This excerpt taken from the IBKC 10-Q filed Aug 11, 2008.
(a) The Interest Rate for the initial interest period from the date of original issuance (as of July 21, 2008) to September 30, 2008 shall be 5.79063% per annum. Thereafter, interest on the outstanding principal amount of this Note and any successor Note or Notes (the Notes) at the rate equal to three-month LIBOR, as in effect for each Interest Reset Period, plus 3.00% per annum from September 30, 2008 until the Maturity Date. Interest will be computed and paid on the basis of a 360-day year and the actual number of days elapsed in the relevant interest period. Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance. Interest shall also be due and payable when these Notes shall become due and payable (whether at maturity or otherwise). The Company shall pay interest on overdue principal and premium, if any, and interest to the extent all obligations of the Borrower hereunder are not paid in full at maturity of this Note, to the extent lawful and then permitted by Federal Reserve rules then applicable to subordinated capital notes includible within Tier 2 capital, at a rate per annum equal to the Interest Rate applicable from time to time plus 3.00% per annum (Default Interest). All Default Interest shall be payable on demand. For purposes of payment of interest by the Company, three-month LIBOR in respect of each Interest Payment Date shall be determined by the SunTrust.
(b) The LIBOR Determination Date is the second London business day prior to the Interest Reset Date, which shall be the same date as each interest payment date. On each LIBOR Determination Date, SunTrust, as calculation agent hereunder (Calculation Agent), will determine LIBOR for the period (the Interest Reset Period) beginning on such Interest Reset Date through the day immediately preceding the next succeeding Interest Reset Date, as follows: SunTrust, as Calculation Agent, will determine the offered rates for three-month U.S. Dollar deposits in the London interbank deposit market, commencing on such Interest Reset Date, which are specified on Reuters Screen LIBOR01 Page (or any successor page), or such similar service as determined by the Bank that displays British Bankers Association interest settlement rates for deposits in U.S. Dollars, as of 11:00 A.M. (London, England time) two (2) London business days prior to the Original Issue Date and each Interest Reset Date; provided, that if no such offered rate appears on such page, the rate used will be the per annum rate of interest determined by SunTrust, as Calculation Agent, to be the rate at which deposits in U.S. Dollars for a three-month period are offered to SunTrust in the London interbank deposit market as of 10:00 A.M. (Atlanta, Georgia time), on the day which is 2 Business Days prior to each Interest Reset Date. If Reuters Screen LIBOR01 is replaced by another page, or if the Reuters service is replaced by a successor service, then LIBOR means the replacement page or service selected by SunTrust to display the London interbank offered rates of major banks.
Rates quoted must be based on a principal amount of at least U.S. $1,000,000. If fewer than three New York City banks selected by SunTrust are quoting rates, LIBOR for such Interest Reset Period will be determined as of the last Business Day preceding the Interest Determination Date on which three-month LIBOR can be determined from the Reuters Screen LIBOR01 Page.
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The foregoing provisions of Section 1 notwithstanding, and regardless of whether SunTrust is a Holder of any of the Notes and prior to any Interest Reset Date, SunTrust, as Calculation Agent, shall have determined (which determination shall be conclusive and binding upon the Company) that (a) by reason of circumstances affecting the relevant London interbank deposit market, adequate means do not exist for ascertaining LIBOR, or (b) LIBOR does not adequately and fairly reflect the cost to SunTrust of maintaining the funding for the Notes, SunTrust, as Calculation Agent, shall give written notice (or telephonic or facsimile notice, promptly confirmed in writing) to the Company and the other Holders of Notes, if any, as soon as practicable thereafter. Until SunTrust notifies the Borrower that the circumstances giving rise to such notice no longer exist, interest on the Subordinated Term Loan shall be calculated at the Base Rate, as in effect from time to time, plus 1.30% per annum.
(c) If any change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, SunTrust hereunder, including the full principal amount of the Note and any accrued but unpaid interest and Default Interest, if any; or
(ii) impose on SunTrust or the eurodollar interbank market any other condition affecting this Note and the result of the foregoing is to increase the cost to SunTrust of maintaining the full amount provided to the Company hereunder or to reduce the amount received or receivable by SunTrust hereunder (whether of principal, interest or any other amount), then the Company shall promptly pay, upon written notice from and demand by SunTrust, for and on behalf of itself and any other Holder, within 5 Business Days after the date of such notice and demand, such additional amount or amounts sufficient to compensate the Lender for such additional costs incurred or reduction suffered.
If SunTrust, as a Holder or as Calculation Agent, shall have determined that on or after the date of this Agreement any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on SunTrusts capital (or on the capital of any parent company of SunTrust) as a consequence of its obligations hereunder to a level below that which SunTrust or any SunTrust parent company corporation could have achieved but for such Change in Law (taking into consideration the policies of SunTrust and its parent companies with respect to capital adequacy) then, from time to time, within 5 Business Days after receipt by the Borrower of written demand by the Lender, the Company shall pay to SunTrust and the other Holders, if any, such additional amounts as will compensate SunTrust for any such reduction suffered.
A certificate of the Lender setting forth the amount or amounts necessary to compensate SunTrust shall be delivered to the Borrower and shall be conclusive, absent manifest error. The Borrower shall pay the Lender such amount or amounts within 10 days. Any failure or delay on the part of the SunTrust to demand compensation pursuant to this Section shall not constitute a
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waiver of SunTrusts right to receive, and the Companys obligation hereunder to pay, such compensation. Any additional compensation due hereunder as a result of this Section shall be paid to SunTrust and to any other Holder of Notes pro rata to the principal amount of Notes held by each of them
(d) In no event shall the amount of interest due or payable hereunder exceed the maximum rate of interest allowed by applicable law, and in the event any such payment is inadvertently paid by the Company or inadvertently received by the Holder, then the Holder promptly upon such determination shall return such excess sum. It is the express intent hereof that the Company not pay and the Holder not receive, directly or indirectly, in any manner whatsoever, interest in excess of that which may be lawfully paid by the Company under applicable law.
2. Method of Payment. The Company will pay interest on the Notes, except as to Default Interest, to SunTrust and any other Holders, at the close of business on the day immediately preceding the Interest Payment Date, even if such Notes are canceled after the related Record Date and on or before such Interest Payment Date, and as provided herein with respect to Default Interest. The Notes will be payable as to principal, premium, and interest, if any, by wire transfer of immediately available funds with respect to principal of, and premium and interest, if any, on all Notes the Holders of which have $5,000,000 or more principal amount of such Notes and who have provided appropriate wire transfer instructions to the Company. Such payment shall be in such lawful coin and currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments on this Note shall be applied first to accrued interest and the balance, if any, to principal. The Companys obligations to pay the principal of, and interest (including Default Interest) on, this Note shall be evidenced by this Note and the records of SunTrust. The calculations of the interest rate and entries made in such records shall be prima facie evidence of the existence and amounts of the obligations of, and payments by, the Company therein recorded; provided, that the failure or delay of SunTrust in maintaining or making such records or any error therein shall not in any manner affect the obligation of the Borrower to pay the principal of, and interest (including Default Interest) in accordance with the terms of this Note.
3. Form and Dating. The Notes may have notations, legends or endorsements required by law and agreements to which the Company is subject or usage. The Notes shall be issued initially in minimum denominations of $250,000 and integral multiples thereof, and may be transferred only in minimum denominations of $250,000 and integral multiples thereof.
4. Redemption. The Company shall have the option, but not the obligation, to redeem the Notes in full, or in part in multiples of not less than $1,000,000, on any Interest Payment Date upon not less than 30 days prior notice to SunTrust and the other Holders at any time prior to September 30, 2015, subject to prior Federal Reserve or any approval required by its then applicable regulators, if such approval is then required.
5. Persons Deemed Owners. The registered Holder of a Note may be treated as its owner for all purposes. The Notes or any interest therein may be assigned or otherwise transferred by the registered Holder(s) thereof; provided, any such transfer shall be made in a manner that does not require the Company to register the Notes under the Securities Act or any
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applicable state securities or blue sky laws. The Company shall record any assignment or transfer of the Notes promptly upon direction of such transfer, and confirmation from, a registered Holder of compliance herewith.
6. Amendment, Supplement and Waiver. Subject to certain exceptions, the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), and any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium, if any, or interest, if any, on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including consents obtained in connection with a purchase of or tender offer or exchange for Notes). Without the consent of any Holder of a Note, the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide for the assumption of the Companys obligations to the Holders of the Notes in the case of a merger, consolidation or sale of all or substantially all of the assets of the Company, or to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Notes of any such Holder.