TERM LOAN AGREEMENT
THIS TERM LOAN AGREEMENT (this "Agreement") is made and
entered into as of the ________ day of December, 1998, by and
between NATIONAL CONSUMER COOPERATIVE BANK, a corporation
organized under the laws of the United States that does business
as the National Cooperative Bank ("Company") and COMERICA BANK, a
Michigan banking corporation ("Bank").
IN CONSIDERATION of the mutual covenants and agreements
herein contained, the Company and the Bank hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 Definitions. As used in this Agreement, and unless
the context requires a different meaning, the following terms
shall have the meanings indicated (such meanings to be, when
appropriate, equally applicable to both the singular and plural
forms of the terms defined):
"Accumulated Funding Deficiency" has the meaning ascribed to
that term in Section 302 of ERISA.
"Affiliate" means, with respect to a Person, any other
Person that, directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, such first Person; unless otherwise specified,
"Affiliate" means an Affiliate of the Company.
"Asset Securitization" shall mean, with respect to any
Person, a transaction involving the sale or transfer of
receivables by such Person to a special purpose corporation or
grantor trust (an "SPV") established solely for the purpose of
purchasing such receivables from the Company for Cash in an
amount equal to the Fair Market Value thereof; provided, however,
that the Company may (A) establish and maintain a reserve account
containing Cash or Securities as a credit enhancement in respect
of any such sale, or (B) purchase or retain a subordinated
interest in such receivables being sold.
"Asset Securitization Recourse Liability" shall mean, with
respect to any Person, the maximum amount of such Person's
liability (whether matured or contingent) under any agreement,
note or other instrument in connection with any one or more Asset
Securitizations in which such Person has agreed to repurchase
receivables or other assets, to provide direct or indirect credit
support (whether through cash payments, the establishment of
reserve accounts containing cash or Securities, an agreement to
reimburse a provider of a letter of credit for any draws
thereunder, the purchase or retention of a subordinated interest
in such receivables or other assets, or other similar
arrangements), or in which such Person may be otherwise liable
for all or a portion of any SPV's obligations under Securities
issued in connection with such Asset Securitizations.
"Authorized Officer" means any of the Chairman of the Board,
the President, any Vice President, the Treasurer of the Company,
and any other officer duly authorized to execute this Agreement
on behalf of the Company.
"Bank Lending Office" or Lending Office of the Bank means
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, or such other office or
offices situated in the United States of America as the Bank may
from time to time designate to the Company by written notice.
"Benefit Plan" means, at any time, any employee benefit plan
(including a Multiemployer Benefit Plan), the funding
requirements of which (under Section 302 of ERISA or Section 412
of the Code) are, or at any time within six years immediately
preceding the time in question were, in whole or in part, the
responsibility of the Company or an ERISA Affiliate.
"Business Day" means any day on which commercial banks are
open for business (and not required or authorized by law to
close) in Detroit, Michigan.
"Capitalized Lease" means any obligation for Rentals which
is required to be capitalized on a balance sheet of the lessee in
accordance with GAAP.
"Cash" means, as to any Person, such Person's cash and cash
equivalents, as defined in accordance with GAAP consistently
applied.
"Class A Notes" means the class A notes issued by the
Company to the Secretary of the Treasury on behalf of the United
States pursuant to Section 116(a)(3)(A) [12 U.S.C.
3026(a)(3)(A)] of the National Consumer Cooperative Bank Act, as
amended, 12 U.S.C. 3001, et seq. (the "Bank Act") on the Final
Government Equity Redemption Date (the "Redemption Date") in full
and complete redemption of the class A stock of the Company held
by the Secretary of the Treasury on such Redemption Date and
replacement notes for such Class A notes in a principal amount(s)
not greater than those notes being replaced and containing
identical terms of subordination as the Class A notes. The terms
"class A notes", "Final Government Equity Redemption Date", and
"class A stock" are defined in the Bank Act, which definitions
are incorporated by this reference as if fully set forth herein.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitment Expiration Date" has the meaning specified in
Section 2.01 of this Agreement.
"Consolidated Adjusted Net Income" for any fiscal period of
the Company, means net earnings or net loss (determined on a
consolidated basis) of the Company and the Subsidiaries after
income taxes for such period, but excluding from the
determination of such earnings the following items (together with
the income tax effect, if any, applicable thereto):
(a) the proceeds of any life insurance policy;
(b) any gain or loss arising from the sale of capital
assets;
(c) any gain arising from any reappraisal, revaluation or
write-up of assets;
(d) any gain arising from transactions of a non-recurring
or nonoperating and material nature or arising from sales or
other dispositions relating to the discontinuance of operations;
(e) earnings of any Subsidiary accrued prior to the date it
became a Subsidiary;
(f) earnings of any corporation, substantially all the
assets of which have been acquired in any manner, realized by
such other corporation prior to the date of such acquisition;
(g) net earnings of any business entity (other than a
Subsidiary) in which the Company or any Subsidiary has an
ownership interest, unless such net earnings shall have actually
been received by the Company or such Subsidiary in the form of
cash distributions;
(h) any portion of the net earnings of any Subsidiary which
for any reason is unavailable for payment of dividends to the
Company or any other Subsidiary;
(i) the earnings of any Person to which assets of the
Company shall have been sold, transferred or disposed of, or into
which the Company shall have merged, prior to the date of such
transaction;
(j) any gain arising from the acquisition of any Securities
of the Company or any Subsidiary; and
(k) any amortization of deferred or other credit
representing the excess of the equity in any Subsidiary at the
date of acquisition thereof over the amount invested in such
Subsidiary.
"Consolidated Adjusted Net Worth" at any time means, with
respect to the Company and the Subsidiaries (determined on a
consolidated basis):
(a) the amount of capital stock liability plus (or minus in
the case of a deficit) the capital surplus and earned surplus of
the Company and the Subsidiaries, less (without duplication) the
sum of
(b) the net book value, after deducting any reserves
applicable thereto, of all items of the following character which
are included in the assets of the Company and the Subsidiaries:
(i) all deferred charges and prepaid expenses other
than prepaid taxes and prepaid insurance premiums;
(ii) treasury stock;
(iii) unamortized debt discount and expense and
unamortized stock discount and expense;
(iv) good will, the excess of the cost of assets
acquired over the book value of such assets on the books of
the transferor, the excess of the cost of investments in any
Person (including any Subsidiary) over the value of such
investments on the books of such Person at the time of
making such investments, organizational or experimental
expense, patents, trademarks, copyrights, trade names and
other intangibles;
(v) all receivables (other than Eurodollar deposits)
owing by Persons whose principal place of business or
principal assets are located in any jurisdiction other than
the United States of America or Canada; and
(vi) any increment resulting from reappraisal,
revaluation or write-up of capital assets subsequent to
December 31, 1991, other than any adjustment made pursuant
to statement of accounting standards number 115.1
(see note 1)
If the Company shall have any Restricted Investments
outstanding at any time, such Investments shall be excluded from
Consolidated Adjusted Net Worth.
"Consolidated Debt" means at any date of determination
thereof, the aggregate amount of all Indebtedness of the Company
and its Subsidiaries, plus, without duplication, the aggregate
amount of the obligations of the Company and its Subsidiaries set
forth below, at such time:
(a) the principal amount of all recourse and nonrecourse
interest bearing obligations of the Company or any Subsidiary
including, without limitation, any such obligations bearing an
implicit rate of interest, such as Capitalized Leases, and
interest bearing obligations secured by any Lien upon Property
owned by the Company or any Subsidiary, even though such Person
has not assumed or become liable for the payment of such
obligations;
(b) the aggregate amount of all demand and term deposits
made by any Person with the Company or any Subsidiary (including,
without limitation, certificates of deposit issued by the Company
or any Subsidiary);
(c) the face amount of all letters of credit issued by the
Company or any Subsidiary and all bankers' acceptances accepted
by the Company or any Subsidiary; and
(d) the aggregate amount of any Asset Securitization
Recourse Liabilities.
"Consolidated Earnings Available for Fixed Charges" shall
mean, for any period, the sum of: (i) Consolidated Adjusted Net
Income during such period; plus (ii) to the extent deducted in
determining Consolidated Adjusted Net Income, (a) all provisions
for any Federal, state or other income taxes made by the Company
and its Subsidiaries during such period, and (b) Consolidated
Fixed Charges during such period plus (iii) contributions made by
the Company to Development Corp.
"Consolidated Effective Net Worth" at any time means:
(a) Consolidated Adjusted Net Worth at such time; plus
(b) the aggregate outstanding principal amount of Class A
Notes at such time.
"Consolidated Fixed Charges" shall mean, with respect to the
Company on a consolidated basis for any period, the sum of: (i)
all interest and all amortized discount and expense on all
Indebtedness for borrowed money of the Company and its
Subsidiaries, plus (ii) all Rentals payable during such period by
the Company and its Subsidiaries.
"Consolidated Net Earnings" means, for any period, the net
income or loss of the Company and its Subsidiaries, as applicable
(determined on a consolidated basis for such Persons at such
time), for such period, as determined in accordance with
generally accepted accounting principles in effect at such time.
"Consolidated Net Worth" means, with respect to the Company,
the sum of (i) the common stock account of the Company determined
as of any date in accordance with GAAP consistent with the
principles applied in the preparation of the Company's
consolidated statement of financial condition for the fiscal year
ended December 31, 1997; (ii) the Class A Notes; and (iii) the
consolidated retained earnings account (whether allocated or
unallocated) of the Company and its Subsidiaries determined as of
any date in accordance with GAAP consistent with the principles
applied in the preparation of the Company's consolidated
statement of financial condition for the fiscal year ended
December 31, 1997.
"Consolidated Senior Debt" means all unsecured Indebtedness
of the Company and its Subsidiaries on a consolidated basis (i)
for borrowed money (including the Indebtedness hereunder, the
Senior Notes, Indebtedness under the Fleet Loan Agreement, and
all demand and term deposits made by any Person with the Company
or any of its Subsidiaries) which is not expressly subordinate or
junior to any other Indebtedness, plus without duplication, (ii)
all "guarantees," as defined in Section 6.02(D) hereof, and (iii)
Asset Securitization Recourse Liabilities to the extent, but only
to the extent, that such obligations have matured and remain
unpaid.
"Consolidated Senior Obligations" at any time means, with
respect to the Company and the Subsidiaries (determined on a
consolidated basis), the sum of:
(a) the aggregate unpaid principal amount of Consolidated
Senior Debt, plus
(b) the aggregate amount of all Capitalized Leases, plus
(c) Restricted Guarantees computed on the basis of total
outstanding contingent liability.
"Consolidated Subsidiary" means, with respect to any Person
at any time, any Subsidiary or other Person the accounts of which
would be consolidated with those of such first Person in its
consolidated financial statements as of such time; unless
otherwise specified, "Consolidated Subsidiary" means a
Consolidated Subsidiary of the Company.
"Credit Agreement Related Claim" means any claim (whether
civil, criminal or administrative and whether sounding in tort,
contract or otherwise) in any way arising out of, related to, or
connected with, this Agreement, the Notes, or the relationship
established hereunder or thereunder.
"Default" means an Event of Default or an event or condition
the existence or occurrence of which would, with the lapse of
time or the giving of notice or both, become an Event of Default.
"Default Rate" means the rate of interest applicable under
Section 3.03 from time to time.
"Development Corp." means NCB Development Corporation, a
District of Columbia non-profit corporation established pursuant
to 12 U.S.C. 3051(b).
"Dollars", and the sign "$" mean such coin or currency of
the United States of America as at the time shall constitute
legal tender for the payment of public and private debts.
"Effective Date" means December 31, 1998.
"Eligible Cooperatives" has the meaning assigned to such
term in Section 3015 of Title 12 of the United States Code.
"Eligible Derivatives" means derivative Securities which are
sold in the ordinary course of the business of the Company and
its Subsidiaries for the purpose of hedging or otherwise managing
portfolio risk.
"Equity Investment(s)" shall mean the amount paid or
committed to be paid in connection with the acquisition of any
stock (common or preferred) or other equity securities of any
Person or any obligation convertible into or exchangeable for a
right, option or warrant to acquire such equity securities.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" means any Person, including a Subsidiary
or other Affiliate, that is a member of any group of
organizations within the meaning of Code Sections 414(b), (c),
(m) or (o) of which the Company is a member.
"Events of Default" means the occurrence of any of the
events described in Section 7.01 of this Agreement.
"Exchange Act" means the Securities and Exchange Act of
1934, as amended, and any successor Federal statute.
"Fair Market Value" means, at any time with respect to any
Property, the sale value of such Property that would be realized
in an arm's-length sale at such time between an informed and
willing buyer and an informed and willing seller, under no
compulsion to buy or sell, respectively.
"Fixed Charges" means, with respect to the Company, for any
period, the sum of: (i) all interest and all amortized discount
and expense on all Indebtedness for borrowed money of the
Company, plus (ii) all Rentals payable during such period by the
Company.
"Fleet Loan Agreement" means the Loan Agreement dated as of
May 28, 1997 among the Company, the Banks party thereto and Fleet
Bank, N.A., as Agent, as amended through the Effective Date.
"Funded Debt" means all Indebtedness for borrowed money that
by its terms matures more than twelve months from the date as of
which any determination of Funded Debt is made, any and all
Indebtedness maturing within twelve months from such date that is
renewable at the option of the obligor to a date beyond twelve
months from the date of such determination, including any
Indebtedness renewable or extendable (whether or not theretofore
renewed or extended) under, or payable from the proceeds of other
Indebtedness that may be incurred pursuant to the provisions of,
any revolving credit agreement or other similar agreement.
"GAAP" means generally accepted accounting principles.
"Government Obligations" means any and all direct
obligations of the United States of America or obligations in
respect of which the payment of the principal of, and interest
thereon, is unconditionally guaranteed by the United States of
America.
"Governmental Body" means (i) the United States of America,
any State thereof, any other country or any political subdivision
of such other country, or any department, agency, commission,
board, bureau or instrumentality of the United States of America,
any State thereof, any other country or political subdivision of
such other country or any subdivision of any of them, and (ii)
any quasi-governmental body, agency or authority (including any
central bank) exercising regulatory authority over the Bank
pursuant to applicable law in respect of the transactions
contemplated by this Agreement.
"Guarantees" means all obligations of any Person
guaranteeing or in effect guaranteeing any indebtedness or
obligation or dividend of any other Person (the "primary
obligor") in any manner, whether directly or indirectly,
including, without limitation, all obligations incurred through
an agreement contingent or otherwise, by such Person:
(a) to purchase any indebtedness or obligation or any
Property constituting security therefor;
(b) to advance or supply funds;
(i) for the purchase or payment of any Indebtedness or
obligation, or
(ii) to maintain working capital, equity capital or
other balance sheet condition or otherwise to advance or
make available funds for the purchase or payment of any
indebtedness or obligation;
(c) to purchase Property, Securities or services primarily
for the purpose of assuring the owner of any indebtedness or
obligation of the ability of the primary obligor to make payment
of the indebtedness or obligation; or
(d) otherwise to assure the owner of the indebtedness or
obligation of the primary obligor against loss in respect
thereof.
Liabilities or endorsements in the ordinary course of
business of checks and other negotiable instruments for deposit
or collection and obligations of the Company or the Subsidiaries
to acquire assets from the Bank in the ordinary course of
business shall not be deemed "Guarantees."
"Indebtedness" means, with respect to any Person, all (i)
liabilities or obligations, direct and contingent, which in
accordance with GAAP would be included in determining total
liabilities as shown on the liability side of a balance sheet of
such Person at the date as of which Indebtedness is to be
determined, including, without limitation, contingent liabilities
which, in accordance with such principles, would be set forth in
a specific Dollar amount on the liability side of such balance
sheet; (ii) liabilities or obligations of others for which such
Person is directly or indirectly liable, by way of guaranty
(whether by direct guaranty, suretyship, discount, endorsement,
take-or-pay agreement, agreement to purchase or advance or keep
in funds or other agreement having the effect of a guaranty) or
otherwise; (iii) liabilities or obligations secured by liens on
any assets of such Person, whether or not such liabilities or
obligations shall have been assumed by it; (iv) liabilities or
obligations of such Person, direct or contingent, with respect to
letters of credit issued for the account of such Person and
banker's acceptances credited for such Person; (v) obligations in
the form of demand and term deposit accounts maintained by such
Person; and (vi) Asset Securitization Recourse Liabilities to the
extent, but only to the extent, that such obligations have
matured and remain unpaid.
"Interest Payment Date" means the 9th day of each April,
July, November and January and, in addition, the Maturity Date
for each Loan.
"Investment" in any Person by the Company means: (a) the
amount paid or committed to be paid, or the value of property or
services contributed or committed to be contributed, by the
Company for or in connection with the acquisition by the Company
of any stock, bonds, notes, debentures, partnership or other
ownership interests or other securities of such Person; and (b)
the amount of any advance, loan or extension of credit to, or
guaranty or other similar obligation with respect to any
Indebtedness of, such Person by the Company and (without
duplication) any amount committed to be advanced, loaned, or
extended to, or the payment of which is committed to be assured
by a guaranty or similar obligation for the benefit of, such
Person by the Company.
"Lien" means any mortgage, deed of trust, pledge, security
interest, encumbrance, lien or charge of any kind (including any
agreement to give any of the foregoing), any conditional sale or
other title retention agreement, any lease in the nature of any
of the foregoing, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code of any
jurisdiction.
"Loans" means the loans to be made by the Bank to the
Company pursuant to this Agreement.
"Loan Date" means each date, on or before April 30, 1999,
when a Loan is advanced pursuant to Section 2.01 hereof.
"Maturity Date" means for each Loan, the date which is the
third anniversary of the date such Loan is initially advanced.
"Multiemployer Benefit Plan" means any Benefit Plan that is
a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
"NCB Capital" means NCB Capital Corporation, a Delaware
corporation, formerly known as NCB Mortgage Corporation.
"NCB Senior Obligations" means, at any date of
determination thereof, with respect to the Company, the sum of:
(a) the aggregate unpaid principal amount of Senior Debt, plus
(b) the aggregate amount of all Capitalized Leases, plus
(c) Restricted Guarantees computed on the basis of total
outstanding contingent liability, plus
(d) Asset Securitization Recourse Liabilities of the
Company (meeting the conditions set forth in either clause (i) or
clause (ii) below):
(i) to the extent, but only to the extent, that such
obligations arise from the Company's obligation to
repurchase receivables or other assets as a result of a
default in payment by the obligor thereunder or any other
default in performance by such obligor under any agreement
related to such receivables; or
(ii) if the Company shall maintain a reserve account
containing Cash or Securities in respect of any such
obligations or shall retain or purchase a subordinated
interest therein, to the extent, but only to the extent, of
the amount of such reserve account or subordinated interest.
"Notes" means each Promissory Note or the Promissory Notes
issued to the Bank by the Company pursuant to this Agreement,
substantially in the form (appropriately completed) of Exhibit A
to this Agreement.
"Notice of Borrowing" means any notice given to the Bank by
the Company pursuant to and in accordance with Section 4.01 of
this Agreement.
"Paid-in-Capital" shall have the meaning ascribed to it by
GAAP.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Permitted Liens" means (i) pledges or deposits by the
Company under ▇▇▇▇▇▇▇'▇ compensation laws, unemployment insurance
laws, social security laws, or similar legislation, or good faith
deposits in connection with bids, tenders, contracts (other than
for the payment of Indebtedness of the Company), or leases to
which the Company is a party, or deposits to secure public or
statutory obligations of the Company or deposits of cash or U.S.
government Bonds to secure surety, appeal, performance or other
similar bonds to which the Company is a party, or deposits as
security for contested taxes or import duties or for the payment
of rent; (ii) Liens imposed by law, such as carriers',
warehousemen's, materialmen's and mechanics' liens, or Liens
arising out of judgments or awards against the Company with
respect to which the Company at the time shall currently by
prosecuting an appeal or proceedings for review; (iii) Liens for
taxes not yet subject to penalties for non-payment and Liens for
taxes the payment of which is being contested as permitted by
Section 6.01(J) hereof; and (iv) Liens incidental to the conduct
of the business of the Company or to the ownership of its
property which were not incurred in connection with Indebtedness
of the Company, all of which Liens do not in the aggregate
materially detract from the value of the properties to which they
relate or materially impair their use in the operation of the
business of the Company.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof, a
court, or any other legal entity, whether acting in an undivided
fiduciary or other capacity.
"Prepayment Amount" means the present value, discounted at
the Reinvestment Rates, of the positive amount by which: (a) the
interest the Bank would have earned had the amount of principal
prepaid been paid according to a Note's amortization schedule at
a Note's interest rate exceeds, (b) the interest the Bank would
earn by reinvesting the amount of principal prepaid at the
Reinvestment Rates.
"Prohibited Transaction" means any transaction that is
prohibited under Code Section 4975 or ERISA Section 406 and not
exempt under Code Section 4975 or ERISA Section 408.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or
intangible.
"Qualified Assets" means, at any date of determination
thereof, the sum of the following items (a), (b) and (c) owned by
the Company:
(a) The principal amount of all promissory notes and other
interest bearing obligations acquired by the Company in the
ordinary course of its business less (i) reserves for credit
losses applicable thereto, and (ii) unearned income;
(b) Cash on hand and in banks; and
(c) Investments other than "Restricted Investments" (as
such term is defined in the Senior Note Agreements as in effect
on the date hereof).
"Regulatory Change" means any applicable law,
interpretation, directive, request or guideline (whether or not
having the force of law), or any change therein or in the
administration or enforcement thereof, that becomes effective or
is implemented or first required or expected to be complied with
after the date hereof, whether the same is (i) the result of an
enactment by a government or any agency or political subdivision
thereof, a determination of a court or regulatory authority, or
otherwise or (ii) enacted, adopted, issued or proposed before or
after the date hereof, including any such that imposes, increases
or modifies any tax, reserve requirement, insurance charge,
special deposit requirement, assessment or capital adequacy
requirement, but excluding any such that imposes, increases or
modifies any income or franchise tax imposed upon the Bank by any
jurisdiction (or any political subdivision thereof) in which the
Bank or any office is located.
"Reinvestment Rates" means the per annum rates of interest
equal to one-half percent (1/2%) above the rates of interest
reasonably determined by the Bank to be in effect not more than
seven days prior to date of any prepayment of principal in the
secondary market for United States Treasury Obligations in
amount(s) and with maturity(ies) which correspond (as closely as
possible) to the principal installment amount(s) and the
prepayment date(s) against which such prepaid principal will be
applied.
"Rentals" means all fixed rentals (including as such all
payments that the lessee is obligated to make to the lessor on
termination of the lease or surrender of the property) payable by
the Company, as lessee or sublessee under a lease of real or
personal property, but shall be exclusive of any amounts required
to be paid by the Company (whether or not designated as rents or
additional rents) on account of maintenance, repairs, insurance,
taxes and similar charges. Fixed rents under any so-called
"percentage leases" shall be computed solely on the basis of the
minimum rents, if any, required to be paid by the lessee
regardless of sales volume or gross revenues.
"Restricted Guarantees" at any time means all Guarantees by
the Company of obligations of others that constitute sum certain
obligations at the time such Guarantees are incurred.
"Restricted Investments" at any time means any investment
that is not permitted under Section 6.02(I) of this Agreement.
"Restricted Payment" means any payment by the Company of the
type described in 6.02(F) of this Agreement.
"Security" shall have the meaning ascribed thereto in
Section 2(1) of the Securities Act, as amended; provided,
however, that Asset Securitization Recourse Liabilities shall not
constitute "Securities" except (i) to the extent that such
obligations arise from the Company's obligation to repurchase
receivables or other assets as a result of a default in payment
by the obligor thereunder or any other default in performance by
such obligor under any agreement related to such receivables or
(ii) if the Company shall maintain a reserve account containing
Cash or Securities in respect of any such obligations or shall
retain or purchase a subordinated interest therein to the extent
of the amount of such reserve account or subordinated interest.
"Selected Banks" means the Bank of Delaware, the bank
signatories to the NatWest Loan Agreement, and the one hundred
largest commercial banks that either are United States national
banking associations or are chartered under the laws of a state
of the United States and that have ratings by ▇▇▇▇▇▇▇▇ BankWatch,
Inc. no lower than B/C.
"Senior Debt" means all Indebtedness of the Company for
borrowed money (including, without limitation, all Indebtedness
under this Agreement, the Senior Note Agreements and the Natwest
Loan Agreement) that is not expressly subordinate or junior to
any other Indebtedness.
"Senior Note Agreements" means collectively, (i) Note
Purchase Agreement dated as of December 16, 1994, as amended
December 5 and December 10, 1996 in respect of the Company's
8.84% Series A Senior Notes due March 31, 2000, 8.85% Series B
Senior Notes due March 31, 2000 and 7.96% Series C Senior Notes
due March 31, 2000; (ii) Master Shelf Agreement dated as of
December 30, 1994, as amended December 6, 1996, in respect to up
to $50,000,000 of Senior Notes, pursuant to which there were
issued $30,000,000 in 7.15% Senior notes due September 29, 2001;
(iii) Senior Note Agreements dated December 15, 1995, as amended
December 6, 1996, in respect of the Company's 6.60% Series D
Senior Notes due December 31, 2002, and 6.59% Series E Senior
Notes due December 31, 2002; and (iv) Master Shelf Agreement
dated as of June 30, 1997, in respect to up to $30,000,000 of
Senior Notes pursuant to which there were issued $10,000,000 in
6.94% Senior Notes due July 14, 2003 and $20,000,000 in 6.22%
Senior Notes due February 3, 2004.
"Senior Notes" shall mean the Senior Notes issued by the
Company under the terms and conditions of the Senior Note
Agreements.
"SPV" shall have the meaning assigned to such term in the
definition of "Asset Securitization" in this Article 1 and NCB I,
Inc., NCB Retail Finance Corporation and any other Subsidiary of
the Company having powers limited to the holding of regular or
residual interests arising out of Asset Securitization.
"Subsidiary" shall mean any corporation a majority of the
capital stock of which at the time outstanding, having ordinary
voting power for the election of directors, is owned by the
Company directly or indirectly.
"Termination Event" means, with respect to any Benefit Plan,
(i) any Reportable Event with respect to such Benefit Plan, (ii)
the termination of such Benefit Plan, or the filing of a notice
of intent to terminate such Benefit Plan, or the treatment of any
amendment to such Benefit Plan as a termination under ERISA
Section 4041(c), (iii) the institution of proceedings to
terminate such Benefit Plan under ERISA Section 4042 or (iv) the
appointment of a trustee to administer such Benefit Plan under
ERISA Section 4042.
"Voting Stock" means Securities of any class or classes of a
corporation the holders of which are ordinarily, in the absence
of contingencies, entitled to vote in the election of the
corporate directors (or persons performing similar functions).
"Year 2000 Issue" shall mean the ability of all software,
hardware, equipment, goods or system utilized by or material to
the business, operations or financial condition of any Person, to
perform date sensitive functions, during and after the year 2000.
Section 1.2 Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with
generally accepted accounting principles in the United States.
Section 1.3 Time Period Computations. In the computation of
a period of time specified in this Agreement from a specified
date to a subsequent date, the word "from" means "from and
including" and the words "to" and "until" mean "to but excluding"
ARTICLE II
GENERAL LOAN PROVISIONS
Section 2.01 The Loans. Subject to the terms and conditions of
this Agreement, on the Loan Dates the Bank shall lend to the
Company, and the Company shall borrow from the Bank, the
aggregate principal amount of FORTY MILLION UNITED STATES DOLLARS
($40,000,000) (the "Loans") in two separate advances of TWENTY
MILLION DOLLARS ($20,000,000) each.
The initial Loan shall be applied to repay, by replacement
and renewal evidence, indebtedness of Company to Bank borrowed
and outstanding under the Term Loan Agreement dated as of
December 24, 1995 between Company and Bank if such indebtedness
has not been repaid in full on or before the date for such
initial Loan, and such prior agreement shall, upon the initial
Loan hereunder, be terminated and superceded by this Agreement.
Section 2.02 Term of Loans. The entire principal amount of each
Loan shall be due and payable on the Maturity Date.
Section 2.03 Proceeds of Loans. With respect to each Loan, the
Bank shall, upon the Company's satisfaction of the conditions
specified in Article IV of this Agreement, make the entire
principal amount of the Loan available to the Company before
12:00 Noon (Detroit, Michigan time) on its Loan Date in Dollars
in immediately available funds at the bank (and for credit to the
account of the Company at such Bank designated by the Company)
specified by the Company in the Notice of Borrowing.
Section 2.04 The Notes. Each Loan shall be evidenced by a
Promissory Note of the Company, which shall be substantially in
the form of Exhibit A to this Agreement (appropriately
completed), dated the Loan Date for such Loan, payable to the
order of the Bank in the principal amount of the relevant Loan.
The first and last days of each interest period during the term
of each Loan and each payment of interest on each Loan shall be
recorded by the Bank on the "Schedule of Interest" attached to
the relevant Note and by specific reference made a part thereof.
Any prepayment of the principal amount of a Loan shall be
recorded by the Bank on the reverse side of the relevant Note and
indicated on the "Schedule of Interest".
ARTICLE III
INTEREST AND REPAYMENT
Section 3.01 Interest on the Loan. The first Loan shall bear
interest at the rate of _________________________ percent
(__________%) per annum. The second Loan shall bear interest at
the fixed rate of interest quoted by Bank therefore, in its
discretion, and accepted by the Company therefore, on or prior to
its Loan Date.
Section 3.02 Additional Interest. If, after the date of this
Agreement, any Regulatory Change
(A) shall subject the Bank to any tax, duty or other charge with
respect to its obligation to make or maintain the Loan, or shall
change the basis of taxation of payments to the Bank of the
principal of or interest on any Loan in respect of any other
amounts due under this Agreement in respect of its obligation to
make any Loan (except for changes in the rate of tax on the
overall net income of the Bank); or
(B) shall impose, modify or deem applicable any reserve, special
deposit, capital adequacy or similar requirement against assets
of, deposits with or for the account of, or credit extended by,
the Bank or shall impose on the Bank any other condition
affecting (1) the obligation of the Bank to make or maintain the
Loan; or (2) the Note;
and the result of any of the foregoing is to increase the
cost to the Bank of making or maintaining any Loan or to reduce
the amount of any sum received or receivable by the Bank under
this Agreement or under any Note, by an amount reasonably deemed
by the Bank to be material, then, within fifteen days after
demand by the Bank, the Company shall pay to the Bank such
additional amount or amounts as will compensate the Bank for such
increased cost or reduction. A certificate of the Bank setting
forth the basis for determining such additional amount or amounts
necessary to compensate the Bank shall be conclusive in the
absence of manifest error.
Section 3.03 Interest after Maturity. In the event the Company
shall fail to make any payment of the principal amount of, or
interest on, any Loan when due (whether by acceleration or
otherwise), after giving effect to any applicable grace period
provided for in this Agreement, the Company shall pay interest on
such unpaid amount, payable from time to time on demand, from the
date such amount shall have become due to the date of payment
thereof, accruing on a daily basis, at a per annum rate (the
"Default Rate") equal to the sum of the interest rate on such
Loan in effect immediately before such amount became due, plus
two percent (2.0%).
Section 3.04 Payment and Computations.
(A) All payments required or permitted to be made to the Bank
under this Agreement or any Note shall be made to the Bank in
Dollars at the Lending Office of the Bank in immediately
available funds.
(B) Interest on the Loans shall be computed on the basis of a
year of 360 days consisting of 12 months of 30 days each and, in
the case of a portion of a month, for the actual number of days
(including the first day but excluding the last day) elapsed.
(C) Interest on the Loans shall be payable in arrears on their
respective Interest Payment Dates; provided, that in the event
that any Interest Payment Date shall be a day which is not a
Business Day, the obligation to make such payment shall be
deferred to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case the Interest
Payment Date shall be advanced to the next preceding Business
Day.
(D) Whenever any payment of principal is required or permitted
to be made on a day which is not a Business Day, the obligation
of the Company to make such payment shall be deferred until the
next succeeding Business Day and, in such case, such extension of
time shall be included in the computation of interest in respect
of such principal amount at the rate in effect at the date such
principal amount was otherwise due and payable.
Section 3.05 Payment at Maturity. Any principal amount of the
Notes theretofore not repaid, together with any accrued interest
thereon, shall be due and payable in full on the Maturity Date.
Section 3.06 Optional Prepayments; Certain Early Repayments.
(A) Subject to the terms and conditions of this Section 3.06,
the Company may, at its sole option, prepay the principal amount
of either Loan in whole or in part (in any amount of $1,000,000
or more) at any time and from time to time (each an "Optional
Prepayment"). Each Optional Prepayment shall be accompanied by
the payment of all accrued and unpaid interest to the date of
such Optional Prepayment on the principal amount of such Optional
Prepayment.
(B) In respect of each Optional Prepayment proposed to be made
by the Company, the right of the Company to make such Optional
Prepayment is subject to the Bank's receipt from the Company, at
least three Business Days prior to the date specified therein as
the date on which Optional Prepayment is to be made, of a written
notice (which shall be irrevocable) specifying (i) the principal
amount of such Optional Prepayment and (ii) the date (which shall
be a Business Day) on which such Optional Prepayment will be
made.
(C) If the Company prepays all or any part of the outstanding
principal balance of a Loan in advance of the Maturity Date
(whether due to optional prepayment, acceleration or for any
other reason), in addition to the payments on principal and
accrued and unpaid interest, the Company shall pay to the Bank,
together with such prepayment, the Prepayment Amount.
ARTICLE IV
CONDITIONS PRECEDENT TO THE LOAN
Section 4.01 Delivery on or Prior to Loan Date. The obligation
of the Bank to make a Loan to the Company hereunder is subject to
the condition precedent that the Bank shall have received an
irrevocable Notice of Borrowing from the Company on the Business
Day prior to the requested Loan Date that specifies the Loan Date
(which shall be a Business Day) and that the Bank shall have
received from the Company, on or prior to the Loan Date, the
following instruments, each dated as of the Loan Date:
(A) The relevant Note, duly executed by the Company;
(B) An opinion of counsel to the Company in form and substance
satisfactory to the Bank;
(C) A certified copy of the resolutions of the Board of
Directors of the Company authorizing the execution and delivery
of this Agreement and the Notes;
(D) A certificate of the Secretary, an Assistant Secretary or an
Assistant Treasurer of the Company certifying the names and true
signatures of the Authorized Officers;
(E) A certified copy of the By-Laws of the Company as in effect
on the Loan Date;
(F) A certified copy of each Senior Note Agreement and other
agreement evidencing Indebtedness of the Company for borrowed
money in effect as of the Loan Date; provided that Company shall
not be required to deliver a copy of any such document to the
extent that it has previously delivered a certified copy of such
document to Bank..
Section 4.02 Further Condition Precedent to the Loan. The
obligation of the Bank to make a Loan shall be subject to the
further conditions precedent that on the relevant Loan Date the
following statements shall be true and correct as of such Loan
Date:
(A) The representations and warranties of the Company contained
in Article V are correct;
(B) No event has occurred and is continuing, or would result
from the Loan after giving effect to the application of the
proceeds therefrom, which constitutes an Event of Default or
would constitute an Event of Default but for the requirement that
notice be given or time elapse or both;
(C) No Default shall have occurred and be continuing at the time
the Loan is to be made or would result from the making of the
Loan or from the application of the proceeds thereof; and
(D) All legal matters incident to the closing of the
transactions contemplated by this Agreement and the making of the
Loan shall be satisfactory to the Bank and its counsel.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants that:
Section 5.01 Existence, Power and Authority. Each of the
Company and its Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with full corporate power and
authority to carry on its business as currently conducted and to
own or hold under lease its property; the Company is duly
qualified or diligently pursuing to become qualified to do
business as a foreign corporation in good standing in each other
jurisdiction in which the conduct of its business or the
maintenance of its property requires it to be so qualified; the
Company has full corporate power and authority to execute and
deliver this Agreement and the Note and to carry out the
transactions contemplated by this Agreement.
Section 5.02 Authorization: Enforceable Obligations. This
Agreement and the Notes have been duly authorized and have been
or will be duly executed and delivered by the Company and
constitute, or when executed and delivered pursuant hereto will
constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with their terms
(except as such enforceability may be limited by general
principles of the law of equity or by any applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting
creditors' rights generally).
Section 5.03 No Legal Bar. The execution, delivery and
performance by the Company of this Agreement and of the Note, (i)
do not and will not violate the certificate of incorporation or
charter, by-laws or any preferred stock provision of the Company
or (ii) do not and will not violate or conflict with any law,
governmental rule or regulation or any judgment, writ, order,
injunction, award or decree of any court, arbitrator,
administrative agency or other governmental authority applicable
to the Company or any indenture, mortgage, contract, agreement or
other undertaking or instrument to which the Company is a party
or by which its property may be bound and (iii) do not and will
not result in the creation or imposition of any lien, mortgage,
security interest or other encumbrance on any of its property
pursuant to the provisions of any such indenture, mortgage,
contract, agreement or other undertaking or instrument.
Section 5.04 Consents. The execution, delivery and performance
by the Company of this Agreement and of the Notes, do not and
will not require any consent, which has not been obtained, of any
other Person (including, without limitation, stockholders of the
Company) or any consent, license, permit, authorization or other
approval of, any giving of notice to, exemption by, any
registration, declaration or filing with, or any taking of any
other action in respect of, any court, arbitrator, administrative
agency or other governmental authority.
Section 5.05 Litigation. Except as previously disclosed to the
Bank in writing, there is no action, suit, investigation or
proceeding by or before any court, arbitrator, administrative
agency or other governmental authority pending or, to the
knowledge of the Company, threatened (i) which involves any of
the transactions contemplated by this Agreement or (ii) against
or affecting the Company which could be reasonably expected to
materially adversely affect the financial condition, business or
operation of the Company.
Section 5.06 No Default. The Company is not in default under
any material order, writ, injunction, award or decree of any
court, arbitrator, administrative agency or other governmental
authority binding upon it or its property, or any material
indenture, mortgage, contract, agreement or other undertaking or
instrument to which it is a party or by which its property may be
bound, and nothing has occurred which would materially adversely
affect the ability of the Company, to carry on its business or
perform its obligations under any such material order, writ,
injunction, award or decree or any such material indenture,
mortgage, contract, agreement or other undertaking or instrument.
Section 5.07 Financial Condition. The consolidated balance
sheet of the Company and its Consolidated Subsidiaries as at
December 31, 1997, and the related consolidated statements of
income, stockholders' or members' equity and cash flows for the
fiscal year ended on such date, reported upon by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP, and the unaudited consolidated statement of financial
condition of the Company and its Consolidated Subsidiaries as at
September 30, 1998, and the related consolidated statements of
income and stockholders' or members' equity for the three (3)
months ended that date, present fairly the consolidated financial
condition of the Company and its Consolidated Subsidiaries as of
said date and the consolidated results of their operations for
such fiscal year, in conformity with GAAP. No material adverse
changes have occurred in the financial condition of the Company
or its Consolidated Subsidiaries since September 30, 1998.
Section 5.08 Use of Proceeds. The Company shall use the
proceeds of the Loan for its general corporate purposes. None of
the proceeds of the Loan shall be used to purchase or carry, or
reduce or retire or refinance any credit incurred to purchase or
carry, any margin stock (within the meaning of Regulations U and
X of the Board of Governors of the Federal Reserve System) or to
extend credit to others for the purchasing or carrying of any
margin stock. If requested by the Bank, the Company shall
complete and sign Part I of a copy of Federal Reserve Form U-1
referred to in Regulation U and deliver such copy to the Bank.
Section 5.09 Company Not an Investment Company. The Company is
not an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment
Company Act of 1940, as amended.
Section 5.10 Environmental Matters. The Company and its
Consolidated Subsidiaries conduct their respective operations in
compliance with all applicable laws and regulations concerning
the discharge of substances into the environment and other
environmental control matters, except to the extent that
non-compliance would not have a material adverse effect on the
business, results of operations or condition (financial or
otherwise) of the Company or its Consolidated Subsidiaries taken
as a whole. Neither the Company nor any of its Consolidated
Subsidiaries has any liability, contingent or otherwise, under
any law, ordinance or regulation relating to the storage,
transport, disposal or release of "oil", "petroleum products",
"hazardous substance", "hazardous waste", "hazardous material",
"hazardous chemical substance", "refuse" or any other term of
similar import (as such terms are defined in any such law,
ordinance or regulation), except to the extent that any such
liability would not have a material adverse effect on the
business, results of operations or condition (financial or
otherwise) of the Company or its Consolidated Subsidiaries taken
as a whole.
Section 5.11 Addressing the Year 2000 Issue. Company has
reviewed its operations and those of its Subsidiaries and major
commercial counterparts with a view to assessing whether it or
its Subsidiaries' respective businesses will, in the receipt,
transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data, be vulnerable to a
Year 2000 Issue. Based on such review, Company has no reason to
believe that any material adverse effect will occur with respect
to its or its Subsidiaries' businesses or operations resulting
from a Year 2000 Issue.
ARTICLE VI
COVENANTS
Section 6.01 Affirmative Covenants. The Company covenants and
agrees that, so long as this Agreement shall remain in effect or
any of the principal of or interest on either Note hereunder
shall remain unpaid:
(A) The Company will deliver to the Bank, within ninety (90)
days after the end of each fiscal year, the consolidated and
consolidating balance sheet of the Company and its Consolidated
Subsidiaries as at the end of such fiscal year, and the related
consolidated and consolidating statements of income,
stockholders' or members' equity and cash flows for such fiscal
year, accompanied by a certificate of independent public
accountants of recognized standing satisfactory to the Bank,
which certificate will contain no material exceptions or
qualifications except such as are acceptable to the Bank;
(B) The Company will deliver to the Bank, within sixty (60) days
after the end of each of the first three quarters of each fiscal
year, the consolidated balance sheet of the Company and its
Consolidated Subsidiaries as at the end of such quarter, and the
related consolidated statements of income and stockholders'
equity for such quarter, certified (subject to year-end
audited-adjustments) by an authorized accounting or financial
officer of the Company;
(C) The Company shall deliver to the Bank within thirty (30)
days after it files them with the Securities and Exchange
Commission copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any
of the foregoing as the Securities and Exchange Commission may by
rules and regulations prescribe) which the Company is required to
file with the Securities and Exchange Commission pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of
1934;
(D) The Company will deliver to the Bank, from time to time,
such additional information regarding its financial condition,
business or affairs as the Bank may reasonably request;
(E) The Company will deliver to the Bank, simultaneously with
the delivery of each set of financial statements referred to in
(a) above, a certificate of the President, any Vice President, or
the Treasurer of the Company (i) stating that in the course of
the performance of his duties he would normally obtain knowledge
of any condition or event which constitutes an Event of Default,
or any event, act or condition which with notice or lapse of time
or both would constitute an Event of Default, (ii) stating
whether or not he has obtained knowledge of any such condition,
act or event and, if so, specifying each such condition, act or
event of which he has knowledge and the nature and period of
existence thereof and the action the Company is taking and
proposes to take with respect thereto; and (iii) setting forth
the calculations necessary to establish the Company's compliance
with Section 6.01(m) hereof;
(F) The Company will preserve and maintain its corporate
existence and each of the material rights, privileges, licenses
and franchises, which are necessary or desirable in the normal
conduct of its business. The Company will comply with all
applicable laws, rules, regulations, and orders of any
governmental or regulatory body or authority, a breach of which
could have a material adverse effect on the financial condition
or business (taken as a whole) of the Company, except where
contested in good faith and by proper proceedings;
(G) Promptly after becoming aware thereof the Company will
deliver to the Bank notice of any Event of Default and any event
which, with the passage of time or the giving of notice or both,
would become an Event of Default;
(H) The Company will keep proper books of record and account in
a manner reasonably satisfactory to the Bank in which, true,
complete and correct entries shall be made of all dealings or
transactions in relation to its business and activities;
(I) The Company will permit the Bank to make or cause to be made
(and, after the occurrence of and during the continuance of an
Event of Default, at the Company's expense), inspections and
audits of any books, records and papers of the Company and to
make extracts therefrom and copies thereof, or to make
inspections and examinations of any properties and facilities of
the Company, on reasonable notice, at all such reasonable times
and as often as the Bank may reasonably require, in order to
assure that the Company is and will be in compliance with its
obligations under this Agreement;
(J) The Company will pay and discharge all of its obligations
and liabilities, including, without limitation, all taxes,
assessments and governmental charges upon its income and
properties, when due, unless and to the extent only that such
obligations, liabilities, taxes, assessments and governmental
charges shall be contested in good faith and by appropriate
proceedings and that proper and adequate book reserves relating
thereto are established by the Company, and then only to the
extent that a bond is filed in cases where the filing of a bond
is necessary to avoid the creation of a lien or encumbrance
against any of its properties;
(K) The Company will promptly notify the Bank in writing of any
litigation, legal proceeding or dispute, other than disputes in
the ordinary course of business or, whether or not in the
ordinary course of business, involving amounts in excess of Two
Hundred Fifty Thousand Dollars ($250,000), affecting the Company
whether or not fully covered by insurance, and regardless of the
subject matter thereof (excluding, however, any actions relating
to workmen's compensation claims or negligence claims relating to
use of motor vehicles, if fully covered by insurance, subject to
deductibles);
(L) The Company will:
(i) Maintain with responsible insurance companies such insurance
on such of its properties, in such amounts and against such risks
as is customarily maintained by similar businesses (including,
without limitation, public liability, embezzlement or other
criminal misappropriation insurance); file with the Bank upon its
request a detailed list of the insurance then in effect, stating
the names of the insurance companies, the amounts and rates of
the insurance, dates of the expiration thereof and the properties
and risks covered thereby; and, within 10 days after notice in
writing from the Bank, obtain such additional insurance as the
Bank may reasonably request; and
(ii) Carry all insurance available through the PBGC or any
private insurance companies covering its obligations (if any) to
the PBGC;
(M) The Company will maintain:
(i) At all times, Consolidated Effective Net Worth in an amount
not less than the sum of (i) Two Hundred Sixty-Five Million
Dollars ($265,000,000) plus (ii) the sum, for all fiscal quarters
of the Company ended subsequent to January 1, 1993, of the
greater of (A) Zero Dollars ($0) and (B) fifty percent (50%) of
Consolidated Net Earnings for each such fiscal quarter.2
(see note 2)
(ii) At all times, Consolidated Adjusted Net Worth in an amount
not less than the sum of (i) One Hundred Million Dollars
($100,000,000) plus (ii) the sum, for all fiscal quarters of the
Company ended subsequent to January 1, 1993, of the greater of
(A) Zero Dollars ($0) and (B) fifty percent (50%) of Consolidated
Net Earnings for each such fiscal quarter. 1
(iii) With respect to the Company at all times, Investments
of the types described in Section 6.02(I)(i) through (xii) in an
aggregate amount not less than Twenty-Five Million ($25,000,000)
Dollars.
(iv) With respect to the Company for each period of four (4)
consecutive fiscal quarters of the Company, Consolidated Earnings
Available for Fixed Charges not less than one hundred ten percent
(110%) of Consolidated Fixed Charges for such period.
(v) With respect to the Company, Paid-in-Capital in each of the
following Subsidiaries in an amount not greater than the
following amounts:
Amount of
Subsidiary Paid-In-Capital
NCB Financial Corporation $15,000,000
NCB Capital $15,000,000
(vi) With respect to the Company at all times, Investments in
Subsidiaries (other than as set forth in subsection 6.01(M)(V)
above and excluding SPV's and secured loans to NCB Capital) in an
aggregate amount with respect to all such Subsidiaries of not
greater than $30,000,000.
(vii) At all times during the periods set forth below, a
ratio of Consolidated Debt to Consolidated Adjusted Net Worth in
an amount not greater than the respective ratio set forth below
opposite each such period:
Period Maximum Ratio of Consolidated
Debt to Consolidated Adjusted Net Worth
December 31, 1998 through and
Including May 26, 1999 8.5 : 1.0
May 27, 1999 through and
Including May 26, 2000 9.0 : 1.0
May 27, 2000 and at all times
Thereafter 9.5 : 1.0
For purposes of calculating the ratio set forth in
subsection 6.01(M)(vii) above, "Consolidated Adjusted Net Worth"
shall be reduced by the amount by which the sum of 75% of (i) 90
day overdue accounts, (ii) non-performing loans, (iii) REO, in
substance foreclosure and other miscellaneous repossession and,
(iv) modified loans, exceed the reserves for credit losses
established by the Company and its Subsidiaries.
(viii) Qualified Assets of not less than one hundred (100%)
percent of the sum (at any date of determination thereof) of:
(i) NCB Senior Obligations, plus
(ii) the aggregate unpaid principal amount of
Subordinated Debt (as defined in the Senior
Note Agreements as in effect on the date
hereof), less
(iii) the aggregate unpaid principal
amount of Class A Notes.
(N) The Company will comply and remain at all times in
compliance with all material provisions of the Senior Note
Agreements and all other agreements evidencing Indebtedness of
the Company for borrowed money and will deliver to the Bank a
certified copy of each Senior Note Agreement and other such
agreement entered into after the Loan Date.
Section 6.02 Negative Covenants. The Company covenants and
agrees that, so long as this Agreement shall remain in effect or
any of the principal of or interest on any Note hereunder shall
remain unpaid, the Company, will not:
(A) Merge or consolidate with any Persons (whether or not the
Borrower is the surviving entity), except (i) for the
Dissolution, and (ii) a Subsidiary may consolidate with, or merge
into, the Borrower or another Subsidiary, or, except as permitted
by subsection 6.01(M)(v), acquire all or substantially all of the
assets or any of the capital stock of any Person.
(B) Sell or transfer any of its property to anyone (other than
to an entity at least fifty percent (50%) of the capital stock of
which at the time outstanding, having ordinary voting power for
the election of directors, is owned by the Company directly or
indirectly through Subsidiaries) with the intention of taking
back a lease of such property, except a lease for a temporary
period during or at the end of which it is intended that the use
by the Company of such property will be discontinued;
(C) Create, or assume or permit to exist, any Lien on any of the
properties or assets of the Company whether now owned or
hereafter acquired, except:
(i) Permitted Liens;
(ii) As set forth on Exhibit B annexed hereto;
(iii) To secure obligations in connection with Eligible
Derivatives;
(D) Assume, endorse, be or become liable for, or guarantee, the
obligations of any Person, except by the endorsement of
negotiable instruments for deposit or collection in the ordinary
course of business. For the purposes hereof, the term "guarantee"
shall include any agreement, whether such agreement is on a
contingency or otherwise, to purchase, repurchase or otherwise
acquire Indebtedness of any other Person, or to purchase, sell or
lease, as lessee or lessor, property or services, in any such
case primarily for the purpose of enabling another person to make
payment of Indebtedness, or to make any payment (whether as an
advance, capital contribution, purchase of an equity interest or
otherwise) to assure a minimum equity, asset base, working
capital or other balance sheet or financial condition, in
connection with the Indebtedness of another Person, or to supply
funds to or in any manner invest in another Person in connection
with such Person's Indebtedness. Asset Securitization Recourse
Liabilities shall not constitute "guarantees" hereunder;
(E) Acquire all or substantially all of the assets or any of the
capital stock of any Person except as permitted under Section
6.01(M)(vi);
(F) (i) Except for redemptions by the Company of its Class B1
Common Stock from the holders thereof who no longer have loans
from the Company outstanding, purchase, redeem, retire or
otherwise acquire, directly or indirectly, or make any sinking
fund payments with respect to, any shares of any class of stock
of the Company now or hereafter outstanding or set apart any sum
for any such purpose; or
(ii)Declare or pay any dividends or make any
distribution of any kind on the Company's outstanding stock,
or set aside any sum for any such purpose, except that the
Company may declare or pay any dividend payable solely in
shares of its common stock;
(G) Make any material change in its business, or in the nature
of its operation, or liquidate or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, assets or
business except in the ordinary course of business and for a fair
consideration, or dispose of any shares of stock or any
Indebtedness, whether now owned or hereafter acquired;
(H) Make any voluntary or optional prepayment of any
Indebtedness of the Company or any of its Subsidiaries for
borrowed money incurred or permitted to exist under the terms of
this Agreement, other than:
(i) Indebtedness evidenced by the Notes;
(ii) Indebtedness of NCB Capital to the Company; and
(iii) any Indebtedness which has a maturity of not more than
one year from the date of its occurrence;
(I) Make, or suffer to exist, any Investment in any Person,
including, without limitation, any shareholder, director, officer
or employee of the Company or any of its Subsidiaries, except
investments in:
(i) Demand deposits in and one-to-four day unsecured loans to
Selected Banks;
(ii) Marketable obligations of the United States;
(iii) Marketable obligations guaranteed by or insured by the
United States, or those for which the full faith and credit of
the United States is pledged for the repayment of principal and
interest thereon;
(iv) Marketable obligations issued, guaranteed, or fully insured
by any agency, instrumentality, or corporation of the United
States established or to be established by the Congress, for
which the credit of such agency, instrumentality, or corporation
is pledged for the repayment of the principal and interest
thereof;
(v) Marketable general obligations of a state, a territory or a
possession of the United States, or any political subdivision of
any of the foregoing, or the District of Columbia,
unconditionally secured by the full faith and credit of such
state, territory, possession, political subdivision or district
provided that such state, territory, possession, political
subdivision or district has general taxing authority and the
power to levy such taxes as may be required for the payment of
principal and interest thereof;
(vi) Domestic and London interbank market, negotiable time and
variable rate certificates of deposit issued by Selected Banks;
(vii) Marketable bankers' acceptances and finance bills
accepted by Selected Banks;
(viii) Prime commercial paper having a credit rating equal to
at least A-2 issued by Standard & Poor's Corporation ("S&P"), P-2
issued by ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's") or Duff-2
issued by Duff & ▇▇▇▇▇▇ Inc.;
(ix) Marketable corporate debt securities having an A credit
rating issued by both S&P and Moody's;
(x) Repurchase, reverse repurchase agreements and security
lending agreements collateralized by securities of the type
described in subsections (ii) and (iv);
(xi) Asset-backed securities issued against a pool of receivables
which have a long-term rating of AAA or better by Standard &
Poors, Moodys or Duff & ▇▇▇▇▇▇ and which have an average life or
final maturity, as determined by the dealer's prepayment
assumptions at the time of purchase, of no more than five years;
(xii) Mortgaged-backed securities issued against an
underlying pool of mortgages which have a long-term rating of AAA
or better by Standard & Poors, Moodys or Duff & ▇▇▇▇▇▇; provided
such mortgage-backed securities shall have an average life, as
determined by the dealer's prepayment assumptions at the time of
purchase, of no more than five years;
(xiii) Subsidiaries, subject to the limitations stated in
subsection 6.01(M)(vi) hereof;
(xiv) Promissory notes and other interest bearing obligations
acquired in the ordinary course of business and the issuance of
letters of credit in the ordinary course of business;
(xv) Equity Investments provided that (i) the aggregate amount of
such Equity Investments (on a cumulative basis) does not exceed
an amount equal to ten (10%) percent of Consolidated Adjusted Net
Worth as at any date of determination thereof, after giving
effect to any such Equity Investment, and (ii) no single Equity
investment in any Person shall be greater than $2,000,000.
(J) Change its fiscal year;
(K) (i) Be or become obligated to the Pension Benefit Guaranty
Corporation, other than in respect of annual premium payments, in
excess of $50,000 in the aggregate;
(ii) Be or become obligated to the IRS with
respect to excise or other penalty taxes provided for in
Section 4975 of the Code in excess of $50,000 in the
aggregate;
(L) Modify, amend, supplement or terminate, or agree to modify,
amend, supplement or terminate its charter or by-laws;
(M) Except as expressly permitted by this Agreement, directly or
indirectly: (i) make any investment in an Affiliate; or (ii)
consolidate with or purchase or acquire assets from an Affiliate;
or enter into any other transaction directly or indirectly with
or for the benefit of any Affiliate (including, without
limitation, guarantees and assumptions of obligations of an
Affiliate); provided, however, that (x) any Affiliate who is an
individual may serve as an employee or director of the Company
and receive reasonable compensation for his services in such
capacity, (y) the Company may enter into any transaction with an
Affiliate providing for the leasing of property, the rendering or
receipt of services or the purchase or sale of product, inventory
and other assets in the ordinary course of business (including an
unsecured line of credit of up to Ten Million Dollars
($10,000,000) to Development Corp. if the monetary or business
consideration arising therefrom would be substantially as
advantageous to the Company as the monetary or business
consideration that would obtain in a comparable arm's-length
transaction with a Person not an Affiliate, and (z) subject to
compliance with Section 6.01(M) and the other provisions of this
Agreement, the Company may make annual charitable contributions
in reasonable amounts as may be determined from time to time by
the Board of Directors of the Company to Development Corp.;
(N) Subject to subsection 6.01(M)(vi) and (vii), create, incur,
permit to exist or have outstanding any Indebtedness, except:
(i) Indebtedness under the Fleet Loan Agreement, and the Note;
(ii) Taxes, assessments and governmental charges, non-interest
bearing accounts payable and accrued liabilities, in any case not
more than 90 days past due from the original due date thereof
(e.g., deferred compensation and deferred taxes) and in each case
incurred and continuing in the ordinary course of business;
(iii) Indebtedness under, and as permitted by, the Senior
Note Agreements;
(iv) Indebtedness under the Class A Notes; and
(v) Indebtedness of NCB Capital and Development Corp. to the
Company.
Section 6.03 Fleet Loan Agreement Covenants. During all such
times as the Fleet Loan Agreement shall remain in force against
the Company, the Company shall comply and remain at all times in
compliance with the provisions of Article 6 and Article 7 thereof
and any financial covenant set forth in any other provision
thereof (all collectively the "Fleet Covenants"), and all of the
Fleet Covenants, together with all relevant definitions
pertaining thereto, shall hereby be incorporated herein by
reference. Any subsequent amendment to any of the Fleet Covenants
to which Bank affirmatively consents in its capacity as one of
the "Banks" thereunder shall also be so incorporated and shall
supersede any previously conflicting provision hereof.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01 Events of Default. If one or more of the following
Events of Default shall occur and be continuing:
(A) (i) the Company shall fail to make any payment of principal
on either Note when due; or
(ii) the Company shall fail to make any payment of interest on
either Note when due and such failure shall continue for a period
of three (3) Business Days; or
(B) the Company shall default in any payment of principal of or
interest on any other obligation for borrowed money beyond any
period of grace provided with respect thereto or in the
performance of any other agreement, term or condition contained
in any instrument or agreement evidencing, securing, guaranteeing
or otherwise relating to any such obligation and shall not have
cured such default within any period of grace provided by such
agreement, or any event or condition referred to in any such
agreement shall occur or fail to occur, if the effect of such
default, event or condition is to cause, or permit the holder or
holders of such obligations (or a trustee on behalf of such
holder or holders) to cause, such obligation to become due prior
to its stated maturity and such accelerated obligation is for an
amount in excess of one percent (1%) of the Indebtedness of the
Company and its Consolidated Subsidiaries; or
(C) any representation or warranty herein made by the Company,
or any certificate or financial statement furnished pursuant to
the provisions hereof, shall prove to have been false or
misleading in any material respect as of the time made or
furnished; or
(D) the Company shall default in the performance or observance
of any covenant, condition or agreement contained in Section
6.01(G), 6.01(M), 6.02 or 6.03; or
(E) the Company shall default in the performance or observance
of any other covenant, condition or provision hereof and such
default shall not be remedied within thirty (30) days after
written notice thereof is delivered to the Company by the holder
of any Note; or
(F) a proceeding (other than a proceeding commenced by the
Company) shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief
in respect of the Company in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Company or for any substantial part of
its total assets, or for the winding-up or liquidation of its
affairs and such proceedings shall remain undismissed or unstayed
and in effect for a period of sixty (60) consecutive days or such
court shall enter a decree or order granting the relief sought in
such proceeding; or
(G) the Company shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, shall consent to the entry of an order for
relief in an involuntary case under any such law, or shall
consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Company or for any substantial part of
its total assets, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as
they become due, or shall take any corporate action in
furtherance of any of the foregoing; or
(H) a judgment or order shall be entered against the Company by
any court, and (i) in the case of a judgment or order for the
payment of money, either (A) such judgment or order shall
continue undischarged and unstayed for a period of 10 days in
which the aggregate amount of all such judgments and orders
exceeds $500,000 or (B) enforcement proceedings shall have been
commenced upon such judgment or order and (ii) in the case of any
judgment or order for other than the payment of money, such
judgment or order could, in the reasonable judgment of the Bank,
together with all other such judgments or orders, have a
materially adverse effect on the Company; or
(I) (i) any Termination Event shall occur with respect to any
Benefit Plan, (ii) any Accumulated Funding Deficiency, whether or
not waived, shall exist with respect to any Benefit Plan, (iii)
any Person shall engage in any Prohibited Transaction involving
any Benefit Plan, (iv) the Company or any ERISA Affiliate shall
be in "default" (as defined in ERISA Section 4219(c)(5)) with
respect to payments owing to a Multiemployer Benefit Plan as a
result of the Company's or any ERISA Affiliate's complete or
partial withdrawal (as described in ERISA Section 4203 or 4208)
from such Multiemployer Benefit Plan, (v) the Company or any
ERISA Affiliate shall fail to pay when due an amount that is
payable by it to the PBGC or to a Benefit Plan under Title IV of
ERISA, or (vi) a proceeding shall be instituted by a fiduciary of
any Benefit Plan against the Company or any ERISA Affiliate to
enforce ERISA Section 515 and such proceeding shall not have been
dismissed within 30 days thereafter, except that no event or
condition referred to in clauses (i) through (vi) shall
constitute an Event of Default if it, together with all other
such events or conditions at the time existing, has not had, and
in the reasonable determination of the Bank will not have, a
materially adverse effect on the Company;
then, and in any such event, the Bank upon notice to the Company
may (a) declare the entire outstanding principal amount, if any,
of the Notes (if then issued), any and all accrued and unpaid
interest thereon and any and all other amounts payable by the
Company to the Bank under this Agreement or the Notes to be
forthwith due and payable, whereupon the entire outstanding
principal amount, if any, of the Notes, together with any and all
accrued and unpaid interest thereon and any and all other such
amounts, shall become and be forthwith due and payable, and (b)
terminate the obligation of the Bank to make Loans, in each case
without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Company;
provided, however, that in the event of the entry of an order for
relief with respect to the Company under the Federal Bankruptcy
Code, (a) any principal amount of the Notes then outstanding,
together with any and all accrued and unpaid interest thereon and
any and all such other amounts, shall thereupon automatically
become and be due and payable, and (b) the Bank's obligation to
make Loans shall thereupon automatically terminate, in each case
without presentment, demand, protest or notice of any kind, all
of which are hereby expressly waived by the Company.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Amendments and Waivers; Cumulative Remedies. No
delay or failure of the Bank or the holder of any Note in
exercising any right, power or privilege hereunder shall affect
such right, power or privilege; nor shall any single or partial
exercise thereof or any abandonment or discontinuance of steps to
enforce such a right, power or privilege preclude any further
exercise thereof or of any other right, power or privilege. The
rights and remedies of the Bank, of any other holder of any Note
hereunder and of the Company are cumulative and not exclusive of
any rights or remedies which any of them would otherwise have.
Any waiver, permit, consent or approval of any kind or character
(whether involving a breach, default, provision, condition or
term hereof or otherwise) on the part of the Bank, of the holder
of any Note, or of the Company under this Agreement or under any
Note must be in writing and shall be effective only in the
specific instance and for the purpose for which given and only to
the extent set forth specifically in such writing. No notice or
demand given hereunder shall entitle the recipient thereof to any
other or further notice or demand in similar or other
circumstances.
Section 8.02 Survival of Representation and Warranties. All
representations, warranties, covenants and agreements of the
Company contained herein or made in writing in connection
herewith shall survive the execution and delivery of this
Agreement, the making of Loans hereunder and the issuance of the
Notes, provided that the survival of a representation or warranty
shall not constitute a restatement of such representation or
warranty after the Effective Date.
Section 8.03 Supervening Illegality. If, after any Loan Date,
as the result of (i) the adoption of any law, rule or regulation
by the United States of America or other Governmental Body, (ii)
any change in the existing laws, rules and regulations of the
United States of America or other Governmental Body, (iii) the
issuance of any order or decree by any Governmental Body, (iv)
any change in the interpretation or administration of any
applicable law, rule, regulation, order or decree by any
Governmental Body (including any central bank or similar agency)
charged with the interpretation or administration thereof, or (v)
compliance by the Bank with any request or directive (whether or
not having the force of law) of any Governmental Body, it shall
be unlawful or impossible for the Bank to maintain the Loans, or
either of them (after the Bank shall have used reasonable efforts
to avoid such result), the Bank shall so notify the Company and
the Bank may require the Company to prepay the entire principal
amount of, and all accrued and unpaid interest on, such Loan or
Loans, together with any amount payable pursuant to Section
3.06(C), by giving the Company at least thirty (30) business
days' prior written notice. If after the Effective Date and prior
to a Loan Date it shall become unlawful or impossible for the
Bank to make a Loan, the obligation to make such Loan shall
terminate forthwith.
Section 8.04 No Reduction in Payments. All payments due to the
Bank hereunder, and all other terms, conditions, covenants and
agreements to be observed and performed by the Company hereunder,
shall be made, observed or performed by the Company without any
reduction or deduction whatsoever, including any, reduction or
deduction for any set-off, recoupment, counterclaim (whether
sounding in tort, contract or otherwise) or tax. The Bank has
submitted to the Company two duly completed and signed copies of
Form 4224 of the United States Internal Revenue Service relating
to all amounts to be received by such Bank pursuant to this
Agreement. The Bank shall, from time to time, submit to the
Company such additional duly completed and signed copies of such
forms (or such successor forms as shall be adopted from time to
time by the relevant United States taxing authorities) as may be
(i) requested in writing by the Company and (ii) appropriate
under then current United States law or regulations to avoid or
reduce United States withholding taxes on payments in respect of
all amounts to be received by the Bank pursuant to this
Agreement.
Section 8.05 Change of Control Option.
(A) In the event that there shall occur any Change of Control
(as defined below) in respect of the Company, the Bank shall have
the right, at its option exercisable at any time within six
months following the Change Date (as defined below), to require
the Company to purchase the Notes on the Purchase Date (as
defined below) at a purchase price that shall be equal to the sum
of (i) the principal amount of the Notes then outstanding, plus
(ii) any and all accrued and unpaid interest on the Notes to the
Purchase Date plus (iii) the amount that would be payable by the
Company under Section 3.06(C) in the case of a prepayment in full
of the Notes (the "Purchase Price").
(B) The Company shall give the Bank written notice of the
occurrence of a Change of Control within five Business Days
following the Change Date. No failure of the Company to give
notice of a Change of Control shall limit the right of the Bank
to require the Company to purchase the Note pursuant to this
Section 8.05.
(C) The Bank may exercise its option hereunder to require the
Company to purchase the Notes by delivering to the Company at any
time within six months after the Change Date (i) written notice
of such exercise specifying the Purchase Date and (ii) the Notes
duly endorsed. The Bank's commitment shall automatically
terminate immediately upon the Company's receipt of the Bank's
written notice of such exercise of its option under and in
accordance with this Section 8.05.
(D) In the event of the exercise by the Bank of its option under
this Section 8.05 in the manner provided herein, the Company
shall pay or cause to be paid to the Bank on the Purchase Date
the Purchase Price (determined in accordance with Subsection
8.05(A)) in immediately available funds.
(E) As used in this Section 8.05, the term:
(i) "Change Date" means the date on which any Change of Control
shall be deemed to have occurred; provided, that, if the Company
shall fail to give timely notice of the occurrence of a Change of
Control to the Bank as provided in Subsection 8.05(B) of this
Section 8.05, for the purpose of determining the duration of the
option of the Bank granted under this Section 8.05, "Change Date"
shall mean the earlier of (i) the date on which notice of a
Change of Control is duly given by the Company to the Bank or
(ii) the date on which the Bank obtains actual knowledge of the
Change of Control.
(ii) "Change of Control" means when, and shall be deemed to have
occurred at such time as, a "person" or "group" (within the
meaning of Sections 13(d) and 14(d)(2) of the Exchange Act)
becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act) of more than fifty percent (50%) of the then
outstanding Voting Stock of the Company; provided, that fifty
percent shall become seventy percent (70%) with respect to any
"employee benefit plan" (as defined in Section 3(3) of ERISA)
maintained by the Company or any Subsidiary of the Company or any
trust or funding vehicle maintained for or pursuant to such
"employee benefit plan".
(iii) "Purchase Date" means the date on which the Company
shall purchase the Note from the Bank pursuant to the exercise by
the Bank of its option under this Section 8.05 pursuant to a
notice given to the Company in accordance with Subsection 8.05(C)
of this Section 8.05, which date shall be a business day not less
than 90 nor more than 120 days after the date the Bank gives the
Company written notice of such exercise.
(iv) "Voting Stock" shall mean capital stock of the Company of
any class or classes (however designated) the holders of which
are ordinarily, in the absence of contingencies, entitled to vote
for the election of the Board of Directors of the Company, it
being understood that, at the Effective Date, the Common Stock,
Classes B and C $100 par value, of the Company are the only
outstanding classes of capital stock of the Company that
constitute "Voting Stock".
Section 8.06 Stamp Taxes. The Company agrees to pay, and to
save the Bank harmless from all liability for, any stamp,
transfer, documentary or similar taxes, assessments or charges
(herein "Stamp Taxes"), and any penalties or interest with
respect thereto, which may be assessed, levied, collected or
imposed, or otherwise become payable, in connection with the
execution and delivery of this Agreement or the Note.
Section 8.07 Notices. Any notice, statement, request or demand
required or permitted hereunder to be in writing may be given by
telex, cable or electronic communication means. All notices,
statements, requests and demands given to or made upon either
party hereto in accordance with the provisions of this Agreement
shall be deemed to have been given or made in the case of
telephonic notice (to the extent expressly permitted hereunder)
when made, or in the case of any other type of notice, when
actually received, if to the Company, to it at
National Consumer Cooperative Bank
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇.▇. - ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Seas
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and:
▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
and if to the Bank, to it at:
Comerica Bank
One Detroit Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address for notice as either party may designate
for itself in a notice to the other party, except in cases where
it is expressly provided herein that such notice, statement,
request or demand shall not be effective until received by the
party to whom it is addressed.
Section 8.08 Governing Law. This Agreement and the Notes shall
be deemed to be contracts under the laws of the State of Michigan
and for all purposes shall be governed by and construed in
accordance with the laws of said state.
Section 8.09 Successors and Assigns.
(A) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and
assigns of the parties hereto, provided that the Company may not
assign or transfer any of its interest hereunder without the
prior written consent of the Bank.
(B) The Bank may make, carry or transfer any Loan at, to or for
the account of, any of its branch offices or the offices of any
of its Affiliates.
(C) The Bank may assign its rights and delegate its obligations
under this Agreement; provided that any such assignment or
delegation (other than the pledge of the Note to the Federal
Reserve Bank) may be made only with the prior written consent of
the Company, which consent shall not be unreasonably withheld or
delayed. The Bank may sell participations in all or any part of
the Loans made by it or its commitment or any other interest
herein or in the Notes to another bank or other entity. In the
case of an assignment, upon notice thereof by the Bank to the
Company, the assignee shall have, to the extent of such
assignment (unless otherwise provided thereby), the same rights
and benefits as it would have if it were the Bank hereunder and
the holder of the Notes, and, if the assignee has expressly
assumed, for the benefit of the Company, the Bank's obligations
hereunder, the Bank shall be relieved of its obligations
hereunder to the extent of such assignment and assumption. In the
case of a participation, the participant shall not have any
rights under this Agreement or the Notes or any other document
delivered in connection herewith (the participant's rights
against the Bank in respect of such participation to be those set
forth in the agreement executed by the Bank in favor of the
participant relating thereto) and all amounts payable by the
Company shall be determined as if the Bank had not sold such
participation.
Section 8.10 Maximum Rate of Interest Permitted by Law. Nothing
in this Agreement shall require the Company to pay interest for
the account of the Bank at a rate exceeding the maximum rate
permitted by applicable law to be charged or received by the
Bank, it being understood that neither this Section nor Section
8.08 is intended to make the criminal laws of any jurisdiction
applicable in circumstances in which they would not otherwise
apply. If the rate of interest specified herein or in the Notes
would otherwise exceed the maximum rate so permitted to be
charged or received with respect to any Note, the rate of
interest required to be paid for the account of the Bank shall be
automatically reduced to such maximum rate.
Section 8.11 Expenses; Indemnification.
(A) The Company shall save the Bank harmless against all
reasonable out-of-pocket expenses (including attorneys' fees and
expenses) of the Bank and shall indemnify the Bank, its
Affiliates, officers, employees and agents ("Indemnified
Persons") against the costs of preparing this Agreement and the
Notes, all costs, expenses, losses and damages arising in
connection with this Agreement or the Notes, including with
respect to any Credit Agreement Related Claim. The obligation of
the Company under this paragraph shall survive the payment of the
Notes.
(B) All amounts payable by the Company under Section 8.11(A)
shall be immediately due upon written request by the Bank for the
payment thereof.
Section 8.12 Set-Off; Suspension of Payment and Performance.
The Bank is hereby authorized by the Company, at any time and
from time to time, without notice, (a) during any Event of
Default, to set off against, and to appropriate and apply to the
payment of, the liabilities of the Company under this Agreement
and the Notes (whether matured or unmatured, fixed or contingent
or liquidated or unliquidated) any and all liabilities owing by
the Bank or any of its Affiliates to the Company (whether payable
in Dollars or any other currency, whether matured or unmatured
and, in the case of liabilities that are deposits, whether
general or special, time or demand and however evidenced and
whether maintained at a branch or office located within or
without the United States) and (b) during any Event of Default,
to suspend the payment and performance of such liabilities owing
by such Person or its Affiliates and, in the case of liabilities
that are deposits, to return as unpaid for insufficient funds any
and all checks and other items drawn against such deposits.
Section 8.13 Judicial Proceedings: Waiver of Jury Trial. Any
judicial proceeding brought against the Company with respect to
any Credit Agreement Related Claim may be brought in any court of
competent jurisdiction whose territorial jurisdiction includes
the Eastern District of Michigan, and, by execution and delivery
of this Agreement, the Company (a) accepts, generally and
unconditionally, the nonexclusive jurisdiction of such courts and
any related appellate court and irrevocably agrees to be bound by
any judgment rendered thereby in connection with any Credit
Agreement Related Claim and (b) irrevocably waives any objection
it may now or hereafter have as to the venue of any such
proceeding brought in such a court or that such a court is an
inconvenient forum. The Company hereby waives personal service of
process and consents that service of process upon it may be made
by certified or registered mail, return receipt requested, at its
address specified or determined in accordance with the provisions
of Section 8.07, and service so made shall be deemed complete on
the third Business Day after such service is deposited in the
mail. Nothing herein shall affect the right of the Bank or any
other Indemnified Person to serve process in any other manner
permitted by law or shall limit the right of the Bank or any
other Indemnified Person to bring proceedings against the Company
in the courts of any other jurisdiction. Any judicial proceeding
by the Company against the Bank involving any Credit Agreement
Related Claim shall be brought only in a court located in the
State of Michigan. THE COMPANY AND THE BANK HEREBY WAIVE TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING TO WHICH THEY ARE BOTH PARTIES
INVOLVING ANY CREDIT AGREEMENT RELATED CLAIM.
Section 8.14 LIMITATION OF LIABILITY. NEITHER THE BANK NOR ANY
OTHER INDEMNIFIED PERSON SHALL HAVE ANY LIABILITY WITH RESPECT
TO, AND THE COMPANY HEREBY WAIVES, RELEASES AND AGREES NOT TO ▇▇▇
FOR, ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES SUFFERED OR
ALLEGED BY THE COMPANY OR THE BANK IN CONNECTION WITH ANY CREDIT
AGREEMENT RELATED CLAIM.
Section 8.15 Severability. The provisions of this Agreement are
severable, and if any clause or provision of this Agreement shall
be held invalid or unenforceable in whole or in part in any
jurisdiction, then such clause or provision shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
Unenforceability without in any manner affecting the validity or
enforceability of such clause or provision in any other
jurisdiction or the remaining provisions hereof in any
jurisdiction.
Section 8.16 Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto on
separate counterparts, each complete set of which, when so
executed and delivered by all parties, shall be an original, but
all such counterparts shall together constitute but one and the
same instrument.
Section 8.17 Headings, Bold Type and Index. The section
headings, subsection headings, and bold type used herein and the
Index hereto have been inserted for convenience of reference only
and do not constitute matters to be considered in interpreting
this Agreement.
IN WITNESS WHEREOF, the parties hereto, by their officers
"hereunto duly authorized, have executed this Agreement as of the
day and year first above written.
NATIONAL CONSUMER
COOPERATIVE BANK COMERICA BANK
By: By:
Its: Its:
EXHIBIT "A"
FORM OF PROMISSORY NOTE
PROMISSORY NOTE
U.S. $20,000,000 Dated:
FOR VALUE RECEIVED, the undersigned, National Consumer
Cooperative Bank, a corporation organized under the laws of the
United States (the "Company"),hereby promises to pay to the order
of Comerica Bank (the "Bank") the principal amount of TWENTY
MILLION UNITED STATES DOLLARS ($20,000,000) on the Maturity Date.
The Company promises to pay interest from the date hereof
until the Maturity Date on the principal amount of this
Promissory Note from time to time outstanding at the per annum
interest rate of ______________________________ PERCENT
(__________%), payable on each Interest Payment Date. Interest
shall be computed on the basis of a year of 360 days consisting
of 12 months of 30 days each and, in the case of a portion of a
month, for the actual number of days (including the first and
excluding the last) elapsed. Any principal amount of this
Promissory Note which is not paid on the Maturity Date shall bear
interest from the Maturity Date and until paid in full at the
Default Rate. In no event shall the rate of interest borne by
this Promissory Note at any time exceed the maximum rate of
interest permitted at that time under applicable law.
Payments of the principal amount of and interest on this
Promissory note shall be made in lawful money of the United
States of America to the Bank at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ or at such other place as the holder of this Note may
designate in writing to the Company.
This Promissory Note is a Note referred to in the Term Loan
Agreement, dated December _____, 1998 (the "Term Loan
Agreement"), between the Bank and the Company. The Term Loan
Agreement, among other things, contains provisions for optional
prepayments on account of the principal of this Promissory Note
by the Company and for acceleration of the maturity of this
Promissory note upon the terms and conditions therein specified.
Capitalized terms used (but not defined) in this Promissory Note
shall have the meanings given to them in the Term Loan Agreement.
NATIONAL CONSUMER COOPERATIVE BANK
By:_____________________________________
Its:____________________________________
SCHEDULE OF INTEREST
This Schedule of Interest attached to the
Promissory Note dated __________________,
199___ of NATIONAL CONSUMER COOPERATIVE BANK,
payable to the order of COMERICA BANK, and
is, by specific reference, incorporated in
and made a part of the Promissory Note.
============================================
Interest Payment of
First Last Principal Interest Notation
Day Day Outstanding Amount Date Made By
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
EXHIBIT "B"
PURSUANT TO SECTION 6.02
OF TERM LOAN AGREEMENT BY AND BETWEEN
NATIONAL CONSUMER COOPERATIVE BANK
AND
COMERICA BANK
__________________________________________________
PERMITTED SECURITY INTERESTS,
LIENS AND ENCUMBRANCES
__________________________________________________
NCB Savings Bank, FSB, ("NCBSB") has under pledge to the Federal
Home Loan Bank of Cincinnati (FHLBC) its mortgage loan portfolio
under a Blanket Agreement for Advances and Security Agreement
which allows a blanket lien to secure borrowings from FHLBC.
Each of the Company and NCB Capital sells mortgage loans, ESOP
loans and other loans from its portfolio in the ordinary course
of business, structured either as an Asset Securitization or a
sale of whole loans. The SPV or other purchaser typically
provides for an alternative security interest and files a
financing statement covering such loans in order to protect
itself against a subsequent determination that such sale was not
a sale but rather a loan.
Note:
1 Need to discuss whether this should be updated.
2 Note that these step-ups run from 1993. Should opening
number and step-up date be adjusted?