TERM LOAN AGREEMENT
DATED AS OF DECEMBER 16, 1996
AMONG
BANKNORTH GROUP, INC.,
THE LENDERS
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS AGENT
TABLE OF CONTENTS
ARTICLE I DEFINITIONS Page 1
ARTICLE II THE CREDITS Page 12
2.1. Commitment Page 12
2.2. Required Payments; Termination Date Page 12
2.3. Ratable Loans Page 12
2.4. Types of Advances Page 12
2.5. Applicable Margin Page 13
2.6. Minimum Amount of Each Advance Page 13
2.7. Optional Principal Payments Page 13
2.8. Method of Selecting Types and Eurodollar
Interest Periods for New Advances Page 13
2.9. Conversion and Continuation of
Outstanding Advances Page 14
2.10. Changes in Interest Rate, etc. Page 15
2.11. Rates Applicable After Default Page 15
2.12. Method of Payment Page 15
2.13. Notes; Telephonic Notices Page 16
2.14. Interest Payment Dates; Interest and Fee Basis Page 16
2.15. Notification of Advances, Interest
Rates and Prepayments Page 17
2.16. Lending Installations Page 17
2.17. Non-Receipt of Funds by the Agent Page 17
2.18. Withholding Tax Exemption Page 18
ARTICLE III CHANGE IN CIRCUMSTANCES Page 18
3.1. Yield Protection Page 18
3.2. Changes in Capital Adequacy Regulations Page 19
3.3. Availability of Types of Advances Page 19
3.4. Funding Indemnification Page 20
3.5. Lender Statements; Survival of Indemnity Page 20
ARTICLE IV CONDITIONS PRECEDENT Page 21
4.1. Initial Advance Page 21
ARTICLE V REPRESENTATIONS AND WARRANTIES Page 22
5.1. Corporate Existence and Standing Page 22
5.2. Authorization and Validity Page 22
5.3. No Conflict; Government Consent Page 22
5.4. Financial Statements Page 23
5.5. Material Adverse Change Page 23
5.6. Taxes Page 23
5.7. Litigation and Contingent Obligations Page 23
5.8. Subsidiaries Page 23
5.9. ERISA Page 23
5.10. Accuracy of Information Page 24
5.11. Regulation U Page 24
5.12. Material Agreements Page 24
5.13. Compliance With Laws Page 24
5.14. Ownership of Properties Page 24
5.15. Investment Company Act Page 24
5.16. Public Utility Holding Company Act Page 25
5.17. Solvency Page 25
ARTICLE VI COVENANTS Page 25
6.1. Financial Reporting Page 25
6.2. Use of Proceeds Page 28
6.3. Notice of Default Page 28
6.4. Conduct of Business Page 28
6.5. Taxes Page 28
6.6. Insurance Page 29
6.7. Compliance with Laws Page 29
6.8. Maintenance of Properties Page 29
6.9. Inspection Page 29
6.10. Dividends Page 29
6.11. Indebtedness Page 30
6.12. Merger Page 30
6.13. Sale of Assets Page 30
6.14. Sale and Leaseback Page 31
6.15. Investments and Acquisitions Page 31
6.16. Liens Page 32
6.17. Fixed Asset Expenditures Page 34
6.18. Consolidated Non-Performing Assets to
Total Equity Capital Page 34
6.19. Funded Debt to Tangible Equity Capital Page 34
6.20. Return on Average Assets Page 35
6.21. Capitalization Page 34
6.22. Capital Guidelines Page 35
6.23. Affiliates Page 35
ARTICLE VII DEFAULTS Page 35
ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES Page 38
8.1. Acceleration Page 38
8.2. Amendments Page 38
8.3. Preservation of Rights Page 39
ARTICLE IX GENERAL PROVISIONS Page 39
9.1. Survival of Representations Page 39
9.2. Governmental Regulation Page 39
9.3. Taxes Page 39
9.4. Headings; References to Statutes Page 39
9.5. Entire Agreement Page 40
9.6. Several Obligations; Benefits of this Agreement Page 40
9.7. Expenses; Indemnification Page 40
9.8. Numbers of Documents Page 40
9.9. Accounting Page 40
9.10. Severability of Provisions Page 41
9.11. Nonliability of Lenders Page 41
9.12. CHOICE OF LAW Page 41
9.13. CONSENT TO JURISDICTION Page 41
9.14. WAIVER OF JURY TRIAL Page 41
9.15. Confidentiality Page 42
ARTICLE X THE AGENT Page 42
10.1. Appointment Page 42
10.2. Powers Page 42
10.3. General Immunity Page 42
10.4. No Responsibility for Loans, Recitals, etc. Page 42
10.5. Action on Instructions of Lenders Page 43
10.6. Employment of Agents and Counsel Page 43
10.7. Reliance on Documents; Counsel Page 43
10.8. Agent's Reimbursement and Indemnification Page 43
10.9. Rights as a Lender Page 44
10.10. Lender Credit Decision Page 44
10.11. Successor Agent Page 44
10.12. Agent's Fees Page 45
ARTICLE XI SETOFF; RATABLE PAYMENTS Page 45
11.1. Setoff Page 45
11.2. Ratable Payments Page 45
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS Page 46
12.1. Successors and Assigns Page 46
12.2. Participations Page 46
12.2.1. Permitted Participants; Effect Page 46
12.2.2. Voting Rights Page 47
12.2.3. Benefit of Setoff Page 47
12.3. Assignments Page 47
12.3.1. Permitted Assignments Page 47
12.3.2. Effect; Effective Date Page 48
12.4. Dissemination of Information Page 48
12.5. Tax Treatment Page 48
ARTICLE XIII NOTICES Page 49
13.1. Giving Notice Page 49
13.2. Change of Address Page 49
ARTICLE XIV COUNTERPARTS Page 49
EXHIBITS
--------
EXHIBIT "A" NOTE Page 51
EXHIBIT "B" FORM OF OPINION Page 53
EXHIBIT "C" COMPLIANCE CERTIFICATE Page 55
EXHIBIT "D" ASSIGNMENT AGREEMENT Page 60
EXHIBIT "E" LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTIONS Page 70
SCHEDULES
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SCHEDULE "1" LITIGATION AND CONTINGENT OBLIGATIONS Page 71
SCHEDULE "2" SUBSIDIARIES AND OTHER INVESTMENTS Page 72
SCHEDULE "3" INDEBTEDNESS AND LIENS Page 73
TERM LOAN AGREEMENT
This Agreement, dated as of December 16, 1996, is among Banknorth
Group, Inc., the Lenders and The First National Bank of Chicago, as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
-----------
As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which
the Borrower or any of its Subsidiaries (i) acquires any assets of another
Person or acquires any going business or all or substantially all of the
assets of any firm, corporation or division thereof, whether through
purchase of assets, merger or otherwise or (ii) directly or indirectly
acquires (in one transaction or as the most recent transaction in a series
of transactions) at least a majority (in number of votes) of the securities
of a corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage or voting power) of
the outstanding partnership interests of a partnership.
"Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Loans made by the Lenders to the Borrower of the same
Type and, in the case of Eurodollar Advances, for the same Eurodollar
Interest Period.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. A Person shall be deemed to control another Person if the
controlling Person owns 10% or more of any class of voting securities (or
other ownership interests) of the controlled Person or possesses, directly
or indirectly, the power to direct or cause the direction of the management
or policies of the controlled Person, whether through ownership of stock, by
contract or otherwise.
"Agent" means The First National Bank of Chicago in its capacity as
agent for the Lenders pursuant to Article X, and not in its individual
capacity as a Lender, and any successor Agent appointed pursuant to Article
X.
"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders.
"Agreement" means this Term Loan Agreement, as it may be amended or
modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent
with that used in preparing the financial statements referred to in Section
5.4.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Corporate Base Rate for such day and (ii) the
sum of Federal Funds Effective Rate for such day plus 1/2% per annum.
"Annualized Net Income" means actual year-to-date Net Income divided
by the actual number of days in the year-to-date period, multiplied by the
actual number of days in the year.
"Applicable Margin" is defined in Section 2.5.
"Article" means an article of this Agreement unless another document
is specifically referenced.
"Authorized Officer" means any of the President and Chief Executive
Officer, Executive Vice President and Chief Financial Officer, Senior Vice
President and Treasurer or Director of Investments of the Borrower, acting
singly.
"Banking Subsidiary" means any insured depository institution (within
the meaning of 12 U.S.C. 1813(c), as amended, supplemented or otherwise
modified from time to time), which is controlled (within the meaning of 12
U.S.C. 1841, as amended, supplemented or otherwise modified from time to
time) by the Borrower.
"Borrower" means Banknorth Group, Inc., a Delaware corporation, and
its successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (i) with respect to any borrowing, payment or
rate selection of Eurodollar Advances, a day (other than a Saturday or
Sunday) on which banks generally are open in Chicago and New York for the
conduct of substantially all of their commercial lending activities and on
which dealings in United States dollars are carried on in the London
interbank market and (ii) for all other purposes, a day (other than a
Saturday or Sunday) on which banks generally are open in Chicago for the
conduct of substantially all of their commercial lending activities.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such
Person prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as
a liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Change in Control" means the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning
of Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 20% or more of the outstanding shares of voting
stock of the Borrower.
"Closing Date" means the date on which all of the conditions set forth
in Section 4.1 are satisfied.
"Code" means the Internal Revenue Code of 1986, as amended, reformed
or otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such Lender to
make a Loan to the Borrower pursuant to Section 2.1 not exceeding the amount
set forth opposite its signature below.
"Condemnation" is defined in Section 7.8.
"Consolidated Financial Statements" means the Consolidated Financial
Statements for Bank Holding Companies With Total Consolidated Assets of $150
Million or More, or With More Than One Subsidiary Bank--FR Y-9 C, as such
report may be amended or modified from time to time, and any similar report
required to be filed by the Borrower.
"Consolidated Net Income" means the Borrower's net income determined
in a manner consistent with that used in preparing the Borrower's September
30, 1996 Consolidated Financial Statements, which amount is currently
reported on line 13 of Schedule HI thereto.
"Consolidated Reports of Condition and Income" means the Consolidated
Reports of Condition and Income for A Bank With Domestic and Foreign
Offices--FFIEC 031, Consolidated Reports of Condition and Income for A Bank
With Domestic Offices Only and Total Assets of $300 Million or More--FFIEC
032, Consolidated Reports of Condition and Income for A Bank With Domestic
Offices Only and Total Assets of $100 Million or More But Less Than $300
Million--FFIEC 033, and Consolidated Reports of Condition and Income for A
Bank With Domestic Offices Only and Total Assets of Less Than $100 Million--
FFIEC 034, as such reports may be amended or modified from time to time, and
any similar report required to be filed by any Banking Subsidiary.
"Contingent Obligation" of a Person means any agreement, undertaking
or arrangement by which such Person assumes, guarantees, endorses,
contingently agrees to purchase or provide funds for the payment of, or
otherwise becomes or is contingently liable upon, the obligation or
liability of any other Person, or agrees to maintain the net worth or
working capital or other financial condition of any other Person, or
otherwise assures any creditor of such other Person against loss, including,
without limitation, any comfort letter, operating agreement, take-or-pay
contract or application for a Letter of Credit.
"Conversion/Continuation Notice" is defined in Section 2.9.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated)
under common control which, together with the Borrower or any of its
Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Corporate Base Rate" means a rate per annum equal to the corporate
base rate of interest announced by First Chicago from time to time, changing
when and as said corporate base rate changes.
"Default" means an event described in Article VII.
"Designated Employee" is defined in Section 2.13.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which bears interest at a
Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Eurodollar Interest Period, the rate determined by the Agent to
be the rate at which deposits in U.S. dollars are offered by First Chicago
to first-class banks in the London interbank market at approximately 11 a.m.
(London time) two Business Days prior to the first day of such Eurodollar
Interest Period, in the approximate amount of First Chicago's relevant
Eurodollar Loan and having a maturity approximately equal to such Eurodollar
Interest Period.
"Eurodollar Interest Period" means, with respect to a Eurodollar
Advance, a period of one, two, three or six months, commencing on a Business
Day selected by the Borrower pursuant to this Agreement. Such Eurodollar
Interest Period shall end on (but exclude) the day which corresponds
numerically to such date one, two, three or six months thereafter, provided,
however, that if there is no such numerically corresponding day in such
next, second, third or sixth succeeding month, such Eurodollar Interest
Period shall end on the last Business Day of such next, second, third or
sixth succeeding month. If a Eurodollar Interest Period would otherwise end
on a day which is not a Business Day, such Eurodollar Interest Period shall
end on the next succeeding Business Day, provided, however, that if said
next succeeding Business Day falls in a new calendar month, such Eurodollar
Interest Period shall end on the immediately preceding Business Day.
"Eurodollar Loan" means a Loan which bears interest at a Eurodollar
Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Eurodollar Interest Period, the sum of (i) the quotient of (a) the
Eurodollar Base Rate applicable to such Eurodollar Interest Period, divided
by (b) one minus the Reserve Requirement (expressed as a decimal) applicable
to such Eurodollar Interest Period, plus (ii) the Applicable Margin. The
Eurodollar Rate shall be rounded to the next higher multiple of 1/16 of 1%
if the rate is not such a multiple.
"Existing Agreement" means that certain Credit Agreement dated as of
October 14, 1994 among the Borrower, the lenders named therein and The First
National Bank of Chicago as agent, as amended.
"Federal Funds Effective Rate" means, for any day, an interest rate
per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published for such day (or, if such
day is not a Business Day, for the immediately preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations at
approximately 10 a.m. (Chicago time) on such day on such transactions
received by the Agent from three Federal funds brokers of recognized
standing selected by the Agent in its sole discretion.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or its delegate, the Federal Reserve Bank of Boston.
"First Chicago" means The First National Bank of Chicago in its
individual capacity, and its successors.
"Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the Applicable Margin, in each
case changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan which bears interest at the Floating
Rate.
"Funded Debt" means all Indebtedness for borrowed money of the
Borrower having a maturity (or extendible to a maturity at the option of the
Borrower) of more than one year from the date of creation thereof.
"Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary
course of such Person's business payable on terms customary in the trade),
(iii) obligations, whether or not assumed, secured by Liens or payable out
of the proceeds or production from property now or hereafter owned or
acquired by such Person, (iv) obligations which are evidenced by notes,
acceptances, or other instruments, (v) Capitalized Lease Obligations, (vi)
Rate Hedging Obligations, (vii) Contingent Obligations, and
(viii)obligations for which such Person is obligated pursuant to a Letter of
Credit.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in
the ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in
the trade), deposit account or contribution of capital by such Person to any
other Person or any investment in, or purchase or other acquisition of, any
assets or any stock, partnership interests, notes, debentures or other
securities of any other Person made by such Person.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent,
any office, branch, subsidiary or affiliate of such Lender or the Agent.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way
liable.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind
or nature whatsoever (including, without limitation, the interest of a
vendor or lessor under any conditional sale, Capitalized Lease or other
title retention agreement).
"Loan" means, with respect to a Lender, such Lender's portion of any
Advance.
"Loan Documents" means this Agreement and the Notes.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of
operations, or prospects of the Borrower and its Subsidiaries taken as a
whole, (ii) the ability of the Borrower to perform its obligations under the
Loan Documents, or (iii) the validity or enforceability of any of the Loan
Documents or the rights or remedies of the Agent or the Lenders thereunder.
"Moody's" means ▇▇▇▇▇'▇ Investors Service Inc. or any successor
corporation thereto.
"Net Income" means the Borrower's net income determined in a manner
consistent with the Agreement Accounting Principles used in preparing the
Borrower's quarterly report on Form 10-Q for the quarter ended September 30,
1996.
"Non-Performing Assets" means the total of (i) Non-Performing Loans,
(ii) Other Real Estate Owned and (iii) without duplication for amounts
included as Other Real Estate Owned, property acquired pursuant to in
substance foreclosures.
"Non-Performing Loans" means (i) the total of loans which are placed
on a nonaccrual status, (ii) the total of loans which are past due 90 days
or more and are still accruing, and (iii) the total of loans and leases
restructured and in compliance with modified terms, in each case determined
in a manner consistent with that used in preparing the Borrower's September
30, 1996 Consolidated Financial Statements, which amounts are currently
reported on line 10 of Schedule HC-H thereto for items (i) and (ii) above
and on line M(1)(f) of Schedule HC-B thereto for item (iii) above.
"Note" means a promissory note, in substantially the form of Exhibit
"A" hereto, duly executed by the Borrower and payable to the order of a
Lender in the amount of its Commitment, including any amendment,
modification, renewal or replacement of such promissory note.
"Notice of Assignment" is defined in Section 12.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Notes, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the
Lenders or to any Lender, the Agent or any indemnified party hereunder
arising under the Loan Documents.
"Other Real Estate Owned" means Other Real Estate Owned as defined in
12 C.F.R. [SECTION]7.3025 (1989), as such regulation may be amended or supple-
mented from time to time, determined in a manner consistent with that used in
preparing the Borrower's September 30, 1996 Consolidated Financial
Statements, which amount is currently reported on lines 7(a) and 7(b) of
Schedule HC thereto.
"Parent Company Only Financial Statements" means the Parent Company
Only Financial Statements for Bank Holding Companies With Total Consolidated
Assets of $150 Million or More, or With More Than One Subsidiary Bank--FR Y-
9 LP, as such report may be amended or modified from time to time, and any
similar report required to be filed by the Borrower.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each March, June, September and
December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Permitted Banking Subsidiary Indebtedness" means obligations incurred
by any Banking Subsidiary in the ordinary course of business in such
circumstances as may be incidental or usual in carrying on the banking or
trust business of a bank or trust company, including, solely by way of
example and not for purposes of limitation, obligations incurred in
connection with (i) any deposits with or funds collected by such Subsidiary,
(ii) any banker's acceptance credit of such Subsidiary, (iii) any check,
note, certificate of deposit, instrument, money or Letter of Credit issued
by such Subsidiary, (iv) any check, note, certificate of deposit, money
order, traveler's check, draft or ▇▇▇▇ of exchange issued, accepted or
endorsed by such Subsidiary, (v) any discount with, borrowing from, or other
obligation to, any Federal Reserve Bank or any Federal Home Loan Bank, (vi)
any agreement made by such Subsidiary to purchase or repurchase securities,
loans or Federal funds or any interest or participation in any thereof,
(vii) any guarantee or similar obligation incurred by such Subsidiary in the
ordinary course of its banking or trust business, (viii) any transaction in
the nature of an extension of credit, whether in the form of a commitment or
otherwise, undertaken by such Subsidiary for the account of a third party
with the application of the same banking considerations and legal lending
limits that would be applicable if the transaction were a loan to such
party, (ix) any transaction in which such Subsidiary acts solely in the
fiduciary or agency capacity, (x) Rate Hedging Obligations incurred in the
ordinary course of business, and (xi) other short-term liabilities similar
to those enumerated in clauses (i) and (vi) above, including United States
Treasury tax and loan borrowings.
"Person" means any natural person, corporation, firm, joint venture,
partnership, association, enterprise, trust or other entity or organization,
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section
412 of the Code as to which the Borrower or any member of the Controlled
Group may have any liability.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets
owned, leased or operated by such Person.
"Purchasers" is defined in Section 12.3.1.
"Rate Hedging Obligations" of a Person means any and all obligations
of such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions
and modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or cross-
currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of
the foregoing.
"Rating" means the issuer rating assigned to the Borrower by Thomson,
Standard & Poor's, Moody's or any other rating agency approved by the
Lenders; provided that if such rating is received from (i) one rating
agency, then that rating will be the Rating, (ii) two rating agencies, then
the lowest rating will be the Rating, and (iii) three rating agencies, then
(a) if two of the three rating agencies agree, then that rating will be the
Rating and (b) if none of the three agencies agree, then the middle rating
will be the Rating.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor
thereto or other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to member banks of the
Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors
relating to the extension of credit by banks for the purpose of purchasing
or carrying margin stocks applicable to member banks of the Federal Reserve
System.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a
Plan, excluding, however, such events as to which the PBGC by regulation
waived the requirement of Section 4043(a) of ERISA that it be notified
within 30 days of the occurrence of such event, provided, however, that a
failure to meet the minimum funding standard of Section 412 of the Code and
of Section 302 of ERISA shall be a Reportable Event regardless of the
issuance of any such waiver of the notice requirement in accordance with
either Section 4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" means (i) prior to the Closing Date, Lenders in the
aggregate having at least 66 2/3% of the Aggregate Commitment or, (ii) on
and after the Closing Date, Lenders in the aggregate holding at least 66
2/3% of the aggregate unpaid principal amount of the outstanding Loans.
"Reserve Requirement" means, with respect to a Eurodollar Interest
Period, the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed under Regulation
D on Eurocurrency liabilities.
"Return on Average Assets" means Annualized Net Income divided by
Total Consolidated Average Assets.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member
of the Controlled Group.
"Standard & Poor's" means Standard & Poor's Corporation or any
successor corporation thereto.
"Subsidiary" of a Person means (i) any corporation more than 50% of
the outstanding securities having ordinary voting power of which shall at
the time be owned or controlled, directly or indirectly, by such Person or
by one or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, or (ii) any partnership, association, joint venture or similar
business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Notwithstanding the foregoing, "Subsidiary" of the Borrower shall also mean
any Banking Subsidiary. Unless otherwise expressly provided, all
references herein to a "Subsidiary" shall mean a Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which (i) represents more than 10%
of the consolidated assets of the Borrower and its Subsidiaries as would be
shown in the consolidated financial statements of the Borrower and its
Subsidiaries as at the beginning of the twelve-month period ending with the
month in which such determination is made, or (ii) is responsible for more
than 10% of the consolidated net sales or of the consolidated net income of
the Borrower and its Subsidiaries as reflected in the financial statements
referred to in clause (i) above.
"Tangible Equity Capital" means (i) Total Equity Capital, minus (ii)
goodwill (determined in a manner consistent with that used in preparing the
Borrower's September 30, 1996 Consolidated Financial Statements, which
amount is currently reported on line 10(c) of Schedule HC thereof).
"Termination Date" means December 16, 2001.
"Thomson" means Thomson Bankwatch, Inc. or any successor corporation
thereto.
"Thrift Financial Report" means the Thrift Financial Report, as such
report may be amended or modified from time to time, and any similar report
required to be filed by any Banking Subsidiary.
"Total Consolidated Assets" means the Borrower's total consolidated
assets determined in a manner consistent with the Agreement Accounting
Principles used in preparing the Borrower's quarterly report on Form 10-Q
for the quarter ended September 30, 1996.
"Total Consolidated Average Assets" means the sum of the actual Total
Consolidated Assets for each day in the year-to-date period divided by the
actual number of days in the year-to-date period.
"Total Equity Capital" means the Borrower's total equity capital
determined in a manner consistent with that used in preparing the Borrower's
September 30, 1996 Consolidated Financial Statements, which amount is
currently reported on line 27(h) of Schedule HC thereof.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or Eurodollar Advance.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested nonforfeitable benefits under all Single Employer Plans
exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-
Owned Subsidiaries of such Person, or by such Person and one or more Wholly-
Owned Subsidiaries of such Person, or (ii) any partnership, association,
joint venture or similar business organization 100% of the ownership
interests having ordinary voting power of which shall at the time be so
owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
-----------
2.1. Commitment. Each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to make a Loan to the Borrower on
the Closing Date in an amount equal to its Commitment. Any payments or
prepayments (whether mandatory or optional) made by the Borrower with
respect to the Loans may not be reborrowed.
2.2. Required Payments; Termination Date. On each Payment Date,
commencing on December 31, 1996, and on the Termination Date, the Borrower
shall make a mandatory payment on the Loans outstanding in an amount equal
to the lesser of (i) $650,000, and (ii) the aggregate principal amount of
the Loans outstanding. All unpaid Obligations shall be paid in full by the
Borrower on the Termination Date.
2.3. Ratable Loans. Each Advance hereunder shall consist of Loans
made from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment.
2.4. Types of Advances. The Advances may be Floating Rate Advances
or Eurodollar Advances, or a combination thereof, selected by the Borrower
in accordance with Sections 2.8 and 2.9.
2.5. Applicable Margin. The Applicable Margin for Advances shall be
based on the Borrower's Rating and shall be determined in accordance with
the table set forth below. The Applicable Margin shall be adjusted on the
earlier of the date of announcement or the date of publication by the
respective rating agencies of a change in the Rating (the "Adjustment
Date"), and shall apply to all outstanding Advances from and after such
Adjustment Date to the next Adjustment Date. In the event that the Borrower
shall at any time cease to be rated by Thomson Bankwatch, Inc. or any other
rating agency which is acceptable to the Lenders, the maximum Applicable
Margin shall apply.
Rating Applicable Margin
------ -----------------
Floating
Standard Rate Eurodollar
Thomson & Poor's Moody's Advances Advances
--------------------------------------------------------------------
B or above AA or above Aa2 or above 0.00% 1.50%
B/C A or above A2 or above 0.00% 1.60%
C BBB or above Baa2 or above 0.00% 1.80%
C/D BB or above Ba2 or above 0.00% 2.00%
D B or above B2 or above 0.00% 2.50%
D/E or below B- or below B3 or below 0.00% 3.00%
or No Rating
2.6. Minimum Amount of Each Advance. Each Eurodollar Advance shall
be in the minimum amount of $1,000,000 (and in multiples of $100,000 if in
excess thereof), and each Floating Rate Advance shall be in the minimum
amount of $500,000 (and in multiples of $100,000 if in excess thereof),
provided, however, that any Floating Rate Advance may be in the amount of
the unused Aggregate Commitment.
2.7. Optional Principal Payments. The Borrower may from time to
time pay, without penalty or premium, all outstanding Floating Rate
Advances, or, in a minimum aggregate amount of $500,000 or any integral
multiple of $100,000 in excess thereof, any portion of the outstanding
Floating Rate Advances upon two Business Days' prior notice to the Agent.
Any payment of a Eurodollar Advance prior to the last day of the applicable
Eurodollar Interest Period shall subject the Borrower to the indemnification
provisions set forth in Section 3.4. Principal payments shall be applied to
the principal installments payable under Section 2.2 in the inverse order of
maturity.
2.8. Method of Selecting Types and Eurodollar Interest Periods for
New Advances. The Borrower shall select the Type of Advance and, in the
case of each Eurodollar Advance, the Eurodollar Interest Period applicable
to each Advance from time to time. The Borrower shall give the Agent
irrevocable notice (a "Borrowing Notice") not later than 10:00 a.m. (Chicago
time) at least one Business Day before the Borrowing Date of each Floating
Rate Advance, and three Business Days before the Borrowing Date for each
Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Eurodollar Interest
Period applicable thereto.
Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Loan or Loans, in funds immediately available in Chicago
to the Agent at its address specified pursuant to Article XIII. The Agent
will make the funds so received from the Lenders available to the Borrower
at the Agent's aforesaid address.
2.9. Conversion and Continuation of Outstanding Advances. Floating
Rate Advances shall continue as Floating Rate Advances unless and until such
Floating Rate Advances are converted into Eurodollar Advances. Each
Eurodollar Advance shall continue as a Eurodollar Advance until the end of
the then applicable Eurodollar Interest Period therefor, at which time such
Eurodollar Advance shall be automatically converted into a Floating Rate
Advance unless the Borrower shall have given the Agent a
Conversion/Continuation Notice requesting that, at the end of such
Eurodollar Interest Period, such Eurodollar Advance either continue as a
Eurodollar Advance for the same or another Eurodollar Interest Period or be
converted into a Floating Rate Advance. Subject to the terms of Section
2.6, the Borrower may elect from time to time to convert all or any part of
an Advance of any Type into another Type of Advance; provided that any
conversion of any Eurodollar Advance shall be made on, and only on, the last
day of the Eurodollar Interest Period applicable thereto. The Borrower
shall give the Agent irrevocable notice (a "Conversion/Continuation Notice")
of each conversion of an Advance or continuation of a Eurodollar Advance not
later than 10:00 a.m. (Chicago time) at least one Business Day, in the case
of a conversion into a Floating Rate Advance, or three Business Days, in the
case of a conversion into or continuation of a Eurodollar Advance, prior to
the date of the requested conversion or continuation, specifying:
(i) the requested date which shall be a Business Day, of such
conversion or continuation;
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued; and
(iii) the amount and Type of Advance into which such Advance is to be
converted or continued and, in the case of a conversion into or
continuation of a Eurodollar Advance, the duration of the
Eurodollar Interest Period applicable thereto.
2.10. Changes in Interest Rate, etc. Each Floating Rate Advance
shall bear interest on the outstanding principal amount thereof, for each
day from and including the date such Advance is made or is converted from a
Eurodollar Advance into a Floating Rate Advance pursuant to Section 2.9 to
but excluding the date it becomes due or is converted into a Eurodollar
Advance pursuant to Section 2.9 hereof, at a rate per annum equal to the
Floating Rate for such day. Changes in the rate of interest on that portion
of any Advance maintained as a Floating Rate Advance will take effect
simultaneously with each change in the Alternate Base Rate. Each Eurodollar
Advance shall bear interest from and including the first day of the
Eurodollar Interest Period applicable thereto to (but not including) the
last day of such Eurodollar Interest Period at the interest rate determined
as applicable to such Eurodollar Advance. No Eurodollar Interest Period may
end after the Termination Date. The Borrower shall select Eurodollar
Interest Periods so that it is not necessary to repay any portion of a
Eurodollar Advance prior to the last day of the applicable Eurodollar
Interest Period in order to make a mandatory repayment required pursuant to
Section 2.2.
2.11. Rates Applicable After Default. Notwithstanding anything to
the contrary contained in Section 2.8 or 2.9, during the continuance of a
Default or Unmatured Default the Required Lenders may, at their option, by
notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that
no Advance may be made as, converted into or continued as a Eurodollar
Advance. During the continuance of a Default, the Required Lenders may, at
their option, by notice to the Borrower (which notice may be revoked at the
option of the Required Lenders notwithstanding any provision of Section 8.2
requiring unanimous consent of the Lenders to changes in interest rates),
declare that (i) each Eurodollar Advance shall bear interest for the
remainder of the applicable Eurodollar Interest Period at the rate otherwise
applicable to such Eurodollar Interest Period plus 2% per annum and (ii)
each Floating Rate Advance shall bear interest at a rate per annum equal to
the Floating Rate otherwise applicable to the Floating Rate Advance plus 2%
per annum.
2.12. Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by noon (local time) on the date when
due and shall be applied ratably by the Agent among the Lenders. Each
payment delivered to the Agent for the account of any Lender shall be
delivered promptly by the Agent to such Lender in the same type of funds
that the Agent received at its address specified pursuant to Article XIII or
at any Lending Installation specified in a notice received by the Agent from
such Lender. The Agent is hereby authorized to charge the account of the
Borrower maintained with First Chicago for each payment of principal,
interest and fees as it becomes due hereunder.
2.13. Notes; Telephonic Notices. Each Lender is hereby authorized to
record the principal amount of each of its Loans and each repayment on the
schedule attached to its Note, provided, however, that the failure to so
record shall not affect the Borrower's obligations under such Note. The
Borrower hereby authorizes the Agent and the Lenders to extend, convert or
continue Advances, effect selections of Types of Advances and to transfer
funds based on telephonic notices made by any person the Agent or any Lender
in good faith believes to be a Designated Employee (as hereinafter defined);
provided, however, that the Agent shall telephonically confirm such notice
prior to taking any such action. The Borrower shall notify the Agent in
writing of the names of the persons authorized to take any such action on
behalf of the Borrower (each a "Designated Employee"), and shall provide the
Agent with a specimen signature of each Designated Employee. The Agent and
the Lenders shall be entitled to rely conclusively on any Designated
Employee's authority to take any such action until the Agent and the Lenders
receive written notice to the contrary from the Borrower. The Agent and the
Lenders shall compare, but shall have no duty to verify, the authenticity of
the signature appearing on any written notice given to the Agent or any
Lender, and with respect to an oral request to take any such action, the
Agent and the Lenders shall inquire as to, but shall have no duty to verify,
the identity of any person representing himself as a Designated Employee.
Neither the Agent nor any Lender shall incur any liability to the Borrower
in acting upon any telephonic notice in the manner referred to in this
Section 2.13. If requested by the Agent or any Lender, the Borrower agrees
to deliver promptly to the Agent or any such Lender a written confirmation,
signed by an Authorized Officer, of each telephonic notice. If the written
confirmation differs in any material respect from the action taken by the
Agent and the Lenders, the records of the Agent and the Lenders shall govern
absent manifest error.
2.14. Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each Floating Rate Advance shall be payable on each Payment Date,
commencing with the first such date to occur after the date hereof and at
maturity. Interest accrued on each Eurodollar Advance shall be payable on
the last day of its applicable Eurodollar Interest Period, on any date on
which the Eurodollar Advance is prepaid, whether by acceleration or
otherwise, and at maturity. Interest accrued on each Eurodollar Advance
having an Eurodollar Interest Period longer than three months shall also be
payable on the last day of each three-month interval during such Eurodollar
Interest Period. Interest shall be calculated for actual days elapsed on
the basis of a 360-day year. Interest shall be payable for the day an
Advance is made but not for the day of any payment on the amount paid if
payment is received prior to noon (local time) at the place of payment. If
any payment of principal of or interest on an Advance shall become due on a
day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a principal payment, such
extension of time shall be included in computing interest in connection with
such payment.
2.15. Notification of Advances, Interest Rates and Prepayments.
Promptly after receipt thereof, the Agent will notify each Lender of the
contents of each Borrowing Notice, Conversion/Continuation Notice, and
repayment notice received by it hereunder. The Agent will notify each
Lender of the interest rate applicable to each Eurodollar Advance promptly
upon determination of such interest rate and will give each Lender prompt
notice of each change in the Alternate Base Rate.
2.16. Lending Installations. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to
any such Lending Installation and the Notes shall be deemed held by each
Lender for the benefit of such Lending Installation. Each Lender may, by
written or telex notice to the Agent and the Borrower, designate a Lending
Installation through which Loans will be made by it and for whose account
Loan payments are to be made.
2.17. Non-Receipt of Funds by the Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it
is scheduled to make payment to the Agent of (i) in the case of a Lender,
the proceeds of a Loan or (ii) in the case of the Borrower, a payment of
principal, interest or fees to the Agent for the account of the Lenders,
that it does not intend to make such payment, the Agent may assume that such
payment has been made. The Agent may, but shall not be obligated to, make
the amount of such payment available to the intended recipient in reliance
upon such assumption. If such Lender or the Borrower, as the case may be,
has not in fact made such payment to the Agent, the recipient of such
payment shall, on demand by the Agent, repay to the Agent the amount so made
available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by the Agent
until the date the Agent recovers such amount at a rate per annum equal to
(i) in the case of payment by a Lender, the Federal Funds Effective Rate for
such day or (ii) in the case of payment by the Borrower, the interest rate
applicable to the relevant Loan.
2.18. Withholding Tax Exemption. At least five Business Days prior to
the first date on which interest or fees are payable hereunder for the
account of any Lender, each Lender that is not incorporated under the laws
of the United States of America, or a state thereof, agrees that it will
deliver to each of the Borrower and the Agent two duly completed copies of
United States Internal Revenue Service Form 1001 or 4224, certifying in
either case that such Lender is entitled to receive payments under this
Agreement and the Notes without deduction or withholding of any United
States federal income taxes. Each Lender which so delivers a Form 1001 or
4224 further undertakes to deliver to each of the Borrower and the Agent two
additional copies of such form (or a successor form) on or before the date
that such form expires (currently, three successive calendar years for Form
1001 and one calendar year for Form 4224) or becomes obsolete or after the
occurrence of any event requiring a change in the most recent forms so
delivered by it, and such amendments thereto or extensions or renewals
thereof as may be reasonably requested by the Borrower or the Agent, in each
case certifying that such Lender is entitled to receive payments under this
Agreement and the Notes without deduction or withholding of any United
States federal income taxes, unless an event (including without limitation
any change in treaty, law or regulation) has occurred prior to the date on
which any such delivery would otherwise be required which renders all such
forms inapplicable or which would prevent such Lender from duly completing
and delivering any such form with respect to it and such Lender advises the
Borrower and the Agent that it is not capable of receiving payments without
any deduction or withholding of United States federal income tax.
ARTICLE III
CHANGE IN CIRCUMSTANCES
-----------------------
3.1. Yield Protection. If any law or any governmental or quasi-
governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law), or any interpretation thereof, or the
compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending Installation to
any tax, duty, charge or withholding on or from payments due from
the Borrower (excluding federal taxation of the overall net income
of any Lender or applicable Lending Installation), or changes the
basis of taxation of payments to any Lender in respect of its
Loans or other amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender or any applicable Lending
Installation (other than reserves and assessments taken into
account in determining the interest rate applicable to Eurodollar
Advances), or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation of
making, funding or maintaining loans or reduces any amount
receivable by any Lender or any applicable Lending Installation in
connection with loans, or requires any Lender or any applicable
Lending Installation to make any payment calculated by reference
to the amount of loans held or interest received by it, by an
amount deemed material by such Lender,
then, within 15 days of demand by such Lender, the Borrower shall pay such
Lender that portion of such increased expense incurred or reduction in an
amount received which such Lender determines is attributable to making,
funding and maintaining its Loans.
3.2. Changes in Capital Adequacy Regulations. If a Lender
determines the amount of capital required or expected to be maintained by
such Lender, any Lending Installation of such Lender or any corporation
controlling such Lender is increased as a result of a Change, then, within
15 days of demand by such Lender, the Borrower shall pay such Lender the
amount necessary to compensate for any shortfall in the rate of return on
the portion of such increased capital which such Lender determines is
attributable to this Agreement, its Loans or its obligation to make Loans
hereunder (after taking into account such Lender's policies as to capital
adequacy). "Change" means (i) any change after the date of this Agreement
in the Risk-Based Capital Guidelines or (ii) any adoption of or change in
any other law, governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force of
law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by any Lender or any Lending
Installation or any corporation controlling any Lender. "Risk-Based Capital
Guidelines" means (i) the risk-based capital guidelines in effect in the
United States on the date of this Agreement, including transition rules, and
(ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988 report of
the Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted
prior to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender determines
that maintenance of its Eurodollar Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation, or directive, whether or
not having the force of law, or if the Required Lenders determine that (i)
deposits of a type and maturity appropriate to match fund Eurodollar
Advances are not available or (ii) the interest rate applicable to a Type of
Advance does not accurately reflect the cost of making or maintaining such
Advance, then the Agent shall suspend the availability of the affected Type
of Advance and require any Eurodollar Advances to be repaid.
3.4. Funding Indemnification. If any payment of a Eurodollar
Advance occurs on a date which is not the last day of the applicable
Eurodollar Interest Period, whether because of acceleration, prepayment or
otherwise, or a Eurodollar Advance is not made on the date specified by the
Borrower for any reason other than default by the Lenders, the Borrower will
indemnify each Lender for any loss or cost incurred by it resulting
therefrom, including, without limitation, any loss or cost in liquidating or
employing deposits acquired to fund or maintain the Eurodollar Advance.
3.5. Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Eurodollar Loans to reduce any liability
of the Borrower to such Lender under Sections 3.1 and 3.2 or to avoid the
unavailability of a Type of Advance under Section 3.3, so long as such
designation is not disadvantageous to such Lender. Each Lender shall
deliver a written statement of such Lender as to the amount due, if any,
under Sections 3.1, 3.2 or 3.4. Such written statement shall set forth in
reasonable detail the calculations upon which such Lender determined such
amount and shall be final, conclusive and binding on the Borrower in the
absence of manifest error. Determination of amounts payable under such
Sections in connection with a Eurodollar Loan shall be calculated as though
each Lender funded its Eurodollar Loan through the purchase of a deposit of
the type and maturity corresponding to the deposit used as a reference in
determining the Eurodollar Rate applicable to such Loan, whether in fact
that is the case or not. Unless otherwise provided herein, the amount
specified in the written statement shall be payable on demand after receipt
by the Borrower of the written statement. The obligations of the Borrower
under Sections 3.1, 3.2 and 3.4 shall survive payment of the Obligations and
termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
--------------------
4.1. Initial Advance.
4.1.1. The Lenders shall not be required to make the initial Advance
hereunder unless the Borrower has furnished to the Agent with sufficient
copies for the Lenders:
(i) Copies of the articles of incorporation of the Borrower,
together with all amendments, and a certificate of good standing,
both certified by the appropriate governmental officer in its
jurisdiction of incorporation.
(ii) Copies, certified by the Secretary or Assistant Secretary of
the Borrower, of its by-laws.
(iii) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Borrower, which shall identify by
name and title and bear the signature of the officers of the
Borrower authorized to sign the Loan Documents and to make
borrowings hereunder, upon which certificate the Agent and the
Lenders shall be entitled to rely until informed of any change in
writing by the Borrower.
(iv) A certificate, signed by the chief financial officer of the
Borrower, stating that on the initial Borrowing Date no Default
or Unmatured Default has occurred and is continuing.
(v) A written opinion of the Borrower's counsel, addressed to the
Lenders in substantially the form of Exhibit "B" hereto.
(vi) Notes payable to the order of each of the Lenders.
(vii) Written money transfer instructions, in substantially the form
of Exhibit "E" hereto, addressed to the Agent and signed by an
Authorized Officer, together with such other related money
transfer authorizations as the Agent may have reasonably
requested.
(viii) Such other documents as any Lender or its counsel may have
reasonably requested.
4.1.2. The Lenders shall not be required to make the initial Advance
hereunder, unless prior to or concurrently with the making of the initial
Advance hereunder, the Existing Agreement shall have been terminated and the
Borrower shall have paid to the lenders and the agent thereunder any and all
unpaid principal of and accrued and unpaid interest on the notes evidencing
the obligations thereunder, and any and all other obligations of the
Borrower thereunder arising under or in connection with the Existing
Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower represents and warrants to the Lenders that as of the
Closing Date:
5.1. Corporate Existence and Standing. Each of the Borrower and its
Subsidiaries is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation and has
all requisite authority to conduct its business in each jurisdiction in
which its business is conducted, except where the failure to obtain such
authority would not have a Material Adverse Effect.
5.2. Authorization and Validity. The Borrower has the corporate
power and authority and legal right to execute and deliver the Loan
Documents and to perform its obligations thereunder. The execution and
delivery by the Borrower of the Loan Documents and the performance of its
obligations thereunder have been duly authorized by proper corporate
proceedings, and the Loan Documents constitute legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance
with their terms, except as enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally.
5.3. No Conflict; Government Consent. Neither the execution and
delivery by the Borrower of the Loan Documents, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions
thereof will violate any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on the Borrower or any of its
Subsidiaries or the Borrower's or any Subsidiary's articles of incorporation
or by-laws or the provisions of any indenture, instrument or agreement to
which the Borrower or any of its Subsidiaries is a party or is subject, or
by which it, or its Property, is bound, or conflict with or constitute a
default thereunder, or result in the creation or imposition of any Lien in,
of or on the Property of the Borrower or a Subsidiary pursuant to the terms
of any such indenture, instrument or agreement. No order, consent,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required to authorize, or is
required in connection with the execution, delivery and performance of, or
the legality, validity, binding effect or enforceability of, any of the Loan
Documents.
5.4. Financial Statements. The December 31, 1995 and September 30,
1996 consolidated financial statements of the Borrower and its Subsidiaries
heretofore delivered to the Lenders were prepared in accordance with
generally accepted accounting principles in effect on the date such
statements were prepared and fairly present the consolidated financial
condition and operations of the Borrower and its Subsidiaries at such date
and the consolidated results of their operations for the period then ended.
5.5. Material Adverse Change. Since September 30, 1996, there has
been no change in the business, Property, prospects, condition (financial or
otherwise) or results of operations of the Borrower and its Subsidiaries
which could have a Material Adverse Effect.
5.6. Taxes. The Borrower and its Subsidiaries have filed all United
States federal tax returns and all other tax returns which are required to
be filed and have paid all taxes due pursuant to said returns or pursuant to
any assessment received by the Borrower or any of its Subsidiaries, except
such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided. The United States income tax returns
of the Borrower and its Subsidiaries have been audited by the Internal
Revenue Service through the fiscal year ended December 31, 1992. No tax
liens have been filed and no claims are being asserted with respect to any
such taxes. The charges, accruals and reserves on the books of the Borrower
and its Subsidiaries in respect of any taxes or other governmental charges
are adequate.
5.7. Litigation and Contingent Obligations. Except as set forth on
Schedule "1" hereto, there is no litigation, arbitration, governmental
investigation, proceeding or inquiry pending or, to the knowledge of any of
their officers, threatened against or affecting the Borrower or any of its
Subsidiaries which could have a Material Adverse Effect. Except as set
forth on Schedule "1" hereto, the Borrower has no material contingent
obligations not provided for or disclosed in the financial statements
referred to in Section 5.4.
5.8. Subsidiaries. Schedule "2" hereto contains an accurate list of
all of the presently existing Subsidiaries of the Borrower, setting forth
their respective jurisdictions of incorporation and the percentage of their
respective capital stock owned by the Borrower or other Subsidiaries. All
of the issued and outstanding shares of capital stock of such Subsidiaries
have been duly authorized and issued and are fully paid and non-assessable.
5.9. ERISA. There are no Unfunded Liabilities. Each Plan complies
in all material respects with all applicable requirements of law and
regulations, no Reportable Event has occurred with respect to any Plan,
neither the Borrower nor any other members of the Controlled Group has
withdrawn from any Plan or initiated steps to do so, and no steps have been
taken to reorganize or terminate any Plan.
5.10. Accuracy of Information. No information, exhibit or report
furnished by the Borrower or any of its Subsidiaries to the Agent or to any
Lender in connection with the negotiation of, or compliance with, the Loan
Documents contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statements contained therein
not misleading.
5.11. Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of those assets of the Borrower and its
Subsidiaries which are subject to any limitation on sale, pledge, or other
restriction hereunder.
5.12. Material Agreements. Neither the Borrower nor any Subsidiary
is a party to any agreement or instrument or subject to any charter or other
corporate restriction which could have a Material Adverse Effect. Neither
the Borrower nor any Subsidiary is in default in the performance, observance
or fulfillment of any of the obligations, covenants or conditions contained
in (i) any agreement to which it is a party, which default could have a
Material Adverse Effect or (ii) any agreement or instrument evidencing or
governing Indebtedness.
5.13. Compliance With Laws. The Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof, having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property. Neither the
Borrower nor any Subsidiary has received any notice to the effect that its
operations are not in material compliance with any of the requirements of
applicable federal, state and local environmental, health and safety
statutes and regulations or the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to
a release of any toxic or hazardous waste or substance into the environment,
which non-compliance or remedial action could have a Material Adverse
Effect.
5.14. Ownership of Properties. Except as set forth on Schedule "3"
hereto, on the date of this Agreement, the Borrower and its Subsidiaries
will have good title, free of all Liens other than those permitted by
Section 6.16, to all of the Property and assets reflected in the financial
statements as owned by it.
5.15. Investment Company Act. Neither the Borrower nor any
Subsidiary thereof is an "investment company" or a company "controlled" by
an "investment company", within the meaning of the Investment Company Act of
1940, as amended.
5.16. Public Utility Holding Company Act. Neither the Borrower nor
any Subsidiary is a "holding company" or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
5.17. Solvency. (i) Immediately after the making of the initial
Loans hereunder, giving effect to the application of the proceeds of such
Loans and using a valuation method agreed to by the Lenders, (a) the fair
value of the assets of the Borrower and the Subsidiaries on a consolidated
basis, at a fair valuation, will exceed the debts and liabilities,
subordinated, contingent or otherwise, of the Borrower and the Subsidiaries
on a consolidated basis; (b) the present fair saleable value of the property
of the Borrower and the Subsidiaries on a consolidated basis will be greater
than the amount that will be required to pay the probable liability of the
Borrower and the Subsidiaries on a consolidated basis on their debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) the Borrower and the
Subsidiaries on a consolidated basis will be able to pay their debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) the Borrower and the
Subsidiaries on a consolidated basis will not have unreasonably small
capital with which to conduct the businesses in which they are engaged as
such businesses are now conducted and are proposed to be conducted after the
date hereof.
(ii) The Borrower does not intend to, or to permit any of its
Subsidiaries to, and does not believe that it or any of its Subsidiaries
will, incur debts beyond its ability to pay such debts as they mature,
taking into account the timing of and amounts of cash to be received by it
or any such Subsidiary and the timing of the amounts of cash to be payable
on or in respect of its Indebtedness or the Indebtedness of any such
Subsidiary.
ARTICLE VI
COVENANTS
---------
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. The Borrower will maintain, for itself
and each Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, and furnish to the
Lenders:
(i) Within 90 days after the close of each of its fiscal years, an
unqualified audit report certified by independent certified public
accountants, acceptable to the Lenders, prepared in accordance with
Agreement Accounting Principles on a consolidated basis for itself
and the Subsidiaries, including balance sheets as of the end of
such period, related profit and loss and reconciliation of surplus
statements, and a statement of cash flows, accompanied by (a) any
management letter prepared by said accountants, and (b) a
certificate of said accountants that, in the course of their
examination necessary for their certification of the foregoing,
they have obtained no knowledge of any Default or Unmatured
Default, or if, in the opinion of such accountants, any Default
or Unmatured Default shall exist, stating the nature and status
thereof.
(ii) Within 45 days after the close of the first three quarterly
periods of each of its fiscal years, for itself and the
Subsidiaries, consolidated unaudited balance sheets as at the
close of each such period and consolidated profit and loss and
reconciliation of surplus statements and a statement of cash flows
for the period from the beginning of such fiscal year to the end
of such quarter, all certified by its chief financial officer.
(iii) Together with the financial statements required hereunder, a
compliance certificate in substantially the form of Exhibit "C"
hereto signed by its chief financial officer showing the
calculations necessary to determine compliance with this
Agreement and stating that no Default or Unmatured Default exists,
or if any Default or Unmatured Default exists, stating the nature
and status thereof.
(iv) Simultaneously with the preparation thereof, and not more than
45 days after the close of each of the first three fiscal quarters
of the Borrower and not more than 90 days after the close of the
last fiscal quarter of the Borrower in each fiscal year (a) call
reports for each Banking Subsidiary in the form delivered to (1)
the Federal Reserve District Bank, the Comptroller of the Currency
or The Federal Deposit Insurance Corporation, as the case may be,
such reports to include the Consolidated Reports of Condition and
Income and all schedules thereto and (2) the Office of Thrift
Supervision, such reports to include the Thrift Financial Reports
and all schedules thereto, and (b) the Consolidated Financial
Statements and the Parent Company Only Financial Statements of
the Borrower as at the end of such quarter, each in the form
delivered to the appropriate Federal Reserve District Bank and
each to include all schedules thereto.
(v) Within 270 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each Single Employer
Plan, certified as correct by an actuary enrolled under ERISA.
(vi) As soon as possible and in any event within 10 days after the
Borrower knows that any Reportable Event has occurred with
respect to any Plan, a statement, signed by the chief financial
officer of the Borrower, describing said Reportable Event and the
action which the Borrower proposes to take with respect thereto.
(vii) As soon as possible and in any event within 10 days after
receipt by the Borrower, a copy of (a) any notice or claim to the
effect that the Borrower or any of its Subsidiaries is or may be
liable to any Person as a result of the release by the Borrower,
any of its Subsidiaries, or any other Person of any toxic or
hazardous waste or substance into the environment, and (b) any
notice alleging any violation of any federal, state or local
environmental, health or safety law or regulation by the Borrower
or any of its Subsidiaries, which, in either case, could reasonably
be expected to have a Material Adverse Effect.
(viii) Promptly upon the furnishing thereof to the shareholders of the
Borrower, copies of all financial statements, reports and proxy
statements so furnished.
(ix) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular
reports which the Borrower or any of its Subsidiaries files with
the Securities and Exchange Commission.
(x) Promptly after the Borrower's or any Subsidiary's receipt
thereof, unless disclosure is prohibited by the terms thereof
and after the Borrower or such Subsidiary has in good faith
attempted to obtain the consent of the relevant regulatory
authority, such authority will not consent to the disclosure
thereof, copies of any (i) notice of charges, (ii) notice of
intent to revoke deposit insurance, (iii) cease and desist order,
(iv) suspension or removal order, (v) memorandum of understanding,
(vi) assessment of civil money penalties, (vii) directive relating
to holding company activities constituting a risk to any Bank
Subsidiary, (viii) directive, order or disapproval of any
exception or exemption request, plan or proposal related to
capital requirements, (ix) request that the Borrower guarantee
any capital restoration plan of any Banking Subsidiary, (x)
notification that any Bank Subsidiary is, or is to be treated as
if it were, not "well capitalized" or "adequately capitalized" for
purposes of 12 U.S.C. 1831(o) and any rules and regulations issued
thereunder (including, without limitation, 12 C.F.R. 565.4), as
amended, supplemented or otherwise modified from time to time;
(xi) request or directive from any regulatory authority requiring
any Banking Subsidiary to submit a capital restoration plan or
restricting the payment of dividends by any Subsidiary to the
Borrower or any other Subsidiary.
(xi) Such other information (including non-financial information and
examination reports to the extent permitted by applicable
regulatory authorities) as the Agent or any Lender may from time
to time reasonably request.
6.2. Use of Proceeds. The Borrower will, and will cause each
Subsidiary to, use the proceeds of the Advances to refinance the Obligations
under and as defined in the Existing Agreement and for general corporate
purposes. The Borrower will not, nor will it permit any Subsidiary to, use
any of the proceeds of the Advances to purchase or carry any "margin stock"
(as defined in Regulation U).
6.3. Notice of Default. The Borrower will, and will cause each
Subsidiary to, give prompt notice in writing to the Lenders of the
occurrence of any Default or Unmatured Default and of any other development,
financial or otherwise, which could have a Material Adverse Effect.
6.4. Conduct of Business. The Borrower will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and to do all things necessary to remain duly incorporated,
validly existing and in good standing as a domestic corporation in its
jurisdiction of incorporation and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is
conducted.
6.5. Taxes. The Borrower will, and will cause each Subsidiary to,
pay when due all taxes, assessments and governmental charges and levies upon
it or its income, profits or Property, except those which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been set aside.
6.6. Insurance. The Borrower will, and will cause each Subsidiary
to, maintain with financially sound and reputable insurance companies
insurance on all their Property in such amounts and covering such risks as
is consistent with sound business practice, and the Borrower will furnish to
any Lender upon request full information as to the insurance carried.
6.7. Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject, except
where the failure to so comply would not, individually or in the aggregate,
have a Material Adverse Effect.
6.8. Maintenance of Properties. The Borrower will, and will cause
each Subsidiary to, do all things necessary to maintain, preserve, protect
and keep its Property in good repair, working order and condition, and make
all necessary and proper repairs, renewals and replacements so that its
business carried on in connection therewith may be properly conducted at all
times.
6.9. Inspection. The Borrower will, and will cause each Subsidiary
to, permit the Lenders, by their respective representatives and agents, to
inspect any of the Property, corporate books and financial records of the
Borrower and each Subsidiary, to examine and make copies of the books of
accounts and other financial records of the Borrower and each Subsidiary,
and to discuss the affairs, finances and accounts of the Borrower and each
Subsidiary with, and to be advised as to the same by, their respective
officers at such reasonable times and intervals as the Lenders may
designate.
6.10. Dividends. The Borrower will not, nor will it permit any
Subsidiary to, declare or pay any dividends on its capital stock (other than
dividends payable in its own capital stock) or redeem, repurchase or
otherwise acquire or retire any of its capital stock at any time
outstanding, except that (i) any Subsidiary may declare and pay dividends to
the Borrower or to a Wholly-Owned Subsidiary, and (ii) the Borrower may
declare or pay dividends on its capital stock or redeem, repurchase or
otherwise acquire or retire any of its capital stock during the period from
September 30, 1996 to the date of calculation in an amount not to exceed the
sum of (a) $7,000,000 plus (b) 40% of the Borrower's Consolidated Net Income
for such period, computed on a cumulative basis for such period; provided
that in the case of clause (ii) above, such cumulative amount is first
reduced by any net losses incurred by the Borrower during such period; and
provided further that in the case of each of clauses (i) and (ii) above,
after giving effect to such event, no Default or Unmatured Default exists.
6.11. Indebtedness. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(i) The Loans.
(ii) Indebtedness existing on the date hereof and described in
Schedule "3" hereto.
(iii) Permitted Banking Subsidiary Indebtedness.
(iv) Contingent Obligations incurred with respect to the endorsement
of instruments for deposit or collection in the ordinary course
of business.
(v) Rate Hedging Obligations incurred by the Borrower and any
Subsidiary (other than any Banking Subsidiary) in the ordinary
course of business solely for the purpose of hedging against
interest rate risk and conducting asset/liability management and
not for speculative purposes.
(vi) Indebtedness owing by any Subsidiary to the Borrower or any
other Subsidiary in connection with Investments permitted pursuant
to Section 6.15(iv) and 6.15(v), and Indebtedness owing by the
Borrower to any Subsidiary in connection with Investments
permitted pursuant to Section 6.15(v).
(vii) In addition to Indebtedness permitted under Section 6.11(vi),
other Indebtedness of Banknorth Mortgage Company, Inc.; provided
that such Indebtedness (i) does not exceed an aggregate principal
amount of $50,000,000 at any one time outstanding, and (ii)
consists of mortgage warehousing loans secured by the underlying
mortgages only.
(viii) Additional Indebtedness of the Borrower and its Subsidiaries in
an aggregate principal amount not to exceed $20,000,000 at any
one time outstanding.
6.12. Merger. The Borrower will not, nor will it permit any
Subsidiary to, merge or consolidate with or into any other Person, except
(i) that a Subsidiary may merge with the Borrower or a Wholly-Owned
Subsidiary and (ii) the Borrower may merge with another Person; provided
that (a) the Borrower is the surviving entity, and (b) immediately before
and after the consummation of such transaction, no Default or Unmatured
Default shall have occurred and be continuing.
6.13. Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property, to any
other Person except for (i) sales of loans, sales of receivables in
connection with asset securitization financings and sales of other similar
assets, in each case in the ordinary course of business, (ii) the
intercompany transfers permitted pursuant to Section 6.15(iv) and 6.15(v),
and (iii) leases, sales or other dispositions of its Property that, together
with all other Property of the Borrower and its Subsidiaries previously
leased, sold or disposed of (other than inventory in the ordinary course of
business) as permitted by this Section during the twelve-month period ending
with the month in which any such lease, sale or other disposition occurs, do
not constitute a Substantial Portion of the Property of the Borrower and its
Subsidiaries.
6.14. Sale and Leaseback. The Borrower will not, nor will it permit
any Subsidiary to, sell or transfer any of its Property in order to
concurrently or subsequently lease as lessee such or similar Property.
6.15. Investments and Acquisitions. The Borrower will not, nor will
it permit any Subsidiary to, make or suffer to exist any Investments
(including, without limitation, loans and advances to, and other Investments
in, Subsidiaries), or commitments therefor, or to create any Subsidiary or
to become or remain a partner in any partnership or joint venture, or to
make any Acquisition of any Person, except:
(i) Investments of any Banking Subsidiary in the ordinary course of
its banking or trust business and other Investments which the
Borrower or any Banking Subsidiary is permitted to hold and
invest in under applicable law and regulation.
(ii) Investments of any other Subsidiary in marketable securities,
money-market instruments and other similar Investments which have
been made by such Subsidiary in accordance with any investment
policy approved by its Board of Directors in the Board's
reasonable discretion.
(iii) Existing Investments in Subsidiaries and other Investments in
existence on the date hereof and described in Schedule "2" hereto.
(iv) Additional Investments of the Borrower in its Subsidiaries in
an aggregate principal amount not exceeding 12.5% of Tangible
Equity Capital at any one time outstanding.
(v) Investments made by any Subsidiary in or to the Borrower or any
Wholly-Owned Subsidiary.
(vi) Any Acquisition; provided that (a) the total assets acquired
pursuant to any individual Acquisition do not exceed an aggregate
amount of 1.5% of Tangible Equity Capital and (b) if such
Acquisition is of a bank, savings and loan association or branch
thereof, or corporation, it shall have been approved and
recommended by the board of directors of such bank, savings and
loan association or branch thereof, or corporation; and provided
further that (a) if such Acquisition is of a bank holding company
and one or more banks, such bank holding company shall have a
composite BOPEC rating of 2 or better, (b) if such Acquisition is
of a bank only, such bank shall have a composite CAMEL rating of 2
or better, (c) if such Acquisition is of a savings and loan
association or a branch thereof, either (1) such savings and loan
association or branch thereof has a composite MACRO rating of 2 or
better, or (2) such Acquisition is being made from the Resolution
Trust Corporation or any successor thereof and is being assisted
by the Resolution Trust Corporation or any successor thereof.
(vii) The creation of (a) new Subsidiaries in connection with the
Acquisitions permitted under Section 6.15(vi), (b) new
Subsidiaries of the Borrower established for the purpose of
conducting any servicing activity for its Subsidiaries
permissible under Section 225.22(a) of Regulation Y of the Federal
Reserve Board or by order of the Federal Reserve Board, (c) any
new Subsidiaries of the Borrower established for the purpose of
conducting any non-banking activity permissible for bank holding
companies under applicable law, including regulations or orders
of the Federal Reserve Board; (d) any new Subsidiaries established
by any Banking Subsidiary of the Borrower for the purpose of
conducting any activity permissible under applicable federal or
state banking laws, regulations or orders; and (e) new Banking
Subsidiaries in connection with internal reorganizations and
restructurings among existing Banking Subsidiaries of the
Borrower, including bank charter conversions and consolidations;
provided, however, that promptly and in any event within five (5)
Business Days after the later to occur of the creation of any new
Subsidiary and the consummation of any such Acquisition (if
applicable), the Borrower shall furnish an updated schedule of
Subsidiaries to the Agent and the Lenders in the form of Schedule
"2" hereto, which schedule shall set forth the respective
jurisdictions of incorporation of the Subsidiaries and the
percentage of their respective capital stock owned by the
Borrower or other Subsidiaries.
6.16. Liens. The Borrower will not, nor will it permit any
Subsidiary to, create, incur, or suffer to exist any Lien in, of or on the
Property of the Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or levies on
its Property if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings and for which adequate
reserves in accordance with generally accepted principles of
accounting shall have been set aside on its books.
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary
course of business which secure payment of obligations not more
than 60 days past due or which are being contested in good faith
by appropriate proceedings and for which adequate reserves shall
have been set aside on its books.
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or
other social security or retirement benefits, or similar
legislation.
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature
generally existing with respect to properties of a similar
character and which do not in any material way affect the
marketability of the same or interfere with the use thereof in
the business of the Borrower or the Subsidiaries.
(v) Liens existing on the date hereof and described in Schedule "3"
hereto.
(vi) Liens granted by a Banking Subsidiary in the ordinary course of
its banking and trust business in connection with any Permitted
Banking Subsidiary Indebtedness.
(vii) Liens to secure public funds or other pledges of funds required
by law to secure deposits.
(viii) Repurchase agreements, reverse repurchase agreements and other
similar transactions entered into by any Banking Subsidiary in
the ordinary course of its banking or trust business.
(ix) Liens granted by any Subsidiary to the Borrower or any other
Subsidiary as required pursuant to 12 U.S.C. 371c, as amended,
supplemented or otherwise modified from time to time, and other
Liens granted in connection with intercompany Indebtedness
permitted under Section 6.11(vi).
(x) Liens granted by Banknorth Mortgage Company, Inc. in connection
with the mortgage warehousing loans permitted under Sections 6.11
(vii); provided, however, that such Liens are only on the
underlying mortgages financed by such mortgage warehousing loans.
(xi) Liens granted by the Borrower or any Subsidiary in the ordinary
course of business on Rate Hedging Obligations permitted under
Section 6.11(v); provided, however, that any such Rate Hedging
Obligation is subject to a bilateral collateral agreement between
the Borrower or such Subsidiary, as applicable, and the other
counterparty in respect of such Rate Hedging Obligation.
(xii) Liens granted by any Banking Subsidiary in the ordinary course
of business to another bank which confirms such Banking
Subsidiary's Letter of Credit; provided, however, that such
Letter of Credit is secured by collateral pledged by the applicant
thereunder, which collateral is sufficient to cover such Banking
Subsidiary's obligations to the confirming bank.
6.17. Fixed Asset Expenditures. The Borrower will not, nor will it
permit any Subsidiary to, expend, or commit to expend, at any time an amount
in excess of the maximum amount permitted by any regulatory agency having
jurisdiction over them in the acquisition of fixed assets.
6.18. Consolidated Non-Performing Assets to Total Equity Capital. The
Borrower will maintain as at the last day of each fiscal quarter a ratio of
(i) Non-Performing Assets to (ii) Total Equity Capital of not greater than
.40 to 1.0.
6.19. Funded Debt to Tangible Equity Capital. The Borrower will
maintain as at the last day of each fiscal quarter a ratio of (i) Funded
Debt to (ii) Tangible Equity Capital which is less than .25 to 1.0.
6.20. Return on Average Assets. The Borrower will maintain as at the
last day of each fiscal quarter a Return on Average Assets of not less than
.25 to 1.0.
6.21. Capitalization. The Borrower will ensure that each Banking
Subsidiary will at all times be, and will at all times be treated by the
relevant regulatory authorities as if they were, "well-capitalized" or
"adequately capitalized" for purposes of 12 U.S.C. 1831(o) and any rules and
regulations issued thereunder (including, without limitation, 12 C.F.R.
565.4), as amended, supplemented or otherwise modified from time to time.
6.22. Capital Guidelines. The Borrower and its Banking Subsidiaries
shall comply at all times with any and all minimum risk-based capital
guidelines, leverage measure capital guidelines and any other capital
guidelines now or hereafter published by any federal or state regulatory
authorities having jurisdiction over them.
6.23. Affiliates. The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation,
the purchase or sale of any Property or service) with, or make any payment
or transfer to, any Affiliate, except in accordance with applicable legal
and regulatory requirements governing transactions among bank or bank
holding company affiliates, which requirements are imposed by any federal or
state regulatory authorities having jurisdiction over the Borrower or any
Subsidiary, including, without limitation, Sections 23A and 23B of the
Federal Reserve Act and Regulation O of the Federal Reserve Board.
6.24. Resolutions. The Borrower shall furnish to the Lenders, by no
later than December 24, 1996, a copy, certified by the Secretary or
Assistant Secretary of the Borrower, of its Board of Directors' resolutions
(and resolutions of other bodies, if any are deemed necessary by counsel for
any Lender) ratifying the execution of the Loan Documents.
ARTICLE VII
DEFAULTS
--------
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on
behalf of the Borrower or any of its Subsidiaries to the Lenders or the
Agent under or in connection with this Agreement, any Loan, or any
certificate or information delivered in connection with this Agreement or
any other Loan Document shall be materially false on the date as of which
made.
7.2. Nonpayment of principal of any Note when due, or nonpayment of
interest upon any Note or of any commitment fee or other obligations under
any of the Loan Documents within five days after the same becomes due.
7.3. The breach by the Borrower of any of the terms or provisions of
Section 6.2, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15, 6.18, 6.19, 6.20, 6.21,
6.22, 6.23 and 6.24.
7.4. The breach by the Borrower (other than a breach which
constitutes a Default under Section 7.1, 7.2 or 7.3) of any of the terms or
provisions of this Agreement which is not remedied within thirty days after
written notice from the Agent or any Lender.
7.5. Failure of the Borrower or any of its Subsidiaries to pay any
Indebtedness in excess of $10,000,000 in the aggregate when due; or the
default by the Borrower or any of its Subsidiaries in the performance of any
term, provision or condition contained in any agreement under which any
Indebtedness in excess of $10,000,000 in the aggregate was created or is
governed, or any other event shall occur or condition exist, the effect of
which is to cause, or to permit the holder or holders of such Indebtedness
to cause, such Indebtedness to become due prior to its stated maturity; or
any Indebtedness of the Borrower or any of its Subsidiaries in excess of
$10,000,000 in the aggregate shall be declared to be due and payable or
required to be prepaid (other than by a regularly scheduled payment) prior
to the stated maturity thereof; or the Borrower or any of its Subsidiaries
shall not pay, or admit in writing its inability to pay, its debts generally
as they become due.
7.6. The Borrower or any of its Subsidiaries shall (i) have an order
for relief entered with respect to it under the Federal bankruptcy laws as
now or hereafter in effect, (ii) make an assignment for the benefit of
creditors, (iii) apply for, seek, consent to, or acquiesce in, the
appointment of a receiver, custodian, trustee, examiner, liquidator or
similar official for it or any Substantial Portion of its Property, (iv)
institute any proceeding seeking an order for relief under the Federal
bankruptcy laws as now or hereafter in effect or seeking to adjudicate it a
bankrupt or insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, adjustment or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief
of debtors or fail to file an answer or other pleading denying the material
allegations of any such proceeding filed against it, (v) take any corporate
action to authorize or effect any of the foregoing actions set forth in this
Section 7.6 or (vi) fail to contest in good faith any appointment or
proceeding described in Section 7.7.
7.7. Without the application, approval or consent of the Borrower or
any of its Subsidiaries, a receiver, trustee, examiner, liquidator or
similar official shall be appointed for the Borrower or any of its
Subsidiaries or any Substantial Portion of its Property, or a proceeding
described in Section 7.6(iv) shall be instituted against the Borrower or any
of its Subsidiaries and such appointment continues undischarged or such
proceeding continues undismissed or unstayed for a period of 30 consecutive
days.
7.8. Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of (each a
"Condemnation"), all or any portion of the Property of the Borrower and its
Subsidiaries which, when taken together with all other Property of the
Borrower and its Subsidiaries so condemned, seized, appropriated, or taken
custody or control of, during the twelve-month period ending with the month
in which any such Condemnation occurs, constitutes a Substantial Portion.
7.9. The Borrower or any of its Subsidiaries shall fail within 30
days to pay, bond or otherwise discharge any judgment or order for the
payment of money in excess of $500,000, which is not stayed on appeal or
otherwise being appropriately contested in good faith.
7.10. The Unfunded Liabilities of all Single Employer Plans shall
exceed in the aggregate $1,000,000 or any Reportable Event shall occur in
connection with any Plan.
7.11. The Borrower or any of its Subsidiaries shall be the subject of
any proceeding or investigation pertaining to the release by the Borrower or
any of its Subsidiaries, or any other Person of any toxic or hazardous waste
or substance into the environment, or any violation of any federal, state or
local environmental, health or safety law or regulation, which, in either
case, could reasonably be expected to have a Material Adverse Effect.
7.12. Any Banking Subsidiary shall cease to be insured under the
Federal Deposit Insurance Act and any rules and regulations issued
thereunder, as amended, supplemented or otherwise modified from time to
time; or a cease and desist order shall be issued against the Borrower or
any Subsidiary pursuant to 12 U.S.C. 1818(b) or (c) or any similar
applicable provision of state law and any rules and regulations issued
thereunder, as amended, supplemented or otherwise modified from time to
time.
7.13. There shall occur, with respect to any Banking Subsidiary, any
event which is grounds for the required submission of a capital restoration
plan under 12 U.S.C. [SECTION]1831(o)(e)(2) and any rules and regulations
issued thereunder, as amended, supplemented or otherwise modified from time to
time, or for seeking the appointment of a receiver or conservator under 12
U.S.C. 1821(c) and any rules and regulations issued thereunder, as amended,
supplemented or otherwise modified from time to time; or any conservator or
receiver shall be appointed for any Banking Subsidiary under any such
provisions or any other state or federal law.
7.14. Any Change in Control shall occur.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
----------------------------------------------
8.1. Acceleration. If any Default described in Section 7.6 or 7.7
occurs with respect to the Borrower, the obligations of the Lenders to make
Loans hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the
part of the Agent or any Lender. If any other Default occurs, the Required
Lenders may terminate or suspend the obligations of the Lenders to make
Loans hereunder, or declare the Obligations to be due and payable, or both,
whereupon the Obligations shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which the
Borrower hereby expressly waives.
If, after acceleration of the maturity of the Obligations or
termination of the obligations of the Lenders to make Loans hereunder as a
result of any Default (other than any Default as described in Section 7.6 or
7.7 with respect to the Borrower) and before any judgment or decree for the
payment of the Obligations due shall have been obtained or entered, the
Required Lenders (in their sole discretion) shall so direct, the Agent
shall, by notice to the Borrower, rescind and annul such acceleration and/or
termination.
8.2. Amendments. Subject to the provisions of this Article VIII,
the Required Lenders (or the Agent with the consent in writing of the
Required Lenders) and the Borrower may enter into agreements supplemental
hereto for the purpose of adding or modifying any provisions to the Loan
Documents or changing in any manner the rights of the Lenders or the
Borrower hereunder or waiving any Default hereunder; provided, however, that
no such supplemental agreement shall, without the consent of each Lender:
(i) Extend the maturity of any Loan or Note or forgive all or any
portion of the principal amount thereof, or reduce the rate or
extend the time of payment of interest or fees thereon.
(ii) Reduce the percentage specified in the definition of Required
Lenders.
(iii) Extend the Termination Date, or reduce the amount or extend the
payment date for, the mandatory payments required under Section
2.2, or permit the Borrower to assign its rights under this
Agreement.
(iv) Amend this Section 8.2.
No amendment of any provision of this Agreement relating to the Agent shall
be effective without the written consent of the Agent. The Agent may waive
payment of the fee required under Section 12.3.2 without obtaining the
consent of any other party to this Agreement.
8.3. Preservation of Rights. No delay or omission of the Lenders or
the Agent to exercise any right under the Loan Documents shall impair such
right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Loan notwithstanding the existence of a Default
or the inability of the Borrower to satisfy the conditions precedent to such
Loan shall not constitute any waiver or acquiescence. Any single or partial
exercise of any such right shall not preclude other or further exercise
thereof or the exercise of any other right, and no waiver, amendment or
other variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lenders required
pursuant to Section 8.2, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by
law afforded shall be cumulative and all shall be available to the Agent and
the Lenders until the Obligations have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
------------------
9.1. Survival of Representations. All representations and
warranties of the Borrower contained in this Agreement shall survive
delivery of the Notes and the making of the Loans herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement
to the contrary notwithstanding, no Lender shall be obligated to extend
credit to the Borrower in violation of any limitation or prohibition
provided by any applicable statute or regulation.
9.3. Taxes. Any taxes (excluding federal income taxes on the
overall net income of any Lender) or other similar assessments or charges
made by any governmental or revenue authority in respect of the Loan
Documents shall be paid by the Borrower, together with interest and
penalties, if any.
9.4. Headings; References to Statutes. Section headings in the Loan
Documents are for convenience of reference only, and shall not govern the
interpretation of any of the provisions of the Loan Documents. Any
references to specific statutes herein shall be deemed to refer to such
statute and any rules and regulations issued thereunder or in connection
therewith, as they may be amended, supplemented or otherwise modified from
time to time.
9.5. Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Borrower, the Agent and the Lenders
and supersede all prior agreements and understandings among the Borrower,
the Agent and the Lenders relating to the subject matter thereof.
9.6. Several Obligations; Benefits of this Agreement. The
respective obligations of the Lenders hereunder are several and not joint
and no Lender shall be the partner or agent of any other (except to the
extent to which the Agent is authorized to act as such). The failure of any
Lender to perform any of its obligations hereunder shall not relieve any
other Lender from any of its obligations hereunder. This Agreement shall
not be construed so as to confer any right or benefit upon any Person other
than the parties to this Agreement and their respective successors and
assigns.
9.7. Expenses; Indemnification. The Borrower shall reimburse the
Agent for any costs, internal charges and out-of-pocket expenses (including
attorneys' fees and time charges of attorneys for the Agent, which attorneys
may be employees of the Agent) paid or incurred by the Agent in connection
with the preparation, negotiation, execution, delivery, review, amendment,
modification, and administration of the Loan Documents. The Borrower also
agrees to reimburse the Agent and the Lenders for any costs, internal
charges and out-of-pocket expenses (including attorneys' fees and time
charges of attorneys for the Agent and the Lenders, which attorneys may be
employees of the Agent or the Lenders) paid or incurred by the Agent or any
Lender in connection with the collection and enforcement of the Loan
Documents. The Borrower further agrees to indemnify the Agent and each
Lender, its directors, officers and employees against all losses, claims,
damages, penalties, judgments, liabilities and expenses (including, without
limitation, all expenses of litigation or preparation therefor whether or
not the Agent or any Lender is a party thereto) which any of them may pay or
incur arising out of or relating to this Agreement, the other Loan
Documents, the transactions contemplated hereby or the direct or indirect
application or proposed application of the proceeds of any Loan hereunder.
The obligations of the Borrower under this Section shall survive the
termination of this Agreement.
9.8. Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the
Lenders.
9.9. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement
Accounting Principles; provided, however, that compliance with Sections
6.18, 6.19 and 6.20 shall be interpreted and all determinations thereunder
shall be made in accordance with regulatory accounting principles as in
effect from time to time, applied in a manner consistent with that used in
preparing the financial statements and reports referred to in Section
6.1(iv) for the fiscal quarter ended September 30, 1996.
9.10. Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable,
or invalid without affecting the remaining provisions in that jurisdiction
or the operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are
declared to be severable.
9.11. Nonliability of Lenders. The relationship between the Borrower
and the Lenders and the Agent shall be solely that of borrower and lender.
Neither the Agent nor any Lender shall have any fiduciary responsibilities
to the Borrower. Neither the Agent nor any Lender undertakes any
responsibility to the Borrower to review or inform the Borrower of any
matter in connection with any phase of the Borrower's business or
operations.
9.12. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING
A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
9.13. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY
NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING
PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.
ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE AGENT OR ANY LENDER OR
ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY,
ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
9.14. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH LENDER
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR
THE RELATIONSHIP ESTABLISHED THEREUNDER.
9.15. Confidentiality. Each Lender acknowledges that it will obtain
certain confidential and proprietary information from the Borrower in the
course of performance or enforcement of the obligations hereunder. Each
Lender agrees to hold any such confidential information which it may receive
from the Borrower pursuant to this Agreement in confidence, except for
disclosure (i) to other Lenders and their respective Affiliates, (ii) to
legal counsel, accountants, and other professional advisors to that Lender
or to a Transferee, (iii) to regulatory officials acting in the course of
their duty, (iv) to any Person as required by law, regulation, or legal
process, (v) to any Person in connection with any legal proceeding to which
that Lender is a party, and (vi) permitted by Section 12.4.
ARTICLE X
THE AGENT
---------
10.1. Appointment. The First National Bank of Chicago is hereby
appointed Agent hereunder and under each other Loan Document, and each of
the Lenders irrevocably authorizes the Agent to act as the agent of such
Lender. The Agent agrees to act as such upon the express conditions
contained in this Article X. The Agent shall not have a fiduciary
relationship in respect of the Borrower or any Lender by reason of this
Agreement.
10.2. Powers. The Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to the Agent by the
terms of each thereof, together with such powers as are reasonably
incidental thereto. The Agent shall have no implied duties to the Lenders,
or any obligation to the Lenders to take any action thereunder except any
action specifically provided by the Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders
or any Lender for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith except for its or their own gross negligence or willful
misconduct.
10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent
nor any of its directors, officers, agents or employees shall be responsible
for or have any duty to ascertain, inquire into, or verify (i) any
statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (ii) the performance or observance of
any of the covenants or agreements of any obligor under any Loan Document,
including, without limitation, any agreement by an obligor to furnish
information directly to each Lender; (iii) the satisfaction of any condition
specified in Article IV, except receipt of items required to be delivered to
the Agent; (iv) the validity, effectiveness or genuineness of any Loan
Document or any other instrument or writing furnished in connection
therewith; or (v) the value, sufficiency, creation, perfection or priority
of any interest in any collateral security. The Agent shall have no duty to
disclose to the Lenders information that is not required to be furnished by
the Borrower to the Agent at such time, but is voluntarily furnished by the
Borrower to the Agent (either in its capacity as Agent or in its individual
capacity).
10.5. Action on Instructions of Lenders. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder
and under any other Loan Document in accordance with written instructions
signed by the Required Lenders, and such instructions and any action taken
or failure to act pursuant thereto shall be binding on all of the Lenders
and on all holders of Notes. The Agent shall be fully justified in failing
or refusing to take any action hereunder and under any other Loan Document
unless it shall first be indemnified to its satisfaction by the Lenders pro
rata against any and all liability, cost and expense that it may incur by
reason of taking or continuing to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute any of
its duties as Agent hereunder and under any other Loan Document by or
through employees, agents, and attorneys-in-fact and shall not be answerable
to the Lenders, except as to money or securities received by it or its
authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Agent shall be
entitled to advice of counsel concerning all matters pertaining to the
agency hereby created and its duties hereunder and under any other Loan
Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons,
and, in respect to legal matters, upon the opinion of counsel selected by
the Agent, which counsel may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree
to reimburse and indemnify the Agent ratably in proportion to their
respective Loans outstanding (i) for any amounts not reimbursed by the
Borrower for which the Agent is entitled to reimbursement by the Borrower
under the Loan Documents, (ii) for any other expenses incurred by the Agent
on behalf of the Lenders, in connection with the preparation, execution,
delivery, administration and enforcement of the Loan Documents and (iii) for
any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the
Agent in any way relating to or arising out of the Loan Documents or any
other document delivered in connection therewith or the transactions
contemplated thereby, or the enforcement of any of the terms thereof or of
any such other documents, provided that no Lender shall be liable for any of
the foregoing to the extent they arise from the gross negligence or willful
misconduct of the Agent. The obligations of the Lenders under this Section
10.8 shall survive payment of the Obligations and termination of this
Agreement.
10.9. Rights as a Lender. In the event the Agent is a Lender, the
Agent shall have the same rights and powers hereunder and under any other
Loan Document as any Lender and may exercise the same as though it were not
the Agent, and the term "Lender" or "Lenders" shall, at any time when the
Agent is a Lender, unless the context otherwise indicates, include the Agent
in its individual capacity. The Agent may accept deposits from, lend money
to, and generally engage in any kind of trust, debt, equity or other
transaction, in addition to those contemplated by this Agreement or any
other Loan Document, with the Borrower or any of its Subsidiaries in which
the Borrower or such Subsidiary is not restricted hereby from engaging with
any other Person. The Agent, in its individual capacity, is not obligated
to remain a Lender.
10.10. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and
based on the financial statements prepared by the Borrower and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
10.11. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to
be effective upon the appointment of a successor Agent or, if no successor
Agent has been appointed, sixty days after the retiring Agent gives notice
of its intention to resign. Upon any such resignation, the Required Lenders
shall have the right to appoint, on behalf of the Borrower and the Lenders,
a successor Agent. If no successor Agent shall have been so appointed by
the Required Lenders within thirty days after the resigning Agent's giving
notice of its intention to resign, then the resigning Agent may appoint, on
behalf of the Borrower and the Lenders, a successor Agent. If the Agent has
resigned and no successor Agent has been appointed, the Lenders may perform
all the duties of the Agent hereunder and the Borrower shall make all
payments in respect of the Obligations to the applicable Lender and for all
other purposes shall deal directly with the Lenders. No successor Agent
shall be deemed to be appointed hereunder until such successor Agent has
accepted the appointment. Any such successor Agent shall be a commercial
bank having capital and retained earnings of at least $250,000,000. Upon
the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the resigning Agent. Upon the
effectiveness of the resignation of the Agent, the resigning Agent shall be
discharged from its duties and obligations hereunder and under the Loan
Documents. After the effectiveness of the resignation of an Agent, the
provisions of this Article X shall continue in effect for the benefit of
such Agent in respect of any actions taken or omitted to be taken by it
while it was acting as the Agent hereunder and under the other Loan
Documents.
10.12. Agent's Fees. The Borrower agrees to pay to the Agent, for
its own account, the fees agreed to by the Borrower and the Agent pursuant
to that certain letter agreement dated as of even date herewith.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
------------------------
11.1. Setoff. In addition to, and without limitation of, any rights
of the Lenders under applicable law, if the Borrower becomes insolvent,
however evidenced, or any Default or Unmatured Default occurs, any and all
deposits (including all account balances, whether provisional or final and
whether or not collected or available) and any other Indebtedness at any
time held or owing by any Lender to or for the credit or account of the
Borrower may be offset and applied toward the payment of the Obligations
owing to such Lender, whether or not the Obligations, or any part hereof,
shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Loans (other than payments
received pursuant to Sections 3.1, 3.2 or 3.4) in a greater proportion than
that received by any other Lender, such Lender agrees, promptly upon demand,
to purchase a portion of the Loans held by the other Lenders so that after
such purchase each Lender will hold its ratable proportion of Loans. If any
Lender, whether in connection with setoff or amounts which might be subject
to setoff or otherwise, receives collateral or other protection for its
Obligations or such amounts which may be subject to setoff, such Lender
agrees, promptly upon demand, to take such action necessary such that all
Lenders share in the benefits of such collateral ratably in proportion to
their Loans. In case any such payment is disturbed by legal process, or
otherwise, appropriate further adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
-------------------------------------------------
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and
the Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under
the Loan Documents and (ii) any assignment by any Lender must be made in
compliance with Section 12.3. Notwithstanding clause (ii) of this Section,
any Lender may at any time, without the consent of the Borrower or the
Agent, assign all or any portion of its rights under this Agreement and its
Notes to a Federal Reserve Bank; provided, however, that no such assignment
shall release the transferor Lender from its obligations hereunder. The
Agent may treat the payee of any Note as the owner thereof for all purposes
hereof unless and until such payee complies with Section 12.3 in the case of
an assignment thereof or, in the case of any other transfer, a written
notice of the transfer is filed with the Agent. Any assignee or transferee
of a Note agrees by acceptance thereof to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the holder of any Note, shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any Note or
Notes issued in exchange therefor.
12.2. Participations.
12.2.1. Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with applicable law, at
any time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note held
by such Lender, or any other interest of such Lender under the Loan
Documents. The consent of the Borrower and the Agent, which consent in
each case shall not be unreasonably withheld, shall be required prior to
a participation becoming effective with respect to a Participant which
is not a Lender or an Affiliate thereof; provided, however, that if a
Default has occurred and is continuing, the consent of the Borrower shall
not be required. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations
under the Loan Documents shall remain unchanged, such Lender shall remain
solely responsible to the other parties hereto for the performance of
such obligations, such Lender shall remain the holder of any such Note
for all purposes under the Loan Documents, all amounts payable by the
Borrower under this Agreement shall be determined as if such Lender
had not sold such participating interests, and the Borrower and the Agent
shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under the Loan Documents.
12.2.2. Voting Rights. Each Lender shall retain the sole right
to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other
than any amendment, modification or waiver with respect to any Loan in
which such Participant has an interest which forgives principal, interest
or fees or reduces the interest rate or fees payable with respect to any
such Loan, postpones any date fixed for any regularly-scheduled payment
of principal of, or interest or fees on, any such Loan, releases any
guarantor of any such Loan or releases any substantial portion of
collateral, if any, securing any such Loan.
12.2.3. Benefit of Setoff. The Borrower agrees that each
Participant shall be deemed to have the right of setoff provided in
Section 11.1 in respect of its participating interest in amounts owing
under the Loan Documents to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under the
Loan Documents, provided that each Lender shall retain the right of
setoff provided in Section 11.1 with respect to the amount of
participating interests sold to each Participant. The Lenders agree to
share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each
Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 11.2 as if
each Participant were a Lender.
12.3. Assignments.
12.3.1. Permitted Assignments. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time
assign to one or more banks or other entities ("Purchasers") all or any
part of its rights and obligations under the Loan Documents. Such
assignment shall be substantially in the form of Exhibit "D" hereto or in
such other form as may be agreed to by the parties thereto. The consent
of the Borrower and the Agent, which consent in each case shall not be
unreasonably withheld, shall be required prior to an assignment becoming
effective with respect to a Purchaser which is not a Lender or an
Affiliate thereof; provided, however, that if a Default has occurred
and is continuing, the consent of the Borrower shall not be required.
12.3.2. Effect; Effective Date. Upon (i) delivery to the Agent
of a notice of assignment, substantially in the form attached as Exhibit
"I" to Exhibit "D" hereto (a "Notice of Assignment"), together with any
consents required by Section 12.3.1, and (ii) payment of a $2,500 fee to
the Agent for processing such assignment, such assignment shall become
effective on the effective date specified in such Notice of Assignment.
The Notice of Assignment shall contain a representation by the Purchaser
to the effect that none of the consideration used to make the purchase
of the Loans under the applicable assignment agreement are "plan assets"
as defined under ERISA and that the rights and interests of the Purchaser
in and under the Loan Documents will not be "plan assets" under ERISA.
On and after the effective date of such assignment, such Purchaser shall
for all purposes be a Lender party to this Agreement and any other Loan
Document executed by the Lenders and shall have all the rights and
obligations of a Lender under the Loan Documents, to the same extent as
if it were an original party hereto, and no further consent or action by
the Borrower, the Lenders or the Agent shall be required to release the
transferor Lender with respect to the percentage of the Loans assigned
to such Purchaser. Upon the consummation of any assignment to a
Purchaser pursuant to this Section 12.3.2, the transferor Lender, the
Agent and the Borrower shall make appropriate arrangements so that
replacement Notes are issued to such transferor Lender and new Notes or,
as appropriate, replacement Notes, are issued to such Purchaser.
12.4. Dissemination of Information. The Borrower authorizes each
Lender to disclose to any Participant or Purchaser or any other Person
acquiring an interest in the Loan Documents by operation of law (each a
"Transferee") and any prospective Transferee any and all information in such
Lender's possession concerning the creditworthiness of the Borrower and its
Subsidiaries; provided that each Transferee and prospective Transferee
agrees to be bound by Section 9.15 of this Agreement.
12.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the
transferor Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, to comply with the provisions of Section
2.18.
ARTICLE XIII
NOTICES
-------
13.1. Giving Notice. Except as otherwise permitted by Section 2.13
with respect to borrowing notices, all notices and other communications
provided to any party hereto under this Agreement or any other Loan Document
shall be in writing or by telex or by facsimile and addressed or delivered
to such party at its address set forth below its signature hereto or at such
other address as may be designated by such party in a notice to the other
parties. Any notice, if mailed and properly addressed with postage prepaid,
shall be deemed given when received; any notice, if transmitted by telex or
facsimile, shall be deemed given when transmitted (answerback confirmed in
the case of telexes).
13.2. Change of Address. The Borrower, the Agent and any Lender may
each change the address for service of notice upon it by a notice in writing
to the other parties hereto.
ARTICLE XIV
COUNTERPARTS
------------
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Agent and the Lenders and each party has notified the Agent by telex or
telephone, that it has taken such action.
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have
executed this Agreement as of the date first above written.
BANKNORTH GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President & CFO
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President
and Chief Financial Officer
Commitment
----------
$6,825,000 THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇
Print Name: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇
Title: Vice President
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇
Vice President
U.S. Financial
Institutions
$6,825,000 LASALLE NATIONAL BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President
Correspondent Banking
Unit - USA
$13,650,000
===========
EXHIBIT "A"
NOTE
$ December 16, 1996
-------------------------
BANKNORTH GROUP, INC., a Delaware corporation (the "Borrower"),
promises to pay to the order of (the
"Lender") the lesser of the principal sum of Dollars or
the aggregate unpaid principal amount of all Loans made by the Lender to the
Borrower pursuant to Article II of the Term Loan Agreement (as the same may
be amended or modified, the "Agreement") hereinafter referred to, in
immediately available funds at the main office of The First National Bank of
Chicago in Chicago, Illinois, as Agent, together with interest on the unpaid
principal amount hereof at the rates and on the dates set forth in the
Agreement. The Borrower shall pay the principal of and accrued and unpaid
interest on the Loans in full on the Termination Date and shall make such
mandatory payments as are required to be made under the terms of Article II
of the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual
practice, the date and amount of each Loan and the date and amount of each
principal payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to
the benefits of, the Term Loan Agreement, dated as of December 16, 1996,
among the Borrower, The First National Bank of Chicago, individually and as
Agent, and the lenders named therein, including the Lender, to which
Agreement, as it may be amended from time to time, reference is hereby made
for a statement of the terms and conditions governing this Note, including
the terms and conditions under which this Note may be prepaid or its
maturity date accelerated. Capitalized terms used herein and not otherwise
defined herein are used with the meanings attributed to them in the
Agreement.
BANKNORTH GROUP, INC.
By:
----------------------------------
Print Name:
--------------------------
Title:
-------------------------------
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF BANKNORTH GROUP, INC.,
DATED DECEMBER 16, l996
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
------------------------------------------------------
EXHIBIT "B"
FORM OF OPINION
, 19
To: The Agent and the Lenders who are parties
to the Agreement described below.
Gentlemen/Ladies:
We are counsel for Banknorth Group, Inc. (the Borrower"), and have
represented the Borrower in connection with its execution and delivery of a
Term Loan Agreement among the Borrower, The First National Bank of Chicago,
individually and as Agent, and the Lenders named therein, providing for
Advances in an aggregate principal amount not exceeding $13,650,000 at any
one time outstanding and dated as of December 16, 1996 (the "Agreement").
All capitalized terms used in this opinion and not otherwise defined shall
have the meanings attributed to them in the Agreement.
We have examined the Borrower's articles of incorporation, by-laws,
resolutions, the Loan Documents and such other matters of fact and law which
we deem necessary in order to render this opinion. Based upon the
foregoing, it is our opinion that:
l. The Borrower and each Subsidiary are corporations duly
incorporated, validly existing and in good standing under the laws of their
states of incorporation and have all requisite authority to conduct their
business in each jurisdiction in which their business is conducted, except
where the failure to obtain such authority would not have a Material Adverse
Effect.
2. The execution and delivery of the Loan Documents by the Borrower
and the performance by the Borrower of the Obligations have been duly
authorized by all necessary corporate action and proceedings on the part of
the Borrower and will not:
(a) require any consent of the Borrower's shareholders;
(b) violate any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on the Borrower or any of its
Subsidiaries or the Borrower's or any Subsidiary's articles of
incorporation or by-laws or any indenture, instrument or agreement
binding upon the Borrower or any of its Subsidiaries; or
(c) result in, or require, the creation or imposition of any Lien
pursuant to the provisions of any indenture, instrument or agreement
binding upon the Borrower or any of its Subsidiaries.
3. The Loan Documents have been duly executed and delivered by the
Borrower and constitute legal, valid and binding obligations of the Borrower
enforceable in accordance with their terms except to the extent the
enforcement thereof may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and subject also to
the availability of equitable remedies if equitable remedies are sought.
4. There is no litigation or proceeding against the Borrower or any
of its Subsidiaries which, if adversely determined, could have a Material
Adverse Effect.
5. No approval, authorization, consent, adjudication or order of any
governmental authority, which has not been obtained by the Borrower or any
of its Subsidiaries, is required to be obtained by the Borrower or any of
its Subsidiaries in connection with the execution and delivery of the Loan
Documents, the borrowings under the Agreement or in connection with the
payment by the Borrower of the Obligations.
This opinion may be relied upon by the Agent, the Lenders and their
participants, assignees and other transferees.
Very truly yours,
----------------------------------
EXHIBIT "C"
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Agreement described below.
This Compliance Certificate is furnished pursuant to that certain Term
Loan Agreement dated as of December 16, 1996 (as amended, modified, renewed
or extended from time to time, the "Agreement") among the Borrower, the
lenders party thereto and The First National Bank of Chicago, as Agent for
the Lenders. Unless otherwise defined herein, capitalized terms used in
this Compliance Certificate have the meanings ascribed thereto in the
Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or
have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Borrower and its Subsidiaries during the
accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which
constitutes a Default or Unmatured Default during or at the end of the
accounting period covered by the attached financial statements or as of the
date of this Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain covenants of
the Agreement, all of which data and computations are true, complete and
correct.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it
has existed and the action which the Borrower has taken, is taking, or
proposes to take with respect to each such condition or event:
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this day of
, 19 .
-----------------------
SCHEDULE I TO COMPLIANCE CERTIFICATE
SCHEDULE I
Compliance as of
-----------------
($ in Thousands)
Section 6.10 Dividends:
A. Dividends Paid
1. Dividends, redemptions and/or
repurchases of capital stock since
9/30/96 as of the last date of
calculation $
-----------------
2. Dividends, redemptions, and/or
repurchases of capital stock during
the quarter just ended $
-----------------
3. Total Dividends Paid (1 + 2) $
-----------------
B. Allowable Dividends
1. $7,000 $
-----------------
2. 40.00% of Consolidated Net Income
(Loss) since 9/30/96 as of the
last date of calculation $
-----------------
3. 40.00% of Consolidated Net Income
(Loss) for the quarter just ended $
-----------------
4. Total Allowable Dividends
(1 + 2 + 3) $
-----------------
C. B - A (must be a positive figure) $
-----------------
Section 6.11 Indebtedness:
A. Total Additional Indebtedness not
to exceed $20,000 at any one time
outstanding $
-----------------
Section 6.15 Investments and Acquisitions:
A. Investments in Subsidiaries
1. Additional Investments in Subsidiaries
in an aggregate principal amount not
exceeding 12.5% of Tangible Equity
Capital at any one time
outstanding $
-----------------
Section 6.18 Consolidated Non-Performing
Assets to Total Equity Capital
A. Consolidated Non-Performing Assets
1. Loans on nonaccrual status $
-----------------
2. Loans 90 days or more past
due and still accruing $
-----------------
3. Loans and leases restructured and
in compliance with modified terms $
-----------------
4. Other Real Estate Owned $
-----------------
5. Property acquired pursuant to
in substance foreclosures $
----------------
6. Total Consolidated Non-Performing
Assets (1 + 2 + 3 + 4 + 5) $
-----------------
B. Total Equity Capital $
-----------------
C. Ratio (A6/B) :1.00
-----------------
D. Maximum Permitted 0.40:1.00
-----------------
Section 6.19 Funded Debt to Tangible
Equity Capital:
A. Funded Debt $
-----------------
B. Total Equity Capital $
-----------------
C. Goodwill $
-----------------
D. Tangible Equity Capital (B-C) $
-----------------
E. Ratio A/D :1.00
-----------------
D. Maximum Permitted 0.25:1.00
-----------------
Section 6.20 Return on Average Assets:
A. Annualized Net Income $
-----------------
B. Total Consolidated Average Assets $
-----------------
C. Ratio (A/B) :1.00
-----------------
D. Minimum Required 0.25:1.00
-----------------
EXHIBIT "D"
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between the
"Assignor") and (the "Assignee") is dated as of
, 19 . The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit
Agreement (which, as it may be amended, modified, renewed or extended from
time to time is herein called the "Credit Agreement") described in Item 1 of
Schedule 1 attached hereto ("Schedule 1"). Capitalized terms used herein
and not otherwise defined herein shall have the meanings attributed to them
in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns
to the Assignee, and the Assignee hereby purchases and assumes from the
Assignor, an interest in and to the Assignor's rights and obligations under
the Credit Agreement such that after giving effect to such assignment the
Assignee shall have purchased pursuant to this Assignment Agreement the
percentage interest specified in Item 3 of Schedule 1 of all outstanding
rights and obligations under the Credit Agreement relating to the facilities
listed in Item 3 of Schedule 1 and the other Loan Documents. The aggregate
Commitment (or Loans, if the applicable Commitment has been terminated)
purchased by the Assignee hereunder is set forth in Item 4 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement
(the "Effective Date") shall be the later of the date specified in Item 5 of
Schedule 1 or two Business Days (or such shorter period agreed to by the
Agent) after a Notice of Assignment substantially in the form of Exhibit "I"
attached hereto has been delivered to the Agent. Such Notice of Assignment
must include any consents required to be delivered to the Agent by Section
12.3.1 of the Credit Agreement. In no event will the Effective Date occur
if the payments required to be made by the Assignee to the Assignor on the
Effective Date under Sections 4 and 5 hereof are not made on the proposed
Effective Date. The Assignor will notify the Assignee of the proposed
Effective Date no later than the Business Day prior to the proposed
Effective Date. As of the Effective Date, (i) the Assignee shall have the
rights and obligations of a Lender under the Loan Documents with respect to
the rights and obligations assigned to the Assignee hereunder and (ii) the
Assignor shall relinquish its rights and be released from its corresponding
obligations under the Loan Documents with respect to the rights and
obligations assigned to the Assignee hereunder.
4. PAYMENTS OBLIGATIONS. On and after the Effective Date, the
Assignee shall be entitled to receive from the Agent all payments of
principal, interest and fees with respect to the interest assigned hereby.
The Assignee shall advance funds directly to the Agent with respect to all
Loans and reimbursement payments made on or after the Effective Date with
respect to the interest assigned hereby. [In consideration for the sale and
assignment of Loans hereunder, (i) the Assignee shall pay the Assignor, on
the Effective Date, an amount equal to the principal amount of the portion
of all Floating Rate Loans assigned to the Assignee hereunder and (ii) with
respect to each Eurodollar Loan made by the Assignor and assigned to the
Assignee hereunder which is outstanding on the Effective Date, (a) on the
last day of the Eurodollar Interest Period therefor or (b) on such earlier
date agreed to by the Assignor and the Assignee or (c) on the date on which
any such Eurodollar Loan either becomes due (by acceleration or otherwise)
or is prepaid (the date as described in the foregoing clauses (a), (b) or
(c) being hereinafter referred to as the "Payment Date"), the Assignee shall
pay the Assignor an amount equal to the principal amount of the portion of
such Eurodollar Loan assigned to the Assignee which is outstanding on the
Payment Date. If the Assignor and the Assignee agree that the Payment Date
for such Eurodollar Loan shall be the Effective Date, they shall agree to
the interest rate applicable to the portion of such Loan assigned hereunder
for the period from the Effective Date to the end of the existing Eurodollar
Interest Period applicable to such Eurodollar Loan (the "Agreed Interest
Rate") and any interest received by the Assignee in excess of the Agreed
Interest Rate shall be remitted to the Assignor. In the event interest for
the period from the Effective Date to but not including the Payment Date is
not paid by the Borrower with respect to any Eurodollar Loan sold by the
Assignor to the Assignee hereunder, the Assignee shall pay to the Assignor
interest for such period on the portion of such Eurodollar Loan sold by the
Assignor to the Assignee hereunder at the applicable rate provided by the
Credit Agreement. In the event a prepayment of any Eurodollar Loan which is
existing on the Payment Date and assigned by the Assignor to the Assignee
hereunder occurs after the Payment Date but before the end of the Eurodollar
Interest Period applicable to such Eurodollar Loan, the Assignee shall remit
to the Assignor the excess of the prepayment penalty paid with respect to
the portion of such Eurodollar Loan assigned to the Assignee hereunder over
the amount which would have been paid if such prepayment penalty was
calculated based on the Agreed Interest Rate. The Assignee will also
promptly remit to the Assignor (i) any principal payments received from the
Agent with respect to Eurodollar Loans prior to the Payment Date and (ii)
any amounts of interest on Loans and fees received from the Agent which
relate to the portion of the Loans assigned to the Assignee hereunder for
periods prior to the Effective Date, in the case of Floating Rate Loans or
fees, or the Payment Date, in the case of Eurodollar Loans, and not
previously paid by the Assignee to the Assignor.]* In the event that either
party hereto receives any payment to which the other party hereto is
entitled under this Assignment Agreement, then the party receiving such
amount shall promptly remit it to the other party hereto.
5. FEES PAYABLE BY THE ASSIGNEE. The Assignee shall pay to the
Assignor a fee on each day on which a payment of interest or fees is made
under the Credit Agreement with respect to the amounts assigned to the
Assignee hereunder (other than a payment of interest or fees for the period
prior to the Effective Date or, in the case of Eurodollar Loans, the Payment
Date, which the Assignee is obligated to deliver to the Assignor pursuant to
Section 4 hereof). The amount of such fee shall be the difference between
(i) the interest or fee, as applicable, paid with respect to the amounts
assigned to the Assignee hereunder and (ii) the interest or fee, as
applicable, which would have been paid with respect to the amounts assigned
to the Assignee hereunder if each interest rate was of 1% less than the
interest rate paid by the Borrower or if the commitment fee was of 1%
less than the commitment fee paid by the Borrower, as applicable. In
addition, the Assignee agrees to pay % of the recordation fee required to
be paid to the Agent in connection with this Assignment Agreement.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim created by the
Assignor. It is understood and agreed that the assignment and assumption
hereunder are made without recourse to the Assignor and that the Assignor
makes no other representation or warranty of any kind to the Assignee.
Neither the Assignor nor any of its officers, directors, employees, agents
or attorneys shall be responsible for (i) the due execution, legality,
validity, enforceability, genuineness, sufficiency or collectability of any
Loan Document, including without limitation, documents granting the Assignor
and the other Lenders a security interest in assets of the Borrower or any
guarantor, (ii) any representation, warranty or statement made in or in
connection with any of the Loan Documents, (iii) the financial condition or
creditworthiness of the Borrower or any guarantor, (iv) the performance of
or compliance with any of the terms or provisions of any of the Loan
Documents, (v) inspecting any of the Property, books or records of the
Borrower, (vi) the validity, enforceability, perfection, priority,
condition, value or sufficiency of any collateral securing or purporting to
secure the Loans or (vii) any mistake, error of judgment, or action taken or
omitted to be taken in connection with the Loans or the Loan Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms that
it has received a copy of the Credit Agreement, together with copies of the
financial statements requested by the Assignee and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement, (ii) agrees that it will,
independently and without reliance upon the Agent, the Assignor or any other
Lender and based on such documents and information at it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under the Loan Documents, (iii) appoints and authorizes
the Agent to take such action as agent on its behalf and to exercise such
powers under the Loan Documents as are delegated to the Agent by the terms
thereof, together with such powers as are reasonably incidental thereto,
(iv) agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender, (v) agrees that its payment instructions and
notice instructions are as set forth in the attachment to Schedule 1, (vi)
confirms that none of the funds, monies, assets or other consideration being
used to make the purchase and assumption hereunder are "plan assets" as
defined under ERISA and that its rights, benefits and interests in and under
the Loan Documents will not be "plan assets" under ERISA, [(vii) confirms
that it is an Eligible Assignee,]* [and (viii) attaches the forms prescribed
by the Internal Revenue Service of the United States certifying that the
Assignee is entitled to receive payments under the Loan Documents without
deduction or withholding of any United States federal income taxes].**
8. INDEMNITY. The Assignee agrees to indemnify and hold the
Assignor harmless against any and all losses, costs and expenses (including,
without limitation, reasonable attorneys' fees) and liabilities incurred by
the Assignor in connection with or arising in any manner from the Assignee's
non-performance of the obligations assumed under this Assignment Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee
shall have the right pursuant to Section 12.3.1 of the Credit Agreement to
assign the rights which are assigned to the Assignee hereunder to any entity
or person, provided that (i) any such subsequent assignment does not violate
any of the terms and conditions of the Loan Documents or any law, rule,
regulation, order, writ, judgment, injunction or decree and that any consent
required under the terms of the Loan Documents has been obtained and (ii)
unless the prior written consent of the Assignor is obtained, the Assignee
is not thereby released from its obligations to the Assignor hereunder, if
any remain unsatisfied, including, without limitation, its obligations under
Sections 4, 5 and 8 hereof.
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the
Aggregate Commitment occurs between the date of this Assignment Agreement
and the Effective Date, the percentage interest specified in Item 3 of
Schedule 1 shall remain the same, but the dollar amount purchased shall be
recalculated based on the reduced Aggregate Commitment.
11. ENTIRE AGREEMENT. This Assignment Agreement and the attached
Notice of Assignment embody the entire agreement and understanding between
the parties hereto and supersede all prior agreements and understandings
between the parties hereto relating to the subject matter hereof.
12. GOVERNING LAW. This Assignment Agreement shall be governed by
the internal law, and not the law of conflicts, of the State of Illinois.
13. NOTICES. Notices shall be given under this Assignment Agreement
in the manner set forth in the Credit Agreement. For the purpose hereof,
the addresses of the parties hereto (until notice of a change is delivered)
shall be the address set forth in the attachment to Schedule 1.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above
written.
[NAME OF ASSIGNOR]
By:
--------------------------
Title:
--------------------------
--------------------------
--------------------------
[NAME OF ASSIGNEE]
By:
--------------------------
Title:
--------------------------
--------------------------
--------------------------
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement: Term Loan Agreement, dated
as of December 16, 1996, among Banknorth Group, Inc., the Lenders
named therein and The First National Bank of Chicago, as Agent.
2. Date of Assignment Agreement:_______________, 19__
3. Amounts (As of Date of Item 2 above):
Facility Facility Facility Facility
1* 2* *3 *4
-----------------------------------------
a. Total of Commitments
(Loans)** under
Credit Agreement $ $ $ $
------ ------ ------ ------
b. Assignee's Percentage
of each Facility purchased
under the Assignment
Agreement*** % % % %
------ ------ ------ ------
c. Amount of Assigned Share in
each Facility purchased under
the Assignment Agreement $ $ $ $
------ ------ ------ ------
4. Assignee's Aggregate (Loan
Amount)** Commitment Amount
Purchased Hereunder: $
------
5. Proposed Effective Date:
------
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By:
--------------------- --------------------------
Title: Title:
------------------ -----------------------
* Insert specific facility names per Credit Agreement
** If a Commitment has been terminated, insert outstanding Loans in place
of Commitment
*** Percentage taken to 10 decimal places
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information Sheet, which must
include notice address for the Assignor and the Assignee
EXHIBIT "I"
to Assignment Agreement
NOTICE
OF ASSIGNMENT
-------------
_________________, 19__
To: BANKNORTH GROUP, INC.*
----------------------
----------------------
[NAME OF AGENT]
----------------------
----------------------
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to that Credit Agreement (the "Credit Agreement")
described in Item 1 of Schedule 1 attached hereto ("Schedule 1").
Capitalized terms used herein and not otherwise defined herein shall have
the meanings attributed to them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and delivered
to ****[the Borrower and]**** the Agent pursuant to Section 12.3.2 of the
Credit Agreement.
3. The Assignor and the Assignee have entered into an Assignment
Agreement, dated as of , 19 (the "Assignment"), pursuant to
which, among other things, the Assignor has sold, assigned, delegated and
transferred to the Assignee, and the Assignee has purchased, accepted and
assumed from the Assignor the percentage interest specified in Item 3 of
Schedule 1 of all outstandings, rights and obligations under the Credit
Agreement relating to the facilities listed in Item 3 of Schedule 1. The
Effective Date of the Assignment shall be the later of the date specified in
Item 5 of Schedule 1 or two Business Days (or such shorter period as agreed
to by the Agent) after this Notice of Assignment and any consents and fees
required by Sections 12.3.1 and 12.3.2 of the Credit Agreement have been
delivered to the Agent, provided that the Effective Date shall not occur if
any condition precedent agreed to by the Assignor and the Assignee has not
been satisfied.
* To be included only if consent must be obtained from the Borrower
pursuant to Section 12.3.1 of the Credit Agreement.
4. The Assignor and the Assignee hereby give to the Borrower and the
Agent notice of the assignment and delegation referred to herein. The
Assignor will confer with the Agent before the date specified in Item 5 of
Schedule 1 to determine if the Assignment Agreement will become effective on
such date pursuant to Section 3 hereof, and will confer with the Agent to
determine the Effective Date pursuant to Section 3 hereof if it occurs
thereafter. The Assignor shall notify the Agent if the Assignment Agreement
does not become effective on any proposed Effective Date as a result of the
failure to satisfy the conditions precedent agreed to by the Assignor and
the Assignee. At the request of the Agent, the Assignor will give the
Agent written confirmation of the satisfaction of the conditions precedent.
5. The Assignor or the Assignee shall pay to the Agent on or before
the Effective Date the processing fee of $2,500 required by Section 12.3.2
of the Credit Agreement.
6. If Notes are outstanding on the Effective Date, the Assignor and
the Assignee request and direct that the Agent prepare and cause the
Borrower to execute and deliver new Notes or, as appropriate, replacements
notes, to the Assignor and the Assignee. The Assignor and, if applicable,
the Assignee each agree to deliver to the Agent the original Note received
by it from the Borrower upon its receipt of a new Note in the appropriate
amount.
7. The Assignee advises the Agent that notice and payment
instructions are set forth in the attachment to Schedule 1.
8. The Assignee hereby represents and warrants that none of the
funds, monies, assets or other consideration being used to make the purchase
pursuant to the Assignment are "plan assets" as defined under ERISA and that
its rights, benefits, and interests in and under the Loan Documents will not
be "plan assets" under ERISA.
9. The Assignee authorizes the Agent to act as its agent under the
Loan Documents in accordance with the terms thereof. The Assignee
acknowledges that the Agent has no duty to supply information with respect
to the Borrower or the Loan Documents to the Assignee until the Assignee
becomes a party to the Credit Agreement.*
* May be eliminated if Assignee is a party to the Credit Agreement prior
to the Effective Date.
NAME OF ASSIGNOR NAME OF ASSIGNEE
By: By:
------------------------- -----------------------
Title: Title:
------------------------- -----------------------
ACKNOWLEDGED [AND CONSENTED TO] ACKNOWLEDGED [AND CONSENTED TO]
BY [NAME OF AGENT] BY [NAME OF BORROWER]
By: By:
------------------------- -----------------------
Title: Title:
------------------------- -----------------------
[Attach photocopy of Schedule 1 to Assignment]
EXHIBIT "E"
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTIONS
To: The First National Bank of Chicago, as Agent (the
"Agent") under the Agreement described below.
Re: Term Loan Agreement, dated as of December 16, 1996 (as the same may be
amended or modified from time to time, the "Credit Agreement"), among
Banknorth Group, Inc. (the "Borrower"), the Agent, and the Lenders
named therein.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned thereto in the Credit Agreement.
The Agent is specifically authorized and directed to act upon the
following standing money transfer instructions with respect to the proceeds
of Advances or other extensions of credit from time to time until receipt by
the Agent of a specific written revocation of such instructions by the
Borrower; provided, however, that the Agent may otherwise transfer funds as
hereafter directed in writing by the Borrower in accordance with Section
13.1 of the Credit Agreement or based on any telephonic notice made in
accordance with Section 2.13 of the Credit Agreement.
Facility Identification Number(s)
-----------------------------------
Customer/Account Name
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Transfer Funds To
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
For Account No.
---------------------------------------------------
Reference/Attention To
----------------------------------------------
Authorized Officer
(Customer Representative) Date
---------------------------
------------------------------- --------------------------------
(Please Print) Signature
Bank Officer Name Date
---------------------------
------------------------------- --------------------------------
(Please Print) Signature
(Deliver Completed Form to Credit
Support Staff For Immediate Processing)
SCHEDULE "1"
LITIGATION AND CONTINGENT OBLIGATIONS
(See Section 5.7)
Im May 1996 a $2.6 million suit was filed against the Company in ▇▇▇▇▇▇▇
County Superior Court, Vermont entitled ▇▇▇▇▇ vs Banknorth Group, Inc.
alleging sexual discrimination, sexual harassment, intentional infliction of
emotional distress and tort. The Company has denied all of the plaintiff's
allegations and believes that it has valid defenses to the plaintiff's
claims. At this time, discovery in the case is not yet completed. The
Company intends to defend itself vigorously against all charges. At this
time, no determination can be made as to the outcome of this litigation.
In addition to the above matter, the Company is a party to other legal
proceedings and claims which have arisen in the ordinary course of business.
Management does not believe the outcome of these other legal matters will
have a material effect on the Company's results of operations, cash flows or
financial position.
SCHEDULE "2"
SUBSIDIARIES AND OTHER INVESTMENTS
(See Sections 5.8 and 6.15)
Amount of Percent Jurisdiction of
Investment In Owned By Investment Ownership Organization
---------------------------------------------------------------------------------------------
BALANCE AS OF SEPTEMBER 30, 1996:
BANKNORTH GROUP, INC. SUBSIDIARIES:(1)
First Massachussetts Bank, N.A. Banknorth $73,359,661 100% Massachusetts
Worcester, MA
The ▇▇▇▇▇▇ Bank, N.A. Banknorth 46,111,861 100% Vermont
Burlington, VT
First Vermont Bank & Trust Co. Banknorth 44,689,456 100% Vermont
Brattleboro, VT
Franklin Lamoille Bank & Trust Co. Banknorth 18,046,917 100% Vermont
St. Albans, VT
North American Bank Corporation Banknorth 12,912,620 100% New Hampshire
Farmington, NH
Farmington National Bank North American 12,912,620 100% New Hampshire
Farmington, NH Bank Corp
Granite Savings Bank & Trust Co. Banknorth 8,993,684 100% Vermont
Barre, VT
Woodstock National Bank Banknorth 4,700,045 100% Vermont
Woodstock, VT
Banknorth Mortgage Company First VT 5,414,926 100% Vermont
Brattleboro, VT
The Stratevest Group, N.A. Banknorth 3,044,496 100% Vermont
Burlington, VT
North Group Realty Banknorth 258,415 100% Vermont
St. Albans, VT
BALANCE AS OF SEPTEMBER 30, 1996:
BANKNORTH GROUP, INC. SUBSIDIARIES:
VENTURE CAPITAL FUNDS:
Vermont Venture Capital ▇▇▇▇▇▇ 72,715 1.32% Vermont
First VT 105,346 3.29% Vermont
North Atlantic Venture Group First VT 152,355 3.36% Maine
Green Mountain Capital, LP Banknorth 91,811 3.27% Vermont
A Massachusetts security corporation is in the process of formation and
is expected to be incorporated on or before January 1, 1997.
SCHEDULE "3"
INDEBTEDNESS AND LIENS
(See Sections 5.14, 6.11 and 6.16)
Indebtedness Indebtedness Property Maturity and Amount
Incurred By Owed To Encumbered (If Any) of Indebtedness
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None