Term Note $25,000,000.00 December 30, 2008
Exhibit 10.2
| $25,000,000.00 | December 30, 2008 |
FOR VALUE RECEIVED, PARKVALE FINANCIAL CORPORATION (the “Borrower”), with an address at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, promises to pay to the order of PNC BANK, NATIONAL
ASSOCIATION (the “Bank”), in lawful money of the United States of America in immediately available
funds at its offices located at One PNC Plaza, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, or at such other location as the Bank may designate from time to time, the principal
sum of TWENTY-FIVE MILLION DOLLARS ($25,000,000.00), together with interest accruing on the
outstanding principal balance from the date hereof, all as provided below.
1. Rate of Interest. A rate per annum equal to (A) LIBOR plus (B) three hundred
and twenty-five (325) basis points (3.25%), for the applicable LIBOR Interest Period.
If the Bank determines (which determination shall be final and conclusive) that, by reason of
circumstances affecting the eurodollar market generally, deposits in dollars (in the applicable
amounts) are not being offered to banks in the eurodollar market for the selected term, or adequate
means do not exist for ascertaining LIBOR, then the Bank shall give notice thereof to the Borrower.
Thereafter, until the Bank notifies the Borrower that the circumstances giving rise to such
suspension no longer exist, (a) the availability of LIBOR shall be suspended, and (b) the interest
rate for all amounts then bearing interest under LIBOR shall be converted at the expiration of the
then current LIBOR Interest Period(s) to the Base Rate.
In addition, if, after the date of this Note, the Bank shall determine (which determination shall
be final and conclusive) that any enactment, promulgation or adoption of or any change in any
applicable law, rule or regulation, or any change in the interpretation or administration thereof
by a governmental authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Bank with any guideline, request or directive (whether
or not having the force of law) of any such authority, central bank or comparable agency shall make
it unlawful or impossible for the Bank to make or maintain or fund loans based on LIBOR, the Bank
shall notify the Borrower. Upon receipt of such notice, until the Bank notifies the Borrower that
the circumstances giving rise to such determination no longer apply, (a) the availability of LIBOR
shall be suspended, and (b) the interest rate on all amounts then bearing interest under LIBOR
shall be converted to the Base Rate either (i) on the last day of the then current LIBOR Interest
Period(s) if the Bank may lawfully continue to maintain or fund loans based on LIBOR to such day,
or (ii) immediately if the Bank may not lawfully continue to maintain loans based on LIBOR.
The foregoing notwithstanding, it is understood that the Borrower may select up to three (3)
different interest periods to apply simultaneously to different portions of the Note bearing
interest under LIBOR. Interest hereunder will be calculated based on the actual number of days
that principal is outstanding over a year of 360 days. In no event will the rate of interest
hereunder exceed the maximum rate allowed by law.
For purposes hereof, the following terms shall have the following meanings:
“Base Rate” shall mean the higher of (A) the Prime Rate, and (B) the sum of the Federal
Funds Open Rate plus fifty (50) basis points (0.50%).
“Business Day” shall mean any day other than a Saturday or Sunday or a legal holiday on
which commercial banks are authorized or required by law to be closed for business in
Pittsburgh, Pennsylvania.
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“Federal Funds Open Rate” shall mean, for any day, the rate per annum determined by the Bank
in accordance with its usual procedures (which determination shall be conclusive absent
manifest error) to be the Open Rate for federal funds transactions as of the opening of
business for federal funds transactions among members of the Federal Reserve System arranged
by federal funds brokers on such day, as quoted by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, any successor entity
thereto, or any other broker selected by the Bank, as set forth on the applicable Telerate
display page; provided, however, that if such day is not a Business Day, the Federal Funds
Rate for such day shall be the Open Rate on the immediately preceding Business Day, or if no
such rate shall be quoted by a federal funds broker at such time, such other rate as
determined by the Bank in accordance with its usual procedures. The rate of interest
charged shall be adjusted as of each Business Day based on changes in the Federal Funds Open
Rate without notice to the Borrower.
“LIBOR” shall mean, for the applicable LIBOR Interest Period, the interest rate per annum
determined by the Bank by dividing (the resulting quotient rounded upwards, at the Bank’s
discretion, to the nearest 1/100th of 1%) (i) the rate of interest determined by the Bank in
accordance with its usual procedures (which determination shall be conclusive absent
manifest error) to be the eurodollar rate two (2) Business Days prior to the first day of
such LIBOR Interest Period for an amount comparable to such advance and having a borrowing
date and a maturity comparable to such LIBOR Interest Period by (ii) a number equal to 1.00
minus the LIBOR Reserve Percentage.
“LIBOR Interest Period” shall mean, with respect to any amount to which the LIBOR Option
applies, the period of one (1), two (2), three (3) or six (6) months as selected by the
Borrower on the date of disbursement of such amount and each successive period selected by
the Borrower thereafter; provided that, (i) if a LIBOR Interest Period would
end on a day which is not a Business Day, it shall end on the next succeeding Business Day
unless such day falls in the next succeeding calendar month in which case the LIBOR Interest
Period shall end on the next preceding Business Day, (ii) the Borrower may not select a
LIBOR Interest Period that would end on a day after the Maturity Date (as hereinafter
defined), and (iii) any LIBOR Interest Period that begins on the last Business Day of a
calendar month (or a day for which there is no numerically corresponding day in the last
calendar month of such LIBOR Interest Period) shall end on the last Business Day of the last
calendar month of such LIBOR Interest Period.
“LIBOR Reserve Percentage” shall mean the maximum effective percentage in effect on such day
as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for
determining the reserve requirements (including, without limitation, supplemental, marginal
and emergency reserve requirements) with respect to eurocurrency funding (currently referred
to as “Eurocurrency liabilities”).
“Prime Rate” shall mean the rate publicly announced by the Bank from time to time as its
prime rate. The Prime Rate is determined from time to time by the Bank as a means of
pricing some loans to its borrowers. The Prime Rate is not tied to any external rate of
interest or index, and does not necessarily reflect the lowest rate of interest actually
charged by the Bank to any particular class or category of customers.
LIBOR shall be adjusted on and as of the effective date of any change in the LIBOR Reserve
Percentage. The Bank shall give prompt notice to the Borrower of LIBOR as determined or adjusted
in accordance herewith, which determination shall be conclusive absent manifest error.
2. LIBOR Interest Period Election. Subject to the terms and conditions of this Note, at the
end of each LIBOR Interest Period applicable to any amounts hereunder, the Borrower may renew the
LIBOR Interest Period applicable to such amounts or convert such amounts to a different LIBOR
Interest Period; provided that, during any period in which any Event of Default (as
hereinafter defined) has occurred and is continuing, any amounts bearing interest under LIBOR
shall, at the Bank’s sole discretion, be converted at the end of the applicable LIBOR Interest
Period to the Base Rate and LIBOR will not be available to Borrower with respect to the renewal of
any other amounts until such Event of Default has been cured by the Borrower or waived by the Bank.
If at
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least three (3) Business Days prior to the expiration of any LIBOR Interest Period, the Borrower
does not notify the Bank of the election of a different LIBOR Interest Period, and the amount of
the portions hereunder to be allocated to each different LIBOR Interest Period, the Borrower shall
be deemed to have selected a LIBOR Interest Period of one month’s duration for all such amounts.
Any such election shall be promptly confirmed in writing by such method as the Bank may require.
3. Payment of Interest. The Borrower shall pay accrued interest on the unpaid principal
balance of this Note in arrears: (a) for amounts hereunder bearing interest under the Base Rate,
on the last day of each calendar quarter during the term hereof, (b) for amounts hereunder bearing
interest under LIBOR, on the last day of the respective LIBOR Interest Period for such amounts, (c)
if any LIBOR Interest Period is longer than three (3) months, then also on the three (3) month
anniversary of such interest period and every three (3) months thereafter, and (d) for all
outstanding amounts, at maturity, whether by acceleration of this Note or otherwise, and after
maturity, on demand until paid in full.
4. Payment of Principal. Principal shall be due and payable in fifteen (15) equal
consecutive quarterly installments in the amount of $625,000.00 each, commencing on March 31, 2010
and continuing on the last day of each quarter thereafter, and a final installment of
$15,625,000.00 on December 31, 2013. Any outstanding principal and accrued interest shall be due
and payable in full on December 31, 2013 (the “Maturity Date”).
If any payment under this Note shall become due on a Saturday, Sunday or public holiday under the
laws of the State where the Bank’s office indicated above is located, such payment shall be made on
the next succeeding Business Day and such extension of time shall be included in computing interest
in connection with such payment. The Borrower hereby authorizes the Bank to charge the Borrower’s
deposit account at the Bank for any payment when due hereunder. Payments received will be applied
to charges, fees and expenses (including attorneys’ fees), accrued interest and principal in any
order the Bank may choose, in its sole discretion.
5. Late Payments; Default Rate. If the Borrower fails to make any payment of principal,
interest or other amount coming due pursuant to the provisions of this Note within fifteen (15)
calendar days of the date due and payable, the Borrower also shall pay to the Bank a late charge
equal to the lesser of five percent (5%) of the amount of such payment or $100.00 (the “Late
Charge”). Such fifteen (15) day period shall not be construed in any way to extend the due date of
any such payment. Upon maturity, whether by acceleration, demand or otherwise, and at the Bank’s
option upon the occurrence of any Event of Default (as hereinafter defined) and during the
continuance thereof, amounts outstanding under this Note shall bear interest at a rate per annum
(based on the actual number of days that principal is outstanding over a year of 360 days) which
shall be two percentage points (2%) in excess of the interest rate in effect from time to time
under this Note but not more than the maximum rate allowed by law (the “Default Rate”). The
Default Rate shall continue to apply whether or not judgment shall be entered on this Note. Both
the Late Charge and the Default Rate are imposed as liquidated damages for the purpose of defraying
the Bank’s expenses incident to the handling of delinquent payments, but are in addition to, and
not in lieu of, the Bank’s exercise of any rights and remedies hereunder, under the other Loan
Documents or under applicable law, and any fees and expenses of any agents or attorneys which the
Bank may employ. In addition, the Default Rate reflects the increased credit risk to the Bank of
carrying a loan that is in default. The Borrower agrees that the Late Charge and Default Rate are
reasonable forecasts of just compensation for anticipated and actual harm incurred by the Bank, and
that the actual harm incurred by the Bank cannot be estimated with certainty and without
difficulty.
6. Prepayment. The Borrower shall have the right to prepay any amount hereunder at any
time and from time to time, in whole or in part; subject, however, to payment of any break funding
indemnification amounts owing pursuant to paragraph 7 below.
7. Yield Protection; Break Funding Indemnification. The Borrower shall pay to the Bank on
written demand therefor, together with the written evidence of the justification therefor, all
direct costs incurred, losses suffered or payments made by Bank by reason of any change in law or
regulation or its interpretation imposing any reserve, deposit, allocation of capital, or similar
requirement (including without limitation, Regulation D of the Board of Governors of the Federal
Reserve System) on the Bank, its holding company or any of their
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respective assets. In addition, the Borrower agrees to indemnify the Bank against any liabilities,
losses or expenses (including, without limitation, loss of margin, any loss or expense sustained or
incurred in liquidating or employing deposits from third parties, and any loss or expense incurred
in connection with funds acquired to effect, fund or maintain any amounts hereunder (or any part
thereof) bearing interest under LIBOR which the Bank sustains or incurs as a consequence of either
(i) the Borrower’s failure to make a payment on the due date thereof, (ii) the Borrower’s
revocation (expressly, by later inconsistent notices or otherwise) in whole or in part of any
notice given to Bank to request, convert, renew or prepay any amounts bearing interest under LIBOR,
or (iii) the Borrower’s payment or prepayment (whether voluntary, after acceleration of the
maturity of this Note or otherwise) or conversion of any amounts bearing interest under LIBOR on a
day other than the regularly scheduled due date therefor. A notice as to any amounts payable
pursuant to this paragraph given to the Borrower by the Bank shall, in the absence of manifest
error, be conclusive and shall be payable upon demand. The Borrower’s indemnification obligations
hereunder shall survive the payment in full of all amounts payable hereunder.
8. Other Loan Documents. This Note is issued in connection with a letter agreement or
loan agreement between the Borrower and the Bank, dated on or before the date hereof, and the other
agreements and documents executed and/or delivered in connection therewith or referred to therein,
the terms of which are incorporated herein by reference (as amended, modified or renewed from time
to time, collectively the “Loan Documents”), and is secured by the property (if any) described in
the Loan Documents and by such other collateral as previously may have been or may in the future be
granted to the Bank to secure this Note.
9. Events of Default. The occurrence of any of the following events will be deemed to be an
“Event of Default” under this Note: (i) the nonpayment of any principal, interest or other
indebtedness under this Note when due; (ii) the occurrence of any event of default or any default
and the lapse of any notice or cure period, or any Obligor’s failure to observe or perform any
covenant or other agreement, under or contained in any Loan Document or any other document now or
in the future evidencing or securing any debt, liability or obligation of any Obligor to the Bank;
(iii) the filing by or against any Obligor of any proceeding in bankruptcy, receivership,
insolvency, reorganization, liquidation, conservatorship or similar proceeding (and, in the case of
any such proceeding instituted against any Obligor, such proceeding is not dismissed or stayed
within 30 days of the commencement thereof, provided that the Bank shall not be obligated to
advance additional funds hereunder during such period); (iv) any assignment by any Obligor for the
benefit of creditors, or any levy, garnishment, attachment or similar proceeding is instituted
against any property of any Obligor held by or deposited with the Bank; (v) a default with respect
to any other indebtedness of any Obligor for borrowed money, if the effect of such default is to
cause or permit the acceleration of such debt; (vi) the commencement of any foreclosure or
forfeiture proceeding, execution or attachment against any collateral securing the obligations of
any Obligor to the Bank; (vii) the entry of a final judgment against any Obligor and the failure of
such Obligor to discharge the judgment within ten (10) days of the entry thereof; (viii) any
material adverse change in any Obligor’s business, assets, operations, financial condition or
results of operations; (ix) any Obligor ceases doing business as a going concern; (x) any
representation or warranty made by any Obligor to the Bank in any Loan Document or any other
documents now or in the future evidencing or securing the obligations of any Obligor to the Bank,
is false, erroneous or misleading in any material respect; (xi) if this Note or any guarantee
executed by any Obligor is secured, the failure of any Obligor to provide the Bank with additional
collateral if in the Bank’s opinion at any time or times, the market value of any of the collateral
securing this Note or any guarantee has depreciated below that required pursuant to the Loan
Documents or, if no specific value is so required, then in an amount deemed material by the Bank;
(xii) a Change of Control; (xiii) the revocation or attempted revocation, in whole or in part, of
any guarantee by any Obligor; (xiv) any governmental authority makes an application to vacate any
Financial Institution Subsidiary’s charter or designates and appoints a liquidator or receiver to
take charge of any Financial Institution Subsidiary’s assets and affairs; (xv) the Federal Deposit
Insurance Corporation (FDIC) notifies any Financial Institution Subsidiary of its intent to
terminate such Financial Institution Subsidiary’s status as an insured bank; (xvi) the FDIC or any
other federal or state regulatory authority issues a cease and desist order or takes other action
of a disciplinary or remedial nature against any Obligor or any subsidiary and such order or other
action could reasonably be expected to have a material adverse effect on the business, assets,
operations, financial condition or results of operations of the Obligor or the Obligor and its
subsidiaries taken as a whole; or (xvii) with respect to any Financial Institution Subsidiary, the
occurrence of any event that is grounds for the required submission of a capital restoration plan
under 12 U.S.C. Section 1831o(e)(2) and the regulations
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thereunder. As used herein, (a) the term “Obligor” means any Borrower and any guarantor of, or any
pledgor, mortgagor or other person or entity providing collateral support for, the Borrower’s
obligations to the Bank existing on the date of this Note or arising in the future and (b) the term
“Change of Control” means an event or series of events by which any person, or any two or more
persons acting in concert, acquire beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or
indirectly, of 30% or more of the outstanding shares of voting stock of the Borrower (or other
securities convertible into such voting stock).
Upon the occurrence of an Event of Default: (a) the Bank shall be under no further obligation to
make advances hereunder; (b) if an Event of Default specified in clause (iii) or (iv) above shall
occur, the outstanding principal balance and accrued interest hereunder together with any
additional amounts payable hereunder shall be immediately due and payable without demand or notice
of any kind; (c) if any other Event of Default shall occur, the outstanding principal balance and
accrued interest hereunder together with any additional amounts payable hereunder, at the Bank’s
option and without demand or notice of any kind, may be accelerated and become immediately due and
payable; (d) at the Bank’s option, this Note will bear interest at the Default Rate from the date
of the occurrence of the Event of Default; and (e) the Bank may exercise from time to time any of
the rights and remedies available under the Loan Documents or under applicable law.
10. Right of Setoff. In addition to all liens upon and rights of setoff against the
Borrower’s money, securities or other property given to the Bank by law, the Bank shall have, with
respect to the Borrower’s obligations to the Bank under this Note and to the extent permitted by
law, a contractual possessory security interest in and a contractual right of setoff against, and
the Borrower hereby grants the Bank a security interest in, and hereby assigns, conveys, delivers,
pledges and transfers to the Bank, all of the Borrower’s right, title and interest in and to, all
of the Borrower’s deposits, moneys, securities and other property now or hereafter in the
possession of or on deposit with, or in transit to, the Bank or any other direct or indirect
subsidiary of The PNC Financial Services Group, Inc., whether held in a general or special account
or deposit, whether held jointly with someone else, or whether held for safekeeping or otherwise,
excluding, however, all IRA, ▇▇▇▇▇, and trust accounts. Every such security interest and right of
setoff may be exercised without demand upon or notice to the Borrower. Every such right of setoff
shall be deemed to have been exercised immediately upon the occurrence of an Event of Default
hereunder without any action of the Bank, although the Bank may enter such setoff on its books and
records at a later time.
11. Indemnity. The Borrower agrees to indemnify each of the Bank, each legal entity, if
any, who controls, is controlled by or is under common control with the Bank, and each of their
respective directors, officers and employees (the “Indemnified Parties”), and to hold each
Indemnified Party harmless from and against any and all claims, damages, losses, liabilities and
expenses (including all fees and charges of internal or external counsel with whom any Indemnified
Party may consult and all expenses of litigation and preparation therefor) which any Indemnified
Party may incur or which may be asserted against any Indemnified Party by any person, entity or
governmental authority (including any person or entity claiming derivatively on behalf of the
Borrower), in connection with or arising out of or relating to the matters referred to in this Note
or in the other Loan Documents or the use of any advance hereunder, whether (a) arising from or
incurred in connection with any breach of a representation, warranty or covenant by the Borrower,
or (b) arising out of or resulting from any suit, action, claim, proceeding or governmental
investigation, pending or threatened, whether based on statute, regulation or order, or tort, or
contract or otherwise, before any court or governmental authority; provided,
however, that the foregoing indemnity agreement shall not apply to any claims, damages,
losses, liabilities and expenses solely attributable to an Indemnified Party’s gross negligence or
willful misconduct. The indemnity agreement contained in this Section shall survive the
termination of this Note, payment of any amounts hereunder and the assignment of any rights
hereunder. The Borrower may participate at its expense in the defense of any such action or claim.
12. Miscellaneous. All notices, demands, requests, consents, approvals and other
communications required or permitted hereunder (“Notices”) must be in writing (except as may be
agreed otherwise above with respect to borrowing requests) and will be effective upon receipt.
Notices may be given in any manner to which the parties may separately agree, including electronic
mail. Without limiting the foregoing, first-class mail, facsimile transmission and commercial
courier service are hereby agreed to as acceptable methods for giving Notices.
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Regardless of the manner in which provided, Notices may be sent to a party’s address as set forth
above or to such other address as any party may give to the other for such purpose in accordance
with this paragraph. No delay or omission on the Bank’s part to exercise any right or power
arising hereunder will impair any such right or power or be considered a waiver of any such right
or power, nor will the Bank’s action or inaction impair any such right or power. The Bank’s rights
and remedies hereunder are cumulative and not exclusive of any other rights or remedies which the
Bank may have under other agreements, at law or in equity. No modification, amendment or waiver
of, or consent to any departure by the Borrower from, any provision of this Note will be effective
unless made in a writing signed by the Bank, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. The Borrower agrees to pay on
demand, to the extent permitted by law, all costs and expenses incurred by the Bank in the
enforcement of its rights in this Note and in any security therefor, including without limitation
reasonable fees and expenses of the Bank’s counsel. If any provision of this Note is found to be
invalid, illegal or unenforceable in any respect by a court, all the other provisions of this Note
will remain in full force and effect. The Borrower and all other makers and indorsers of this Note
hereby forever waive presentment, protest, notice of dishonor and notice of non-payment. The
Borrower also waives all defenses based on suretyship or impairment of collateral. If this Note is
executed by more than one Borrower, the obligations of such persons or entities hereunder will be
joint and several. This Note shall bind the Borrower and its heirs, executors, administrators,
successors and assigns, and the benefits hereof shall inure to the benefit of the Bank and its
successors and assigns; provided, however, that the Borrower may not assign this
Note in whole or in part without the Bank’s written consent and the Bank at any time may assign
this Note in whole or in part.
This Note has been delivered to and accepted by the Bank and will be deemed to be made in the State
where the Bank’s office indicated above is located. This Note will be interpreted and the
rights and liabilities of the Bank and the Borrower determined in accordance with the laws of the
State where the Bank’s office indicated above is located, excluding its conflict of laws
rules. The Borrower hereby irrevocably consents to the exclusive jurisdiction of any state or
federal court in the county or judicial district where the Bank’s office indicated above is
located; provided that nothing contained in this Note will prevent the Bank from bringing any
action, enforcing any award or judgment or exercising any rights against the Borrower individually,
against any security or against any property of the Borrower within any other county, state or
other foreign or domestic jurisdiction. The Borrower acknowledges and agrees that the venue
provided above is the most convenient forum for both the Bank and the Borrower. The Borrower
waives any objection to venue and any objection based on a more convenient forum in any action
instituted under this Note.
13. WAIVER OF JURY TRIAL. The Borrower irrevocably waives any and all rights the
Borrower may have to a trial by jury in any action, proceeding or claim of any nature relating to
this Note, any documents executed in connection with this Note or any transaction contemplated in
any of such documents. The Borrower acknowledges that the foregoing waiver is knowing and
voluntary.
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The Borrower acknowledges that it has read and understood all the provisions of this Note,
including the waiver of jury trial, and has been advised by counsel as necessary or appropriate.
WITNESS the due execution hereof as a document under seal, as of the date first written above, with
the intent to be legally bound hereby.
| WITNESS / ATTEST: | PARKVALE FINANCIAL CORPORATION | |||||
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
(SEAL)
|
||||
| Title: Corporate Secretary | Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. | |||||
| Title: President & Chief Executive Officer | ||||||
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