the repayment of the Debt in whole
or in part, whether at maturity or upon redemption, the Trust shall apply the
proceeds from such repayment or payment to simultaneously redeem Securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the Debt so repaid or redeemed, at a redemption price of $100 per Security
plus an amount equal to accrued and unpaid Distributions thereon at the date of
the redemption.
(b) If fewer than all the outstanding Securities are to be so redeemed,
the Common Securities and the Preferred Securities will be redeemed Pro Rata.
(c) If the Holders of all the Common Securities consent to the dissolution
of the Trust as a result of a Dissolution Event or a Tax Event (as defined
below), the Republic Trustees shall, except in certain limited circumstances
described in this Section 4(c), and, after paying or making reasonable provision
to pay all claims and obligations of the Trust in accordance with Section
3808(e) of the Business Trust Act, cause Debt held by the Trust, having an
aggregate principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the Coupon Rate of, and accrued and unpaid
interest equal to accrued and unpaid Distributions on, and having the same
record date for payment as the Securities, to be distributed to the Holders of
the Securities in liquidation of such Holders' interests in the Trust on a Pro
Rata basis; PROVIDED, however, that, as a condition of such dissolution and
distribution, the Republic Trustees shall have received an opinion of
independent tax counsel experienced in such matters (a "No Recognition
Opinion"), which opinion may rely on published revenue rulings of the Internal
Revenue Service, to the effect that the Holders of the Securities will not
recognize any gain or loss for United States federal income tax purposes as a
result of the dissolution of the Trust and the distribution of Debt, and
PROVIDED, further, that, if there is available to the Sponsor the opportunity to
eliminate, within a reasonable time, the adverse effects of the Tax Event by
taking some ministerial action, such as filing a form or making an election, or
pursuing some other similar reasonable measure that has
31
no adverse effect on the Trust, the Debt Issuer, the Sponsor or the Holders
of the Securities ("Ministerial Action"), the Trust will pursue such
Ministerial Action in lieu of dissolution.
If, at any time, a Tax Event or a Dissolution Event shall occur and be
continuing, the Debt Issuer shall have the right at any time, upon not less than
10 nor more than 60 days notice, to redeem the Debt in whole or in part for cash
so long as such event is continuing, and, following such redemption, Securities
with an aggregate liquidation amount equal to the aggregate principal amount of
the Debt so redeemed shall be redeemed by the Trust at the Redemption Price on a
Pro Rata basis; PROVIDED, HOWEVER, that, in the case of a Tax Event, if there is
available to the Debt Issuer or the Trust the opportunity to eliminate, within a
reasonable time, the adverse effects of the Tax Event by taking some Ministerial
Action, the Trust or the Debt Issuer will pursue such Ministerial Action in lieu
of redemption.
A "Dissolution Event" shall occur upon the occurrence, and during the
continuation, of either of the following events: (i) the Republic Trustees shall
have received an opinion of independent counsel experienced in practice under
the federal securities laws that there is more than an insubstantial risk that
the Trust is or will be considered an Investment Company; or (ii) the Board of
Governors of the Federal Reserve System or a Federal Reserve Bank (the "Federal
Reserve") shall have advised the Debt Issuer that the Preferred Securities are
not or will be considered not to be "Tier 1 capital" of the Debt Issuer under
the regulations, policies and guidelines of the Federal Reserve.
"Tax Event" means that the Republic Trustees shall have received an opinion
of independent tax counsel experienced in such matters (a "Dissolution Tax
Opinion") to the effect that, as a result of (a) any amendment to, clarification
of or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, (b) any judicial decision, official
administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action"), or (c) any amendment to,
clarification of, or change in the official position or the interpretation of
such Administrative Action or judicial decision that differs from the
theretofore generally accepted position, in each case, by any legislative body,
court, governmental authority or regulatory body, irrespective of the manner in
which such amendment, clarification or change is made known, which amendment,
clarification, or change is effective or such Administrative Action or decision
is announced, in each case, on or after the first date of the Private Placement
Memorandum, there is more than an insubstantial risk that (i) the Trust is, or
will be within 90 days of the date thereof, subject to United States federal
income tax with respect to interest accrued or received on the Debt or subject
to more than a de minimis amount of other taxes, duties or other governmental
changes, (ii) any portion of interest payable by the Debt Issuer to the Trust on
the Debt is not, or within 90 days of the date thereof will not be, deductible
by the Debt Issuer for United States federal income tax purposes or (iii) the
Debt Issuer could become liable to pay, on the next date on which any amount
would be payable with respect to the Debt, any Additional Interest (as defined
in the Indenture).
After the date for any distribution of Debt upon dissolution of the Trust:
(i) the Securities will be deemed to be no longer outstanding, (ii) the Holders
of the Preferred Securities will receive a certificate or certificates
representing the Debt to be delivered upon such distribution and (iii) any
Certificates representing Preferred Securities will be deemed to represent
undivided beneficial
32
interests in such of the Debt having an aggregate principal amount equal to
the aggregate stated liquidation amount of, with an interest rate identical
to the Coupon Rate of, and accrued and unpaid interest equal to accrued and
unpaid Distributions on, such Preferred Securities until such Certificates
are presented to the Debt Issuer or its agent for conversion, transfer or
reissue.
(d) The Trust may not redeem fewer than all the outstanding Preferred
Securities unless all accrued and unpaid Distributions have been paid on all
Preferred Securities for all quarterly Distribution periods terminating on or
before the date of redemption.
(e) Redemption or Distribution Procedures.
(i) Notice of any redemption of, or notice of distribution of Debt in
exchange for, the Securities (a "Redemption/Distribution Notice") will be given
by the Trust by mail to each Holder of Securities to be redeemed or exchanged
not fewer than 10 nor more than 60 days before the date fixed for redemption or
exchange thereof which, in the case of a redemption, will be the date fixed for
redemption of the Debt. For purposes of the calculation of the date of
redemption or exchange and the dates on which notices are given pursuant to this
Section 4(e)(i), a Redemption/Distribution Notice shall be deemed to be given on
the day such notice is first mailed by first-class mail, postage prepaid, to
Holders of such Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of such Securities at the address of each such Holder
appearing on the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing thereof with respect to any
Holder shall affect the validity of the redemption or exchange proceedings with
respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata from
each Holder of Securities.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/ Distribution Notice, which notice may only be issued if the Debt is
redeemed as set out in this Section 4 (which notice will be irrevocable), then
with respect to Preferred Securities and Common Securities, provided that the
Debt Issuer has paid the Trust a sufficient amount of cash in connection with
the related redemption or maturity of the Debt, the Trust will pay the relevant
Redemption Price to the Holders of such Securities by check mailed to the
address of each such Holder appearing on the books and records of the Trust on
the redemption date. If a Redemption/Distribution Notice shall have been given
and funds deposited as required, then immediately prior to the close of business
on the date of such deposit, Distributions will cease to accrue on the
Securities so called for redemption and all rights of Holders of such Securities
so called for redemption will cease, except the right of the Holders of such
Securities to receive the applicable redemption price specified in Section 4(a),
but without interest on such redemption price. If any date fixed for redemption
of Securities is not a Business Day, then payment of any such redemption price
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay)
except that, if such Business Day falls in the next calendar year, such payment
will be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date fixed for redemption. If payment
of the Redemption Price in respect of any Securities is improperly withheld or
refused and not paid either by the Trust or by the Sponsor as guarantor pursuant
to the relevant Securities Guaranty, Distributions on such Securities will
continue to accrue from the
33
original redemption date to the actual date of payment, in which case the
actual payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price. In the event of any redemption
of Preferred Securities issued by the Trust in part, the Trust shall not be
required to (i) issue, register the transfer of or exchange any Certificates
for Securities during a period beginning at the opening of business 15 days
before any selection for redemption of Preferred Securities and ending at the
close of business on the earliest date on which the relevant notice of
redemption is deemed to have been given to all holders of Preferred
Securities to be so redeemed or (ii) register the transfer of or exchange any
Certificates for Securities so selected for redemption, in whole or in part,
except for the unredeemed portion of any Securities being redeemed in part,
except in connection with any conversion of Securities in accordance with
their terms.
(iv) Redemption/Distribution Notices shall be sent by the Republic
Trustees on behalf of the Trust to the Holders thereof.
5. VOTING RIGHTS - Preferred Securities. (a) Except as provided under
Section 7 and as otherwise required by law and the Declaration, the Holders of
the Preferred Securities will have no voting rights. The Republic Trustee is
required to call a meeting of the holders of the Preferred Securities if
directed to do so by holders of at least 10% in aggregate liquidation amount
thereof.
(b) No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debt in accordance with the Declaration and the terms of the
Securities.
6. VOTING RIGHTS - COMMON SECURITIES. (a) Except as provided under
Sections 6(b) and 7 and as otherwise required by law and the Declaration, the
Holders of the Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance with
Article IV of the Declaration, to vote to appoint, remove or replace any Trustee
or to increase or decrease the number of Trustees and are entitled, in
accordance with Article VII of the Declaration, to consent to the dissolution of
the Trust under certain conditions.
7. AMENDMENTS TO DECLARATION AND INDENTURE. (a) In addition to any
requirements under Section 11.1 of the Declaration, if any proposed amendment to
the Declaration provides for, or the Republic Trustees otherwise propose to
effect, (i) any action that would adversely affect the powers, preferences or
special rights of the Securities, whether by way of amendment to the Declaration
or otherwise, or (ii) the dissolution, winding-up or termination of the Trust,
other than as described in Section 7.1 of the Declaration, then the Holders of
outstanding Securities, voting together as a single class, will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities, affected thereby; provided, however, if
any amendment or proposal referred to in clause (i) above would adversely affect
only the Preferred Securities or only the Common Securities, then only the
affected class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of a
Majority in liquidation amount of such class of Securities.
34
(b) Notwithstanding the foregoing, no amendment or modification may be
made to the Declaration if such amendment or modification would (i) cause the
Trust to be classified for purposes of United States federal income taxation as
other than a grantor trust, or (ii) cause the Trust to be deemed an "investment
company" which is required to be registered under the Investment Company Act.
8. PRO RATA. A reference in these terms of the Securities to any
payment, distribution or treatment as being "Pro Rata" shall mean pro rata to
each Holder of Securities according to the aggregate liquidation amount of the
Securities held by the relevant Holder in relation to the aggregate liquidation
amount of all Securities outstanding unless, in relation to a payment, an Event
of Default has occurred and is continuing, in which case any funds available to
make such payment shall be paid first to each Holder of the Preferred Securities
pro rata according to the aggregate liquidation amount of Preferred Securities
held by the relevant Holder relative to the aggregate liquidation amount of all
Preferred Securities outstanding, and only after satisfaction of all amounts
owed to the Holders of the Preferred Securities, to each Holder of Common
Securities pro rata according to the aggregate liquidation amount of Common
Securities held by the relevant Holder relative to the aggregate liquidation
amount of all Common Securities outstanding.
9. RANKING. The Preferred Securities rank pari passu and payment thereon
shall be made Pro Rata with the Common Securities except that, where an Event of
Default has occurred and is continuing, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of the
Holders of the Preferred Securities.
10. ACCEPTANCE OF SECURITIES GUARANTY AND INDENTURE. Each Holder of
Preferred Securities and Common Securities, by the acceptance of such
Securities, agrees to the provisions of the Preferred Securities Guaranty and
the Common Securities Guaranty, respectively, including the subordination
provisions therein and to the provisions of the Indenture.
11. NO PREEMPTIVE RIGHTS. The Holders of the Securities shall have no
preemptive rights to subscribe for any additional securities.
12. CONVERSION RIGHTS. The Holders of Securities shall have the right at
any time prior to 5:00 p.m. (Louisville, Kentucky time) on the Business Day
immediately preceding the date of repayment of such Securities, whether at
maturity or upon redemption, to cause the Conversion Agent to convert
Securities, on behalf of the converting Holders, into shares of Republic Common
Stock in the manner described herein on and subject to the following terms and
conditions:
(a) The Securities will be convertible at the office of the
Conversion Agent into fully paid and nonassessable shares of Republic Common
Stock pursuant to the Holder's direction to the Conversion Agent to exchange
such Securities for a portion of the Debt theretofore held by the Trust on the
basis of one Security per $100 principal amount of Debt, and immediately convert
such amount of Debt into fully paid and nonassessable shares of Republic Common
Stock at an initial conversion rate of 5 shares of Republic Common Stock per
$100 principal amount of Debt (which is equivalent to a conversion price of $20
per share of Republic Common Stock, subject to certain adjustments set forth in
the terms of the Debt (as so adjusted, the "Conversion Price")).
35
(b) To convert Securities into Republic Common Stock, the Holder
shall submit to the Conversion Agent at the office of the Sponsor an irrevocable
request to convert Securities on behalf of such Holder (the "Conversion
Request"), together with the Certificates for such Securities. The Conversion
Request shall (i) set forth the number of Securities to be converted and the
name or names, if other than the Holder, in which the shares of Republic Common
Stock should be issued and (ii) direct the Conversion Agent (A) to exchange such
Securities for a portion of the Debt held by the Trust (at the rate of exchange
specified in the preceding paragraph) and (B) to immediately convert such Debt
on behalf of such Holder, into Republic Common Stock (at the conversion rate
specified in the preceding paragraph). The Conversion Agent shall notify the
Trust of the Holder's election to exchange Securities for a portion of the Debt
held by the Trust and the Trust shall, upon receipt of such notice, deliver to
the Conversion Agent the appropriate principal amount of Debt for exchange in
accordance with this paragraph 12. The Conversion Agent shall thereupon notify
the Debt Issuer of the Holder's election to convert such Debt into shares of
Republic Common Stock. Accrued Distributions will not be paid on Securities that
are converted, nor will any payment, allowance or adjustment be made for
accumulated and unpaid Distributions, whether or not in arrears, accrued on
converted Securities (including any Additional Interest or Compounded Interest
accrued thereon) except that (i) Holders of Securities at the close of business
on a record date will be entitled to receive the Distributions payable on such
Securities on the corresponding payment date notwithstanding the conversion of
such Securities following such record date but prior to such payment date and
(ii) if, during an Extension Period, notice of any redemption of Securities is
mailed or otherwise given to Holders of Securities, then, if any Holder of
Securities converts any Securities into Republic Common Stock on any date on or
after the date on which such notice of redemption is mailed or otherwise given,
and such date of conversion falls on any day from and including the first day of
an Extension Period through and including the record date for the payment of the
Distributions on the Securities which have been deferred as a result of such
Extension Period, such holder shall be entitled to receive all accrued and
unpaid Distributions on such Securities to the most recent payment date prior to
the date of such conversion, whether or not such payment date falls in such
Extension Period (or, if the date of such conversion is (A) during an Extension
Period, (B) on or prior to the payment date upon which such Extension Period
ends and (C) after the record date for the payment date referred to in clause
(B) above, all accrued and unpaid Distributions on such Securities to such
payment date) shall be distributed to the Holder who converts such Securities,
which distribution shall be made on the redemption date fixed for redemption.
Except as provided above, neither the Trust nor the Debt Issuer will make, or be
required to make, any payment, allowance or adjustment upon any conversion on
account of any accumulated and unpaid Distributions on the Securities (including
any Additional Interest or Compounded Interest) surrendered for conversion. The
Debt Issuer shall make no payment or allowance for distributions on the shares
of Republic Common Stock issued upon such conversion, except to the extent that
such shares of Republic Common Stock are held of record on the record date for
any such distributions. Securities shall be deemed to have been converted
immediately prior to 5:00 p.m. (Louisville, Kentucky time) on the day on which a
Conversion Request relating to such Securities is received by the Trust in
accordance with the foregoing provision (the "Conversion Date"). The Person or
Persons entitled to receive Republic Common Stock issuable upon conversion of
the Debt shall be treated for all purposes as the record holder or holders of
such Republic Common Stock at such time. As promptly as practicable on or after
the Conversion Date, the Debt Issuer shall issue and deliver at the office of
the Conversion Agent a certificate or certificates for the number of full shares
of Republic Common Stock issuable upon such conversion, together with the cash
payment, if any, in lieu of any fraction of any share to the Person or Persons
entitled to receive the same, unless otherwise directed by
36
the Holder in the notice of conversion and the Conversion Agent shall
distribute such certificate or certificates to such Person or Persons.
(c) Each Holder of a Security by his acceptance thereof appoints
Steven E. Trager (the "Conversion Agent") as the agent of the holder for the
purpose of effecting the conversion of Securities in accordance with this
paragraph 12. If Steven E. Trager resigns or otherwise fails to serve as
Conversion Agent, then the Property Trustee shall serve as Conversion Agent. In
effecting the conversion and transactions described in this paragraph 12, the
Conversion Agent shall be acting as agent of the Holders of Securities directing
it to effect such conversion transactions. The Conversion Agent is hereby
authorized (i) to exchange Securities from time to time for Debt held by the
Trust in connection with the conversion of such Securities in accordance with
this paragraph 12 and (ii) to convert all or a portion of the Debt into Republic
Common Stock and thereupon to deliver such shares of Republic Common Stock in
accordance with the provisions of this paragraph 12 and to deliver to the Trust
a new Debt Security for any resulting unconverted principal amount.
(d) No fractional shares of Republic Common Stock will be issued
as a result of conversion, but in lieu thereof, such fractional interest will be
paid in cash (based on the last reported sale price of Republic Common Stock on
the Conversion Date (or, if such date is not a trading date, on the next trading
date) if Republic Common Stock is then traded on a national securities exchange
or is subject to quotation on an inter-dealer automated quotation system, or
otherwise based on the Conversion Price) by the Debt Issuer to the Trust, which
in turn will make such payment to the Holder or Holders of Securities so
converted.
(e) The Debt Issuer shall at all times reserve and keep available
out of its authorized and unissued Republic Common Stock, solely for issuance
upon the conversion of the Debt, free from any preemptive or other similar
rights, such number of shares of Republic Common Stock as shall from time to
time be issuable upon the conversion of all the Debt then outstanding.
Notwithstanding the foregoing, the Debt Issuer shall be entitled to deliver upon
conversion of Debt, shares of Republic Common Stock reacquired and held in the
treasury of the Debt Issuer (in lieu of the issuance of authorized and unissued
shares of Republic Common Stock), so long as any such treasury shares are free
and clear of all liens, charges, security interests or encumbrances. Any shares
of Republic Common Stock issued upon conversion of the Debt shall be duly
authorized, validly issued, fully paid and nonassessable. The Conversion Agent
shall deliver the shares of Republic Common Stock received upon conversion of
the Debt to the converting Holder free and clear of all liens, charges, security
interests and encumbrances, except for United States withholding taxes.
(f) The Debt Issuer will pay any and all taxes that may be payable
in respect of the issue or delivery of shares of Republic Common Stock on
conversion of Debt and the delivery of shares of Republic Common Stock by the
Trust upon conversion of the Securities. The Debt Issuer shall not, however, be
required to pay any tax that may be payable in respect of any transfer involved
in the issue and delivery of shares of Republic Common Stock in a name other
than that in which the Securities so converted were registered, and no such
issue or delivery shall be made unless and until the Person requesting such
issue has paid to the Trust the amount of any such tax or has established to the
satisfaction of the Trust that such tax has been paid.
37
(g) Nothing in the preceding paragraph 12 shall limit the
requirement of the Trust to withhold taxes pursuant to the terms of the
Securities or as set forth in this Annex I to the Declaration or the Declaration
itself or otherwise require the Trustees or the Trust to pay any amounts on
account of such withholdings.
13. MISCELLANEOUS. These terms constitute a part of the Declaration. The
Sponsor will provide a copy of the Declaration, the Preferred Securities
Guaranty or the Common Securities Guaranty (as may be appropriate), and the
Indenture to a Holder without charge on written request to the Sponsor at its
principal place of business.
38
EXHIBIT A-1
FORM OF INITIAL PREFERRED SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[Include the following Restricted Securities Legend on all Preferred
Securities, unless otherwise determined by the Sponsor in accordance with
applicable law ---- [The securities represented by this certificate have not
been registered under the Securities Act of 1933, as amended, or the securities
laws of any state (the "Securities Laws"). These securities may not be offered,
sold, transferred, pledged or hypothecated in the absence of registration under
applicable Securities Laws, or the availability of an exemption therefrom. This
certificate will not be transferred on the books of the Corporation or any
transfer agent acting on behalf of the Corporation except upon the receipt of an
opinion of counsel, satisfactory to the Corporation, that the proposed transfer
is exempt from the registration requirements of all applicable Securities Laws,
or the receipt of evidence, satisfactory to the Corporation, that the proposed
transfer is the subject of an effective registration statement under all
applicable Securities Laws.]
Certificate Number Number of Preferred Securities
Certificate Evidencing Preferred Securities
of
REPUBLIC CAPITAL TRUST
Quarterly Income Preferred Securities
(Liquidation amount $100 per Preferred Security)
REPUBLIC CAPITAL TRUST, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that
_____________ (the "Holder") is the registered owner of preferred securities of
the Trust representing undivided beneficial interests in the assets of the
Trust, designated the Quarterly Income Preferred Securities (liquidation amount
$100 per Preferred Security) (the "Preferred Securities"). The Preferred
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this Certificate duly endorsed
and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Preferred
Securities represented hereby are issued pursuant to, and shall in all respects
be subject to, the provisions of the Declaration of Trust of the Trust dated as
of February 5, 1997, including the designation of the terms of the Preferred
Securities as set forth in Annex I to the Declaration, as the same may be
amended from time to time (the "Declaration"). Capitalized terms used herein
but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Preferred Securities Guaranty to the
extent provided therein, the terms of which are incorporated by reference
herein. The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guaranty and the Indenture to the Holder without charge upon written
request to the Trust at its principal place of business.
39
Upon receipt of this Security, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance of this Security, the Holder agrees to treat, for United
States federal income tax purposes, the Debt as indebtedness and the Preferred
Securities as evidence of beneficial ownership in the Debt.
IN WITNESS WHEREOF, the Trust has executed this certificate this ____
day of __________, 1997.
REPUBLIC CAPITAL TRUST
GUARANTEED to the extent provided By: _________________________
in the Preferred Securities Guaranty, Name: Steven E. Trager
incorporated herein by reference: Title: Republic Trustee
REPUBLIC BANCORP, INC.
By:________________________________
Title:_____________________________
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a
rate per annum of 8.5% (the "Coupon Rate") of the stated liquidation amount of
$100 per Preferred Security, such rate being the rate of interest payable on the
Debt to be held by the Trust. Except as set forth below in respect of an
Extension Period, Distributions in arrears for more than a quarterly period will
bear interest thereon compounded quarterly at the Coupon Rate (to the extent
permitted by applicable law). The term "Distributions" as used herein includes
cash distributions and any such compounded interest and any Additional Interest
paid on the Debt unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debt held by the Trust and to
the extent the Trust has funds available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months.
Except as otherwise described below, Distributions on the Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears on January 1, April 1, July 1 and
October 1 of each year, commencing on April 1, 1997. The Debt Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period at any time and from time to time on the Debt for a
period not exceeding 20 consecutive quarterly periods (each an "Extension
Period"), during which Extension Period no interest will be due and payable on
the Debt, PROVIDED, that no Extension Period shall be initiated while accrued
interest with respect to prior, completed Extension Periods is unpaid or extend
beyond the date of the maturity of the Debt. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the Debt Issuer may further extend such Extension Period; PROVIDED, THAT such
Extension Period together with all such previous and further extensions thereof
may not exceed 20 consecutive quarterly periods or extend beyond the maturity of
the Debt. Distributions accrued during any Extension Period will be payable on
the next quarterly Distribution payment date to Holders as they appear on the
books and records of the Trust on the record date next following the termination
of the Extension Period. Upon the termination of any Extension Period and the
payment of all amounts then due, the Debt Issuer may commence a new Extension
Period, subject to the above requirements.
40
The Preferred Securities shall be redeemable and, through the Debt,
may be converted into Class A Common Stock of the Debt Issuer as provided in the
Declaration.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
_________________________________________________________
_________________________________________________________
(Insert assignee's social security or tax identification number)
_________________________________________________________
_________________________________________________________
(Insert address and zip code of assignee) and irrevocably appoints
_________________________________________________________
_________________________________________________________
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: __________________________________________
Signature: __________________________________________
(Sign exactly as your name appears on the other side of this Preferred
Security Certificate)
Signature Guaranty:*__________
*Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Security registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Security
registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
CONVERSION REQUEST
To: Steven E. Trager, as Conversion Agent
The undersigned owner of these Preferred Securities hereby
irrevocably exercises the option to convert these Preferred Securities, or the
portion below designated, into Class A Common Stock of Republic Bancorp, Inc.
(the "Common Stock") in accordance with the terms of the Declaration of Trust
(the "Declaration"), dated as of February 5, 1997 by Steven E. Trager, A. Scott
Trager, and L. Lee Kinsolving, Jr., as Republic Trustees, Wilmington Trust
Company, as Delaware Trustee, and Republic Bancorp, Inc. as Sponsor. Pursuant
to the aforementioned exercise of the option to convert these Preferred
Securities, the
41
undersigned hereby directs the Conversion Agent (as that term is defined in
the Declaration) to (i) exchange such Preferred Securities for a portion of
the Debt (as that term is defined in the Declaration) held by the Trust (at
the rate of exchange specified in the terms of the Preferred Securities set
forth as Annex I to the Declaration) and (ii) immediately convert such Debt
on behalf of the undersigned, into Common Stock (at the conversion rate
specified in the terms of the Preferred Securities set forth as Annex I to
the Declaration).
The undersigned also hereby directs the Conversion Agent that
the shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Date: ________________
Number of Preferred Securities to be converted: ___________________
If a name or names other than the undersigned, please indicate in the spaces
below the name or names in which the shares of Common Stock are to be issued,
along with the address or addresses of such person or persons.
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
__________________________________________
(Sign exactly as your name appears on the other side of this Preferred
Security Certificate) (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number.
__________________________________________
__________________________________________
__________________________________________
__________________________________________
Signature Guaranty:* _______________________________
*Signature must be guaranteed by an "eligible guarantor institution" that is, a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
42
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
[The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or the securities laws
of any state (the "Securities Laws"). These securities may not be offered,
sold, transferred, pledged or hypothecated in the absence of registration under
applicable Securities Laws, or the availability of an exemption therefrom. This
certificate will not be transferred on the books of the Corporation or any
transfer agent acting on behalf of the Corporation except upon the receipt of an
opinion of counsel, satisfactory to the Corporation, that the proposed transfer
is exempt from the registration requirements of all applicable Securities Laws,
or the receipt of evidence, satisfactory to the Corporation, that the proposed
transfer is the subject of an effective registration statement under all
applicable Securities Laws.]
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
Of
REPUBLIC CAPITAL TRUST
REPUBLIC CAPITAL TRUST, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that Republic
Bancorp, Inc. (the "Holder") is the registered owner of common securities of the
Trust representing undivided beneficial interests in the assets of the Trust
(the "Common Securities"). The Common Securities are transferable on the books
and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this Certificate duly endorsed and in proper form for transfer.
The designation, rights, privileges, restrictions, preferences and other terms
and provisions of the Common Securities represented hereby are issued pursuant
to, and shall in all respects be subject to, the provisions of the Declaration
of Trust of the Trust dated as of February 5, 1997, including the designation of
the terms of the Common Securities as set forth in Annex I to the Declaration,
as the same may be amended from time to time (the "Declaration"). Capitalized
terms used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Common Securities
Guaranty to the extent provided therein, the terms of which are incorporated by
reference herein. The Sponsor will provide a copy of the Declaration, the
Common Securities Guaranty and the Indenture to the Holder without charge upon
written request to the Sponsor at its principal place of business.
Upon receipt of this Certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance of this Certificate, the Holder agrees to treat, for
United States federal income tax purposes, the Debt as indebtedness and the
Common Securities as evidence of undivided beneficial ownership in the Debt.
43
IN WITNESS WHEREOF, the Trust has executed this certificate this
_____day of ______________, 1997.
REPUBLIC CAPITAL TRUST
GUARANTEED to the extent provided By: _________________________
in the Common Securities Guaranty, Name: Steven E. Trager
incorporated herein by reference: Title: Republic Trustee
REPUBLIC BANCORP, INC.
By:________________________________
Title:_____________________________
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be identical in
amount to the Distributions payable on each Preferred Security, which is at a
rate per annum of 8.5% (the "Coupon Rate") of the stated liquidation amount of
$100 per Preferred Security, such rate being the rate of interest payable on the
Debt to be held by the Trust. Except as set forth below in respect of an
Extension Period, Distributions in arrears for more than one quarterly period
will bear interest thereon compounded quarterly at the Coupon Rate (to the
extent permitted by applicable law). The term "Distributions" as used herein
includes cash distributions and any such compounded distribution and any
Additional Interest paid on the Debt unless otherwise stated. A Distribution is
payable only to the extent that payments are made in respect of the Debt held by
the Trust and to the extent the Trust has funds available therefor. The amount
of Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months.
Except as otherwise described below, Distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears on January 1, April 1, July 1 and
October 1 of each year, commencing on April 1, 1997. The Debt Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period at any time and from time to time on the Debt for a
period not exceeding 20 consecutive quarterly periods (each an "Extension
Period"), during which Extension Period no interest will be due and payable on
the Debt, PROVIDED, that no Extension Period shall be initiated while accrued
interest with respect to prior, completed Extension Periods is unpaid or extend
beyond the date of the maturity of the Debt. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the Debt Issuer may further extend such Extension Period; PROVIDED, THAT such
Extension Period together with all such previous and further extensions thereof
may not exceed 20 consecutive quarterly periods or extend beyond the maturity of
the Debt. Distributions accrued during any Extension Period will be payable on
the next quarterly Distribution payment date to Holders as they appear on the
books and records of the Trust on the record date next following the termination
of the Extension Period. Upon the termination of any Extension Period and the
payment of all amounts then due, the Debt Issuer may commence a new Extension
Period, subject to the above requirements.
The Common Securities shall be redeemable, and, through the Debt, may
be converted into Class A Common Stock of the Debt Issuer as provided in the
Declaration.
44
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common
Security Certificate to:
_________________________________________________________
_________________________________________________________
_________________________________________________________
(Insert assignee's social security or tax identification number)
_________________________________________________________
_________________________________________________________
_________________________________________________________
(Insert address and zip code of assignee) and irrevocably appoints
_________________________________________________________
_________________________________________________________
_________________________________________________________
agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: __________________________________________
Signature: __________________________________________
(Sign exactly as your name appears on the other side of this Common
Security Certificate)
Signature Guaranty:*__________
*Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Security registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Security
registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
CONVERSION REQUEST
To: Steven E. Trager, as Conversion Agent
The undersigned owner of these Common Securities hereby
irrevocably exercises the option to convert these Common Securities, or the
portion below designated, into Class A Common Stock of Republic Bancorp, Inc.
(the "Common Stock") in accordance with the terms of the Declaration of Trust
(the "Declaration"), dated as of February 5, 1997 by Steven E. Trager, A. Scott
Trager, and L. Lee Kinsolving, Jr., as Republic Trustees, Wilmington Trust
Company, as Delaware Trustee, and Republic Bancorp, Inc. as
45
Sponsor. Pursuant to the aforementioned exercise of the option to convert
these Common Securities, the undersigned hereby directs the Conversion Agent
(as that term is defined in the Declaration) to (i) exchange such Common
Securities for a portion of the Debt (as that term is defined in the
Declaration) held by the Trust (at the rate of exchange specified in the
terms of the Common Securities set forth as Annex I to the Declaration) and
(ii) immediately convert such Debt on behalf of the undersigned, into Common
Stock (at the conversion rate specified in the terms of the Common Securities
set forth as Annex I to the Declaration).
The undersigned also hereby directs the Conversion Agent that
the shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Date: ________________
Number of Common Securities to be converted: ___________________
If a name or names other than the undersigned, please indicate in the spaces
below the name or names in which the shares of Common Stock are to be issued,
along with the address or addresses of such person or persons.
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
__________________________________________
(Sign exactly as your name appears on the other side of this Common
Security Certificate) (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number.
__________________________________________
__________________________________________
__________________________________________
__________________________________________
Signature Guaranty:* _______________________________
*Signature must be guaranteed by an "eligible guarantor institution" that is, a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
46
EXHIBIT B
SPECIMEN OF DEBT
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE (THE
"SECURITIES LAWS"). THESE SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF REGISTRATION UNDER APPLICABLE
SECURITIES LAWS, OR THE AVAILABILITY OF AN EXEMPTION THEREFROM. THIS
CERTIFICATE WILL NOT BE TRANSFERRED ON THE BOOKS OF THE CORPORATION OR ANY
TRANSFER AGENT ACTING ON BEHALF OF THE CORPORATION EXCEPT UPON THE RECEIPT OF AN
OPINION OF COUNSEL, SATISFACTORY TO THE CORPORATION, THAT THE PROPOSED TRANSFER
IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF ALL APPLICABLE SECURITIES LAWS,
OR THE RECEIPT OF EVIDENCE, SATISFACTORY TO THE CORPORATION, THAT THE PROPOSED
TRANSFER IS THE SUBJECT OF AN EFFECTIVE REGISTRATION STATEMENT UNDER ALL
APPLICABLE SECURITIES LAWS
NO. 01 PRINCIPAL AMOUNT $____________
REPUBLIC BANCORP, INC.
8.5% SUBORDINATED DEFERRABLE INTEREST DEBT SECURITY DUE 2027
REPUBLIC BANCORP, INC., a Kentucky corporation (the "Corporation"), which term
includes any successor corporation under the Indenture hereinafter referred to,
for value received, hereby promises to pay to Republic Capital Trust, a Delaware
business trust, or registered assigns, the principal sum of Ten Million Dollars
($10,000,000) on April 1, 2027, and to pay interest on said principal sum from
[THE DATE OF ISSUE], 1997, or from the most recent interest payment date (each
such date, an "Interest Payment Date") to which interest has been paid or duly
provided for, quarterly (subject to deferral as set forth herein) in arrears on
January 1, April 1, July 1 and October 1 of each year commencing April 1, 1997,
at the rate of Eight and 5/10 Per Cent (8.5%) per annum until the principal
hereof shall have become due and payable, and on any overdue principal and
premium, if any, and (without duplication and to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum compounded quarterly. The amount of
interest payable on any Interest Payment Date shall be computed on the basis of
a 360-day year of twelve 30-day months. In the event that any date on which
interest is payable on this Debt Security is not a Business Day, then payment of
interest payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the Person
in whose name this Debt Security (or one or more Predecessor Securities, as
defined in said Indenture) is registered at the close of business on the Record
Date for such interest installment, which shall be the close of business on the
15th Business Day next preceding such Interest Payment Date. Any such interest
installment not punctually paid or duly provided for shall forthwith cease to be
payable to the registered holders on such Record Date and may be paid to the
Person in whose name this Debt Security (or one or more Predecessor Securities)
is registered at the close of business on
47
a special record date to be fixed by the Corporation for the payment of such
defaulted interest, notice whereof shall be given to the registered holders
of Debt Securities not less than 10 days prior to such special record date,
or may be paid at any time in any other lawful manner, all as more fully
provided in the Indenture. The principal of (and premium, if any) and the
interest on this Debt Security shall be payable at the office or agency of
the Corporation (or other paying agent appointed by the Corporation)
maintained for that purpose in any coin or currency of the United States of
America that at the time of payment is legal tender for payment of public and
private debts; PROVIDED, however, that payment of interest may be made at the
option of the Corporation by check mailed to the registered holder at such
address as shall appear in the Security Register.
The indebtedness evidenced by this Debt Security is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debt Security is
issued subject to the provisions of the Indenture with respect thereto. Each
holder of this Debt Security, by accepting the same, agrees to and shall be
bound by the provisions of the Indenture. Each holder hereof, by his or her
acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder
of Senior Indebtedness, whether now outstanding or hereafter incurred, and
waives reliance by each such holder upon said provisions.
The provisions of this Debt Security are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
IN WITNESS WHEREOF, the Corporation has caused this instrument to be
executed.
REPUBLIC BANCORP, INC. Dated: __________, 1997
By:_____________________________________
Name:__________________________________
Title:____________________________________
Attest:__________________________________
Name:__________________________________
Title:____________________________________
[Text of Reverse Side]
This Debt Security of the Corporation is issued under and pursuant to the
Indenture between the Corporation and Steven E. Trager, as trustee, dated
February 5, 1997 (the "Indenture"), to which Indenture reference is hereby made
for a description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Corporation and the holders of the Debt Securities
(referred to herein as the "Debt Securities") of which this Debt Security is a
part. The summary of the terms of this Debt Security contained herein does not
purport to be complete
48
and is qualified by reference to the Indenture. The Debt Securities are
limited in aggregate principal amount as specified in said Indenture.
The Corporation shall have the right to redeem this Debt Security at the
option of the Corporation, in whole or in part at any time on or after April 1,
2002 (an "Optional Redemption"), at the redemption price (the "Redemption
Price") equal to the principal amount being redeemed, plus accrued and unpaid
interest to the redemption date, which shall be paid prior to 12:00 noon,
Louisville, Kentucky time, on the date of such redemption or at such earlier
time as the Corporation determines. In addition, the Corporation has the right
to redeem the Debt Securities, in whole or in part, at any time at the
Redemption Price upon the occurrence, and during the continuation, of any of the
following events: (i) the Republic Trustees shall have received an opinion of
independent counsel experienced in practice under the federal securities laws
that there is more than an insubstantial risk that the Trust is or will be
considered an Investment Company or (ii) the Board of Governors of the Federal
Reserve System or a Federal Reserve Bank (the "Federal Reserve") shall have
advised the Debt Issuer that the Preferred Securities are not or will be
considered not to be "Tier 1 Capital" of the Debt Issuer under the regulations,
policies and guidelines of the Federal Reserve; or (iii) a Tax Event. Any
redemption pursuant to this paragraph will be made upon not less than 10 days
nor more than 60 days notice, at the Redemption Price. If the Debt Securities
are only partially redeemed by the Corporation pursuant to an Optional
Redemption, the Debt Securities will be redeemed pro rata or by lot or by any
other method utilized by the Corporation.
On the terms and subject to the conditions set forth in the Indenture, the
Holder of the Debt Securities has the right, exercisable at any time on or
before 5:00 p.m. (Louisville, Kentucky time) on the Business Day immediately
preceding the date of repayment of such Securities, whether at maturity or upon
redemption, to convert such Securities into fully paid and nonassessable whole
shares of Republic Common Stock at a conversion rate of 5 shares of Republic
Common Stock for each $100 in aggregate principal amount of Securities, subject
to adjustment under certain circumstances, as provided in the Indenture.
In the event of redemption of this Debt Security in part only, a new Debt
Security or Debt Securities for the unredeemed portion hereof will be issued in
the name of the holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debt Securities may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Corporation, with the
consent of the holders of not less than a majority in aggregate principal amount
of the Debt Securities affected at the time outstanding, as specified in the
Indenture, to execute supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or of modifying in any manner the
rights of the holders of the Debt Securities; provided, however, that no such
supplemental indenture shall among other things, (i) extend the fixed maturity
of any Debt Securities, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, or reduce any premium
payable upon the redemption thereof, without the consent of the holder
49
of each Debt Security so affected, or (ii) reduce, the aforesaid percentage
of Debt Securities, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holder of each Debt
Security then outstanding and affected thereby. The Indenture also contains
provisions permitting the holders of a majority in aggregate principal amount
of the Debt Securities at the time outstanding affected thereby, on behalf of
all of the holders of the Debt Securities, to waive any past default in the
performance of any of the covenants contained in the Indenture, or
established pursuant to the Indenture, and its consequences, except a default
in the payment of the principal of or premium, if any, or interest on any of
the Debt Securities. Any such consent or waiver by the registered holder of
this Debt Security (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such holder and upon all future holders and
owners of this Debt Security and of any Debt Security issued in exchange
herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Debt Security.
No reference herein to the Indenture and no provision of this Debt Security
or of the Indenture shall alter or impair the obligation of the Corporation,
which is absolute and unconditional, to pay the principal of and interest on
this Debt Security at the time and place and at the rate and in the money herein
prescribed.
The Corporation shall have the right at any time during the term of the
Debt Securities and from time to time to extend the interest payment period of
the Debt Securities for up to 20 consecutive quarterly periods (each, an
"Extension Period") as provided in the Indenture. During the Extension Period
no interest shall be due and payable; provided that no Extension Period may
extend beyond the Maturity Date. To the extent permitted by applicable law,
interest on the Debt Securities, the payment of which has been deferred, will
bear interest thereon compounded quarterly. At the end of an Extension Period,
the Corporation shall pay all interest accrued and unpaid on the Debt
Securities, including any Additional Interest and Compounded Interest, that
shall be payable.
As provided in the Indenture and subject to certain limitations herein and
therein set forth, this Debt Security is transferable by the registered holder
hereof on the Debt Security Register of the Corporation, upon surrender of this
Debt Security for registration of transfer at the office or agency of the
Corporation in Louisville, Kentucky, accompanied by a written instrument or
instruments of transfer in form satisfactory to the Corporation duly executed by
the registered holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Debt Securities of authorized denominations and for
the same aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such
transfer, but the Corporation may require payment of a sum sufficient to cover
any tax or other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Debt
Security, the Corporation may deem and treat the registered holder hereof as the
absolute owner hereof for the purpose of receiving payment of or on account of
the principal hereof and premium, if any, and interest due hereon and for all
other purposes, and the Corporation shall not be affected by any notice to the
contrary.
50
No recourse shall be had for the payment of the principal or premium on, if
any or the interest on this Debt Security, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator, stockholder, officer or director, past, present or future, as
such, of the Corporation or of any predecessor or successor corporation, whether
by virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for, the issuance hereof,
expressly waived and released.
The Debt Securities are issuable only in registered form without coupons in
denominations of $100 and any integral multiple thereof. All terms used in this
Debt Security that are defined in the Indenture shall have the meanings assigned
to them in the Indenture.
THE INTERNAL LAWS OF THE STATE OF KENTUCKY SHALL GOVERN THE INDENTURE
AND THE DEBT SECURITIES WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
NOTICE OF CONVERSION
To: Republic Bancorp, Inc.
The undersigned owner of this Security hereby irrevocably exercises
the option to convert this Security, or the portion below designated, into Class
A Common Stock (the "Common Stock") of Republic Bancorp, Inc. (the "Company") in
accordance with the terms of the Indenture referred to in the Security, between
the Company and Steven E. Trager, as Trustee, and directs that the shares
issuable and deliverable upon conversion, together with any check in payment for
fractional shares, be issued in the name of and delivered to the undersigned,
unless a different name has been indicated in the assignment below. If shares
are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto.
Date:_______________
Principal Amount of Securities to be converted ($100 or integral multiples
thereof): _______________
If a name or names other than the undersigned, please indicate in the spaces
below the name or names in which the shares of Common Stock are to be issued,
along with the address or addresses of such person or persons.
____________________________________________________
____________________________________________________
____________________________________________________
____________________________________________________
(Signed exactly as your name appears on the Security) (for conversion only)
51
Please print or typewrite name and address, including zip code, and social
security or other identifying number.
____________________________________________________
____________________________________________________
____________________________________________________
Signature Guarantee:*_______________________
*Signature must be guaranteed by an "eligible institution," that is a bank,
stockbroker, savings and loan association or credit union meeting the
requirements of the Security Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the security
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.)
52
EXHIBIT C
FORM OF PURCHASE AGREEMENT
53
SUBSCRIPTION AGREEMENT
Republic Bancorp, Inc.
Republic Capital Trust
Republic Corporate Center
Louisville, Kentucky 40202
Gentlemen:
This subscription is submitted to Republic Capital Trust (the
"Trust"), a Delaware Business Trust, and Republic Bancorp, Inc. (the "Company")
in accordance with and subject to the terms and conditions described in this
Subscription Agreement (the "Agreement") and the Private Placement Memorandum
dated January 30, 1997 (the "Memorandum"), relating to an offering (the
"Offering") of Quarterly Income Preferred Securities, $100 par ("Preferred
Stock"), of the Trust and the securities to be issued by the Company in
connection therewith, namely, the Guaranty to be entered into between the
Company and a trustee on behalf of the holders of the Preferred Securities (the
"Guaranty") and the 8.5% Convertible Subordinated Debt Securities of the Company
maturing March 31, 2027 (the "Subordinated Debt Securities"), with each $100 in
principal of Subordinated Debt Securities convertible into five shares of the
Class A Common Stock of the Company (the "Class A Common Stock") (the Preferred
Securities, the Guaranty, the Subordinated Debt Securities and the Class A
Common Stock are, collectively, the "Securities").
The undersigned (the "Subscriber"), intending to be legally bound,
hereby irrevocably agrees to purchase from the Trust the number of shares of
Preferred Securities set forth on the signature page hereof, at $100 per
Preferred Securities, for a total amount constituting the purchase price (the
"Purchase Price").
I. CLOSING.
A. TIME AND PLACE. The initial closing (the "Initial Closing") of
the transactions contemplated by the Memorandum shall be held at the offices of
the Company, 601 West Market Street, Louisville, Kentucky 40202, on February 5,
1997 at 2:00 p.m., or on such later date or at such other time and place as the
Trust and the Company may direct (the "Initial Closing Date"). If the date of
this Agreement is on or prior to the Initial Closing Date, the closing of the
transactions contemplated by this Agreement shall occur at the Initial Closing.
If the date of this Agreement is after the Initial Closing Date, the closing of
the sale and purchase of the Preferred Securities shall occur on the date of the
Agreement or, if not a business day, the next business day thereafter (a
"Subsequent Closing Date") (the Initial Closing Date and a Subsequent Closing
Date are collectively referred to as the "Closing Date"). The closing of the
transactions contemplated by this Agreement on the Closing Date shall be subject
to the terms and conditions of this Agreement.
B. PAYMENT OF THE PURCHASE PRICE BY THE SUBSCRIBER. The Purchase
Price shall be due and payable on the Closing Date. All payments of the
Purchase Price shall be made in immediately available funds by bank wire
transfer or by the delivery to the Trust of a certified check payable to the
Trust. If wire transfer is utilized, the Subscriber must complete the
information called for on the signature page hereof relating thereto.
Within ninety (90) days of the Closing Date, the Trust shall deliver to the
Subscriber a certificate registered in the Subscriber's name and representing
the Preferred Securities purchased
pursuant to this Agreement, which certificate shall bear the legend set forth
in Section 3.L hereof, together with any legends required under applicable
state securities or other applicable laws (the "Legends").
2. ACCEPTANCE OF SUBSCRIPTION. The date of this Agreement shall be the
date it is accepted and executed by the Company and the Trust. The Subscriber
understands and agrees that the Trust and the Company in their sole discretion
reserve the right to accept or reject this subscription and any other
subscription for the Securities, in whole or in part, at any time prior to the
Closing Date, notwithstanding prior receipt by the Subscriber of oral or written
notice of acceptance. If the subscription is rejected in whole, this
Subscription Agreement shall thereafter be of no further force or effect.
3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF SUBSCRIBER. The
Subscriber hereby represents, warrants and agrees with the Trust and the
Company, as follows:
A. The address set forth below is the Subscriber's true and correct
residence and the Subscriber has no present intention of becoming a resident of
any other state or jurisdiction.
B. The Subscriber has received and carefully reviewed the Memorandum
and all attachments thereto, and understands the information contained therein.
The Subscriber and the Subscriber's attorney, accountant, or adviser have had a
reasonable opportunity to inspect all documents, records, books and material
contracts pertaining to this investment, including, without limitation, the
Memorandum. The Subscriber confirms that the Securities are being purchased
without the Subscriber's receipt of any offering literature other than the
Memorandum. Except for information set forth in the Memorandum, the Subscriber
is not relying on the Trust or the Company or any agent of the Trust or the
Company with respect to the tax and other economic considerations of an
investment in the Securities.
C. The Subscriber has had a reasonable opportunity to ask questions
and receive answers from a person or persons acting on behalf of the Trust and
the Company concerning the Offering of the Securities, the terms and conditions
and all other aspects of investment in the Trust and the Company, and all such
questions have been answered to the full satisfaction of the Subscriber.
D. The Subscriber is not subscribing for the Securities as a result
of or subsequent to any advertisement, article, notice or other communication
published in any newspaper, magazine, or similar media or broadcast over
television or radio, or presented at any seminar or meeting, or any solicitation
of a subscription by a person other than a representative of the Trust or the
Company.
E. If the Subscriber is a natural person, the Subscriber has reached
the age of majority in the jurisdiction in which the Subscriber resides; the
Subscriber has adequate means of providing for the Subscriber's current
financial needs and contingencies, is able to bear the substantial economic
risks of an investment in the Securities for an indefinite period of time, has
no need for liquidity in such investment, and, at the present time, could afford
a complete loss of such investment. The Subscriber's overall commitment to
investments which are not readily marketable is reasonable in relation to the
Subscriber's net worth. The Subscriber recognizes
2
that there are substantial restrictions on the transferability of the
Securities under federal and state securities laws, that the Securities may
have to be held indefinitely and that it may not be possible for the
Subscriber to liquidate the investment in the Trust and the Company. The
Subscriber recognizes that investment in the Securities is speculative in
nature, and involves substantial risks, including the risk of loss of the
entire amount of such investment, and has taken full cognizance of and
understands all of the risks related to the purchase of the Securities.
F. The Subscriber and the Subscriber's advisers have such knowledge
and experience in financial, tax and business matters so as to enable the
Subscriber to utilize the information made available to the Subscriber in
connection with the Offering to evaluate the merits and risks of an investment
in the Securities, and to make an informed investment decision with respect
thereto.
G. The Subscriber understands that the Offering and sale of the
Securities is intended to be exempt from registration under the Securities Act
of 1933, as amended (the "Act"), by virtue of Section 4(2) of the Act and the
provisions of Regulation D promulgated thereunder. The Securities have not been
registered under the Act or under the securities laws of any state and neither
the Trust nor the Company will be under any obligation to so register the
Securities. The Subscriber represents that the Subscriber is purchasing the
Securities for the Subscriber's own account, for investment and not with a view
to resale, distribution, or other disposition, and Subscriber has no present
plans to enter into any contract, undertaking, agreement or arrangement for any
such resale, distribution or other disposition. The Subscriber will not sell or
otherwise transfer the Preferred Securities, and any Securities received in
respect thereof, without registration under the Act and applicable state
securities laws, or pursuant to an exemption therefrom.
H. The Subscriber is an "accredited investor" as that term is
defined in Rule 501 promulgated under the Act, inasmuch as the Subscriber meets
the requirements of one or more of the subparagraphs listed in EXHIBIT A hereto
as of the date of this Agreement, and if there is any material change in such
status prior to the sale of the Preferred Securities, the Subscriber will
immediately notify the Trust and the Company in writing.
I. The execution, delivery and performance of this Agreement by the
Subscriber (i) will not constitute a default under or conflict with any
agreement or instrument to which the Subscriber is a party or by which it or its
assets are bound, (ii) will not conflict with or violate any order, judgment,
decree, statute, ordinance or regulation applicable to the Subscriber
(including, without limitation, any applicable laws relating to permissible
legal investments) and (iii) do not require the consent of any person or entity.
This Agreement has been duly authorized, executed and delivered by the
Subscriber and constitutes the valid and binding agreement of the Subscriber
enforceable against it in accordance with its terms. Subscriber has all
requisite power to purchase the Securities subscribed for hereunder and shall
deliver to the Trust and the Company such documents and legal opinions
reasonably requested by it with respect to such authority and power.
J. The Subscriber has not retained, or otherwise entered into any
agreement or understanding with, any broker or finder in connection with the
purchase of Securities by the Subscriber, and neither the Trust nor the Company
will incur any liability for any fee, commission
3
or other compensation on account of any such retention, agreement or
understanding by the Subscriber.
K. The Subscriber, if executing this Agreement in a representative
or fiduciary capacity, has full power and authority to execute and deliver this
Agreement in such capacity and on behalf of the subscribing individual,
partnership, trust, estate, corporation, or other entity for whom the Subscriber
is executing this Agreement, and such individual, partnership, trust, estate,
corporation, or other entity has full right and power to enter into this
Agreement and make an investment in the Securities.
L. The Subscriber understands that the certificate or certificates
representing the Preferred Securities, and any Securities issued in respect
thereof, shall bear a legend in substantially the following form, together with
any legend required by applicable state securities or other applicable law, and
the Subscriber shall not transfer any or all of the Securities, or any interest
therein, except in accordance with the terms of such legend:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or the
securities laws of any state (the "Securities Laws"). These
securities (and any securities into which they may be converted) may
not be offered, sold, transferred, pledged or hypothecated in the
absence of registration under applicable Securities Laws, or the
availability of an exemption therefrom. This certificate will not be
transferred on the books of the Corporation or any transfer agent
acting on behalf of the Corporation except upon the receipt of an
opinion of counsel, satisfactory to the Corporation, that the proposed
transfer is exempt from the registration requirements of all
applicable Securities Laws, or the receipt of evidence, satisfactory
to the Corporation, that the proposed transfer is the subject of an
effective registration statement under all applicable Securities Laws.
M. The Subscriber: [i] has not filed a registration statement which
is the subject of a currently effective stop order entered pursuant to any
state's law within five years prior to the date hereof; [ii] has not been
convicted within five years prior to the date hereof of any felony or
misdemeanor in connection with the purchase or sale of any security or any
felony involving fraud or deceit including, but not limited to, forgery,
embezzlement, obtaining money under false pretenses, larceny or conspiracy to
defraud; [iii] is not currently subject to any state's administrative order or
judgment entered by that state's securities administrator within five years
prior to the date hereof and is not subject to any state's administrative order
or judgment in which fraud or deceit was found and the order or judgment was
entered within five years of the date hereof; [iv] is not currently subject to
any state's administrative order or judgment which prohibits the use of any
exemption from registration in connection with the purchase or sale of
securities; [v] is not subject to any order, judgment or decree of any court of
competent jurisdiction temporarily or preliminarily restraining or enjoining,
and is not subject to any order, judgment or decree of any court of competent
jurisdiction, entered within five years prior to the date hereof, permanently
restraining or enjoining the Subscriber from engaging in or continuing any
conduct or practice in connection with the purchase or sale of any security or
involving the making of any false filing with any state.
4
4. TERMINATION. The Company and the Trust will each have the right to
terminate Offering, and this Agreement, if Preferred Securities with an
aggregate liquidation amount of $9,700,000 have not been fully subscribed and
paid for February 5, 1997. This Agreement will terminate automatically if the
Closing Date has not occurred by the close of business on June 30, 1997.
5. SURVIVAL. The representations, warranties, and agreements of the
Subscriber contained herein shall be true and correct in all material respects
on and as of the Closing Date as if made on and as of such date and shall
survive the execution and delivery of this Agreement and the purchase of the
Securities by the Subscriber.
6. INDEMNIFICATION. The Subscriber understands the meaning and legal
consequences of the representations and warranties contained in this Agreement
and agrees to indemnify and hold harmless the Trust and the Company, their
directors, officers, agents and attorneys, from and against any and all loss,
damage, liability, claim, cause of action, judgment or expense, including
reasonable attorneys' fees to the extent permitted by law, due to or arising out
of a breach of any representation or warranty of the Subscriber contained in
this Agreement.
7. MISCELLANEOUS.
A. COOPERATION. Subject to the terms and conditions herein
provided, each of the parties hereto shall use reasonable efforts to take, or
cause to be taken, such action, to execute and deliver, or cause to be executed
and delivered, such additional documents and instruments and to do, or cause to
be done, all things necessary, proper or advisable under the provisions of this
Agreement and under applicable law to consummate and make effective the
transactions contemplated hereby.
B. NOTICES. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telegraphed,
sent by facsimile transmission or sent by mail, postage prepaid. Any such
notice shall be deemed given when so delivered personally, telegraphed or sent
by facsimile transmission or, if mailed by certified or registered mail, three
days after the date of deposit in the mails, as follows:
If to the Trust or the Company, one copy to: Steven Trager
Republic Bancorp, Inc.
Republic Capital Trust
Republic Corporate Center
Louisville, Kentucky 40202
Telecopier: (502) 561-7188
with a copy to: Cynthia W. Young, Esq.
Wyatt, Tarrant & Combs
2800 Citizens Plaza
Louisville, KY 40202
Telecopier: (502) 589-0309
If to the Subscriber, one copy to the address indicated on the signature
page hereof.
5
Any party, by notice given in accordance with this section to the other
party, may designate another address or person for receipt of notices hereunder.
Notices by a party may be given by counsel to such party.
C. ENTIRE AGREEMENT. This Agreement constitutes the complete
understanding between the parties with respect to the subject matter hereof and
supersedes all prior agreements or undertakings, written or oral, and all
contemporaneous oral agreements or understandings with respect to such subject
matter.
D. AMENDMENTS. This Agreement may not be amended nor shall any
waiver, change, modification, consent or discharge be effected except by an
instrument in writing executed by or on behalf of the party seeking or against
whom enforcement of any amendment, waiver, change, modification, consent or
discharge is sought.
E. NO WAIVER. Any failure or delay on the part of a party in
exercising any power or right hereunder shall not operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, preclude
any other or further exercise thereof or the exercise of any other right or
power hereunder or otherwise available in law or in equity.
F. SEVERABILITY. If any provisions of this Agreement for any reason
shall be held to be illegal, invalid, or unenforceable, such illegality shall
not affect any other provision of this Agreement, but this Agreement shall be
construed as if such illegal, invalid or unenforceable provision had never been
herein.
G. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Kentucky.
H. BINDING EFFECT. This Agreement and all of its provisions, rights
and obligations shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors. This Agreement may not be
assigned by any party without the express written consent of the other and any
purported assignment, unless so consented to, shall be void and without effect.
Nothing contained herein, express or implied, is intended or shall be construed
to confer upon or to give anyone other than the parties hereto and their
respective representatives and successors any rights or benefits under or by
reason of this Agreement.
I. COUNTERPARTS. The Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall become binding when
one or more counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected hereon as the signatories.
J. CAPTIONS. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
6
IN WITNESS WHEREOF, the Subscriber hereto has executed this Agreement
as of _______________, 1997.
Number of Quarterly Income Preferred Securities
($100 Liquidation Amount per Preferred Security):
_______________________________
Total Investment ($50,000 minimum):
$
----------------------------
__________________________________________
Name of Subscriber [Type or Print Name as
You Want It to Appear on the Certificate]
__________________________________________
Signature(s) and title, if applicable
Address:__________________________________
__________________________________________
__________________________________________
Telephone Number:________________________
Telecopier Number:________________________
Social Security or
Federal Tax I.D. No.:______________________
FOR WIRE TRANSFER OF PURCHASE PRICE:
Name of Transferring Bank:
____________________________________
Name of Account:____________________
Account Number:_____________________
7
ACCEPTED as of ________________, 1997, which date constitutes the date
of this Subscription Agreement:
REPUBLIC BANCORP, INC. REPUBLIC CAPITAL TRUST
By:______________________________ By:______________________________
Title:____________________________ Title:___________________________
8
EXHIBIT A
Under Regulation D promulgated under the Securities Act of 1933, as
amended, an "accredited investor" is:
(a) A natural person who had individual income of more than $200,000 in each of
the most recent two years, or joint income with that person's spouse in
excess of $300,000 in each of the most recent two years and who reasonably
expects to reach that same income level for the current year;
(b) A natural person whose individual net worth, or joint net worth with that
person's spouse, is in excess of $1,000,000;
(c) A trust, with total assets in excess of $5,000,000, which is not formed for
the purpose of acquiring the Securities, and whose purchase is directed by
a person who has such knowledge and experience in financial and business
matters that such person is capable of evaluating the risks and merits of
an investment in the Securities;
(d) A corporation, a partnership, an organization described in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended, or a
Massachusetts or similar business trust, not formed for the specific
purpose of acquiring the Securities, with total assets in excess of
$5,000,000;
(e) A bank as defined in Section 3(a)(2) of the Act or a savings and loan
association or other institution as defined in Section 3(a)(5)(A) of the
Act, whether acting in its individual or fiduciary capacity; a broker or
dealer registered pursuant to Section 15 of the Securities Exchange Act of
1934; an insurance company as defined in Section 2(13) of the Act; an
investment company registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48) of the
Investment Company Act of 1940; a Small Business Investment Company
licensed by the U.S. Small Business Administration under Section 301(c) or
(d) of the Small Business Investment Act of 1958; a plan established and
maintained by a state, its political subdivisions, or an agency or
instrumentality of a state or its political subdivisions, for the benefit
of its employees, if such plan has total assets in excess of $5,000,000; or
an employee benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, if the investment decision is made by a plan
fiduciary, as defined in Section 3(21) of the Employee Retirement Income
Security Act of 1974, which is either a bank, savings and loan association,
insurance company, or registered adviser, or if the employee benefit plan
has total assets in excess of $5,000,000 or, if the employee benefit plan
is a self-directed plan, the investment decisions are made solely by
persons who are accredited investors;
(f) A private business development company as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940; or
(g) An entity in which all of the equity owners meet the requirements of at
least one of the above subparagraphs for accredited investors.
9