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EXHIBIT 10.9
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CREDIT AGREEMENT
DATED AS OF
JANUARY 30, 1998,
BETWEEN
MIDWEST BANC HOLDINGS, INC.,
MIDWEST ONE MORTGAGE SERVICES, INC.,
AND
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
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TABLE OF CONTENTS
SECTION DESCRIPTION PAGE
SECTION 1. THE CREDITS......................................................1
Section 1.1. Revolving Credit.............................................1
Section 1.2. Manner and Disbursement of Loans.............................2
Section 1.3. Extension of Termination Date................................2
Section 1.4. Appointment of the Company as Agent for the Borrowing
Subsidiary; Reliance by Bank.................................2
SECTION 2. INTEREST AND CHANGE IN CIRCUMSTANCES.............................3
Section 2.1. Interest Rate Options........................................3
Section 2.2. Minimum Amounts..............................................4
Section 2.3. Computation of Interest......................................4
Section 2.4. Manner of Rate Selection.....................................4
Section 2.5. Change of Law................................................4
Section 2.6. Unavailability of Deposits or Inability to Ascertain
Adjusted LIBOR...............................................5
Section 2.7. Taxes and Increased Costs....................................5
Section 2.8. Funding Indemnity............................................6
Section 2.9. Lending Branch...............................................7
Section 2.10. Discretion of Bank as to Manner of Funding...................7
SECTION 3. FEES, PREPAYMENTS, TERMINATIONS AND APPLICATIONS.................7
Section 3.1. Fees.........................................................7
Section 3.2. Mandatory Prepayments........................................7
Section 3.3. Voluntary Prepayments........................................7
Section 3.4. Mandatory Termination........................................8
Section 3.5. Voluntary Terminations.......................................8
Section 3.6. Place and Application of Payments............................8
Section 3.7. Notations....................................................9
SECTION 4. COLLATERAL.......................................................9
Section 4.1. Collateral...................................................9
Section 4.2. Further Assurances...........................................9
SECTION 5. DEFINITIONS; INTERPRETATION......................................9
Section 5.1. Definitions..................................................9
Section 5.2. Interpretation..............................................16
SECTION 6. REPRESENTATIONS AND WARRANTIES..................................17
Section 6.1. Organization and Qualification..............................17
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Section 6.2. Subsidiaries................................................17
Section 6.3. Authority and Validity of Obligations.......................17
Section 6.4. Use of Proceeds; Margin Stock...............................18
Section 6.5. Financial Reports...........................................18
Section 6.6. No Material Adverse Change..................................19
Section 6.7. Full Disclosure.............................................19
Section 6.8. Good Title..................................................19
Section 6.9. Litigation and Other Controversies..........................19
Section 6.10. Taxes.......................................................19
Section 6.11. Approvals...................................................19
Section 6.12. Investment Company..........................................20
Section 6.13. ERISA.......................................................20
Section 6.14. Compliance with Laws........................................20
Section 6.15. Other Agreements............................................20
Section 6.16. No Default..................................................21
SECTION 7. CONDITIONS PRECEDENT............................................21
Section 7.1. All Advances................................................21
Section 7.2. Initial Advance.............................................21
SECTION 8. COVENANTS.......................................................22
Section 8.1. Maintenance of Business.....................................22
Section 8.2. Maintenance of Properties...................................23
Section 8.3. Taxes and Assessments.......................................23
Section 8.4. Insurance...................................................23
Section 8.5. Financial Reports...........................................23
Section 8.6. Inspection..................................................25
Section 8.7. Non-Performing Assets.......................................26
Section 8.8. Regulatory Capital Requirements.............................26
Section 8.9. Minimum Consolidated Net Income.............................27
Section 8.10. Minimum Consolidated Tangible Net Worth.....................27
Section 8.11. Indebtedness for Borrowed Money.............................27
Section 8.12. Liens.......................................................27
Section 8.13. Investments, Loans, Advances and Acquisitions...............29
Section 8.14. Mergers, Consolidations, Leases and Sales...................29
Section 8.15. Maintenance of Subsidiaries.................................30
Section 8.16. Dividends and Certain Other Restricted Payments.............30
Section 8.17. ERISA.......................................................30
Section 8.18. Compliance with Laws........................................31
Section 8.19. Formation of Subsidiaries...................................31
Section 8.20. Change in the Nature of Business............................31
Section 8.21. Use of Proceeds.............................................31
SECTION 9. EVENTS OF DEFAULT AND REMEDIES..................................31
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Section 9.1. Events of Default...........................................31
Section 9.2. Non-Bankruptcy Defaults.....................................33
Section 9.3. Bankruptcy Defaults.........................................34
SECTION 10. THE GUARANTEE...................................................34
Section 10.1. The Guarantee...............................................34
Section 10.2. Guarantee Unconditional.....................................34
Section 10.3. Discharge Only Upon Payment in Full; Reinstatement in
Certain Circumstances.......................................35
Section 10.4. Waivers.....................................................36
Section 10.5. Subrogation and Contribution................................36
Section 10.6. Stay of Acceleration........................................36
SECTION 11. MISCELLANEOUS...................................................36
Section 11.1. Non-Business Day............................................36
Section 11.2. No Waiver, Cumulative Remedies..............................36
Section 11.3. Amendments, Etc.............................................37
Section 11.4. Costs and Expenses..........................................37
Section 11.5. Documentary Taxes...........................................37
Section 11.6. Survival of Representations.................................37
Section 11.7. Notices.....................................................37
Section 11.8. Confidentiality.............................................38
Section 11.9. Headings....................................................38
Section 11.10. Severability of Provisions..................................38
Section 11.11. Construction................................................38
Section 11.12. Counterparts................................................39
Section 11.13. Binding Nature, Governing Law, Etc..........................39
Section 11.14. Submission to Jurisdiction; Waiver of Jury Trial...........39
Signature.......................................................................40
EXHIBIT A - Revolving Note One
EXHIBIT B - Revolving Note Two
EXHIBIT C - Compliance Certificate
SCHEDULE 6.2 - Subsidiaries
SCHEDULE 6.9 - Pending Litigation
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CREDIT AGREEMENT
▇▇▇▇▇▇ Trust and Savings Bank
Chicago, Illinois
Ladies and Gentlemen:
The undersigned, Midwest Banc Holdings, Inc., a Delaware corporation
(the "Company") and Midwest One Mortgage Services, Inc., an Illinois corporation
(the "Borrowing Subsidiary") (the Company and the Borrowing Subsidiary are
hereinafter referred to collectively as the "Borrowers" and individually as a
"Borrower"), apply to you (the "Bank") for your commitment, subject to the terms
and conditions hereof and on the basis of the representations and warranties
hereinafter set forth, to extend credit to the Borrowers, all as more fully
hereinafter set forth.
SECTION 1. THE CREDITS.
Section 1.1. Revolving Credit. Subject to the terms and conditions
hereof, the Bank agrees to extend a revolving credit (the "Revolving Credit") to
the Borrowers which may be availed of by each Borrower from time to time during
the period from and including the date hereof to but not including the
Termination Date, at which time the commitment of the Bank to extend credit
under the Revolving Credit shall expire. The Revolving Credit may be utilized by
each Borrower in the form of loans (individually a "Loan" and collectively the
"Loans"), all as more fully hereinafter set forth, provided that (a) the
principal amount of Loans outstanding at any one time to both Borrowers shall
not in the aggregate exceed $25,000,000 (the "Commitment", as such amount may be
reduced pursuant to Section 3.5 hereof) and (b) the principal amount of Loans
outstanding at any one time to the Borrowing Subsidiary shall not in the
aggregate exceed $5,000,000 (the "Borrowing Subsidiary Sublimit"). Each Loan
shall be in a minimum amount of $100,000; provided, however, that each Loan
which bears interest with reference to the Adjusted LIBOR shall be in such
greater amount as is required by Section 2 hereof. All Loans made to the Company
shall be made against and evidenced by a single promissory note in the form
(with appropriate insertions) attached hereto as Exhibit A ("Note One") payable
to the order of the Bank in the principal amount of $25,000,000. All Loans made
to the Borrowing Subsidiary shall be made against and evidenced by a single
promissory note in the form (with appropriate insertions) attached hereto as
Exhibit B ("Note Two") payable to the order of the Bank in the principal amount
of $5,000,000. Each Note shall be dated the date of issuance thereof and be
expressed to mature on the Termination Date. Without regard to the principal
amount of a Note stated on its face, the actual principal amount at any time
outstanding and owing by the relevant Borrower on account of the relevant Note
shall be the sum of all Loans made to such Borrower hereunder less all payments
of principal actually received by the Bank. During the period from and including
the date hereof to but not including the Termination Date, each Borrower may use
the Commitment (in the case of the Borrowing Subsidiary, up to the amount of the
Borrowing Subsidiary Sublimit) by borrowing, repaying
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and reborrowing Loans in whole or in part, all in accordance with the terms and
conditions of this Agreement.
Section 1.2. Manner and Disbursement of Loans. The Company (acting
on behalf of itself and the Borrowing Subsidiary pursuant to Section 1.4 hereof)
shall give written or telephonic notice to the Bank (which notice shall be
irrevocable once given and, if given by telephone, shall be promptly confirmed
in writing) by no later than 11:00 a.m. (Chicago time) on the date a Borrower
requests the Bank to make a Loan hereunder. Each such notice shall specify the
identity of the Borrower, the date of the Loan requested (which must be a
Business Day) and the amount of such Loan. Each Loan to a Borrower shall
initially constitute part of the relevant Base Rate Portion except to the extent
the Company has otherwise timely selected a LIBOR Portion as provided in Section
2 hereof. Subject to the provisions of Section 7 hereof, the proceeds of each
Loan shall be made available to the relevant Borrower at the principal office of
the Bank in Chicago, Illinois, in immediately available funds.
Section 1.3. Extension of Termination Date. Not less than 75 days
or more than 120 days prior to each anniversary of the date hereof, the Company,
on behalf of the Borrowers, may advise the Bank in writing of its desire to
extend the Termination Date for an additional 12 months; provided that there
shall not be more than one such request for an extension of the Termination Date
made during any single 12-month period. In the event that the Bank is agreeable
to such extension, it shall so notify the Company within 60 days of the
requested extension (it being understood that the Bank may accept or decline
such a request in its sole discretion, and in the event that the Bank fails to
so notify the Company that the Bank has agreed to such extension the Bank shall
be deemed to have refused to grant the requested extension) and the Borrowers
and the Bank shall enter into such documents as the Bank may reasonably deem
necessary or appropriate to reflect such extension, and all costs and expenses
incurred by the Bank in connection therewith (including reasonable attorneys'
fees) shall be paid by the Borrowers.
Section 1.4. Appointment of the Company as Agent for the Borrowing
Subsidiary; Reliance by Bank. (a) Appointment. The Borrowing Subsidiary
irrevocably appoints the Company as its agent hereunder to make requests on the
Borrowing Subsidiary's behalf under Section 1 hereof for Loans to be made to
such Borrower, to select on the Borrowing Subsidiary's behalf the interest rate
to be applicable under Section 2 hereof to borrowings made by such Borrower, and
to take any other action contemplated by the Loan Documents with respect to
credit extended hereunder to the Borrowing Subsidiary. The Bank shall be
entitled to conclusively presume that any action by the Company under the Loan
Documents is taken on behalf of one or the other of the Borrowers.
(b) Reliance. All requests for Loans and selection of interest rates
to be applicable thereto may be written or oral, including by telephone or
telecopy. The Borrowers agree that the Bank may rely on any such notice given by
any person the Bank in good faith reasonably believes is an Authorized
Representative without the necessity of independent investigation (the Borrowers
hereby indemnifying the Bank from any liability or loss ensuing from such
reliance), and in the event any such telephonic or other oral notice
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conflicts with any written confirmation, such oral or telephonic notice shall
govern if the Bank has acted in reliance thereon.
SECTION 2. INTEREST AND CHANGE IN CIRCUMSTANCES.
Section 2.1. Interest Rate Options.
(a) Subject to all of the terms and conditions of this Section 2,
portions of the principal indebtedness evidenced by a Note (all of the
indebtedness evidenced by a Note bearing interest at the same rate for the same
period of time being hereinafter referred to as a "Portion") may, at the option
of the relevant Borrower, bear interest with reference to the Base Rate ("Base
Rate Portions") or with reference to an Adjusted LIBOR ("LIBOR Portions"), and
Portions of a Note may be converted from time to time from one basis to the
other. All of the indebtedness evidenced by a Note which is not part of a LIBOR
Portion shall constitute a single Base Rate Portion applicable to such Note. All
of the indebtedness evidenced by a Note which bears interest with reference to a
particular Adjusted LIBOR for a particular Interest Period shall constitute a
single LIBOR Portion applicable to such Note. There shall not be more than 4
LIBOR Portions applicable to the Notes outstanding at any one time. Anything
contained herein to the contrary notwithstanding, the obligation of the Bank to
create, continue or effect by conversion any LIBOR Portion shall be conditioned
upon the fact that at the time no Default or Event of Default shall have
occurred and be continuing. Each Borrower hereby promises to pay interest on
each Portion at the rates and times specified in this Section 2.
(b) Base Rate Portion. The Base Rate Portion of a Note shall bear
interest at the rate per annum equal to the Base Rate as in effect from time to
time minus .25%, provided that if such Base Rate Portion or any part thereof is
not paid when due (whether by lapse of time, acceleration or otherwise) such
Portion shall bear interest, whether before or after judgment, until payment in
full thereof at the rate per annum determined by adding 2% to the Base Rate as
in effect from time to time. Interest on each Base Rate Portion shall be payable
quarter-annually in arrears on the last day of each March, June, September and
December in each year (commencing March 31, 1998) and at maturity of the
relevant Note and interest after maturity (whether by lapse of time,
acceleration or otherwise) shall be due and payable upon demand. Any change in
the interest rate on the Base Rate Portions resulting from a change in the Base
Rate shall be effective on the date of the relevant change in the Base Rate.
(c) LIBOR Portions. Each LIBOR Portion of a Note shall bear interest
for each Interest Period selected therefor at a rate per annum determined by
adding .95% to the Adjusted LIBOR for such Interest Period, provided that if any
LIBOR Portion is not paid when due (whether by lapse of time, acceleration or
otherwise) such Portion shall bear interest, whether before or after judgment,
until payment in full thereof through the end of the Interest Period then
applicable thereto at the rate per annum determined by adding 2% to the interest
rate which would otherwise be applicable thereto, and effective at the end of
such Interest Period such LIBOR Portion shall automatically be converted into
and added to the relevant Base Rate Portion and shall thereafter bear interest
at the interest rate applicable
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to such Base Rate Portion after default. Interest on each LIBOR Portion shall be
due and payable on the last day of each Interest Period applicable thereto and,
with respect to any Interest Period applicable to a LIBOR Portion in excess of 3
months, on the date occurring every 3 months after the date such Interest Period
began and at the end of such Interest Period, and interest after maturity
(whether by lapse of time, acceleration or otherwise) shall be due and payable
upon demand. The Company, on behalf of the relevant Borrower, shall notify the
Bank on or before 11:00 a.m. (Chicago time) on the third Business Day preceding
the end of an Interest Period applicable to a LIBOR Portion whether such LIBOR
Portion is to continue as a LIBOR Portion, in which event the Company shall
notify the Bank of the new Interest Period selected therefor, and in the event
the Company shall fail to so notify the Bank, such LIBOR Portion shall
automatically be converted into and added to the relevant Base Rate Portion as
of and on the last day of such Interest Period.
Section 2.2. Minimum Amounts. Each LIBOR Portion shall be in an
amount equal to $1,000,000 or such greater amount which is an integral multiple
of $500,000.
Section 2.3. Computation of Interest. All interest on the LIBOR
Portions of the Notes shall be computed on the basis of a year of 360 days for
the actual number of days elapsed, and all interest on the Base Rate Portion of
the Notes shall be computed on the basis of a year of 365 or 366 days, as the
case may be, for the actual number of days elapsed.
Section 2.4. Manner of Rate Selection. The Company, on behalf of
the relevant Borrower, shall notify the Bank by 11:00 a.m. (Chicago time) at
least 3 Business Days prior to the date upon which it requests that any LIBOR
Portion be created or that any part of the relevant Base Rate Portion be
converted into a LIBOR Portion (each such notice to specify in each instance the
amount thereof and the Interest Period selected therefor). If any request is
made to convert a LIBOR Portion into the relevant Base Rate Portion available
hereunder, such conversion shall only be made so as to become effective as of
the last day of the Interest Period applicable thereto. All requests for the
creation, continuance and conversion of Portions of the Loans under this
Agreement shall be irrevocable, provided that the Borrowers may prepay LIBOR
Portions subject to indemnifying the Bank pursuant to Section 2.8 hereof. Such
requests may be written or oral and the Bank is hereby authorized to honor
telephonic requests for creations, continuances and conversions received by it
from any person the Bank in good faith believes to be an Authorized
Representative without the need of independent investigation, the Borrowers
hereby indemnifying the Bank from any liability or loss ensuing from so acting.
Section 2.5. Change of Law. Notwithstanding any other provisions of
this Agreement or any Note, if at any time the Bank shall determine in good
faith that any change in applicable laws, treaties or regulations or in the
interpretation thereof makes it unlawful for the Bank to create or continue to
maintain any LIBOR Portion, it shall promptly so notify the Company and the
obligation of the Bank to create, continue or maintain any such LIBOR Portion
under this Agreement shall be suspended until it is no longer unlawful for the
Bank to create, continue or maintain such LIBOR Portion. The relevant Borrower,
on demand, shall, if the continued maintenance of any such LIBOR Portion is
unlawful, thereupon prepay the outstanding principal amount of the affected
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LIBOR Portion, together with all interest accrued thereon and all other amounts
payable to the Bank with respect thereto under this Agreement; provided,
however, that such Borrower may elect to convert the principal amount of the
affected Portion into the relevant Base Rate Portion, subject to the terms and
conditions of this Agreement.
Section 2.6. Unavailability of Deposits or Inability to Ascertain
Adjusted LIBOR. Notwithstanding any other provision of this Agreement or any
Note, if prior to the commencement of any Interest Period the Bank shall
determine in good faith that deposits in the amount of any LIBOR Portion
scheduled to be outstanding during such Interest Period are not readily
available to the Bank in the relevant market or, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining Adjusted LIBOR, then the Bank shall promptly give notice thereof to
the Company and the obligation of the Bank to create, continue or effect by
conversion any such LIBOR Portion in such amount and for such Interest Period
shall be suspended until deposits in such amount and for the Interest Period
selected by the relevant Borrower shall again be readily available in the
relevant market and adequate and reasonable means exist for ascertaining
Adjusted LIBOR.
Section 2.7. Taxes and Increased Costs. With respect to any LIBOR
Portion, if the Bank shall determine in good faith that any change in any
applicable law, treaty, regulation or guideline (including, without limitation,
Regulation D of the Board of Governors of the Federal Reserve System) or any new
law, treaty, regulation or guideline, or any interpretation of any of the
foregoing by any governmental authority charged with the administration thereof
or any central bank or other fiscal, monetary or other authority having
jurisdiction over the Bank or its lending branch or the LIBOR Portions
contemplated by this Agreement (whether or not having the force of law), shall:
(i) impose, increase, or deem applicable any reserve, special
deposit or similar requirement against assets held by, or deposits in
or for the account of, or loans by, or any other acquisition of funds
or disbursements by, the Bank which is not in any instance already
accounted for in computing the interest rate applicable to such LIBOR
Portion;
(ii) subject the Bank, any LIBOR Portion or any Note to the
extent it evidences a LIBOR Portion to any tax (including, without
limitation, any United States interest equalization tax or similar tax
however named applicable to the acquisition or holding of debt
obligations and any interest or penalties with respect thereto), duty,
charge, stamp tax, fee, deduction or withholding in respect of this
Agreement, any LIBOR Portion or any Note to the extent it evidences a
LIBOR Portion, except such taxes as may be measured by the overall net
income or gross receipts of the Bank or its lending branches and
imposed by the jurisdiction, or any political subdivision or taxing
authority thereof, in which the Bank's principal executive office or
its lending branch is located;
(iii) change the basis of taxation of payments of principal and
interest due from any Borrower to the Bank hereunder or under any Note
to the extent it
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evidences any LIBOR Portion (other than by a change in taxation of the
overall net income or gross receipts of the Bank); or
(iv) impose on the Bank any penalty with respect to the
foregoing or any other condition regarding this Agreement, any LIBOR
Portion or its disbursement, or any Note to the extent it evidences any
LIBOR Portion;
and the Bank shall determine in good faith that the result of any of the
foregoing is to increase the cost (whether by incurring a cost or adding to a
cost) to the Bank of creating or maintaining any LIBOR Portion hereunder or to
reduce the amount of principal or interest received or receivable by the Bank
(without benefit of, or credit for, any prorations, exemption, credits or other
offsets available under any such laws, treaties, regulations, guidelines or
interpretations thereof), then the relevant Borrower shall pay on demand to the
Bank from time to time as specified by the Bank such additional amounts as the
Bank shall reasonably determine are sufficient to compensate and indemnify it
for such increased cost or reduced amount. If the Bank makes such a claim for
compensation, it shall provide to the Company a certificate setting forth the
computation of the increased cost or reduced amount as a result of any event
mentioned herein in reasonable detail and such certificate shall be deemed prima
facie correct absent manifest error. The Borrowers shall not be required to make
payment to the Bank for any additional amount claimed pursuant to this Section
unless the Bank has given written notice to the Company of the Bank's intent to
request such payment prior to or within 60 days after the date on which the Bank
became entitled to claim such amount.
Section 2.8. Funding Indemnity. In the event the Bank shall incur
any loss, cost or expense (including, without limitation, any loss (including
loss of profit), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired or contracted to be acquired by
the Bank to fund or maintain any LIBOR Portion or the relending or reinvesting
of such deposits or other funds or amounts paid or prepaid to the Bank) as a
result of:
(i) any payment of a LIBOR Portion on a date other than the
last day of the then applicable Interest Period for any reason, whether
before or after default, and whether or not such payment is required by
any provisions of this Agreement; or
(ii) any failure by the relevant Borrower to create, borrow,
continue or effect by conversion a LIBOR Portion on the date specified
in a notice given pursuant to this Agreement;
then, upon the demand of the Bank, the relevant Borrower shall pay to the Bank
such amount as will reimburse the Bank for such loss, cost or expense. If the
Bank requests such a reimbursement, it shall provide to the Company a
certificate setting forth the computation of the loss, cost or expense giving
rise to the request for reimbursement in reasonable detail and such certificate
shall be deemed prima facie correct absent manifest error.
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Section 2.9. Lending Branch. The Bank may, at its option, elect to
make, fund or maintain Portions of the Loans hereunder at such of its branches
or offices as the Bank may from time to time elect. To the extent reasonably
possible, the Bank shall designate an alternate branch or funding office with
respect to the LIBOR Portions to reduce any liability of the relevant Borrower
to the Bank under Section 2.7 hereof or to avoid the unavailability of an
interest rate option under Section 2.6 hereof, so long as such designation is
not otherwise disadvantageous to the Bank.
Section 2.10. Discretion of Bank as to Manner of Funding.
Notwithstanding any provision of this Agreement to the contrary, the Bank shall
be entitled to fund and maintain its funding of all or any part of the Notes in
any manner it sees fit, it being understood, however, that for the purposes of
this Agreement all determinations hereunder (including, without limitation,
determinations under Sections 2.6, 2.7 and 2.8 hereof) shall be made as if the
Bank had actually funded and maintained each LIBOR Portion during each Interest
Period applicable thereto through the purchase of deposits in the relevant
market in the amount of such LIBOR Portion, having a maturity corresponding to
such Interest Period, and bearing an interest rate equal to the LIBOR for such
Interest Period.
SECTION 3. FEES, PREPAYMENTS, TERMINATIONS AND APPLICATIONS.
Section 3.1. Fees.
(a) Upfront Fee. The Borrowers shall pay, jointly and severally, to
the Bank on the date hereof a non-refundable upfront fee of $25,000.
(b) Commitment Fee. For the period from and including the date hereof
to but not including the Termination Date, the Borrowers shall pay, jointly and
severally, to the Bank a commitment fee at the rate of .25% per annum (computed
on the basis of a year of 360 days for the actual number of days elapsed) on the
average daily unused portion of the Commitment. Such commitment fee shall be
payable quarter-annually in arrears on the last day of each March, June,
September and December in each year (commencing March 31, 1998) and on the
Termination Date.
Section 3.2. Mandatory Prepayments. (a) In the event that the
aggregate principal amount of Loans outstanding on the Notes shall at any time
exceed the Commitment, the Company shall immediately upon demand pay over the
amount of the excess to the Bank as and for a mandatory prepayment on Note One.
(b) In the event that the aggregate principal amount of Loans
outstanding on Note Two shall at any time exceed the Borrowing Subsidiary
Sublimit, the Borrowing Subsidiary shall immediately upon demand pay over the
amount of the excess to the Bank as and for a mandatory prepayment on Note Two.
Section 3.3. Voluntary Prepayments. Each Borrower shall have the
privilege of prepaying Loans outstanding and owing by it in whole or in part
(but, if in part, then (i) if such Loans constitute part of the relevant Base
Rate Portion, in an amount not less than
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$100,000, (ii) if such Loans constitute part of a LIBOR Portion, in an amount
not less than $500,000, and (iii) in each case, in an amount such that the
minimum amount required for a Loan pursuant to Sections 1.1 and 2.2 hereof
remain outstanding) at any time upon one Business Day prior notice to the Bank
(such notice if received subsequent to 11:00 a.m. Chicago time) on a given day
to be treated as though received at the opening of business on the next Business
Day), by paying to the Bank the principal amount to be prepaid and (i) if such a
prepayment prepays the relevant Note in full and is accompanied by the
termination in whole of the Commitment, accrued interest thereon to the date of
prepayment and (ii) any amounts due the Bank under Section 2.8 hereof.
Section 3.4. Mandatory Termination. After the occurrence of a
Change of Control, the Bank may, by written notice to the Company at any time on
or before the date occurring 120 days after the date the Company notifies the
Bank of such Change of Control, terminate the remaining Commitment and all other
obligations of the Bank hereunder on the date stated in such notice (which shall
in no event be sooner than 120 days after the occurrence of such Change of
Control). On the date the Commitment is so terminated, all outstanding
Obligations (including, without limitation, all principal of and accrued
interest on the Notes) shall forthwith be due and payable without further
demand, presentment, protest, or notice of any kind and the Company shall
immediately pay to the Bank the full amount then available for drawing under
each Letter of Credit (the Company agreeing to immediately make such payment on
the date the Commitment is so terminated and acknowledging and agreeing that the
Bank would not have an adequate remedy at law for the failure by the Company to
honor any such demand and that the Bank shall have the right to require the
Company to specifically perform such undertaking whether or not any drawings or
other demands for payment have been made under any Letter of Credit).
Section 3.5. Voluntary Terminations. The Company, on behalf of the
Borrowers, shall have the right at any time and from time to time, upon 3
Business Days prior notice to the Bank, to terminate without premium or penalty
and in whole or in part (but if in part, then in an amount not less than
$100,000) the Commitment, provided that (a) the Commitment may not be so reduced
to an amount less than the aggregate principal amount of the Loans then
outstanding and (b) any reduction of the Commitment below $5,000,000 shall be
accompanied by a concurrent reduction in the Borrowing Subsidiary Sublimit. No
termination of the Commitment pursuant to this Section may be reinstated.
Section 3.6. Place and Application of Payments. All payments of
principal, interest, fees and all other Obligations payable hereunder and under
the other Loan Documents shall be made to the Bank at its office at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ (or at such other place as the Bank may
specify) no later than 2:00 p.m. (Chicago time) on the date any such payment is
due and payable. Payments received by the Bank after 2:00 p.m. (Chicago time)
shall be deemed received as of the opening of business on the next Business Day.
All such payments shall be made in lawful money of the United States of America,
in immediately available funds at the place of payment, without set-off or
counterclaim. Unless the relevant Borrower otherwise directs, principal payments
shall be first applied to the relevant Base Rate Portion until payment in full
thereof, with any balance applied to the relevant LIBOR Portions in the order in
which their Interest Periods expire. Any amount
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13
paid on a Note may, subject to all of the terms and conditions hereof, be
borrowed, repaid and borrowed again. All payments (whether voluntary or
required) shall be accompanied by any amount due the Bank under Section 2.8
hereof, but no acceptance of such a payment without requiring a payment of
amounts due under Section 2.8 shall preclude a later demand by the Bank for any
amount due it under Section 2.8 in respect of such payment.
Section 3.7. Notations. All Loans made against the Notes, the
status of all amounts evidenced by the Notes as constituting part of a Base Rate
Portion or a LIBOR Portion, and, in the case of any LIBOR Portion, the rates of
interest and Interest Periods applicable to such Portions shall be recorded by
the Bank on its books and records or, at its option in any instance, endorsed on
a schedule to the relevant Note and the unpaid principal balance and status,
rates and Interest Periods so recorded or endorsed by the Bank shall be prima
facie evidence in any court or other proceeding brought to enforce the Notes of
the principal amount remaining unpaid thereon, the status of the Loans evidenced
thereby and the interest rates and Interest Periods applicable thereto; provided
that the failure of the Bank to record any of the foregoing shall not limit or
otherwise affect the obligation of the relevant Borrower to repay the principal
amount of the relevant Note together with accrued interest thereon. Prior to any
negotiation of a Note, the Bank shall record on a schedule thereto the status of
all amounts evidenced thereby as constituting part of the Base Rate Portion or a
LIBOR Portion and, in the case of any LIBOR Portion, the rates of interest and
the Interest Periods applicable thereto.
SECTION 4. COLLATERAL.
Section 4.1. Collateral. The payment and performance of the Loans
and the other Obligations shall be secured by all of the issued and outstanding
capital stock (except for directors' qualifying shares as required by law) of
each Banking Subsidiary of the Company pursuant to a pledge agreement in form
and substance satisfactory to the Bank, as the same may be amended or modified
from time to time (the "Pledge Agreement").
Section 4.2. Further Assurances. The Company covenants and agrees
that it shall comply with, and cause each of its Banking Subsidiaries to comply
with, all terms and conditions of each of the Collateral Documents and that the
Company shall, at any time and from time to time as requested by the Bank,
execute and deliver and cause its Banking Subsidiaries to execute and deliver
such further documents and do such acts and things as the Bank may deem
reasonably necessary or desirable to provide for or protect or perfect the Lien
of the Bank in the Collateral.
SECTION 5. DEFINITIONS; INTERPRETATION.
Section 5.1. Definitions. The following terms when used herein
shall have the following meanings:
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"Adjusted LIBOR" means a rate per annum determined by the Bank in
accordance with the following formula:
Adjusted LIBOR = LIBOR
-----------------------
100%-Reserve Percentage
"Reserve Percentage" means, for the purpose of computing Adjusted LIBOR, the
maximum rate of all reserve requirements (including, without limitation, any
marginal, emergency, supplemental or other special reserves) imposed by the
Board of Governors of the Federal Reserve System (or any successor) under
Regulation D on Eurocurrency liabilities (as such term is defined in Regulation
D) for the applicable Interest Period as of the first day of such Interest
Period, but subject to any amendments to such reserve requirement by such Board
or its successor, and taking into account any transitional adjustments thereto
becoming effective during such Interest Period. For purposes of this definition,
LIBOR Portions shall be deemed to be Eurocurrency liabilities as defined in
Regulation D without benefit of or credit for prorations, exemptions or offsets
under Regulation D. "LIBOR" means, for each Interest Period, (a) the LIBOR Index
Rate for such Interest Period, if such rate is available, and (b) if the LIBOR
Index Rate cannot be determined, the arithmetic average of the rates of interest
per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) at which
deposits in U.S. Dollars in immediately available funds are offered to the Bank
at 11:00 a.m. (London, England time) 2 Business Days before the beginning of
such Interest Period by 3 or more major banks in the interbank eurodollar market
selected by the Bank for a period equal to such Interest Period and in an amount
equal or comparable to the applicable LIBOR Portion scheduled to be outstanding
from the Bank during such Interest Period. "LIBOR Index Rate" means, for any
Interest Period, the rate per annum (rounded upwards, if necessary, to the next
higher one hundred-thousandth of a percentage point) for deposits in U.S.
Dollars for a period equal to such Interest Period, which appears on the
Telerate Page 3750 as of 11:00 a.m. (London, England time) on the day 2 Business
Days before the commencement of such Interest Period. "Telerate Page 3750" means
the display designated as "Page 3750" on the Telerate Service (or such other
page as may replace Page 3750 on that service or such other service as may be
nominated by the British Bankers' Association as the information vendor for the
purpose of displaying British Bankers' Association Interest Settlement Rates for
U.S. Dollar deposits). Each determination of LIBOR made by the Bank shall be
conclusive and binding absent manifest error.
"Affiliate" means any Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, another Person.
A Person shall be deemed to control another Person for the purposes of this
definition if such Person possesses, directly or indirectly, the power to
direct, or cause the direction of, the management and policies of the other
Person, whether through the ownership of voting securities, common directors,
trustees or officers, or by voting control agreement or similar arrangement.
"Agreement" means this Credit Agreement, as the same may be amended,
modified or restated from time to time in accordance with the terms hereof.
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15
"Authorized Representative" means, for each Borrower, those persons
shown on the list of officers provided by such Borrower pursuant to Section
7.2(a) hereof or on any update of any such list provided by such Borrower to the
Bank, or any further or different officer of such Borrower so named by any
Authorized Representative of such Borrower in a written notice to the Bank.
"Bank" is defined in the introductory paragraph hereof.
"Banking Subsidiary" means any Subsidiary which is a bank or thrift
organized under the laws of the United States of America or any state thereof.
"Base Rate" means, for any day, the greater of (i) the rate of interest
announced by the Bank from time to time as its prime commercial rate, as in
effect on such day (it being understood and agreed that such rate may not be the
Bank's best or lowest rate); and (ii) the sum of (x) the rate determined by the
Bank to be the average (rounded upwards, if necessary, to the next higher 1/100
of 1%) of the rates per annum quoted to the Bank at approximately 10:00 a.m.
(Chicago time) (or as soon thereafter as is practicable) on such day (or, if
such day is not a Business Day, on the immediately preceding Business Day) by
two or more Federal funds brokers selected by the Bank for sale to the Bank at
face value of Federal funds in an amount equal or comparable to the principal
amount owed to the Bank for which such rate is being determined, plus (y) 3/8 of
1%.
"Base Rate Portions" is defined in Section 2.1(a) hereof.
"Borrowers" is defined in the introductory paragraph hereof.
"Borrowing Subsidiary" is defined in the introductory paragraph hereof.
"Borrowing Subsidiary Sublimit" is defined in Section 1.1 hereof.
"Business Day" means any day other than a Saturday or Sunday on which
the Bank is not authorized or required to close in Chicago, Illinois and, when
used with respect to LIBOR Portions, a day on which the Bank is also dealing in
United States Dollar deposits in London, England.
"Capital Lease" means any lease of Property which in accordance with
GAAP is required to be capitalized on the balance sheet of the lessee.
"Capitalized Lease Obligation" means the amount of the liability shown
on the balance sheet of any Person in respect of a Capital Lease determined in
accordance with GAAP.
"Change in Control" means the acquisition by any "person" or "group"
(as such terms are used in sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended) (other than members of the Company's board of directors
or officers of the Company, in each case who are shareholders of the Company as
of the date of this Agreement) at any time
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16
of beneficial ownership of 25% or more of the outstanding voting stock of the
Company on a fully diluted basis.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto.
"Collateral" means all properties, rights, interests, and privileges
from time to time subject to the Liens granted to the Bank by the Collateral
Documents, it being understood and agreed that the Collateral as of the date of
this Agreement consists of all the equity securities of each of the Company's
Banking Subsidiaries and all rights with respect thereto and proceeds thereof.
"Collateral Documents" means the Pledge Agreement and all other
security agreements, assignments, financing statements and other documents as
shall from time to time secure any Obligations.
"Commitment" is defined in Section 1.1 hereof.
"Company" is defined in the introductory paragraph hereof.
"Consolidated Net Income" means, with reference to any period, the net
income (or net loss) of the Company and its Subsidiaries for such period as
computed on a consolidated basis in accordance with GAAP.
"Consolidated Tangible Net Worth" means, as of any time the same is to
be determined, the total shareholders' equity (including capital stock,
additional paid-in-capital and retained earnings after deducting treasury stock,
but excluding minority interests in Subsidiaries) which would appear on the
balance sheet of the Company and its Subsidiaries determined on a consolidated
basis in accordance with GAAP, less the aggregate book value of all assets which
would be classified as intangible assets under GAAP, including, without
limitation, goodwill, patents, trademarks, trade names, copyright, franchises
and deferred charges (including, without limitation, unamortized debt discount
and expense, organization costs and deferred research and development expense)
and similar assets.
"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 or application
for a letter of credit.
"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 Company or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.
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17
"Default" means any event or condition the occurrence of which would,
with the passage of time or the giving of notice, or both, constitute an Event
of Default.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute thereto.
"Event of Default" means any event or condition identified as such in
Section 9.1 hereof.
"GAAP" means generally accepted accounting principles as in effect from
time to time, including such principles as are utilized in the preparation of
call reports and other regulatory reports required to be filed by the Company
and its Banking Subsidiaries, applied by the Company and its Subsidiaries on a
basis consistent with the preparation of the Company's most recent financial
statements furnished to the Bank pursuant to Section 6.5 hereof.
"Indebtedness for Borrowed Money" means for any Person (without
duplication) (i) all indebtedness created, assumed or incurred in any manner by
such Person representing money borrowed (including by the issuance of debt
securities), (ii) all indebtedness for the deferred purchase price of property
or services (other than trade accounts payable arising in the ordinary course of
business), (iii) all indebtedness secured by any Lien upon Property of such
Person, whether or not such Person has assumed or become liable for the payment
of such indebtedness, (iv) all Capitalized Lease Obligations of such Person, (v)
all Contingent Obligations, (vi) all obligations of such Person on or with
respect to letters of credit, bankers' acceptances and other extensions of
credit whether or not representing obligations for borrowed money and (vii)
Permitted Banking Subsidiary Indebtedness.
"Interest Period" means, with respect to any LIBOR Portion, the period
commencing on, as the case may be, the creation, continuation or conversion date
with respect to such LIBOR Portion and ending 3 or 6 months thereafter as
selected by the Company, on behalf of the relevant Borrower, in its notice as
provided herein; provided that all of the foregoing provisions relating to
Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day which
is not a Business Day, that Interest Period shall be extended to the
next succeeding Business Day, unless the result of such extension would
be to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding
Business Day;
(ii) no Interest Period may extend beyond the final maturity
date of the relevant Note; and
(iii) the interest rate to be applicable to each Portion for
each Interest Period shall apply from and including the first day of
such Interest Period to but excluding the last day thereof.
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For purposes of determining an Interest Period, a month means a period starting
on one day in a calendar month and ending on a numerically corresponding day in
the next calendar month, provided, however, if an Interest Period begins on the
last day of a month or if there is no numerically corresponding day in the month
in which an Interest Period is to end, then such Interest Period shall end on
the last Business Day of such month.
"LIBOR Portions" is defined in Section 2.1(a) hereof.
"Lien" means any mortgage, lien, security interest, pledge, charge or
encumbrance of any kind in respect of any Property, including the interests of a
vendor or lessor under any conditional sale, Capital Lease or other title
retention arrangement.
"Loan" is defined in Section 1.1 hereof.
"Loan Documents" means this Agreement, the Notes and the Collateral
Documents and each other instrument or document delivered hereunder or
thereunder or otherwise in connection therewith.
"Non-Performing Assets" means, with reference to any Person, as of any
time the same is to be determined, the sum of all non-performing assets of such
Person as determined in accordance with regulatory accounting principles
applicable to such Person, including, without limitation, (i) loans or other
extensions of credit on which any payment (whether principal or interest or
otherwise) is not made within 90 days of its original due date, (ii) loans which
have been placed on a non-accrual basis, (iii) loans structured so as to not
bear interest at a then market rate or so that other terms thereof have been
compromised, and (iv) property acquired by repossession or foreclosure and,
without duplication, property acquired pursuant to in-substance foreclosure.
"Note One" is defined in Section 1.1 hereof.
"Note Two" is defined in Section 1.1 hereof.
"Notes" means and includes Note One and Note Two.
"Obligations" means all obligations of the Borrowers to pay principal
and interest on the Loans, all fees and charges payable hereunder, and all other
payment obligations of either Borrower arising under or in relation to any Loan
Document, in each case whether now existing or hereafter arising, due or to
become due, direct or indirect, absolute or contingent, and howsoever evidenced,
held or acquired.
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to any or all of its functions under ERISA.
"Permitted Banking Subsidiary Indebtedness" means obligations incurred
by any Banking Subsidiary or the Borrowing Subsidiary in the ordinary course of
business in such circumstances as may be incidental or usual in carrying on the
banking or trust or mortgage
-14-
19
business of a bank, thrift, trust company, or mortgage company incurred in
accordance with applicable laws and regulations and safe and sound practices,
including, without 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,
(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, and (x) other short-term liabilities similar to those enumerated in
clauses (i) and (vi) above, including United States Treasury tax and loan
borrowings.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization or any other
entity or organization, including a government or agency or political
subdivision thereof.
"Plan" means any employee pension benefit plan covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the Code
that either (i) is maintained by a member of the Controlled Group for employees
of a member of the Controlled Group or (ii) is maintained pursuant to a
collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which a member of the Controlled Group
is then making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions.
"Pledge Agreement" is defined in Section 3.1 hereof.
"Portion" is defined in Section 2.1(a) hereof.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Revolving Credit" is defined in Section 1.1 hereof.
"Subsidiary" means any corporation or other Person more than 50% of the
outstanding ordinary voting shares or other equity interests of which is at the
time directly or indirectly owned by the Company, by one or more of its
Subsidiaries, or by the Company and one or more of its Subsidiaries.
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20
"Termination Date" means January 30, 2000, or such later date to which
the Termination Date is extended pursuant to Section 1.3 hereof, or such earlier
date on which the Commitment is terminated in whole pursuant to Section 3.4,
3.5, 9.2 or 9.3 hereof.
"Tier I Capital" of any Person means, at any time, the regulatory
"core" capital (Tier I) of such Person, as defined and determined from time to
time by applicable bank or thrift regulatory authorities.
"Tier I Leverage Ratio" of any Person means, at any time, the ratio of
regulatory "core" capital (Tier I) to total assets, all as defined and
determined from time to time by applicable bank or thrift regulatory
authorities.
"Tier I Risk Based Capital Ratio" means the ratio of regulatory "core"
capital (Tier I) to weighted-risk assets and off-balance sheet items, all as
defined and determined from time to time by applicable bank or thrift regulatory
authorities.
"Total Risk Based Capital Ratio" of any Person means, at any time, the
ratio of regulatory "core" capital (Tier I) and supplementary capital elements
(Tier II) to weighted-risk assets and off-balance sheet items, all as defined
and determined from time to time by applicable bank or thrift regulatory
authorities.
"Unfunded Vested Liabilities" means, for any Plan at any time, the
amount (if any) by which the present value of all vested nonforfeitable accrued
benefits under such Plan exceeds the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents a
potential liability of a member of the Controlled Group to the PBGC or the Plan
under Title IV of ERISA.
"Welfare Plan" means a "welfare plan" as defined in Section 3(1) of
ERISA.
"Wholly-Owned Subsidiary" means a Subsidiary of which all of the issued
and outstanding shares of capital stock (other than directors' qualifying shares
as required by law) or other equity interests are owned by the Company and/or
one or more Wholly-Owned Subsidiaries within the meaning of this definition.
Section 5.2. Interpretation. The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined. The words
"hereof", "herein", and "hereunder" and words of like import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All references to time of day herein are references
to Chicago, Illinois time unless otherwise specifically provided. Where the
character or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, it shall be done in
accordance with GAAP except where such principles are inconsistent with the
specific provisions of this Agreement.
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21
SECTION 6. REPRESENTATIONS AND WARRANTIES.
The Borrowers represent and warrant to the Bank as follows:
Section 6.1. Organization and Qualification. The Company is duly
organized, validly existing and in good standing as a corporation under the laws
of the State of Delaware, has full and adequate corporate power to own its
Property and conduct its business as now conducted, and is duly licensed or
qualified and in good standing in each jurisdiction in which the nature of the
business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying, where the failure to do so is reasonably
likely to have a material adverse effect on the financial condition, Properties,
business or operations of such Person. Without limiting the generality of the
foregoing, the Company is a "bank holding company" as that term is defined in
the federal Bank Holding Company Act of 1956, as amended, and as such, the
Company has received all necessary approvals from and has filed all necessary
reports with the Board of Governors of the Federal Reserve System.
Section 6.2. Subsidiaries. Each Subsidiary (including, without
limitation, the Borrowing Subsidiary) is duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is incorporated or
organized, as the case may be, has full and adequate power to own its Property
and conduct its business as now conducted, and is duly licensed or qualified and
in good standing in each jurisdiction in which the nature of the business
conducted by it or the nature of the Property owned or leased by it requires
such licensing or qualifying, where the failure to do so is reasonably likely to
have a material adverse effect on the financial condition, Properties, business
or operations of the Company and its Subsidiaries taken as a whole. Schedule 6.2
hereto identifies each Subsidiary, the jurisdiction of its incorporation or
organization, as the case may be, the percentage of issued and outstanding
shares of each class of its capital stock or other equity interests owned by the
Company and the Subsidiaries and, if such percentage is not 100% (excluding
directors' qualifying shares as required by law), a description of each class of
its authorized capital stock and other equity interests and the number of shares
of each class issued and outstanding. All of the outstanding shares of capital
stock and other equity interests of each Subsidiary are validly issued and
outstanding and fully paid and nonassessable and all such shares and other
equity interests indicated on Schedule 6.2 as owned by the Company or a
Subsidiary are owned, beneficially and of record, by the Company or such
Subsidiary free and clear of all Liens other than Liens granted in favor of the
Bank. There are no outstanding commitments or other obligations of any
Subsidiary to issue, and no options, warrants or other rights of any Person to
acquire, any shares of any class of capital stock or other equity interests of
any Subsidiary.
Section 6.3. Authority and Validity of Obligations. Each Borrower
has full right and authority to enter into this Agreement and the other Loan
Documents, to make the borrowings herein provided for, to issue its Note in
evidence thereof, and to perform all of its obligations hereunder and under the
other Loan Documents. The Loan Documents delivered by each Borrower have been
duly authorized, executed and delivered by the relevant Borrower and constitute
valid and binding obligations of such Borrower
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enforceable in accordance with their terms except as enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors' rights generally and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law); and this Agreement and the other Loan Documents
do not, nor does the performance or observance by the Borrowers of any of the
matters and things herein or therein provided for, contravene or constitute a
default under any provision of law or any judgment, injunction, order or decree
binding upon either Borrower or any provision of the articles of incorporation
or by-laws of either Borrower or any covenant, indenture or agreement of or
affecting either Borrower or any of their Property, or result in the creation or
imposition of any Lien on any Property of either Borrower except for Liens
granted in favor of the Bank.
Section 6.4. Use of Proceeds; Margin Stock. The Company shall use
the proceeds of the Loans made available to it hereunder for its general working
capital purposes and such other legal and proper purposes as are consistent with
all applicable laws, provided that, except with respect to funding non-hostile
acquisitions of banks and/or thrifts pursuant to Section 8.13(g) hereof, the
proceeds of the Loans made available to the Company shall not be used for the
purpose of acquiring all or any substantial part of the assets or equity
interest in another Person without the prior written consent of the Bank. The
Borrowing Subsidiary shall use the proceeds of the Loans made available to it
hereunder solely for its general working capital purposes, provided that the
proceeds of the Loans made available to the Borrowing Subsidiary shall not be
used for the purpose of acquiring all or any substantial part of the assets or
equity interest in another Person without the prior written consent of the Bank.
Neither Borrower is engaged in the business of extending credit for the purpose
of purchasing or carrying margin stock (within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System), and no part of the
proceeds of any Loan will be used to purchase or carry any margin stock, or to
extend credit to others for the purpose of purchasing or carrying any such
margin stock. Margin stock (as hereinabove defined) constitutes less than 25% of
those assets of the Company and its Subsidiaries which are subject to any
limitation on sale, pledge, or other restriction hereunder.
Section 6.5. Financial Reports. The consolidated balance sheet of
the Company and its Subsidiaries as at December 31, 1996, and the related
consolidated statements of income, retained earnings and cash flows of the
Company and its Subsidiaries for the fiscal year then ended, and accompanying
notes thereto, which financial statements are accompanied by the audit report of
▇▇▇▇▇, ▇▇▇▇▇▇ & Company, LLP., independent public accountants, and the unaudited
interim balance sheet of the Company and its Subsidiaries as at September 30,
1997, and the related statements of income, retained earnings and cash flows of
the Company and its Subsidiaries for the 9 months then ended, heretofore
furnished to the Bank, fairly present the consolidated financial condition of
the Company and its Subsidiaries as at said dates and the consolidated results
of their operations and cash flows for the periods then ended in conformity with
generally accepted accounting principles applied on a consistent basis. Neither
the Company nor any Subsidiary has contingent liabilities which are material to
it other than as indicated on such financial statements or, with respect to
future periods, on the financial statements furnished pursuant to Section 8.5
hereof.
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Section 6.6. No Material Adverse Change. Since September 30, 1997,
there has been no change in the condition (financial or otherwise) or business
prospects of the Company or any Subsidiary which individually or in the
aggregate have been materially adverse to the Company or the Company and its
Subsidiaries taken as a whole.
Section 6.7. Full Disclosure. The statements and information
furnished to the Bank in connection with the negotiation of this Agreement and
the other Loan Documents and the commitment by the Bank to provide all or part
of the financing contemplated hereby do not contain any untrue statements of a
material fact or omit a material fact necessary to make the material statements
contained herein or therein not misleading, the Bank acknowledging that as to
any projections furnished to the Bank, the Borrowers only represent that the
same were prepared on the basis of information and estimates the Borrowers
believed to be reasonable.
Section 6.8. Good Title. The Company and its Subsidiaries each have
good and defensible title to their assets as reflected on the most recent
consolidated balance sheet of the Company and its Subsidiaries furnished to the
Bank (except for sales of assets by the Company and its Subsidiaries in the
ordinary course of business) subject to no Liens other than such thereof as are
permitted by Section 8.13 hereof.
Section 6.9. Litigation and Other Controversies. Except as
disclosed on Schedule 6.9 hereof, there is no litigation or governmental
proceeding or labor controversy pending, nor to the knowledge of the Company
threatened, against the Company or any Subsidiary which if adversely determined
would (a) impair the validity or enforceability of, or impair the ability of
either Borrower to perform its obligations under, this Agreement or any other
Loan Document or (b) result in any material adverse change in the financial
condition, Properties, business or operations of the Company or the Company and
its Subsidiaries taken as a whole .
Section 6.10. Taxes. All tax returns required to be filed by the
Company or any Subsidiary in any jurisdiction have, in fact, been filed, and all
taxes, assessments, fees and other governmental charges upon the Company or any
Subsidiary or upon any of their respective Properties, income or franchises,
which are shown to be due and payable in such returns, have been paid, except to
the extent the same are being contested in good faith and by appropriate
proceedings which prevent enforcement of the matter under contest and adequate
reserves are provided therefor. The Company does not know of any proposed
additional tax assessment against it or its Subsidiaries for which adequate
provision in accordance with GAAP has not been made on its accounts. Adequate
provisions in accordance with GAAP for taxes on the books of the Company and
each Subsidiary have been made for all open years, and for its current fiscal
period.
Section 6.11. Approvals. No authorization, consent, license, or
exemption from, or filing or registration with, any court or governmental
department, agency or instrumentality, nor any approval or consent of the
stockholders of the Company or any other Person, is or will be necessary to the
valid execution, delivery or performance by either Borrower of this Agreement or
any other Loan Document, except for the approval of
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the Board of Directors of each Borrower which has been obtained and remains in
full force and effect.
Section 6.12. Investment Company. Neither the Company nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
Section 6.13. ERISA. The Company and each other member of its
Controlled Group has fulfilled its obligations under the minimum funding
standards of, and is in compliance in all material respects with, ERISA and the
Code pertaining to each Plan to the extent applicable to it and has not incurred
any liability to the PBGC or a Plan under Title IV of ERISA other than a
liability to the PBGC for premiums under Section 4007 of ERISA. Neither the
Company nor any Subsidiary has any material contingent liabilities with respect
to any post-retirement benefits under a Welfare Plan, other than liability for
continuation coverage described in article 6 of Title I of ERISA.
Section 6.14. Compliance with Laws. The Company and each of its
Subsidiaries are in compliance with the requirements of all federal, state and
local laws, rules and regulations applicable to or pertaining to their
Properties or business operations (including, without limitation, the
Occupational Safety and Health Act of 1970, the Americans with Disabilities Act
of 1990, and laws and regulations establishing quality criteria and standards
for air, water, land and toxic or hazardous wastes and substances), to the
extent non-compliance therewith is reasonably likely to have a material adverse
effect on the financial condition, Properties, business or operations of the
Company or the Company and its Subsidiaries taken as a whole. Neither the
Company nor any Subsidiary has received notice to the effect that its operations
are not in compliance with any of the requirements of applicable federal, state
or local environmental, health and safety statutes and regulations or are the
subject of any governmental 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 is reasonably
likely to have a material adverse effect on the financial condition, Properties,
business or operations of the Company or the Company and its Subsidiaries taken
as a whole. Neither of the Borrowers (or any of their directors or officers) nor
any Banking Subsidiary (or any of its directors or officers) is a party to, or
subject to, any agreement with, or directive or order issued by, any federal or
state bank or thrift regulatory authority which imposes restrictions or
requirements on it which are not generally applicable to banks or thrifts, or
their holding companies; and no action or administrative proceeding is pending
or, to the knowledge of either Borrower, threatened against either Borrower or
any Banking Subsidiary or any of their directors or officers which seeks to
impose any such restriction or requirement.
Section 6.15. Other Agreements. Neither the Company nor any
Subsidiary is in default under the terms of any covenant, indenture or agreement
of or affecting the Company, any Subsidiary or any of their Properties, which
default if uncured would have a material adverse effect on the financial
condition, Properties, business or operations of the Company or any Subsidiary.
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Section 6.16. No Default. No Default or Event of Default has
occurred and is continuing.
SECTION 7. CONDITIONS PRECEDENT.
The obligation of the Bank to make any Loan under this Agreement is
subject to the following conditions precedent:
Section 7.1. All Advances. As of the time of the making of each
Loan (including the initial Loan) hereunder:
(a) each of the representations and warranties set forth in
Section 6 hereof and in the other Loan Documents shall be true and
correct as of such time, except to the extent the same expressly relate
to an earlier date;
(b) the Borrowers shall be in full compliance with all of the
terms and conditions of this Agreement and of the other Loan Documents,
and no Default or Event of Default shall have occurred and be
continuing or would occur as a result of making such extension of
credit; and
(c) such extension of credit shall not violate any order,
judgment or decree of any court or other authority or any provision of
law or regulation applicable to the Bank (including, without
limitation, Regulation U of the Board of Governors of the Federal
Reserve System) as then in effect.
A Borrower's request for any Loan shall constitute its warranty as to the facts
specified in subsections (a) and (b) above.
Section 7.2. Initial Advance. At or prior to the making of the
initial Loan hereunder, the following conditions precedent shall also have been
satisfied:
(a) the Bank shall have received the following (each to be
properly executed and completed) and the same shall have been approved
as to form and substance by the Bank:
(i) the Notes;
(ii) the Pledge Agreement, duly executed by the
Company, together with (a) the original stock certificates for
all the issued and outstanding shares of stock (exclusive of
directors' qualifying shares) of each of its Banking
Subsidiaries as of the date hereof, (b) stock powers for the
Collateral, each to be executed in blank and undated, and (c)
UCC financing statements to be filed against the Company, as
debtor, in favor of the Bank, as secured party;
(iii) a payoff letter from LaSalle National Bank
confirming the amount required to pay off the obligations
owing to it by each Borrower and
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confirming the release of all collateral for such credit upon
receipt of such payoff amount;
(iv) copies (executed or certified, as may be
appropriate) of all proceedings taken in connection with the
execution and delivery of this Agreement and the other Loan
Documents to the extent the Bank or its counsel may reasonably
request; and
(v) an incumbency certificate containing the name,
title and genuine signatures of each Borrower's Authorized
Representatives;
(b) the Bank shall have received the initial fees called for
hereby;
(c) legal matters incident to the execution and delivery of
this Agreement and the other Loan Documents and to the transactions
contemplated hereby shall be satisfactory to the Bank and its counsel;
and the Bank shall have received the favorable written opinion of
counsel for the Borrowers in form and substance satisfactory to the
Bank and its counsel;
(d) the Bank shall have received a good standing certificate
for each Borrower (dated as of the date no earlier than 30 days prior
to the date hereof) from the office of the secretary of state of the
state of its incorporation and each state in which it is qualified to
do business as a foreign corporation; and
(e) the Bank shall have received such other agreements,
instruments, documents, certificates and opinions as the Bank may
reasonably request.
SECTION 8. COVENANTS.
The Borrowers agree that, so long as any credit is available to or in
use by either Borrower hereunder, except to the extent compliance in any case or
cases is waived in writing by the Bank:
Section 8.1. Maintenance of Business. The Company shall, and shall
cause each Subsidiary to, preserve and keep in full force and effect its
corporate existence and rights (charter or statutory) necessary for the proper
conduct of business under the respective regulatory agencies having supervision
of such business; provided, however, that nothing in this Section shall prevent
the Company from dissolving any Subsidiary if such action is, in the judgment of
the Company, desirable in the conduct of its business and not disadvantageous in
any material respect to the Bank. The Company shall, and shall cause each
Subsidiary to, preserve and keep in force and effect all licenses, permits and
franchises necessary to the proper conduct of its business; provided, however,
that nothing in this Section shall prevent the Company or any Subsidiary from
permitting any license, permit or franchise to lapse if such action is, in the
judgment of the Company, desirable in the conduct of its business and not
disadvantageous in any material respect to the Bank.
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Section 8.2. Maintenance of Properties. The Company shall maintain,
preserve and keep its property, plant and equipment in good repair, working
order and condition (ordinary wear and tear excepted) and shall from time to
time make all needful and proper repairs, renewals, replacements, additions and
betterments thereto so that at all times the efficiency thereof shall be fully
preserved and maintained, and shall cause each Subsidiary to do so in respect of
Property owned or used by it; provided, however, that nothing in this Section
shall prevent (a) the Company or any Subsidiary from discontinuing the operation
and maintenance of any of its properties if such discontinuation is, in the
judgment of the Company, desirable in the conduct of its business and not
disadvantageous in any material respect to the Bank or (b) any Banking
Subsidiary from closing or selling a branch office if such closing or sale is,
in the judgment of the Company, desirable in the conduct of its business and is
not disadvantageous in any material respect to the Bank.
Section 8.3. Taxes and Assessments. The Company shall duly pay and
discharge, and shall cause each Subsidiary to duly pay and discharge, all taxes,
rates, assessments, fees and governmental charges upon or against it or its
Properties, in each case before the same become delinquent and before penalties
accrue thereon, unless and to the extent that the same are being contested in
good faith and by appropriate proceedings which prevent enforcement of the
matter under contest and adequate reserves are provided therefor.
Section 8.4. Insurance. The Company shall insure and keep insured,
and shall cause each Subsidiary to insure and keep insured, with good and
responsible insurance companies, all insurable Property owned by it which is of
a character usually insured by Persons similarly situated and operating like
Properties against loss or damage from such hazards and risks, and in such
amounts, as are insured by Persons similarly situated and operating like
Properties; and the Company shall insure, and shall cause each Subsidiary to
insure, such other hazards and risks (including employers' and public liability
risks) with good and responsible insurance companies as and to the extent
usually insured by Persons similarly situated and conducting similar businesses.
The Company shall upon request furnish to the Bank a certificate setting forth
in summary form the nature and extent of the insurance maintained pursuant to
this Section.
Section 8.5. Financial Reports. The Company shall, and shall cause
each Subsidiary to, maintain a standard system of accounting in accordance with
GAAP and shall furnish to the Bank and its duly authorized representatives such
information respecting the business and financial condition of the Company and
its Subsidiaries (including non-financial information and examination reports
and supervisory letters to the extent permitted by applicable regulatory
authorities) as the Bank may reasonably request; and without any request, shall
furnish to the Bank:
(a) unless a Form 10-Q report is delivered to the Bank for
such quarter-annual accounting period pursuant to subsection (f) below,
as soon as available, and in any event within 45 days after the close
of each quarter-annual accounting period of the Company, a copy of the
Company's consolidated balance sheet of the Company and its
Subsidiaries as of the last day of such period and the consolidated
statements of income, retained earnings and cash flows of the Company
and its Subsidiaries for the
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quarter and the fiscal year-to date period then ended, each in
reasonable detail showing in comparative form the figures for the
corresponding date and period in the previous fiscal year, prepared by
the Company in accordance with GAAP and certified to by the President
or chief financial officer of the Company;
(b) as soon as available, and in any event within 120 days
after the close of each annual accounting period of the Company, a copy
of the consolidated and consolidating balance sheet of the Company and
its Subsidiaries as of the close of such period and the consolidated
and consolidating statements of income, retained earnings and cash
flows of the Company and its Subsidiaries for such period, and
accompanying notes thereto, each in reasonable detail showing in
comparative form the figures for the previous fiscal year, accompanied
by an unqualified opinion thereon of ▇▇▇▇▇, ▇▇▇▇▇▇ & Company, LLP or
another firm of independent public accountants of recognized standing,
selected by the Company and satisfactory to the Bank, to the effect
that the consolidated financial statements have been prepared in
accordance with GAAP and present fairly in accordance with GAAP the
consolidated financial condition of the Company and its Subsidiaries as
of the close of such fiscal year and the results of their operations
and cash flows for the fiscal year then ended and that an examination
of such accounts in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing
standards and, accordingly, such examination included such tests of the
accounting records and such other auditing procedures as were
considered necessary in the circumstances (it being understood and
agreed no such opinion is required with respect to any consolidating
financial statements);
(c) as soon as available, and in any event within 45 days
after the close of each quarter-annual accounting period of each
Banking Subsidiary, all call reports and other financial statements
required to be delivered by such Banking Subsidiary to any governmental
authority or authorities having jurisdiction over such Banking
Subsidiary and all schedules thereto;
(d) promptly after receipt thereof, any management letters or
similar written reports concerning significant aspects of the Company's
or any Subsidiary's operations and financial affairs given to it by its
independent public accountants;
(e) promptly upon the furnishing thereof to the shareholders
of the Company, copies of all financial statements, reports and proxy
statements so furnished;
(f) promptly upon the filing thereof (if any), copies of all
registration statements, Form 10-K, Form 10-Q and Form 8-K reports and
proxy statements which the Company or any of its Subsidiaries file with
the Securities and Exchange Commission;
(g) promptly upon the receipt or execution thereof, (i)
notice by the Company or any Banking Subsidiary that (1) it has
received a request or directive
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from any federal or state regulatory agency which requires it to submit
a capital maintenance or restoration plan or restricts the payment of
dividends by any Banking Subsidiary to the Company or (2) it has
submitted a capital maintenance or restoration plan to any federal or
state regulatory agency or has entered into a memorandum or agreement
with any such agency, including, without limitation, any agreement
which restricts the payment of dividends by any Banking Subsidiary to
the Company or otherwise imposes restrictions or requirements on it
which are not generally applicable to banks or thrifts or their holding
companies, and (ii) copies of any such plan, memorandum or agreement,
unless disclosure is prohibited by the terms thereof and, after the
Company or such Banking Subsidiary has in good faith attempted to
obtain the consent of such regulatory agency, such agency will not
consent to the disclosure of such plan, memorandum or agreement to the
Bank;
(h) promptly after knowledge thereof shall have come to the
attention of any responsible officer of either Borrower, written notice
of any threatened (in writing) or pending litigation or governmental
proceeding or labor controversy against either Borrower or any
Subsidiary which, if adversely determined, would materially adversely
effect the financial condition, Properties, business or operations of
the Company or any Subsidiary or of the occurrence of any Default or
Event of Default hereunder; and
(i) prompt written notice of a Change in Control.
Each of the financial statements furnished to the Bank pursuant to subsections
(a) and (b) of this Section shall be accompanied by a written certificate in the
form attached hereto as Exhibit C signed by the President or chief financial
officer of the Company to the effect that to the best of such officer's
knowledge and belief no Default or Event of Default has occurred during the
period covered by such statements or, if any such Default or Event of Default
has occurred during such period, setting forth a description of such Default or
Event of Default and specifying the action, if any, taken by either Borrower to
remedy the same. Such certificate shall also set forth the calculations
supporting such statements in respect of Sections 8.7, 8.8, 8.9, 8.10 and 8.11
of this Agreement.
Section 8.6. Inspection. The Company shall, and shall cause each
Subsidiary to, permit the Bank and its duly authorized representatives and
agents to visit and inspect any of the Properties, corporate books and financial
records of the Company and each Subsidiary, to examine and make copies of the
books of accounts and other financial records of the Company and each
Subsidiary, and to discuss the affairs, finances and accounts of the Company and
each Subsidiary with, and to be advised as to the same by, its officers,
employees and independent public accountants (and by this provision each
Borrower hereby authorizes such accountants to discuss with the Bank the
finances and affairs of the Company and of each Subsidiary) at such reasonable
times and reasonable intervals as the Bank may designate; provided, however,
that neither the Company nor any Subsidiary shall be required to make available
to the Bank any customer lists or other proprietary information unless such
information is required by the Bank to determine the financial condition of the
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Company or any Subsidiary or to determine the ability of either Borrower to meet
its obligations hereunder.
Section 8.7. Non-Performing Assets. The Company shall, as of the
last day of each fiscal quarter, maintain on a consolidated basis with its
Banking Subsidiaries, and shall cause each Banking Subsidiary to maintain as of
such day on an individual basis, a ratio of (a) Non-Performing Assets of the
Company on such consolidated basis or such Banking Subsidiary, as the case may
be, to (b) the sum of (i) stockholders' equity for the Company or Tier I Capital
for such Banking Subsidiary, as the case may be, plus (ii) loan loss reserves
established by the Company on such consolidated basis or such Banking
Subsidiary, as the case may be, in accordance with regulatory accounting
principles applicable to the Company or such Banking Subsidiary, of not more
than .25 to 1.0.
Section 8.8. Regulatory Capital Requirements.
(a) The Company shall maintain on a consolidated basis with its
Banking Subsidiaries, and shall cause each Banking Subsidiary to maintain on an
individual basis:
(i) a Tier I Leverage Ratio of greater than 5% or such
greater amount as may be required to be considered "well capitalized"
by applicable regulatory authorities from time to time;
(ii) a Total Risk Based Capital Ratio of greater than 10% or
such greater amount as may be required to be considered "well
capitalized" by applicable regulatory authorities from time to time;
and
(iii) a Tier I Risk Based Capital Ratio of greater than 6% or
such greater amount as may be required to be considered "well
capitalized" by applicable regulatory authorities from time to time.
(b) Each Banking Subsidiary shall at all times be at least "well
capitalized" as defined in the Federal Deposit Insurance Corporation Improvement
Act of 1991, as applicable, and any regulations to be issued thereunder, as such
statute or regulations may each be amended or supplemented from time to time.
(c) Each such requirement described in clauses (a) and (b) above
shall be computed and determined in accordance with the rules and regulations as
in effect from time to time established by the rules and regulations as in
effect from time to time established by the appropriate governmental authority
having jurisdiction over such Banking Subsidiary. In addition to the provisions
set forth above, the Company shall, and shall cause each Subsidiary to, comply
with any and all capital guidelines and requirements as in effect from time to
time established by the relevant governmental authority or authorities having
jurisdiction over the Company or any Subsidiary.
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Section 8.9. Minimum Consolidated Net Income. As of the last day of
each fiscal quarter, the Company shall maintain Consolidated Net Income for the
four fiscal quarters then ended of not less than $5,500,000.
Section 8.10. Minimum Consolidated Tangible Net Worth. The Company
shall at all times maintain Consolidated Tangible Net Worth of not less than
$45,000,000.
Section 8.11. Indebtedness for Borrowed Money. The Company shall
not, nor shall it permit any Subsidiary to, issue, incur, assume, create or have
outstanding any Indebtedness for Borrowed Money; provided, however, that the
foregoing shall not restrict nor operate to prevent:
(a) the Obligations of the Company owing to the Bank and other
indebtedness and obligations of the Company or any Subsidiary from time
to time owing to the Bank;
(b) Permitted Banking Subsidiary Indebtedness;
(c) indebtedness of the Company or any Subsidiary owing to the
Company or any other Subsidiary;
(d) Contingent Obligations incurred with respect to the
endorsement of instruments for deposit or collection in the ordinary
course of business;
(e) purchase money indebtedness and Capitalized Lease
Obligations secured by Liens permitted by Section 8.12(e) hereof in an
aggregate amount not to exceed $2,000,000 at any one time outstanding;
(f) indebtedness repaid and permanently retired out of the
initial Loan made hereunder;
(g) indebtedness in the aggregate principal amount not
exceeding $275,000 owing to ▇▇▇▇▇▇ ▇▇▇▇▇▇, as the same may be reduced
by repayments of principal thereon; and
(h) indebtedness not otherwise permitted under this Section in
aggregate amount not to exceed $2,000,000 at any one time outstanding.
Section 8.12. Liens. The Company shall not, nor shall it permit any
Subsidiary to, create, incur or permit to exist any Lien of any kind on any
Property owned, whether now or hereafter owned, directly or indirectly, by the
Company or any other Subsidiary, except
(a) Liens arising by statute in connection with worker's
compensation, unemployment insurance, old age benefits, social security
obligations, taxes, assessments, statutory obligations or other similar
charges, good faith cash deposits in connection with tenders, contracts
or leases to which the Company or any Subsidiary
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is a party or other cash deposits required to be made in the ordinary
course of business, provided in each case that the obligation is not
for borrowed money and that the obligation secured is not overdue or,
if overdue, is being contested in good faith by appropriate proceedings
which prevent enforcement of the matter under contest and adequate
reserves have been established therefor;
(b) mechanics', workmen's, materialmen's, landlords',
carriers', or other similar Liens arising in the ordinary course of
business with respect to obligations which are not due or which are
being contested in good faith by appropriate proceedings which prevent
enforcement of the matter under contest;
(c) the pledge of assets for the purpose of securing an
appeal, stay or discharge in the course of any legal proceeding,
provided that the aggregate amount of liabilities of the Company and
its Subsidiaries secured by a pledge of assets permitted under this
subsection, including interest and penalties thereon, if any, shall not
be in excess of $1,000,000 at any one time outstanding;
(d) liens, charges and encumbrances incidental to the conduct
of the business of the Banking Subsidiaries or the ownership of any of
their Properties incurred in the ordinary course of business and not in
connection with the borrowing of money, and liens securing Permitted
Banking Subsidiary Indebtedness in the ordinary course of business;
(e) Liens on property of the Company or any of its
Subsidiaries created solely for the purpose of securing indebtedness
permitted by Section 8.11(e) hereof, representing or incurred to
finance, refinance or refund the purchase price of Property, provided
that no such Lien shall extend to or cover other Property of the
Company or such Subsidiary other than the respective Property so
acquired, and the principal amount of indebtedness secured by any such
Lien shall at no time exceed the original purchase price of such
Property;
(f) Liens to secure public funds or other pledges of funds
required by law to secure deposits;
(g) 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;
(h) Liens on the real estate owned by the Company securing
indebtedness permitted by Section 8.11(g) hereof; and
(i) 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 Company
or its Subsidiaries.
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Section 8.13. Investments, Loans, Advances and Acquisitions. The
Company will not, and will not permit any Subsidiary to, directly or indirectly,
make, retain or have outstanding any investments (whether through purchase of
stock or obligations or otherwise) in, or loans or advances (other than for
travel advances and similar cash advances made to employees in the ordinary
course of business) to, any other Person, or acquire all or any substantial part
of the assets or business of any other Person or division thereof; provided,
however, that the foregoing provisions shall not apply to nor operate to
prevent:
(a) investments in direct obligations of the United States of
America or of any agency or instrumentality thereof whose obligations
constitute full faith and credit obligations of the United States of
America provided that any such obligations shall mature within one year
from the date the same are acquired;
(b) investments in commercial paper rated P-1 by ▇▇▇▇▇'▇
Investors Services, Inc. and A-1 by Standard & Poor's Corporation
maturing within one year of the date of issuance thereof;
(c) investments in certificates of deposit issued by any
United States commercial bank having capital and surplus of not less
than $25,000,000 maturing not more than one year from the date of
acquisition thereof placed with such bank;
(d) investments of any Banking Subsidiary made in accordance
with sound banking practices in the ordinary course of its banking or
trust business consisting of extensions of credit in the form of loans,
acceptances, repurchase agreements, letter of credit and similar
transactions;
(e) investments of any Banking Subsidiary made in the
ordinary course of its banking or trust business consisting of
marketable securities and money-market instruments which it is
permitted to hold and invest in under applicable law and regulation;
(f) investments of the Borrowing Subsidiary made in the
ordinary course of its business consisting of residential mortgage
loans, servicing rights and similar assets;
(g) one or more non-hostile acquisitions by the Company of
any banks or thrifts with an aggregate purchase price (whether in cash,
assumed liabilities or otherwise, but excluding from such determination
the value of equity securities of the Company issued to the sellers in
connection with any such transaction) for all such transactions during
the term of this Agreement not exceeding $5,000,000; and
(h) investments, loans and advances not otherwise permitted
by this Section aggregating not more than $2,000,000 at any one time
outstanding.
Section 8.14. Mergers, Consolidations, Leases and Sales. The Company
shall not, nor shall it permit any Subsidiary to, be a party to any merger or
consolidation, or sell, transfer,
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34
lease or otherwise dispose of the Collateral or all or any substantial part of
its property, assets or business, or lease any property theretofor owned by the
Company or any Subsidiary; provided, however, that this Section shall not
prohibit:
(a) any Subsidiary from merging into or consolidating with
the Company or any Wholly-Owned Subsidiary provided that at the time of
such merger or consolidation and immediately after giving effect
thereto, no Default or Event of Default shall occur or be continuing
and the surviving entity is the Company or such Wholly-Owned
Subsidiary, as the case may be; and
(b) sales or leases of assets (other than the Collateral) in
the ordinary course of business.
A sale or disposition of 5% of the consolidated total assets of the Company
shall be deemed substantial for the foregoing purposes.
Section 8.15. Maintenance of Subsidiaries. The Company shall not
assign, sell or transfer, or permit any Subsidiary to issue, assign, sell or
transfer, any shares of capital stock of a Subsidiary; provided that the
foregoing shall not operate to prevent (a) the issuance, sale and transfer to
any person of any shares of capital stock of a Subsidiary solely for the purpose
of qualifying, and to the extent legally necessary to qualify, such person as a
director of such Subsidiary or (b) the transfer of the capital stock of a
Subsidiary which is not a Banking Subsidiary to the Company or another
Subsidiary.
Section 8.16. Dividends and Certain Other Restricted Payments. The
Company shall not (a) declare or pay any dividends on or make any other
distributions in respect of any class or series of its capital stock (other than
dividends payable solely in its capital stock) or (b) directly or indirectly
purchase, redeem or otherwise acquire or retire any of its capital stock;
provided, however, that the Company may declare and pay dividends and/or redeem
its capital stock during any fiscal year if, and only if, at the time of each
such dividend or redemption and immediately after giving effect thereto, (x) the
aggregate amount of dividends paid and amount paid to redeem its capital stock
in such fiscal year does not exceed the lesser of 25% of Consolidated Net Income
(deemed 0 if a loss) for the most recently completed fiscal year or $1,000,000,
and (y) no Default or Event of Default exists.
Section 8.17. ERISA. The Company shall, and shall cause each
Subsidiary to, promptly pay and discharge all obligations and liabilities
arising under ERISA of a character which if unpaid or unperformed is reasonably
likely to result in the imposition of a Lien against any of its Properties. The
Company shall, and shall cause each Subsidiary to, promptly notify the Bank of
(i) the occurrence of any reportable event (as defined in ERISA) with respect to
a Plan (other than such a reportable event described in ERISA Section 4043(c)
for which the 30-day notice requirement is waived provided that the loss of
qualification of a Plan and the failure to meet the minimum funding standards of
Section 412 of the Code or Section 302 of ERISA shall require notification
regardless of whether notice of such event is waived), (ii) receipt of any
notice from the PBGC of its intention to seek termination of any Plan or
appointment of a trustee therefor, (iii) its intention to terminate
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or withdraw from any Plan, and (iv) the occurrence of any event with respect to
any Plan which would result in the incurrence by the Company or any Subsidiary
of any material liability, fine or penalty, or any material increase in the
contingent liability of the Company or any Subsidiary with respect to any
post-retirement Welfare Plan benefit.
Section 8.18. Compliance with Laws. The Company shall, and shall
cause each Subsidiary to, comply in all respects with the requirements of all
federal, state and local laws, rules, regulations, ordinances and orders
applicable to or pertaining to their Properties or business operations,
non-compliance with which could have a material adverse effect on the financial
condition, Properties, business or operations of the Company or any Subsidiary
or could result in a Lien upon any of their Property.
Section 8.19. Formation of Subsidiaries. Except for existing
Subsidiaries designated on Schedule 6.2 hereto, the Company shall not, nor shall
it permit any Subsidiary to, form or acquire any Subsidiary without the prior
written consent of the Bank unless such formation or acquisition is, in the
judgment of the Company, desirable in the conduct of its business and not
disadvantageous in any material respect to the Bank.
Section 8.20. Change in the Nature of Business. The Company shall
not, and shall not permit any Subsidiary to, engage in any business or activity
if as a result the general nature of the business of the Company or any
Subsidiary would be changed in any material respect from the general nature of
the business engaged in by the Company or such Subsidiary on the date of this
Agreement.
Section 8.21. Use of Proceeds. Each Borrower shall use the proceeds
of the Loans made available to it hereunder in accordance with the terms of
Section 6.4 hereof.
SECTION 9. EVENTS OF DEFAULT AND REMEDIES.
Section 9.1. Events of Default. Any one or more of the following
shall constitute an "Event of Default" hereunder:
(a) default in the payment when due of the principal of any
Note (whether at the stated maturity thereof or at any other time
provided for in this Agreement), or default for a period of 5 days in
the payment when due all or any part of any other Obligation payable by
the Company hereunder or under any other Loan Document (whether at the
stated maturity thereof or at any other time provided for in this
Agreement), or default for a period of 5 days in the payment when due
of any other indebtedness or obligation (whether direct, contingent or
otherwise) of either Borrower owing to the Bank; or
(b) default in the observance or performance of any covenant
set forth in Sections 8.7, 8.8, 8.9, 8.10, 8.11, 8.13, 8.14, 8.15,
8.16, or 8.21 hereof or default after notice to the Company in the
observance or performance of any covenant set forth in Sections 8.5 or
8.6 hereof or default with respect to voluntary Liens granted by the
Company or any of its Subsidiaries in violation of Section 8.12 hereof;
or
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(c) default in the observance or performance of any other
provision hereof or of any other Loan Document which is not remedied
within 30 days after the earlier of (i) the date on which such failure
shall first become known to any executive officer of either Borrower or
(ii) written notice thereof is given to the Company by the Bank; or
(d) any representation or warranty made by either Borrower
herein or in any other Loan Document, or in any statement or
certificate furnished by it pursuant hereto or thereto, or in
connection with any extension of credit made hereunder, proves untrue
in any material respect as of the date of the issuance or making
thereof; or
(e) any event occurs or condition exists (other than those
described in subsections (a) through (d) above) which is specified as
an event of default under any of the other Loan Documents, or any of
the Loan Documents, or any material provision thereof, shall for any
reason not be or shall cease to be in full force and effect or is
declared to be null and void;
(f) default shall occur under any Indebtedness for Borrowed
Money aggregating $1,000,000 or more issued, assumed or guaranteed by
either Borrower or any Subsidiary, or under any indenture, agreement or
other instrument under which the same may be issued, and such default
shall continue for a period of time sufficient to permit the
acceleration of the maturity of any such Indebtedness for Borrowed
Money (whether or not such maturity is in fact accelerated), or any
such Indebtedness for Borrowed Money shall not be paid when due
(whether by lapse of time, acceleration or otherwise); or
(g) any judgment or judgments, writ or writs, or warrant or
warrants of attachment, or any similar process or processes, the
aggregate amount of which (after reduction by the amount covered by
insurance) exceeds $1,000,000 shall be entered or filed against either
Borrower or any Subsidiary or against any of their Property and which
remains unvacated, unbonded, unstayed or unsatisfied for a period of 30
days; or
(h) either Borrower or any member of its Controlled Group
shall fail to pay when due an amount or amounts aggregating in excess
$500,000 which it shall have become liable to pay to the PBGC or to a
Plan under Title IV of ERISA; or notice of intent to terminate a Plan
or Plans having aggregate Unfunded Vested Liabilities in excess of
$500,000 (collectively, a "Material Plan") shall be filed under Title
IV of ERISA by either Borrower or any other member of its Controlled
Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to
terminate or to cause a trustee to be appointed to administer any
Material Plan or a proceeding shall be instituted by a fiduciary of any
Material Plan against either Borrower or any member of its Controlled
Group to enforce Section 515 or 4219(c)(5) of ERISA and such proceeding
shall not have been dismissed within 30 days thereafter; or a condition
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shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any Material Plan must be terminated; or
(j) dissolution or termination of the existence of either
Borrower or any Banking Subsidiary (unless otherwise permitted by the
terms of this Agreement); or
(k) the Borrowing Subsidiary or any Bank Subsidiary shall
cease at any time and for any reason to be a Wholly-Owned Subsidiary of
the Company; or
(l) any conservator or receiver shall be appointed for either
Borrower or any Banking Subsidiary under applicable federal or state
law applicable to banks, thrifts, or their holding companies, or any
Banking Subsidiary shall suspend payment of its obligations, or any
Banking Subsidiary shall cease to be a federally insured depository
institution, or a cease and desist order shall be issued against either
Borrower or any Subsidiary pursuant to applicable federal or state law
applicable to banks, thrifts, or their holding companies, or either
Borrower or any Subsidiary shall enter into any commitment to maintain
the capital of an insured depository institution in a required amount
with any federal or state regulator or any such regulator shall require
either Borrower or any Subsidiary to submit a capital maintenance or
restoration plan, in each case where such action continues in effect
for a period of 30 days; or
(m) either Borrower or any Subsidiary shall (i) have entered
involuntarily against it an order for relief under the United States
Bankruptcy Code, as amended, (ii) not pay, or admit in writing its
inability to pay, its debts generally as they become due, (iii) make an
assignment for the benefit of creditors, (iv) 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 part
of its Property, (v) institute any proceeding seeking to have entered
against it an order for relief under the United States Bankruptcy Code,
as amended, to adjudicate it 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, or (vi) fail to contest in good faith any appointment or
proceeding described in Section 9.1(n) hereof; or
(n) a custodian, receiver, trustee, examiner, liquidator or
similar official shall be appointed for either Borrower or any
Subsidiary or any substantial part of its Property, or a proceeding
described in Section 9.1(m)(v) shall be instituted against either
Borrower or any Subsidiary, and such appointment continues undischarged
or such proceeding continues undismissed or unstayed for a period of 60
days.
Section 9.2. Non-Bankruptcy Defaults. When any Event of Default
described in subsection (a) through (l), both inclusive, of Section 9.1 has
occurred and is continuing, the Bank may, by notice to the Company, take one or
more of the following actions:
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(a) terminate the obligation of the Bank to extend any
further credit hereunder on the date (which may be the date thereof)
stated in such notice;
(b) declare the principal of and the accrued interest on the
Notes to be forthwith due and payable and thereupon the Notes,
including both principal and interest and all fees, charges and other
Obligations payable hereunder and under the other Loan Documents, shall
be and become immediately due and payable without further demand,
presentment, protest or notice of any kind; and
(c) enforce any and all rights and remedies available to it
under the Loan Documents or applicable law.
Section 9.3. Bankruptcy Defaults. When any Event of Default
described in subsection (m) or (n) of Section 9.1 has occurred and is
continuing, then the Notes, including both principal and interest, and all fees,
charges and other Obligations payable hereunder and under the other Loan
Documents, shall immediately become due and payable without presentment, demand,
protest or notice of any kind, and the obligation of the Bank to extend further
credit pursuant to any of the terms hereof shall immediately terminate. In
addition, the Bank may exercise any and all remedies available to it under the
Loan Documents or applicable law.
SECTION 10. THE GUARANTEE.
Section 10.1. The Guarantee. To induce the Bank to provide the
credits described herein to the Borrowing Subsidiary and in consideration of
benefits expected to accrue to the Company by reason of the commitment of the
Bank hereunder and for other good and valuable consideration, receipt of which
is hereby acknowledged, the Company hereby unconditionally and irrevocably
agrees it is liable for, and guarantees to the Bank and any other holder of the
Obligations, the due and punctual payment of all present and future indebtedness
of the Borrowing Subsidiary evidenced by or arising out of the Loan Documents,
including, but not limited to, the due and punctual payment of principal of and
interest on Note Two and the due and punctual payment of all other Obligations
now or hereafter owed by the Borrowing Subsidiary under the Loan Documents as
and when the same shall become due and payable, whether at stated maturity, by
acceleration or otherwise, according to the terms hereof and thereof. In case of
failure by the Borrowing Subsidiary punctually to pay any indebtedness or other
Obligations guaranteed hereby, the Company hereby unconditionally agrees to make
such payment or to cause such payment to be made punctually as and when the same
shall become due and payable, whether at stated maturity, by acceleration or
otherwise, and as if such payment were made by the defaulting Borrower.
Section 10.2. Guarantee Unconditional. The obligations of the
Company as a guarantor under this Section 10 shall be unconditional and absolute
and, without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
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(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Borrowing Subsidiary under
this Agreement or any other Loan Document or by operation of law or
otherwise;
(b) any modification or amendment of or supplement to this
Agreement or any other Loan Document;
(c) any change in the corporate existence, structure or
ownership of, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting, the Borrowing Subsidiary or its assets,
or any resulting release or discharge of any obligation of the
Borrowing Subsidiary contained in any Loan Document;
(d) the existence of any claim, set-off or other rights which
either Borrower may have at any time against the Bank or any other
Person, whether or not arising in connection herewith;
(e) any failure to assert, or any assertion of, any claim or
demand or any exercise of, or failure to exercise, any rights or
remedies against the Borrowing Subsidiary or any other Person or
Property;
(f) any application of any sums by whomsoever paid or
howsoever realized to any obligation of either Borrower, regardless of
what obligations of the Borrowing Subsidiary remain unpaid;
(g) any invalidity or unenforceability relating to or against
the Borrowing Subsidiary for any reason of this Agreement or of any
other Loan Document or any provision of applicable law or regulation
purporting to prohibit the payment by the Borrowing Subsidiary of the
principal of or interest on Note Two, or any other amount payable by it
under the Loan Documents; or
(h) any other act or omission to act or delay of any kind by
the Bank or any other Person or any other circumstance whatsoever that
might, but for the provisions of this paragraph, constitute a legal or
equitable discharge of the obligations of the Company under this
Section 10.
Section 10.3. Discharge Only Upon Payment in Full; Reinstatement in
Certain Circumstances. The Company's obligations under this Section 10 shall
remain in full force and effect until the Commitment of the Bank to extend
credit hereunder is terminated and the principal of and interest on Note Two and
all other amounts payable by each Borrower under this Agreement and all other
Loan Documents shall have been paid in full. If at any time any payment of the
principal of or interest on Note Two or any other amount payable by the
Borrowing Subsidiary under the Loan Documents is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of the
Borrowing Subsidiary or otherwise, the Company's obligations under this Section
10 with respect to such payment shall be reinstated at such time as though such
payment had become due but had not been made at such time.
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Section 10.4. Waivers. The Company irrevocably waives acceptance
hereof, presentment, demand, protest and any notice not provided for herein, as
well as any requirement that at any time any action be taken by the Bank or any
other Person against the Borrowing Subsidiary or any other Person.
Section 10.5. Subrogation and Contribution. Unless and until the
Obligations have been fully paid and satisfied and the Commitment has
terminated, the Company hereby agrees it will not exercise any claim or other
right it may now or hereafter acquire against the Borrowing Subsidiary that
arises from the existence, payment, performance or enforcement of such
Borrower's obligations under this Section 10 or any other Loan Document,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution, indemnification, or any right to participate in any
claim or remedy of the Bank or any other holder of any of the Obligations
against the Borrowing Subsidiary whether or not such claim, remedy or right
arises in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from the Borrowing Subsidiary directly
or indirectly, in cash or other Property or by set-off or in any other manner,
payment or security on account of such claim or other right (other than
reimbursement claims against the Borrowing Subsidiary for amounts advanced for
its account).
Section 10.6. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by the Borrowing Subsidiary under this Agreement
or any other Loan Document is stayed upon the insolvency, bankruptcy or
reorganization of such Borrower, all such amounts otherwise subject to
acceleration under the terms of this Agreement or the other Loan Documents shall
nonetheless be payable by the Company hereunder forthwith on demand by the Bank.
SECTION 11. MISCELLANEOUS.
Section 11.1. Non-Business Day. If any payment hereunder becomes due
and payable on a day which is not a Business Day, the due date of such payment
shall be extended to the next succeeding Business Day on which date such payment
shall be due and payable. In the case of any payment of principal falling due on
a day which is not a Business Day, interest on such principal amount shall
continue to accrue during such extension at the rate per annum then in effect,
which accrued amount shall be due and payable on the next scheduled date for the
payment of interest.
Section 11.2. No Waiver, Cumulative Remedies. No delay or failure on
the part of the Bank or on the part of the holder of the Obligations in the
exercise of any power or right shall operate as a waiver thereof or as an
acquiescence in any default, nor shall any single or partial exercise of any
power or right preclude any other or further exercise thereof or the exercise of
any other power or right. The rights and remedies hereunder of the Bank and of
the holder of the Obligations are cumulative to, and not exclusive of, any
rights or remedies which any of them would otherwise have.
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Section 11.3. Amendments, Etc. No amendment, modification,
termination or waiver of any provision of this Agreement or of any other Loan
Document, nor consent to any departure by either Borrower therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Bank and the relevant Borrower. No notice to or demand on any Borrower in any
case shall entitle such Borrower to any other or further notice or demand in
similar or other circumstances.
Section 11.4. Costs and Expenses. The Borrowers jointly and
severally agree to pay on demand the costs and expenses of the Bank in
connection with the negotiation, preparation, execution and delivery of this
Agreement, the other Loan Documents and the other instruments and documents to
be delivered hereunder or thereunder (which costs and expenses in the case of
the negotiation, preparation, execution and delivery of this Agreement shall be
limited to $10,000), and in connection with the transactions contemplated hereby
or thereby, and in connection with any consents hereunder or waivers or
amendments hereto or thereto, including the fees and expenses of counsel for the
Bank with respect to all of the foregoing (whether or not the transactions
contemplated hereby are consummated). The Borrowers further jointly and
severally agree to pay to the Bank or any other holder of the Obligations all
costs and expenses (including court costs and reasonable attorneys' fees), if
any, incurred or paid by the Bank or any other holder of the Obligations in
connection with any Default or Event of Default or in connection with the
enforcement of this Agreement or any of the other Loan Documents or any other
instrument or document delivered hereunder or thereunder. The obligations of the
Borrowers under this Section shall survive the termination of this Agreement.
Section 11.5. Documentary Taxes. The Borrowers jointly and severally
agree to pay on demand any documentary, stamp or similar taxes payable in
respect of this Agreement or any other Loan Document, including interest and
penalties, in the event any such taxes are assessed, irrespective of when such
assessment is made and whether or not any credit is then in use or available
hereunder.
Section 11.6. Survival of Representations. All representations and
warranties made herein or in any of the other Loan Documents or in certificates
given pursuant hereto or thereto shall survive the execution and delivery of
this Agreement and the other Loan Documents, and shall continue in full force
and effect with respect to the date as of which they were made as long as any
credit is in use or available hereunder.
Section 11.7. Notices. Except as otherwise specified herein, all
notices hereunder shall be in writing (including, without limitation, notice by
telecopy) and shall be given to the relevant party at its address or telecopier
number set forth below, or such other address or telecopier number as such party
may hereafter specify by notice to the other given by United States certified or
registered mail, by telecopy or by other telecommunication device capable of
creating a written record of such notice and its receipt.
Notices hereunder shall be addressed:
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to the Company at: to the Bank at:
Midwest Centre ▇.▇. ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section and a confirmation of such telecopy has been received
by the sender, (ii) if given by mail, 5 days after such communication is
deposited in the mail, certified or registered with return receipt requested,
addressed as aforesaid or (iii) if given by any other means, when delivered at
the addresses specified in this Section; provided that any notice given pursuant
to Section 1 or Section 2 hereof shall be effective only upon receipt.
Section 11.8. Confidentiality. The Bank shall hold in confidence any
nonpublic information delivered or made available to it by the Company or any
Subsidiary or their respective officers, employees and independent public
accountants. The foregoing to the contrary notwithstanding, nothing herein shall
prevent the Bank from disclosing any information delivered or made available to
it by the Company or any Subsidiary (i) to any other Person if reasonably
incidental to the administration of the credit contemplated hereby, (ii) upon
the order of any court or administrative agency, (iii) upon the request or
demand of any regulatory agency or authority, (iv) which has been publicly
disclosed other than as a result of a disclosure by the Bank which is not
permitted by this Agreement, (v) in connection with any litigation to which the
Bank or any of its Affiliates may be a party, along with the Company, any
Subsidiary or any of their respective Affiliates, (vi) to the extent reasonably
required in connection with the exercise of any right or remedy under this
Agreement, the other Loan Documents or otherwise, (vii) to the Bank's legal
counsel and financial consultants and auditors, and (viii) to any actual or
proposed participant or assignee of all or part of its rights under the credit
contemplated hereby provided such participant or assignee agrees in writing to
be bound by the duty of confidentiality under this Section to the same extent as
if it were the Bank hereunder.
Section 11.9. Headings. Section headings used in this Agreement are
for convenience of reference only and are not a part of this Agreement for any
other purpose.
Section 11.10. Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 11.11. Construction. The parties hereto acknowledge and agree
that this Agreement and the other Loan Documents shall not be construed more
favorably in favor of one than the other based upon which party drafted the
same, it being acknowledged that all
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parties hereto contributed substantially to the negotiation of this Agreement
and the other Loan Documents. Nothing contained herein shall be deemed or
construed to permit any act or omission which is prohibited by the terms of any
of the other Loan Documents, the covenants and agreements contained herein being
in addition to and not in substitution for the covenants and agreements
contained in the other Loan Documents.
Section 11.12. Counterparts. This Agreement may be executed in any
number of counterparts, and by different parties hereto on separate counterpart
signature pages, and all such counterparts taken together shall be deemed to
constitute one and the same instrument.
Section 11.13. Binding Nature, Governing Law, Etc. This Agreement
shall be binding upon each Borrower and its successors and assigns, and shall
inure to the benefit of the Bank and the benefit of its successors and assigns,
including any subsequent holder of the Obligations. Neither Borrower may assign
its rights hereunder without the written consent of the Bank. This Agreement
constitutes the entire understanding of the parties with respect to the subject
matter hereof and any prior agreements, whether written or oral, with respect
thereto are superseded hereby. THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE
PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF ILLINOIS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAWS.
Section 11.14. Submission to Jurisdiction; Waiver of Jury Trial. Each
Borrower hereby submits to the nonexclusive jurisdiction of the United States
District Court for the Northern District of Illinois and of any Illinois State
court sitting in the City of Chicago for purposes of all legal proceedings
arising out of or relating to this Agreement, the other Loan Documents or the
transactions contemplated hereby or thereby. Each Borrower irrevocably waives,
to the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such proceeding brought in such
a court and any claim that any such proceeding brought in such a court has been
brought in an inconvenient forum. EACH BORROWER AND THE BANK HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.
[SIGNATURE PAGE TO FOLLOW]
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Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall constitute a contract between us for the uses and purposes
hereinabove set forth.
Dated as of this 30th day of January, 1998.
MIDWEST BANC HOLDINGS, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Title President
--------------------------------
MIDWEST ONE MORTGAGE SERVICES, INC.
By
-------------------------------------
Name
--------------------------------
Title
--------------------------------
Accepted and agreed to at Chicago, Illinois as of the day and year last
above written.
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By
-------------------------------------
Name
---------------------------------
Title
--------------------------------
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Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall constitute a contract between us for the uses and purposes
hereinabove set forth.
Dated as of this 30th day of January, 1998.
MIDWEST BANC HOLDINGS, INC.
By
-------------------------------------
Name
---------------------------------
Title
--------------------------------
MIDWEST ONE MORTGAGE SERVICES, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Title President
--------------------------------
Accepted and agreed to at Chicago, Illinois as of the day and year last
above written.
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By
-------------------------------------
Name
---------------------------------
Title
--------------------------------
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EXHIBIT A
REVOLVING NOTE ONE
Chicago, Illinois
$25,000,000.00 January 30, ▇▇▇▇
▇▇ the Termination Date, for value received, the undersigned, MIDWEST
BANC HOLDINGS, INC., a Delaware corporation (the "Borrower"), hereby promises to
pay to the order of ▇▇▇▇▇▇ TRUST AND SAVINGS BANK (the "Bank") at its office at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, the principal sum of (i) TWENTY FIVE
MILLION AND NO/100 Dollars ($25,000,000.00), or (ii) such lesser amount as may
at the time of the maturity hereof, whether by acceleration or otherwise, be the
aggregate unpaid principal amount of all Loans owing from the Borrower to the
Bank under the Revolving Credit provided for in the Credit Agreement hereinafter
mentioned.
This Note evidences Loans made or to be made to the Borrower by the
Bank under the Revolving Credit provided for under that certain Credit Agreement
dated as of January 30, 1998, between the Borrower, Midwest One Mortgage
Services, Inc., and the Bank (said Credit Agreement, as the same may be amended,
modified or restated from time to time, being referred to herein as the "Credit
Agreement") and the Borrower hereby promises to pay interest at the office
described above on such Loans evidenced hereby at the rates and at the times and
in the manner specified therefor in the Credit Agreement.
Each Loan made under the Revolving Credit against this Note, any
repayment of principal hereon, the status of each such Loan from time to time as
part of the Base Rate Portion or a LIBOR Portion and, in the case of any LIBOR
Portion, the interest rate and Interest Period applicable thereto shall be
endorsed by the holder hereof on a schedule to this Note or recorded on the
books and records of the holder hereof (provided that such entries shall be
endorsed on a schedule to this Note prior to any negotiation hereof). The
Borrower agrees that in any action or proceeding instituted to collect or
enforce collection of this Note, the entries endorsed on a schedule to this Note
or recorded on the books and records of the holder hereof shall be prima facie
evidence of the unpaid principal balance of this Note, the status of each such
Loan from time to time as part of the Base Rate Portion or a LIBOR Portion and,
in the case of any LIBOR Portion, the interest rate and Interest Period
applicable thereto.
This Note is issued by the Borrower under the terms and provisions of
the Credit Agreement and is secured by, among other things, the Collateral
Documents, and this Note and the holder hereof are entitled to all of the
benefits and security provided for thereby or referred to therein, to which
reference is hereby made for a statement thereof. This Note may be declared to
be, or be and become, due prior to its expressed maturity, voluntary prepayments
may be made hereon, and certain prepayments are required to be made hereon, all
in the events, on the terms and with the effects provided in the Credit
Agreement. All
47
capitalized terms used herein without definition shall have the same meanings
herein as such terms are defined in the Credit Agreement.
The Borrower hereby promises to pay all costs and expenses (including
court costs and reasonable attorneys' fees) suffered or incurred by the holder
hereof in collecting this Note or enforcing any rights in any collateral
therefor. The Borrower hereby waives presentment for payment and demand. THIS
NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE INTERNAL LAWS
OF THE STATE OF ILLINOIS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
MIDWEST BANC HOLDINGS, INC.
By
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Name
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Title
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48
EXHIBIT B
REVOLVING CREDIT NOTE
Chicago, Illinois
$5,000,000.00 January 30, ▇▇▇▇
▇▇ the Termination Date, for value received, the undersigned, MIDWEST
ONE MORTGAGE SERVICES, INC., an Illinois corporation (the "Borrower"), hereby
promises to pay to the order of ▇▇▇▇▇▇ TRUST AND SAVINGS BANK (the "Bank") at
its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, the principal sum of
(i) FIVE MILLION AND NO/100 Dollars ($5,000,000.00), or (ii) such lesser amount
as may at the time of the maturity hereof, whether by acceleration or otherwise,
be the aggregate unpaid principal amount of all Loans owing from the Borrower to
the Bank under the Revolving Credit provided for in the Credit Agreement
hereinafter mentioned.
This Note evidences Loans made or to be made to the Borrower by the
Bank under the Revolving Credit provided for under that certain Credit Agreement
dated as of January 30, 1998, between the Borrower, Midwest Banc Holdings, Inc.
and the Bank (said Credit Agreement, as the same may be amended, modified or
restated from time to time, being referred to herein as the "Credit Agreement")
and the Borrower hereby promises to pay interest at the office described above
on such Loans evidenced hereby at the rates and at the times and in the manner
specified therefor in the Credit Agreement.
Each Loan made under the Revolving Credit against this Note, any
repayment of principal hereon, the status of each such Loan from time to time as
part of the Base Rate Portion or a LIBOR Portion and, in the case of any LIBOR
Portion, the interest rate and Interest Period applicable thereto shall be
endorsed by the holder hereof on a schedule to this Note or recorded on the
books and records of the holder hereof (provided that such entries shall be
endorsed on a schedule to this Note prior to any negotiation hereof). The
Borrower agrees that in any action or proceeding instituted to collect or
enforce collection of this Note, the entries endorsed on a schedule to this Note
or recorded on the books and records of the holder hereof shall be prima facie
evidence of the unpaid principal balance of this Note, the status of each such
Loan from time to time as part of the Base Rate Portion or a LIBOR Portion and,
in the case of any LIBOR Portion, the interest rate and Interest Period
applicable thereto.
This Note is issued by the Borrower under the terms and provisions of
the Credit Agreement and is secured by, among other things, the Collateral
Documents, and this Note and the holder hereof are entitled to all of the
benefits and security provided for thereby or referred to therein, to which
reference is hereby made for a statement thereof. This Note may be declared to
be, or be and become, due prior to its expressed maturity, voluntary prepayments
may be made hereon, and certain prepayments are required to be made hereon, all
in the events, on the terms and with the effects provided in the Credit
Agreement. All
49
capitalized terms used herein without definition shall have the same meanings
herein as such terms are defined in the Credit Agreement.
The Borrower hereby promises to pay all costs and expenses (including
court costs and reasonable attorneys' fees) suffered or incurred by the holder
hereof in collecting this Note or enforcing any rights in any collateral
therefor. The Borrower hereby waives presentment for payment and demand. THIS
NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE INTERNAL LAWS
OF THE STATE OF ILLINOIS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
MIDWEST ONE MORTGAGE SERVICES, INC.
By
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Name
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Title
--------------------------------
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