EXHIBIT 10(C)
Draft of October 31, 1997
Marked to Show Changes From
Draft of September 15, 1997
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
Draft of 10/31/97
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Bank Loan Agreement
Dated as of ______________, 1997
Between
▇▇▇▇▇▇ Trust and Savings Bank
as Borrower,
and
▇▇▇▇▇▇ Preferred Capital Corporation
as Lender
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Table of Contents
Section Page
Parties.................................................................... 1
Article I Definitions and Accounting Terms......................... 1
Section 1.01. Certain Defined Terms.................................. 1
Section 1.02. Computation of Time Periods............................ 5
Section 1.03. Accounting Terms....................................... 5
Article II Amount and Terms of the Loans............................ 5
Section 2.01. The Loans.............................................. 5
Section 2.02. Use of Proceeds........................................ 6
Section 2.03. Repayment of Principal................................. 6
Section 2.04. Prepayment............................................. 6
Section 2.05. Interest............................................... 7
Section 2.06. Payments and Computations.............................. 7
Section 2.07. Security for the Loan.................................. 7
Section 2.08. Late Charge............................................ 8
Section 2.09. Taxes.................................................. 8
Section 2.10. Loan to Principal Ratio................................ 8
Article III Conditions of Lending.................................... 9
Section 3.01. Conditions Precedent to Closing........................ 9
Article IV Representations and Warrantees........................... 10
Section 4.01. Representations and Warranties of Borrower............. 10
Article V Covenants of Borrower.................................... 12
Section 5.01. Affirmative Covenants.................................. 12
Section 5.02. Negative Covenants..................................... 13
Section 5.03. Reporting Requirements................................. 13
Article VI Events of Default......................................... 14
Article VII Miscellaneous............................................ 16
Section 7.01. Amendments, Etc........................................ 16
Section 7.02. Notices, Etc........................................... 16
Section 7.03. No Waiver; Remedies.................................... 16
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Section 7.04. Costs, Expenses, Indemnity............................. 16
Section 7.05. Binding Effect......................................... 18
Section 7.06. Non Recourse........................................... 18
Section 7.07. Execution in Counterparts.............................. 18
Section 7.08. Jurisdiction, Etc...................................... 18
Section 7.09. Governing Law.......................................... 19
Section 7.10. Waiver of Jury Trial................................... 19
Section 7.11. Compliance with Usury Laws............................. 19
Section 7.12. Exhibits............................................... 19
Section 7.13. Further Assurances..................................... 19
Exhibits
Exhibit A The Loan
Exhibit B Form Note
Exhibit C Mortgage Loans
Exhibit D Form of Mortgage Loan Assignment Agreement
Exhibit E Mortgage Loan Balances
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Bank Loan Agreement
Bank Loan Agreement (this "Agreement") dated as of ____________, 1997
between ▇▇▇▇▇▇ Trust and Savings Bank, an Illinois banking corporation
("Borrower"), and ▇▇▇▇▇▇ Preferred Capital Corporation, a Maryland corporation
(the "Lender").
All capitalized terms used herein shall have the respective meanings set
forth in Section 1.01 hereof.
Witnesseth:
Whereas, ▇▇▇▇▇▇▇▇ has requested that Lender lend to Borrower an aggregate
amount of $________________.
Whereas, Lender has indicated its willingness to lend such amount on the
terms and conditions of this Agreement.
Now, Therefore, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
Article I
Definitions and Accounting Terms
Section 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person; provided, however,
that the Company shall not be considered an Affiliate of any Person. For
purposes of this definition, the term "control" (including the terms
"controlling," "controlled by" and "under common control with") of a
Person means the possession, direct or indirect, of the power to vote 10%
or more of the Voting Stock of such Person or to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of Voting Stock, by contract or otherwise; provided, however,
that the Company should not be considered an Affiliate of any Person.
"Agreement" has the meaning specified in the first paragraph of this
Agreement.
"Borrower" has the meaning specified in the first paragraph of this
Agreement.
"Business Day" means a day of the year on which banks are not required
or authorized by law to close in Illinois and New York.
"Collateral" means all property referred to as "Collateral" in the
Collateral Documents and all other property that is or is intended to be
subject to any Lien in favor of Lender.
"Collateral Documents" means the Mortgage Loan Assignment Agreement,
and any other agreement that creates or purports to create a Lien in favor
of Lender to secure the Loan and, collectively, all such agreements for the
Loan.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given
or time elapse or both.
"Environmental Action" means any action, suit, demand, demand letter,
claim, notice of noncompliance or violation, notice of liability or
potential liability, investigation, proceeding, consent order or consent
agreement relating in any way to any Environmental Law, any Environmental
Permit or Hazardous Material or arising from alleged injury or threat to
health, safety or the environment, including, without limitation, (a) by
any governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages and (b) by any governmental
or regulatory authority or third party for damages, contribution,
indemnification, cost, recovery, compensation or injunctive relief.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or judicial or agency interpretation, policy or guidance
relating to pollution or protection of the environment, health, safety or
natural resources, including, without limitation, those relating to the
use, handling, transportation, treatment, storage, disposal, release or
discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Events of Default" has the meaning specified in Section 6.01.
"Excess Loan Amount" has the meaning specified in Section 2.10.
"Fiscal Year" means a fiscal year of Borrower ending on December 31 in
any calendar year or such other fiscal year as Borrower may select from
time to time in accordance with the terms of this Agreement.
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"GAAP" means generally accepted accounting principles consistently
applied and consistent with those applied in the preparation of the
financial statements referred to in Section 5.03.
"Hazardous Materials" means (a) refined petroleum products, by-
products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (b) any other
chemicals, materials or substances designated, classified or regulated as
hazardous or toxic or as a pollutant or contaminant under any Environmental
Law.
"Indemnified Party" has the meaning specified in Section 7.04(b).
"Interest Payment Date" means, with respect to the Loan and with
respect to each Interest Period, the fifteenth (15th) day of the calendar
month immediately following such Interest Period; provided, however, that
if such Interest Payment Date is not a Business Day, such Interest Payment
Date shall be the immediately succeeding Business Day.
"Interest Period" means each calendar month or portion thereof during
the term of the Loan or, in the case of the initial Interest Period, the
Closing Date through the last day of the calendar month in which the
Closing Date occurs.
"Interest Rate" has the meaning specified in Section 2.05(b).
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated thereunder.
"Laws" means all present and future applicable laws, statutes, codes,
ordinances, orders, judgments, decrees, injunctions, rules, regulations,
determinations, awards and court orders of any federal, state, local or
foreign government, governmental authority, regulatory agency or authority.
"Lender" has the meaning specified in the first paragraph of this
Agreement.
"Lien" means any lien, security interest, mortgage, deed of trust,
priority, negative pledge, charge, conditional sale, title retention
agreement, financial lease or other encumbrance or similar right of others,
or any agreement to give any of the foregoing.
"Loan" means the loan in the original principal amount as set forth on
Exhibit A to be made by Lender to Borrower pursuant to this Agreement
evidenced by the Note and secured by the Mortgage Loans (including the
interest of the Borrower in the real property securing such Mortgage Loans)
as more particularly
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described in the Mortgage Loan Assignment Agreement and the other Loan
Documents.
"Loan Documents" means (i) this Agreement, (ii) the Note, (iii) the
Mortgage Loan Assignment Agreement, (iv) the Collateral Documents, (v) the
Power of Attorney dated the date hereof by ▇▇▇▇▇▇▇▇ appointing Lender as
its attorney-in-fact and (vi) any other written agreement, document or
instrument evidencing, securing or otherwise related to the Loan, and,
collectively, means all of the Loan Documents, in each case as amended or
otherwise modified from time to time.
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means a change which results in a Material
Adverse Effect.
"Material Adverse Effect" means a material adverse effect on (a) the
rights and remedies of Lender under any Loan Document or (b) the ability of
Borrower to perform its obligations under any Loan Document to which it is
or is to be a party.
"Maturity Date" means the date set forth on Exhibit A, or such earlier
date on which the final payment of principal of the Note becomes due and
payable whether by declaration, acceleration, or otherwise.
"Mortgage Loans" means the Mortgage Loans set forth on Exhibit C
hereof.
"Mortgage Loan Assignment Agreement" means that certain mortgage loan
assignment agreement substantially in the form of Exhibit D, dated as of
the date hereof, executed and delivered by Borrower assigning the Mortgage
Loans listed on Exhibit C, including ▇▇▇▇▇▇▇▇'s interest in the real
property securing those Mortgage Loans, to Lender as security for the Loan
made to Borrower, as the same may be amended, replaced, restated,
supplemented or otherwise modified from time to time.
"Mortgage Loan File" means, with respect to each Mortgage Loan, the
loan documents pertaining to such Mortgage Loan and any appraisal,
architectural and engineering report, title report, survey, insurance
policy and other information and materials with respect to the real
property securing such Mortgage Loan.
"Note" means a promissory note of Borrower payable to the order of
Lender, in substantially the form attached hereto as Exhibit B evidencing
the indebtedness of Borrower to Lender resulting from the Loan made by
Lender, as the same may be amended, replaced, restated, supplemented or
otherwise modified from time to time.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated
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association, joint venture or other entity, or a government or any
political subdivision or agency thereof.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency), (b) the interest in the capital or
profits of such partnership, joint venture or limited liability company or
(c) the beneficial interest in such trust or estate is at the time directly
or indirectly owned or controlled by such Person, by such Person and one or
more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries; provided, however, that the Company shall not be considered a
Subsidiary of any Person.
"Taxes" has the meaning specified in Section 2.09(a).
"Voting Stock" means the share capital or capital stock issued by a
corporation, or equivalent interests in any other Person, the holders of
which are ordinarily, in the absence of contingencies, entitled to vote for
the election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening of
such a contingency.
Section 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding."
Section 1.03. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP.
Article II
AMOUNT AND TERMS OF THE LOANS
Section 2.01. The Loans. (a) Subject to the terms and conditions set
forth in this Agreement, ▇▇▇▇▇▇ hereby agrees to make the Loan to Borrower on
the Closing Date, which Loan is in the original principal amount set forth on
Exhibit A and shall mature on the Maturity Date as set forth on Exhibit A.
Borrower hereby agrees to accept the Loan on the Closing Date, subject to and
upon the terms and conditions set forth in this Agreement.
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(b) The Loan shall be recourse only to the Mortgage Loans securing the
Loan as provided in Section 7.06.
(c) ▇▇▇▇▇▇▇▇ may request and receive only one borrowing hereunder with
respect to the Loan and any amount borrowed and repaid or prepaid hereunder in
respect of the Loan may not be reborrowed.
(d) ▇▇▇▇▇▇▇▇'s obligation to pay the principal of and interest on the Loan
shall be evidenced by the Note, duly executed and delivered by Borrower on the
Closing Date in the original principal amount of the Loan and shall mature on
the Maturity Date. The Note shall be payable as to principal, interest and all
other amounts due under the Loan Documents, as specified in this Agreement, the
Note, and the other Loan Documents.
Section 2.02. Use of Proceeds. Borrower shall use the proceeds of the Loan
disbursed to it pursuant to Section 2.01 for general banking purposes.
Section 2.03. Repayment of Principal. Subject to the provisions of
Section 2.04, Borrower shall repay to Lender the outstanding principal amount on
the Loan in full on the Maturity Date.
Section 2.04. Prepayment.
(a) Voluntary. Other than the mandatory prepayments of principal in
accordance with Section 2.04(b), Borrower shall not have the right to prepay (in
whole or in part) the Loan.
(b) Mandatory. (A) In the event of a payment of all or any portion of
principal on any Mortgage Loan (both scheduled payments or unscheduled mandatory
or voluntary prepayments), Borrower shall prepay, on the Interest Payment Date
immediately following the date of such repayment or prepayment, without premium,
a portion of the principal balance of the Loan in an amount equal to the amount
repaid or prepaid, multiplied by eighty percent (80%).
(B) Upon an event of default under any Mortgage Loan, Borrower shall
prepay, without premium, a portion of the principal balance of the Loan in an
amount equal to the outstanding principal balance of such defaulted Mortgage
Loan, multiplied by eighty percent (80%).
(C) Borrower shall prepay, without premium, the Excess Loan Amount (if
any), in accordance with Section 1(e) of the Mortgage Loan Assignment Agreement.
(D) On or prior to _____________, 1997, Borrower shall prepay, without
premium, the Loan in an amount equal to the amount by which the outstanding
principal balance of the Loan, as of the Closing Date, exceeded eighty percent
(80%) of the
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aggregate outstanding principal balances of the Mortgage Loans securing the Loan
as of the Closing Date.
Section 2.05. Interest.
(a) Scheduled Interest. Subject to the provisions of Section 2.05(c),
Borrower shall pay interest at the Interest Rate on the unpaid principal amount
of the Loan from the Closing Date until payment in full of the principal amount
of the Loan. Except as expressly provided herein, all interest on the Loan shall
be paid in arrears on the Interest Payment Date for the relevant Interest
Period.
(b) Interest Rate. The interest rate applicable to the Loan from the
Closing Date and for each Interest Period thereafter shall be a rate per annum
(the "Interest Rate") equal to the lesser of (i) the maximum non-usurious rate
permitted by applicable Law and (ii) the rate set forth opposite the Loan on
Exhibit A hereto.
(c) Default Interest. If Borrower shall default in any payment of principal
or interest in respect of the Loan, or any other amount owed by Borrower under
this Agreement, Borrower shall pay interest on the defaulted amount, payable in
arrears on each Interest Payment Date and on demand, at a rate per annum equal
at all times to the lesser of (x) the maximum non-usurious rate permitted by
applicable Law or (y) three percent (3%) per annum above the Interest Rate until
such defaulted amount has been paid by Borrower, together with interest thereon
at the Default Rate. Payment or acceptance of the increased rate as provided in
this Section is not a permitted alternative for timely payment and shall not
constitute a waiver of a Default or an Event of Default or an amendment to this
Agreement or any other Loan Document and shall not otherwise prejudice or limit
any rights or remedies of Lender.
Section 2.06. Payments and Computations. (a) Borrower shall make each
payment hereunder and under the Note, irrespective of any right of counterclaim
or set-off, not later than 11:00 a.m. (Eastern Standard time) on each Interest
Payment Date in United States dollars to Lender at an account or accounts Lender
may designate from time to time in same day funds.
(b) All computations of interest shall be made by Lender (or any Person
designated by ▇▇▇▇▇▇) on the basis of a year of 360 days consisting of twelve
(12) months of thirty (30) days each. Each determination by Lender (or any
Person designated by ▇▇▇▇▇▇) of interest hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(c) Whenever any payment hereunder or under the Note shall be stated to be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day.
Section 2.07. Security for the Loan. The Loan shall be secured by (a) the
Mortgage Loans including the Borrower's interest in the real property securing
such Mortgage Loans
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as more particularly described in the Mortgage Loan Assignment Agreement, (b)
the other Collateral Documents and (c) the security interests and Liens granted
in this Agreement and in the other Loan Documents.
Section 2.08. Late Charge. Subject to Section 7.11, in the event that any
installment of interest or principal with respect to the Loan shall become
overdue for a period in excess of five (5) days, a "late charge" in an amount
equal to five percent (5%) of the amount so overdue may be charged to Borrower
by ▇▇▇▇▇▇ for the purpose of defraying the expenses incident to handling such
delinquent payments. Subject to Section 7.11, such late charge shall be in
addition to, and not in lieu of, any other remedy Lender may have and is in
addition to ▇▇▇▇▇▇'s right to collect reasonable fees and charges of any agents
or attorneys which ▇▇▇▇▇▇ may employ in connection with any Default.
Section 2.09. Taxes. (a) Any and all payments by Borrower under the Note
shall be made in accordance with Section 2.06 and the terms of the Note, free
and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings imposed by the federal
government, any state government or any political subdivision or taxing
authority thereof or therein, and all liabilities with respect thereto (all such
taxes, levies, imposts, deductions, charges, withholdings and liabilities in
respect of payments hereunder or under the Note being hereinafter referred to as
"Taxes"). If Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable under the Note to Lender (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.09) Lender receives an amount equal to the sum it would have received had no
such deductions been made, (ii) Borrower shall make such deductions and (iii)
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law.
(b) Borrower shall indemnify Lender for and hold it harmless against the
full amount of Taxes, and for the full amount of taxes of any kind imposed by
any jurisdiction on amounts payable under this Section 2.09, imposed on or paid
by ▇▇▇▇▇▇ and any liability (including penalties, additions to tax, interest and
expenses) arising therefrom or with respect thereto. This indemnification shall
be made within thirty (30) days from the date Lender makes written demand
therefor.
(c) Within thirty (30) days after the date of any payment of Taxes,
Borrower shall furnish to Lender, at its address referred to in Section 7.02,
the original or a certified copy of a receipt evidencing such payment.
Section 2.10. Loan to Principal Ratio. On January 31 and July 31 of each
year in which any portion of the Loan is outstanding, Lender may determine with
respect to the Loan the ratio, expressed as a percentage, the numerator of which
is the amount of the outstanding principal balance of the Loan as of such
determination date and the denominator of which is the aggregate outstanding
principal balances of the Mortgage Loans securing the Loan as of such
determination date. In the event the ratio with respect to the
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Loan exceeds eighty percent (80%), Lender may determine the amount by which the
outstanding principal balance of the Loan as of the determination date exceeds
eighty percent (80%) of the aggregate outstanding principal balances of the
Mortgage Loans securing the Loan as of the determination date (the "Excess Loan
Amount") and Borrower shall prepay such amount in accordance with Section
2.04(b).
ARTICLE III
CONDITIONS OF LENDING
Section 3.01. Conditions Precedent to Closing. The obligations of Lender
under this Agreement, including the obligation to make the Loan hereunder, are
subject to the fulfillment by Borrower of the following conditions precedent no
later than the Closing Date:
(a) Lender shall have completed a due diligence investigation of
Borrower and the Mortgage Loans and determined, in its sole discretion, but
without limitation of Borrower's representations and warranties hereunder,
that Borrower and the Mortgage Loans meet ▇▇▇▇▇▇'s underwriting standards,
which due diligence investigation may include, without limitation, review
of the Mortgage Loan File for each Mortgage Loan.
(b) Lender shall have received the following, each in form and
substance satisfactory to Lender (unless otherwise specified):
(i) The Note to the order of ▇▇▇▇▇▇, duly executed by
▇▇▇▇▇▇▇▇,
(ii) The Mortgage Loan Assignment Agreement duly executed by
Borrower sufficient to grant Lender a valid security interest in the
Mortgage Loans;
(iii) An opinion of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, counsel for ▇▇▇▇▇▇▇▇,
as to the enforceability of this Agreement and the Loan Documents,
subject to customary conditions and limitations and otherwise in form
and substance reasonably satisfactory to Lender;
(iv) Certified copies of the resolutions of the Board of
Directors of ▇▇▇▇▇▇▇▇ approving and authorizing the execution and
delivery and performance of all Loan Documents required to be executed
and delivered by Borrower with respect to this Agreement and the other
Loan Documents;
(v) A copy of the organizational documents of Borrower
together with each amendment thereto, and, where applicable, certified
by the Illinois Commissioner of Banks and Trust Companies as being a
true and correct copy thereof;
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(vi) A Good Standing Certificate in respect of Borrower issued by
the Illinois Commissioner of Banks and Trust Companies dated
reasonably near to the Closing Date; and
(vii) A certificate of the Secretary or an Assistant Secretary of
Borrower certifying the names and true signatures of the officers of
Borrower authorized to sign this Agreement and each other Loan
Document to which ▇▇▇▇▇▇▇▇ is or is to be a party and the other
documents to be delivered hereunder and thereunder.
(c) The representations and warranties of Borrower contained in each
Loan Document shall be true and correct on and as of the Closing Date,
before and after giving effect to the making of the Loan by ▇▇▇▇▇▇ and to
the application of the proceeds therefrom, as though made on and as of such
date.
(d) No event shall have occurred and be continuing, or would result
from the making of the Loan by ▇▇▇▇▇▇ or from the application of the
proceeds therefrom, that constitutes a Default.
Article IV
Representations and Warranties
Section 4.01. Representations and Warrant of Borrower. Borrower
represents and warrants as follows:
(a) Borrower (i) is a bank duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, (ii)
is duly qualified and in good standing in each other jurisdiction in which
the conduct of its business requires it to so qualify or be licensed except
where the failure to so qualify or be licensed would not have a Material
Adverse Effect and (iii) has all requisite power and authority (including,
without limitation, all governmental licenses, permits and other approvals)
to own the Mortgage Loans and to carry on its business as now conducted and
as proposed to be conducted.
(b) The execution, delivery and performance by Borrower of this
Agreement and each other Loan Document to which it is or is to be a party,
and the consummation of the transactions contemplated hereby, are within
Borrower's corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene Borrower's charter or by-laws,
(ii) violate any applicable Law or governmental regulation or permit
applicable to Borrower, (iii) conflict with or result in the breach of, or
constitute a default under, any contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting
Borrower, or (iv) except for the Liens created under the Loan Documents,
result in or require the creation or imposition of any Lien upon or with
respect to any of the properties of Borrower. Borrower is not in violation
of any such law, rule,
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regulation, order, writ, judgment, injunction, decree, determination or
award or in breach of any such contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument, the violation or breach
of which is reasonably likely to have a Material Adverse Effect.
(c) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body or any
other third party is required for (i) the due execution, delivery,
recordation, filing or performance by Borrower of this Agreement or any
other Loan Document to which it is or is to be a party, or for the
consummation of the transactions contemplated hereby, (ii) the grant by
Borrower of the Liens granted by it pursuant to the Collateral Documents,
(iii) the perfection or maintenance of the Liens created by the Collateral
Documents (including the first priority nature thereof), or (iv) the
exercise by Lender of its rights under the Loan Documents or the remedies
in respect of the Collateral pursuant to the Collateral Documents.
(d) This Agreement and each other Loan Document has been duly
executed and delivered by ▇▇▇▇▇▇▇▇. This Agreement and each other Loan
Document to which Borrower is a party is the legal, valid and binding
obligation of Borrower, enforceable against Borrower in accordance with its
terms except as enforcement may, be limited by bankruptcy, insolvency or
other similar laws affecting the rights of creditors generally and by
principals of equity.
(e) There is no action, suit, investigation, litigation or
proceeding affecting Borrower or any of its Subsidiaries, including any
Environmental Action, pending or threatened before any court, governmental
agency or arbitrator that (i) would be reasonably likely to have a Material
Adverse Effect or (ii) purports to affect the legality, validity or
enforceability of this Agreement or any other Loan Document or the
consummation of the transactions contemplated hereby.
(h) No proceeds of the Loan will be used to acquire any equity
security of a class that is registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended.
(i) Borrower is not engaged in the business of extending credit for
the purpose of purchasing or carrying Margin Stock, and no proceeds of the
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 Margin Stock.
(j) Borrower is not (i) an "investment company" or a company
"controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended, (ii) a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of either a
"holding company" or a "subsidiary company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or (iii) subject to
any other Law that purports to restrict or regulate its ability to borrow
money.
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(k) Borrower and each of its Subsidiaries and Affiliates has filed,
has caused to be filed or has been included in all material tax returns
(federal, state, local and foreign) required to be filed and has paid all
taxes shown thereon to be due, together with applicable interest and
penalties.
(l) No proceeds of the Loan will be used to acquire any security in
any transaction which is subject to Sections 13 and 14 of the Securities
Exchange Act of 1934, as amended.
(m) Borrower (i) is the sole owner of the Mortgage Loans and such
ownership is free and clear of any lien, security interest or other
encumbrance, (ii) has not granted, and will not grant, any participation or
other interest or assignment, other option or rights to the Mortgage Loans,
other than pursuant to this Agreement and the other Loan Documents, and
(iii) has not pledged, collaterally assigned or otherwise hypothecated any
interest therein, and will at no time do so or agree to do so, other than
pursuant to this Agreement and the other Loan Documents.
(n) Attached hereto as Exhibit C is a complete list of all Mortgage
Loans, duly executed originals of which have previously been delivered to
______, as custodian for Lender, and (i) the Mortgage Loans have not been
amended or modified and are in full force and effect, (ii) to the knowledge
of Borrower, there has not occurred an event which, if uncured or
uncorrected, constitutes or would constitute, with the giving of notice,
passage of time or both, a material default by the mortgagor under any such
Mortgage Loan, (iii) there has not occurred an event which, if uncured or
uncorrected, constitutes or would constitute, with the giving of notice,
passage of time or both, a material default by the Borrower under any such
Mortgage Loan, and (iv) there are no provisions in the Mortgage Loans
restricting the assignability of the lender's rights thereunder.
Article V
Covenants of Borrower
Section 5.01. Affirmative Covenants. So long as any portion of the Loan
shall remain unpaid, Borrower will:
(a) Payment of Taxes, Etc. Pay and discharge, before the same shall
become delinquent, (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property and (ii) all lawful claims
that, if unpaid, might by law become a Lien upon any of its property
provided, however, that Borrower shall not be required to pay or discharge
any such tax, assessment, charge or claim that is being contested in good
faith and by proper proceedings and as to which appropriate reserves are
being maintained, unless and until any Lien resulting therefrom attaches to
its property and becomes enforceable against its other creditors;
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(b) Preservation of Existence, Etc. Preserve and maintain its
existence, legal structure, legal name, rights (charter and statutory),
permits, licenses, approvals, privileges and franchises; provided, however,
that Borrower shall not be required to preserve any legal name, right,
permit, license, approval, privilege or franchise if the Board of Directors
of Borrower shall determine that the preservation thereof is no longer
desirable in the conduct of the business of Borrower, as the case may be,
and that the loss thereof is not disadvantageous in any material respect to
Borrower or Lender;
(c) Keeping of Books. Keep proper books of record and account with
regard to the Mortgage Loans, in which full and correct entries shall be
made of all financial transactions and the assets and business of Borrower
in accordance with generally accepted accounting principles in effect from
time to time;
(d) Performance by ▇▇▇▇▇▇▇▇. Observe, perform and satisfy, in a
timely manner, all the terms, provisions, covenants and conditions of, and
pay when due all costs, fees and expenses to the extent required under the
Loan Documents and delivered by, or applicable to Borrower; and
(e) Assistance. Render any assistance that ▇▇▇▇▇▇ may reasonably
request to perfect ▇▇▇▇▇▇'s security interest in, and enforce Lender's
rights under, any Mortgage Loan or to otherwise enable Lender to qualify as
a real estate investment trust under the Internal Revenue Code.
Section 5.02. Negative Covenants. So long as any portion of the Loan
shall remain unpaid, Borrower will not, at any time:
(a) Diminish Value of Mortgage Loans. Take any affirmative action,
or expressly consent to any action which would have the effect of impairing
or diminishing the value of the Mortgage Loans or the priority of the Liens
or security interest in the collateral securing such Mortgage Loans;
(b) Sale of Mortgage Loans. Sell or enter into an agreement to sell
all or a portion of the Mortgage Loans or interest therein, other than
pursuant to the Loan Documents, or release any borrower or guarantor or any
portion of the collateral, except as expressly provided in the Mortgage
Loans, or pledge, collaterally assign or otherwise hypothecate any interest
in the Mortgage Loan, other than pursuant to the Loan Documents;
(c) Change in Nature of Business. Make any material change in the
nature of its business as carried on at the date hereof;
(d) ERISA. Engage in any transaction which would cause any
obligation, or action taken or to be taken, hereunder (or the exercise by
Lender of any of its rights under this Agreement and the Loan Documents) to
be a nonexempt (under a statutory or administrative class exemption)
prohibited transaction under ERISA; or
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(e) Domicile. Take any action to change its place of incorporation,
residence or domicile (other than with the prior written consent of
▇▇▇▇▇▇).
Section 5.03. Reporting Requirements. So long as any portion of the Loan
shall remain unpaid, Borrower will furnish to Lender:
(a) Default Notice. As soon as possible and in any event within
five days after the occurrence of each Default or any event, development or
occurrence reasonably likely to have a Material Adverse Effect continuing
on the date of such statement, a statement of Borrower setting forth
details of such Default and the action that ▇▇▇▇▇▇▇▇ has taken and proposes
to take with respect thereto;
(b) Annual Financial. As soon as available and in any event within
120 days after the end of each Fiscal Year, a balance sheet of Borrower as
of the end of such Fiscal Year and a statement of income and a statement of
cash flows of Borrower for such Fiscal Year, in each case accompanied by an
opinion acceptable to Lender of independent public accountants of
recognized standing acceptable to Lender, and a certificate of the chief
financial officer of Borrower stating that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement as
to the nature thereof and the action that ▇▇▇▇▇▇▇▇ has taken and proposes
to take with respect thereto;
(c) Litigation. Promptly after the commencement thereof, notice of
all actions, suits, investigations, litigation and proceedings before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which either individually or in the
aggregate is likely to have a Material Adverse Effect on Borrower, and
promptly after the occurrence thereof, notice of any adverse change in the
status or the financial effect on Borrower; and
(d) Other Information. Such other information respecting the
business. condition (financial or otherwise), operations, performance,
properties or prospects of Borrower as Lender may from time to time
reasonably request.
Article VI
Events of Default
Section 6.01. Events of Default. With respect to the Loan, if any of the
following events ("Events of Default") shall occur and be continuing:
(a) Borrower shall fail to make any payment of principal of or
interest on the Loan when the same shall become due and payable; or
(b) Borrower fails to pay all or any portion of any other amount
payable by Borrower pursuant to this Agreement; or
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(c) any representation or warranty made by Borrower under or in
connection with any Loan Document shall prove to have been incorrect in any
material respect when made; or
(d) any provision of the organizational documents affecting the
purpose for which Borrower is formed is amended or modified in any manner
which is reasonably likely to result in a Material Adverse Effect, or if
Borrower fails to perform or enforce the provisions of the organizational
documents in a manner that is reasonably likely to result in a Material
Adverse Effect or attempt to dissolve Borrower; or
(e) Borrower shall violate or fail to comply with any of the
provisions of Section 5.02; or
(f) Borrower shall fail to perform any other term, covenant or
agreement contained in any Loan Document on its part to be performed or
observed if such failure shall remain unremedied for 30 days after the
earlier of the date on which (A) Borrower becomes aware of such failure or
(B) written notice thereof shall have been given to such Borrower by
Lender; or
(g) Borrower shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors;
or any proceeding shall be instituted by or against Borrower seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry, of an order for
relief or the appointment of a receiver, trustee or other similar official
for it or for any substantial part of its property and, in the case of any
such proceeding instituted against it (but not instituted by it) that is
being diligently contested by it in good faith, either such proceeding
shall remain undismissed or unstayed for a period of sixty (60) days or any
of the actions sought in such proceeding (including, without limitation,
the entry of an order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, it or any substantial
part of its property) shall occur; or Borrower shall take any corporate
action to authorize any of the actions set forth above in this
subsection (g); or
(h) any material provision of any Loan Document after delivery
thereof shall for any reason cease to be valid and binding on or
enforceable against Borrower, or Borrower shall so state in writing; or
(i) any Collateral Document after delivery thereof shall for any
reason (other than pursuant to the terms thereof) cease to create a valid
and perfected first priority lien on and security interest in the
Collateral purported to be covered thereby,
then, and in any such event (other than an Event of Default described in
subsection (g) above) and at any time, Lender may, in addition to any other
rights or remedies available to
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it pursuant to this Agreement and the other Loan Documents, or at law or in
equity, take such action, without notice or demand, that Lender deems advisable
to protect and enforce its rights against Borrower and in any of the Collateral,
including, without limitation, by notice to Borrower, declare the Note, all
interest thereon and all other amounts payable with respect to the Note under
this Agreement and the other Loan Documents with respect to the Note to be
forthwith due and payable, whereupon the Note, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by Borrower, and may enforce or avail itself of any or all rights or
remedies provided in the Loan Documents against the Borrower and/or the
Collateral (including selling the Mortgage Loans); and upon an Event of Default
described in subsection (g) above, the Note, all such interest and all such
amounts shall automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly
waived by Borrower.
Article VII
Section 7.01. Amendments, Etc. No amendment or waiver of any provision of
this Agreement, the Note or any other Loan Document, nor consent to any
departure by Borrower therefrom, shall in any event be effective unless the same
shall be in writing and signed by ▇▇▇▇▇▇, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.
Section 7.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered,
if to Borrower, at its address at ▇▇▇▇▇▇ Trust and Savings Bank,
______________________________; and if to Lender, at its address at ▇▇▇▇▇▇
Preferred Capital Corporation, _____________ ___________________________ or at
such other address as shall be designated by such parties in a written notice to
Borrower and Lender. All such notices and communications shall, when mailed,
telegraphed, telecopied or telexed, be effective when deposited in the mails,
delivered to the telegraph company, transmitted by telecopier or confirmed by
telex answerback, respectively, except that notices and communications to Lender
pursuant to Article II or III shall not be effective until received by ▇▇▇▇▇▇.
Delivery by telecopier of an executed counterpart of any amendment or waiver of
any provision of this Agreement, the Note or any Exhibit hereto to be executed
and delivered hereunder shall be effective as delivery of a manually executed
counterpart thereof.
Section 7.03. No Waiver; Remedies. No failure on the part of Lender to
exercise, and no delay in exercising, any right hereunder or under the Note or
any other Loan Documents shall operate as a waiver thereof; nor shall any single
or partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right.
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The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
Section 7.04. Costs, Expenses, Indemnity. (a) Borrower agrees to pay on
demand (i) all reasonable costs and expenses of Lender in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Documents (including, without limitation, (A) all due diligence,
collateral review, transportation, computer, duplication, appraisal, Lender
audit, insurance, consultant, search, filing and recording fees and expenses and
(B) the reasonable fees and expenses of counsel for Lender with respect to
advising Lender as to its rights and responsibilities, or the perfection,
protection or preservation of rights or interests, under the Loan Documents,
with respect to negotiations with Borrower or with other creditors of Borrower
or any of its Subsidiaries arising out of any Default or any events or
circumstances that may give rise to a Default and with respect to presenting
claims in or otherwise participating in or monitoring any bankruptcy, insolvency
or other similar proceeding involving creditors' rights generally and any
proceeding ancillary thereto) and (ii) all costs and expenses of Lender in
connection with the enforcement of the Loan Documents, whether in any action,
suit or litigation, and bankruptcy, insolvency or other similar proceeding
affecting creditors' rights generally (including, without limitation, the
reasonable fees and expenses of counsel for Lender).
(b) ▇▇▇▇▇▇▇▇ agrees to indemnify and hold harmless Lender and its
Affiliates and their officers, directors, employees, agents and advisors (each,
an "Indemnified Party") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation or proceeding or preparation of a defense in connection therewith)
the Loan, the actual or proposed use of the proceeds of the Loan, the Loan
Documents or any of the transactions contemplated thereby, except to the extent
such claim, damage, loss, liability or expense is found in a final, non-
appealable judgment by a court of competent jurisdiction to have resulted from
such Indemnified Party's gross negligence or willful misconduct. In the case of
an investigation, litigation or other proceeding to which the indemnity in this
Section 7.04(b) applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by Borrower, its directors,
shareholders or creditors or an Indemnified Party or any Indemnified Party is
otherwise a party thereto and whether or not the transactions contemplated
hereby are consummated. ▇▇▇▇▇▇▇▇ also agrees not to assert any claim against
Lender or any of its Affiliates, or any of their respective officers, directors,
employees, attorneys and agents, on any theory of liability, for special,
indirect, consequential or punitive damages arising out of or otherwise relating
to the Loan, the actual or proposed use of the proceeds of the Loan, the Loan
Documents or any of the transactions contemplated thereby. The foregoing
indemnity and agreement not to assert claims expressly applies, without
limitation, to the negligence (but not gross negligence or willful misconduct)
of the Indemnified Parties.
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(c) If Borrower fails to pay when due any costs, expenses or other
amounts payable by it under any Loan Document, including, without limitation,
fees and expenses of counsel and indemnities, such amount may be paid on behalf
of such Borrower by ▇▇▇▇▇▇, in its sole discretion.
(d) Without prejudice to the survival of any other agreement of Borrower
hereunder or under any other Loan Document, the agreements and obligations of
Borrower contained in Sections 2.08 and 2.09 and this Section 7.04 shall survive
the payment in full of principal, interest and all other amounts payable
hereunder and under any of the other Loan Documents.
Section 7.05. Binding Effect. This Agreement shall become effective when
it shall have been executed by ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ and thereafter shall be
binding upon and inure to the benefit of Borrower and ▇▇▇▇▇▇ and their
respective successors and assigns, except that Borrower shall not have the right
to assign its rights hereunder or any interest herein without the prior written
consent of Lender.
Section 7.06. Non Recourse. Except as otherwise provided herein and in
the other Loan Documents, Lender shall not enforce the liability and obligation
of Borrower to perform and observe the obligations contained herein and in the
other Loan Documents by any action or proceeding wherein a money judgment shall
be sought against Borrower, except that Lender may bring an action or proceeding
to enable Lender to enforce and realize upon this Agreement and the other Loan
Documents, its security interest in the Mortgage Loans given to Lender created
by this Agreement or the other Loan Documents, provided, however, that any
judgment in any action or proceeding shall be enforceable against Borrower only
to the extent of ▇▇▇▇▇▇▇▇'s interest in the Mortgage Loans given to Lender. The
provisions of this Section shall not, however, (i) constitute a waiver, release
or impairment of any obligation evidenced or secured by the Note or the other
Loan Documents, (ii) affect the validity or enforceability of any indemnity made
in connection with this Agreement or the other Loan Documents, or (iii) impair
the enforcement of the Mortgage Loan Assignment Agreement.
Section 7.07. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement. Any delivery of a counterpart signature by telecopier shall,
however, be promptly followed by delivery of a manually executed counterpart.
Section 7.08. Jurisdiction, Etc. (a) Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any court sitting in Illinois, and any
appellate court thereof, in any action or proceeding arising out of or relating
to this Agreement or any of the other Loan Documents to which it is a party, or
for recognition or enforcement of any judgment, and each of the parties hereto
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hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such Illinois
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Agreement or any of the
other Loan Documents in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is a party in any Illinois court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
Section 7.09. Governing Law. This Agreement and the other Loan Documents
shall be governed by, and construed in accordance with, the laws of Illinois.
Section 7.10. Waiver of Jury Trial. To the maximum extent permitted by
law, Borrower and Lender irrevocably waive all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to any of the Loan Documents, the Loan or
the actions of Lender in the negotiation, administration, performance or
enforcement thereof.
Section 7.11. Compliance with Usury Laws. It is expressly stipulated and
agreed to be the intent of ▇▇▇▇▇▇▇▇ and Lender that the Loan comply with the
applicable usury and other laws relating to the Loan Documents now or hereafter
in effect. If any such applicable laws render usurious any amount called for
under any of the Loan Documents, or contracted for, charged or received with
respect to the Loan, or if the acceleration of the maturity of the Loan or if
any prepayment by Borrower results in Borrower having paid any interest in
excess of that permitted by law, then it is the express intent of the parties
that all excess amounts theretofore collected by Lender be refunded to Borrower,
and the provisions of the Loan Documents immediately be deemed reformed and the
amounts thereafter collected under such Loan Documents reduced, without the
necessity of the execution of any new document, so as to comply with the then
applicable law, but so as to permit the recovery of the fullest amount otherwise
called for under the Loan Documents.
Section 7.12. Exhibits. The Exhibits attached hereto are hereby
incorporated herein as a part of this Agreement with the same effect as if set
forth in the body hereof.
Section 7.13. Further Assurances. The Borrower shall, at its sole expense
and without expense to Lender, do such further acts and execute and deliver such
further documents as Lender from time to time may reasonably require for the
purpose of assuring and confirming unto Lender the rights hereby created or
intended now or hereafter so to be, or for carrying out the intention or
facilitating the performance of the terms of any Loan
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Document, or for assuring the validity of any security interest or Lien under
any Collateral Document.
* * *
[Signatures on Next Page]
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In Witness Whereof, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
Borrower:
▇▇▇▇▇▇ Trust and Savings Bank
By
---------------------------------------
Lender:
▇▇▇▇▇▇ Preferred Capital Corporation
By
---------------------------------------
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EXHIBIT A
THE LOAN
Outstanding Amount Maturity Date Interest Rate*
Loan $ 15-Jan-20__ %
___________________
* All rates are quoted on a semi-annual basis.
A-1
EXHIBIT B
FORM OF NOTE
B-1
EXHIBIT C
MORTGAGE LOANS
C-16-1
EXHIBIT D
FORM OF MORTGAGE LOAN ASSIGNMENT AGREEMENT
D-1
EXHIBIT E
MORTGAGE LOAN BALANCE
Outstanding Amount
Mortgage Loan $
E-1