CREDIT AGREEMENT
This Credit Agreement, dated as of the Effective Date set forth below
(the "Agreement"), is by and between National City Bancshares, Inc., an
Indiana corporation, (the "Borrower"), and NBD BANK, a Michigan banking
corporation (the "Bank").
RECITALS:
(A) The Bank and the Borrower wish to provide for a revolving credit in a
principal amount not to exceed $10,000,000, as provided herein.
AGREEMENT:
THEREFORE, in consideration of the Recitals and the mutual promises
contained in this Agreement, the parties agree as follows:
ARTICLE I -- DEFINITIONS
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of either (a) the Prime Rate for such day or (b) the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Authorized Officer" means any of the Chairman, President, Executive Vice
President or Secretary-Treasurer, acting singly.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Rate Loans, a day other than Saturday or Sunday on
which banks are open for business in Detroit and New York and on which
dealings in United States dollars are carried on in the London interbank
market, and (ii) for all other purposes, a day other than Saturday or Sunday
on which banks are open for business in Detroit.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.
"Commitments" means the obligation of the Bank to make Loans not
exceeding $10,000,000, as such amount may be modified or reduced from time to
time pursuant to the terms hereof.
"Consolidated Interest Expense" means, for any period, the interest
expense of the Borrower and its Subsidiaries calculated on a consolidated
basis for such period.
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"Consolidated Net Income" means, for any period, the consolidated net
income or loss of the Borrower and its Subsidiaries for such period,
determined in accordance with GAAP.
"Consolidated Net Worth" means, at any date, the consolidated net worth
of the Borrower and its Subsidiaries at such date, determined in accordance
with GAAP.
"Consolidated Return on Average Assets" of the Borrower means the ratio
of Consolidated Net Income to Consolidated Average Assets, expressed as a
percentage.
"Consolidated Tangible Net Worth" means, at any date, Consolidated Net
Worth after subtracting therefrom the aggregate amount of all intangible
assets of the Borrower and its Subsidiaries, including, without limitation,
goodwill, franchises, licenses, patents, trademarks, trade names, copyrights,
service marks, brand names and operating rights, all determined in accordance
with GAAP.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes
or is contingently liable upon, the obligation or liability of any other
Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person, or otherwise assures any creditor of
such other Person against loss, including, without limitation, any comfort
letter, operating agreement or take-or-pay contract.
"Consolidated Average Assets" means, for any period, the consolidated
average assets for such period, determined in accordance with GAAP.
"Credit Facility" means the Revolving Credit.
"Current Assets" shall mean current assets as determined in accordance
with GAAP.
"Current Liabilities" shall mean current liabilities as determined in
accordance with GAAP.
"Default" means an event described in Section 7.
"EBIT" means, with respect to the Borrower and its Subsidiaries and for
any period of its determination, the Consolidated Net Income of the Borrower
and its Subsidiaries for such period, plus the consolidated interest expense
and taxes, all determined in accordance with GAAP consistently applied.
"EBITDA" means, with respect to the Borrower and its Subsidiaries for
any period of determination, EBIT of the Borrower and its Subsidiaries for
such period, plus depreciation and amortization of the Borrower and its
Subsidiaries for such period, all determined in accordance with GAAP.
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"Effective Date" shall mean the date set forth in the last paragraph of
this Agreement described as the effective date of this Agreement.
"Eurodollar Base Rate" means the rate determined by the Bank to be the
rate at which deposits in U.S. dollars are offered to the Bank by first-class
banks in the London interbank market at approximately 11 a.m. (London time)
two Business Days prior to the first day of that Eurodollar Interest Period,
in the approximate amount of the relevant Eurodollar Rate Loan and having a
maturity approximately equal to that Eurodollar Interest Period.
"Eurodollar Interest Period" means a period of one, two, three or six
months commencing on a Business Day selected by the Borrower pursuant to this
Agreement. The Eurodollar Interest Period ends on the day which corresponds
numerically to that date one, two, three or six months thereafter. If there
is no numerically corresponding day in the next, second, third or sixth
succeeding month, that Eurodollar Interest Period ends on the last Business
Day of the relevant month. If a Eurodollar Interest Period would otherwise
end on a day which is not a Business Day, that Eurodollar Interest Period
ends on the next succeeding Business Day, unless that Business Day falls in a
new month in which case that Eurodollar Interest Period ends on the
immediately preceding Business Day.
"Eurodollar Rate" means the sum of (i) the quotient of (a) the
Eurodollar Base Rate applicable to that Eurodollar Interest Period divided by
(b) one minus the Reserve Requirement (expressed as a decimal) applicable to
that Eurodollar Interest Period plus (ii) 3/4%. The Eurodollar Rate will be
rounded, if necessary, to the next higher 1/16 of 1%.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not
a Business Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations at approximately 10
a.m. (Detroit time) on such day on such transactions received by the Bank
from three Federal funds brokers of recognized standing selected by the Bank
in its sole discretion.
"Fixed Rate" means the Eurodollar Rate and the Negotiated Rate.
"Fixed Rate Loan" means a Loan which bears interest at the Fixed Rate.
"Floating Rate" means a rate per annum equal to the Alternate Base Rate,
changing when and as the Alternate Base Rate changes.
"GAAP" means, as of the date of determination, generally accepted
accounting principles, consistently applied.
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"Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary
course of such Person's business payable on terms customary in the trade),
(iii) obligations, whether or not assumed, secured by Liens or payable out of
the proceeds or production from property now or hereafter owned or acquired
by such Person, (iv) obligations which are evidenced by notes, acceptances,
or other instruments, (v) Capitalized Lease Obligations, (vi) net liabilities
under interest rate swap, exchange or cap agreements, and (vii) Contingent
Obligations.
"Intangible Assets" means goodwill, licenses, patents, copyrights,
franchises, mailing lists, catalogs, trademarks, bond discount, underwriting
expense, organizational expense and other similar intangible assets.
"Interest Period" means a Eurodollar Interest Period and a Negotiated
Rate Interest Period.
"Investments" in any Person shall mean: (a) the acquisition of capital
stock, bonds, notes, debentures, partnership or other ownership interests,
other securities or Indebtedness of such Person; (b) any deposit with, or
loan or other extension of credit to, such Person; (c) any guarantee of
Indebtedness or other liabilities of such Person; and (d) any amount
committed to be lent to such Person.
"Lending Installation" means any office, branch, subsidiary or affiliate
of the Bank.
"Lien" means any security interest, mortgage, pledge, lien, claim,
charge, encumbrance, title retention agreement, lessor's interest under a
capitalized lease or analogous instrument, in, of or on any Person's assets
or properties in favor of any other Person.
"Loan" means a loan under the Credit Facility.
"Loan Documents" shall mean this Agreement, the Note, and any other
documents executed in connection with the Credit Facility.
"Material Adverse Effect" means an event or action that (i) could
reasonably be expected to materially and adversely affect the business,
properties, prospects, condition (financial or otherwise), or results of
operations of the Borrower and its Subsidiaries taken as a whole, or (ii) has
been brought by or before any court or arbitrator or any governmental body,
agency or official, and draws into question the validity or enforceability of
any material provision of this Agreement.
"Negotiated Rate" means with respect to a Negotiated Rate Loan for the
relevant Negotiated Rate Interest Period, a rate of interest established by
the Bank in its sole and absolute discretion.
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"Negotiated Rate Interest Period" means with respect to a Negotiated
Rate Loan, a period of not less than one day and not more than 180 days,
commencing on a Business Day selected by the Borrower pursuant to this
agreement. If such Negotiated Rate Interest Period would end on a day which
is not a Business Day, such Negotiated Rate Interest Period shall end on the
next succeeding Business Day, unless such next succeeding Business Day is
after the Revolving Credit Termination Date, in which case such Negotiated
Rate Interest Period shall end on the next preceding Business Day. No
Negotiated Rate Interest Period may end after the Revolving Credit
Termination Date.
"Negotiated Rate Loan" means a Loan which bears interest at the
Negotiated Rate.
"Nonperforming Loans" shall have the meaning attributed thereto in
Section 6.18.
"Note" means the Revolving Credit Note.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Note, all accrued and unpaid facility fees, and all other
obligations of the Borrower to the Bank arising under this Agreement, and the
Note.
"Person" means any corporation, natural person, firm, limited liability
company, joint venture, partnership, trust, unincorporated organization,
enterprise, government or any department or agency of any government.
"Prime Rate" means a rate per annum equal to the "prime rate" of
interest announced by the Bank from time to time, changing when and as the
prime rate changes, which shall not necessarily be the lowest rate charged by
the Bank to any of its customers.
"Rate Option" means the Eurodollar Rate, the Floating Rate or the
Negotiated Rate.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System from time to time in effect and includes any successor
or other regulation or official interpretation of the Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
"Regulation Y" means Regulation Y of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors
relating thereto.
"Reserve Requirement" means with respect to a Eurodollar Interest
Period, the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed under Regulation
D on Eurocurrency liabilities (in the case of Eurodollar Rate Loans).
"Revolving Credit" means the revolving credit facility established by
Section 2.1.
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"Revolving Credit Commitment" means the obligation of the Bank to make
Loans under the Revolving Credit not exceeding $10,000,000, as such amount
may be modified or reduced from time to time pursuant to the terms hereof.
"Revolving Credit Note" means the Revolving Credit Note of the Borrower
in the form of Exhibit A evidencing Loans under the Revolving Credit.
"Revolving Credit Termination Date" means October 31, 1998.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Subordinated Debt" means all debt, obligations and liabilities of the
Borrower to any Person other than the Bank which has been subordinated to the
Obligations pursuant to a subordination agreement satisfactory in form and
content to the Bank.
"Subsidiary" means any corporation more than 50% of the outstanding
voting securities of which are at the time owned or controlled, directly or
indirectly, by the Borrower or by one or more Subsidiaries or by the Borrower
and one or more Subsidiaries, or any similar business organization which is
so owned or controlled, or any Subsidiary Bank.
"Subsidiary Bank" shall mean any person which is an "insured depository
institution" within the meaning of 12 U.S.C. Section 1831(c), as amended, and
which is "controlled" by the Borrower within the meaning of 12 U.S.C. Section
1841(a), as amended.
"Tier 1 Capital" shall mean the Tier 1 capital of the Borrower and its
Subsidiaries, determined in accordance with Appendix A to Regulation Y.
"Total Capital" means, for any period, the consolidated total capital of
the Borrower and its Subsidiaries for such period determined in accordance
with GAAP.
"UCC" shall mean the Uniform Commercial Code as adopted in the State of
Michigan and amended from time to time.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
The foregoing definitions are applicable to both the singular and plural
forms of the defined terms. Any accounting terms used but not otherwise
defined have the meanings given them under GAAP.
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ARTICLE II -- THE LOANS
2.1. COMMITMENT. From and including the Effective Date of this
Agreement and prior to the Revolving Credit Termination Date, the Bank
agrees, on the terms of this Agreement to make Loans to the Borrower for the
Borrower's account from time to time in amounts not exceeding, in the
aggregate at any one time outstanding, the Revolving Credit Commitment. Loans
under the Revolving Credit shall be evidenced by, and accrue interest and be
payable as provided in, the Revolving Credit Note. Subject to the terms of
this Agreement, the Borrower may borrow, repay and reborrow at any time prior
to the Revolving Credit Termination Date. The Commitment to lend hereunder
shall expire on the Revolving Credit Termination Date.
2.2. CLOSING FEE AND REDUCTION OF REVOLVING CREDIT COMMITMENT. The
Borrower agrees to pay to the Bank a closing fee equal to $2,500 concurrently
with the execution of this Agreement. The Borrower acknowledges that that
fee has been earned by the Bank and that it is nonrefundable upon payment.
The Borrower may permanently reduce the Revolving Credit Commitment in whole,
or in part in integral multiples of $100,000, upon at least ten Business
Days' written notice to the Bank, which must specify the amount of the any
reduction, but the amount of the Revolving Credit Commitment may not be
reduced below the outstanding principal amount of the Loans.
2.3. THE LOANS. The Loans may be Floating Rate Loans, Eurodollar Rate
Loans, Negotiated Rate Loans or a combination of them, selected by the
Borrower in accordance with Section 2.4. The Loans made under the Credit
Facility must be repaid in full on the Revolving Credit Termination Date.
The Bank may book the Loans at any Lending Installation. The Borrower may
from time to time pay outstanding Floating Rate Loans in whole, or in part in
integral multiples of $50,000, to the Bank without penalty or premium. A
Fixed Rate Loan may not be paid prior to the last day of the applicable
Interest Period.
2.4. METHOD OF SELECTING RATE OPTIONS AND INTEREST PERIODS. The
Borrower may select the Rate Option and Interest Period applicable to each
Loan from time to time. The Borrower must give the Bank an irrevocable
borrowing notice not later than 10:00 a.m. Detroit time at least one (1)
Business Date before the borrowing date of each Floating Rate Loan or
Negotiated Rate Loan, and three (3) Business Days before the borrowing date
for each Eurodollar Rate Loan, specifying:
(i) the borrowing date of that Loan, which must be a Business Day,
(ii) the aggregate amount of that Loan,
(iii) the Rate Option selected for that Loan, and
(iv) in the case of each Fixed Rate Loan, the Interest Period
applicable to it.
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Each Fixed Rate Loan will bear interest on the outstanding principal amount
for each day during the Interest Period applicable to it from and including
the first day of that Interest Period to (but not including) the last day of
that Interest Period at the interest rate determined as applicable to that
Fixed Rate Loan. If at the end of an Interest Period for an outstanding
Fixed Rate Loan, the Borrower has failed to select a new Rate Option or to
pay that Loan, then that Loan will be converted to a Floating Rate Loan on
and after the last day of the Interest Period until paid or until the
effective date of a new Rate Option with respect to it is selected by the
Borrower. An outstanding Floating Rate Loan may be converted to a Fixed Rate
Loan at any time subject to the notice provisions applicable to the type of
Loan selected. The Borrower may not select a Fixed Rate for a Loan if there
exists a Default or Unmatured Default. The Borrower may not select an
Interest Period for the Loans under the Revolving Credit which would end
after the Revolving Credit Termination Date. Each Fixed Rate Loan must be in
the minimum amount of $500,000 (and in multiples of $50,000 if in excess of
the minimum). Each Floating Rate Loan must be in a minimum amount of $50,000.
2.5. RATES APPLICABLE AFTER DEFAULT. If any Loan is not paid at
maturity, whether by acceleration or otherwise, (i) each Fixed Rate Loan will
bear interest for the remainder of the applicable Interest Period at the rate
otherwise applicable to that Interest Period plus 3% per annum, and (ii) each
Floating Rate Loan will bear interest at a rate per annum equal to the
Floating Rate otherwise applicable to the Floating Rate Loan plus 3% per
annum. During the continuance of any other Default, the Bank may, at its
option, by notice to the Borrower, declare that (y) each Fixed Rate Loan will
bear interest for the remainder of the applicable Interest Period at the rate
otherwise applicable to that Interest Period plus 3% per annum, and (z) each
Floating Rate Loan will bear interest at a rate per annum equal to the
Floating Rate otherwise applicable to the Floating Rate Loan plus 3% per
annum.
2.6. METHOD OF PAYMENT. All payments of principal, interest, and fees
must be made in immediately available funds to the Bank at the Bank's address
specified pursuant to Section 10.5, or at any other Lending Installation of
the Bank specified in writing by the Bank to the Borrower, by noon (local
time) on the date when due. The Bank is authorized to charge the account of
the Borrower maintained with it for each payment of principal, interest and
fees as it becomes due.
2.7. NO SETOFF OR DEDUCTION. All payments of principal and interest
shall be made by the Borrower without setoff or counterclaim, and free and
clear of, and without deduction or withholding for, or on account of, any
present or future taxes, levies, imposts, duties, fees, assessments, or other
charges of whatever nature, imposed by any governmental authority, or by any
department, agency or other political subdivision or taxing authority unless
any such deduction is required by law. If any such deduction is made, as
required by such law, the Borrower shall make additional payments sufficient
to assure that the Bank receives all amounts contemplated by this Agreement.
2.8. THE NOTES; TELEPHONIC NOTICES. The Bank is authorized to record on
its books the date, amount, Rate Option and Interest Period of each Loan, and
the date and amount of each principal payment made under the Notes. These
records govern absent manifest error, provided
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that neither the failure to record nor any error in that record affects the
Borrower's obligations under the Notes. The Borrower authorizes the Bank to
extend Loans and effect Rate Option selections based on telephonic notices
made by any person or persons the Bank in good faith believes to be acting on
behalf of the Borrower. The Borrower agrees to deliver promptly to the Bank
a written confirmation, if that confirmation is requested by the Bank, of
each telephonic notice, signed by an authorized officer of the Borrower. If
the written confirmation differs in any material respect from the action
taken by the Bank, the records of the Bank govern, absent manifest error.
2.9. INTEREST PAYMENT DATES; INTEREST BASIS. Interest accrued on the
Loans is payable (i) for Floating Rate Loans, on the last day of each
quarter, (ii) for Fixed Rate Loans, on the last day of its applicable
Interest Period and (iii) for all Loans, on any date on which the Loan is
paid or prepaid, whether due to acceleration or otherwise. Interest accrued
on each Fixed Rate Loan having an Interest Period longer than three months is
also payable on the last day of each three-month interval during that
Interest Period. Interest and commitment fees are calculated for actual days
elapsed on the basis of a 360-day year. Interest is payable for the day a
Loan is made but not for the day of any payment on the amount paid if payment
is received prior to noon (local time) at the place of payment. If any
payment of principal of or interest on a Loan becomes due on a day which is
not a Business Day, that payment must be made on the next succeeding Business
Day and, in the case of a principal payment, that extension of time is
included in computing interest.
ARTICLE III -- CHANGE IN CIRCUMSTANCES
3.1. YIELD PROTECTION. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether
or not having the force of law), or any interpretation of them, or compliance
by the Bank with them,
(i) subjects the Bank or any applicable Lending Installation to
any tax, duty, charge or withholding on or from payments due from the
Borrower (excluding taxation of the overall net income of the Bank or
applicable Lending Installation), or changes the basis of taxation of
payments to the Bank in respect of its Loans or other amounts due to it under
this Agreement, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by, the
Bank or any applicable Lending Installation (other than reserves and
assessments taken into account in determining the interest rate applicable to
Fixed Rate Loans), or
(iii) imposes any other condition the result of which is to
increase the cost to the Bank or any applicable Lending Installation of
making, funding or maintaining loans or reduces any amount receivable by the
Bank or any applicable Lending Installation in connection with loans, or
requires the Bank or any applicable Lending Installation to make any payment
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calculated by reference to the amount of loans held or interest received by
it, by an amount deemed material by the Bank, or
(iv) affects the amount of capital required or expected to be
maintained by the Bank or any Lending Installation or any corporation
controlling the Bank, and the Bank determines the amount of capital required
is increased by or based on the existence of this Agreement or its obligation
to make Loans under this Agreement or of commitments of this type, then,
within 15 days of the Bank's demand, the Borrower must pay the Bank that
portion of the increased expense incurred (including, in the case of Section
3.1(iv), any reduction in the rate of return on capital to an amount below
that which it could have achieved but for the law, rule, regulation, policy,
guideline or directive, and after taking into account the Bank's policies as
to capital adequacy) or reduction in amounts received which the Bank
determines is attributable to making, funding and maintaining its Loans and
its commitments hereunder.
3.2. AVAILABILITY OF RATE OPTIONS. If the Bank determines that
maintenance of its Fixed Rate Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation or directive, whether or not
having the force of law, or if the Bank determines that (i) deposits of a
type and maturity appropriate to match fund Fixed Rate Loans are not
available to it, or (ii) a Rate Option does not accurately reflect the cost
of making or maintaining a Loan at that Rate Option, then the Bank may
suspend the availability of the affected Rate Option and require any Fixed
Rate Loans outstanding under an affected Rate Option to be repaid or
converted to an unaffected Rate Option.
3.3. FUNDING INDEMNIFICATION. If any payment of a Fixed Rate Loan
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Fixed Rate
Loan is not made on the date specified by the Borrower for any reason other
than default by the Bank, the Borrower indemnifies the Bank for any loss or
cost incurred by it resulting from these facts, including without limitation
any loss or cost in liquidating or employing deposits acquired to fund or
maintain the Fixed Rate Loan.
3.4. BANK STATEMENTS; SURVIVAL OF INDEMNITY. To the extent reasonably
possible, the Bank will designate an alternate Lending Installation with
respect to Fixed Rate Loans to reduce any liability of the Borrower to the
Bank under Section 3.1 or to avoid the unavailability of a Rate Option under
Section 3.2, so long as that designation is not disadvantageous to the Bank.
The Bank will deliver a written statement as to the amount due, if any, under
Section 3.1 or 3.3. That written statement will set forth in reasonable
detail the calculations upon which the Bank determined the amount, and is
final, conclusive and binding on the Borrower in the absence of manifest
error. Determination of amounts payable under those Sections in connection
with a Fixed Rate Loan will be calculated as though the Bank funded its Fixed
Rate Loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the Fixed
Rate applicable to that Loan, whether in fact that is the case or not.
Unless otherwise provided in this Agreement, the amount specified in the
written statement is payable on demand after receipt by the Borrower of the
written statement. The obligations of the
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Borrower under Sections 3.1 and 3.3 survive payment of the Obligations and
termination of this Agreement.
ARTICLE IV -- CONDITIONS PRECEDENT
4.1. CONDITIONS PRECEDENT TO INITIAL EXTENSION OF CREDIT. The Bank
shall not be obligated to make the initial extension of credit under this
Agreement, unless prior to or simultaneously with the extension of credit,
the Bank shall have first received the following documents in form and
substance satisfactory to it and its counsel:
(A) This Agreement, duly executed by the Borrower;
(B) The Note applicable to the initial extension of credit, duly
executed by the Borrower;
(C) Copies of such organizational documents of the Borrower as the
Bank shall reasonably request, including Articles of Incorporation, Bylaws, a
Certificate of Good Standing and documents evidencing necessary corporate
action with respect to this Agreement, the Loan Documents, and the
transactions contemplated by them.
(D) A written opinion of the Borrower's counsel, addressed to the
Bank in substantially the form of Exhibit "B" hereto.
4.2. CONDITIONS PRECEDENT TO EACH EXTENSION OF CREDIT. The Bank shall
not be obligated to make any extension of credit under this Agreement unless:
(A) The representations and warranties contained in Article V
shall be true on the date of the extension of credit with the same effect as
if made on and as of that date, and shall be deemed to be restated on and as
of that date.
(B) No Default shall have occurred and be continuing or will exist
upon the extension of the credit.
ARTICLE V -- WARRANTIES
The Borrower warrants to the Bank that:
5.1. CORPORATE EXISTENCE AND STANDING. Each of the Borrower and the
Subsidiaries (including without limitation, each Subsidiary Bank) is a
corporation, partnership, limited liability company, or a national or state
banking association duly and properly incorporated or organized, as the case
may be, validly existing and (to the extent such concept applies to such
entity) in good standing under the laws of its jurisdiction of incorporation
or organization and has all requisite authority to conduct its business in
each jurisdiction in which its business is conducted.
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5.2. AUTHORIZATION AND VALIDITY. The Borrower has the power and
authority and legal right to execute and deliver the Loan Documents and to
perform its obligations under them. The execution and delivery by the
Borrower of the Loan Documents and the performance of its obligations under
them have been duly authorized by proper corporate or organizational
proceedings, and this Agreement and the Note each constitute legal, valid and
binding obligations of the Borrower enforceable against the Borrower in
accordance with their terms.
5.3. NO CONFLICT; GOVERNMENT CONSENT. Neither the execution and
delivery by the Borrower of this Agreement and the Note, nor the consummation
of the transactions described in them, nor compliance with their provisions
will violate any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on the Borrower or any Subsidiary, or the Borrower's
or any Subsidiary's articles of incorporation or by-laws, or the provisions
of any indenture, instrument or agreement to which the Borrower or any
Subsidiary is a party or is subject, or by which it or its property is bound,
or conflict with or constitute a default under any indenture, instrument or
agreement, or result in the creation or imposition of any Lien in, of or on
the property of the Borrower or a Subsidiary pursuant to the terms of any
indenture, instrument or agreement. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with,
or exemption by, or other action in respect of, any governmental or public
body or authority, or any subdivision of them, is required to authorize, or
is required in connection with the execution, delivery and performance of, or
the legality, validity, binding effect or enforceability of, this Agreement
or the Note.
5.4. FINANCIAL STATEMENTS. The June 30, 1997 consolidated financial
statements of the Borrower and its Subsidiaries heretofore delivered to the
Bank were prepared in accordance with GAAP in effect on the date such
statements were prepared and fairly present the consolidated financial
condition and operations of the Borrower and the Subsidiaries at that date
and the consolidated results of their operations for the period then ended.
5.5. MATERIAL ADVERSE CHANGE. Since June 30, 1997 there has been no
material adverse change in the business, properties, condition (financial or
otherwise), prospects or results of operations of the Borrower and its
Subsidiaries.
5.6. LITIGATION AND CONTINGENT OBLIGATIONS. Except as set forth on
Schedule 1, there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting the Borrower or any Subsidiary which might
have a Material Adverse Effect. Other than any liability incident to that
litigation, arbitration or proceedings, the Borrower has no material
contingent obligations not provided for or disclosed in the financial
statements referred to in Section 5.4.
5.8. COMPLIANCE WITH LAWS. The Borrower and its Subsidiaries have
complied in all material respects with all applicable statutes, rules,
regulations, orders and restrictions of any domestic or foreign government or
any instrumentality or agency of them, having jurisdiction over the conduct
of their respective businesses or the ownership of their respective
properties.
12
5.9 REGULATION U. The Borrower is not engaged principally in, nor is
one of the Borrower's important activities, the business of extending credit
for the purpose of purchasing or carrying "margin stock" within the meaning
of Regulation U of the Board of Governors of the Federal Reserve System as
now and from time to time hereinafter in effect.
5.10. BANK HOLDING COMPANY. The Borrower has complied in all
respects with all federal, state and local laws pertaining to bank holding
companies, including without limitation the Bank Holding Company Act of 1956,
as amended, and there are no conditions precedent or subsequent to its
engaging in the business of being a registered bank holding company.
ARTICLE VI -- COVENANTS
During the term of this Agreement, unless the Bank otherwise consents in
writing:
6.1. FINANCIAL REPORTING. The Borrower will maintain, for themselves
and each Subsidiary, a system of accounting established and administered in
accordance with GAAP, and furnish to the Bank:
(i) Within 120 days after the close of each of the Borrower's
fiscal years, an unqualified (except for qualifications relating to changes
in accounting principles or practices reflecting changes in GAAP and required
or approved by the Guarantor's independent certified public accountants)
audit report certified by independent certified public accountants,
acceptable to the Bank, prepared in accordance with GAAP on a consolidating
basis for itself and the Subsidiaries, including balance sheets as of the end
of that period, related profit and loss and reconciliation of surplus
statements, and a statement of cash flows.
(ii) Within 45 days after the close of the first three quarterly
periods of each of its fiscal years, for the Borrower and the Subsidiaries,
unaudited balance sheets as at the close of each that period and profit and
loss and reconciliation of surplus statements and statements of cash flows
for the period from the beginning of that fiscal year to the end of that
quarter, all certified by an officer of the Borrower.
(iii) Together with the financial statements required
hereunder, a compliance certificate in substantially the form of Exhibit "C"
hereto signed by an Authorized Officer of the Borrower, showing the
calculations necessary to determine compliance with this Agreement and
stating that no Default or Unmatured Default exists, or if any Default or
Unmatured Default exists, stating the nature and status thereof.
(iv) Promptly upon furnishing it to its shareholders, copies of all
financial statements and proxy statements so furnished.
13
(v) Promptly upon filing them, copies of all registration
statements and annual, quarterly, monthly or other regular reports which the
Borrower or any Subsidiary files with the Securities and Exchange Commission.
(vi) Any other information (including non-financial information)
which the Bank or any Bank Installation from time to time reasonably requests.
(vii) Within 45 days after the close of each quarter of each
fiscal year of the Borrower and each Subsidiary Bank, a copy of the Call
Report furnished to the Federal Deposit Insurance Corporation or any other
regulatory authority with respect to such quarter by such Subsidiary Bank.
6.2. USE OF PROCEEDS. The Borrower will, and will cause each Subsidiary
to, use the proceeds of the Loans for working capital. The Borrower may not,
nor may it permit any Subsidiary to, use any of the proceeds of the Loans to
purchase or carry any "margin stock" (as defined in Regulation U).
6.3. CONDUCT OF BUSINESS. The Borrower will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted, and do all things necessary to remain duly incorporated, validly
existing and in good standing as a domestic corporation in its jurisdiction
of incorporation and maintain all requisite authority to conduct its business
in each jurisdiction in which its business is conducted, except that the
Borrower may dissolve a Subsidiary if that dissolution would not have a
Material Adverse Effect.
6.4. TAXES. The Borrower will, and will cause each Subsidiary to,
timely file complete and correct United States federal and applicable
foreign, state and local tax returns required by law, and pay when due all
taxes, assessments and governmental charges and levies on it or its income,
profits or property, except those which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves have been
set aside.
6.5. COMPLIANCE WITH LAWS. The Borrower will, and will cause each
Subsidiary to, comply in all material respects with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to
which it may be subject.
6.6. MERGER. The Borrower will not merge or consolidate with or into
any other Person unless the Borrower is the legally surviving corporation
and, after giving effect to the merger or consolidation, no Default or
Unmatured Default exists.
6.7. LIENS. The Borrower will not, nor will it permit any Subsidiary
to, create, incur, or suffer to exist any Lien in, of or on the property of
the Borrower or any Subsidiary, except:
14
(i) Liens for taxes, assessments or governmental charges or levies
on its property if they are not at the time delinquent or if they can be paid
later without penalty, or are being contested in good faith and by
appropriate proceedings.
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary course of
business which secure payment of obligations not more than 60 days past due
or which are being contested in good faith by appropriate proceedings and for
which adequate reserves have been set aside on its books.
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other social
security or retirement benefits, or similar legislation.
(iv) Utility easements, building restrictions and any other
encumbrances or charges against real property which are of a nature generally
existing with respect to properties of a similar character and which do not
in any material way affect their marketability or interfere with their use in
the business of the Borrower or the Subsidiaries.
(v) Liens existing on the date of this Agreement, and described in
Schedule "2" hereof.
6.8. WELL CAPITALIZED. The Borrower will, and will cause each
Subsidiary to, remain at all times at least "well capitalized" for purposes
of 12 U.S.C. Section 1831(o) and any regulations issued thereunder (including
12 C.F.R. Section 565.4), as amended.
6.9. NOTICE OF DEFAULT. The Borrower will, and will cause each
Subsidiary to, give prompt notice in writing to the Bank of the occurrence of
any Default or Unmatured Default and of any other development, financial or
otherwise, which might have a Material Adverse Effect or might materially
adversely affect the ability of the Borrower to repay the Obligations.
6.10. DIVIDENDS. The Borrower will not, nor will it permit any
Subsidiary to, declare or pay any dividends or make any distributions on its
capital stock (other than dividends payable in its own capital stock) or
redeem, repurchase or otherwise acquire or retire any of its capital stock at
any time outstanding.
6.11. DEBT. The Borrower will not, nor will it permit any Subsidiary
to, incur or permit to remain outstanding, debt for borrowed money or
installment obligations, except debt reflected in the latest financial
statement of the Borrower furnished to the Bank prior to execution of this
Agreement and not to be paid with proceeds of borrowings under the Credit
Facilities. For purposes of this covenant, the sale of any accounts
receivable is deemed the incurring of debt for borrowed money.
15
6.12. GUARANTIES. The Borrower will not, nor will it permit any
Subsidiary to, guarantee or otherwise become or remain secondarily liable on
the undertaking of another, except for endorsement of drafts for deposit and
collection in the ordinary course of business.
6.13. INVESTMENTS. The Borrower will not make any Investments,
except that Borrower may:
(a) purchase or otherwise acquire and own short-term money market items
(specifically including but not limited to preferred stock mutual funds);
(b) make Investments in Subsidiaries or any other bank or banks (other
than guarantees of Indebtedness of Subsidiaries, except as permitted by
Section 6.12), and upon the Borrower's purchase or other acquisition of 50%
or more of the voting stock of any bank, such bank shall thereupon become a
Subsidiary for all purposes under this Agreement;
(c) make Investments in Subsidiaries other than banks (other than
guarantees of Indebtedness of Subsidiaries, except as permitted by Section
6.12).
(d) make any other Investment permitted by applicable governmental laws
and regulations (other than guarantees of Indebtedness of Subsidiaries,
except as permitted by Section 6.12).
(e) make Investments in economic development bonds issued by
governmental authorities.
Nothing in this Section 6.13 shall prohibit the Borrower or any Subsidiary
from making loans, advances, or other extensions of credit in the ordinary
course of business upon substantially the same terms as heretofore extended
by them in such business or upon such terms as may at the time be customary
in the Borrower's or such Subsidiary's business.
6.14. MINIMUM NET WORTH. The Borrower will maintain at all times a
Consolidated Tangible Net Worth of not less than $100,000,000.
6.15. RETURN ON AVERAGE ASSETS. The Borrower will not, on any date
permit Consolidated Return on Average Assets to be less than 1.00% (measured
at the end of each fiscal quarter for the then-most recently ended four
fiscal quarters).
6.16. TIER 1 CAPITAL TO TOTAL ASSETS. The Borrower will not at any
time permit the ratio of its Tier 1 Capital to Consolidated Total Assets to
be greater than 8%.
6.17. INDEBTEDNESS TO TOTAL CAPITAL. The Borrower will not at any
time permit the ratio of its Indebtedness to Total Capital to be greater than
50%.
16
6.18. RATE OF NONPERFORMING LOANS TO ASSETS. The Borrower will, and
will require each Subsidiary to, cause all loans classified as
"non-performing" (which shall include all loans in non-accrual status, more
than ninety (90) days past due in principal or interest, restructured or
renegotiated, or listed as "other restructured" or "other real estate owned"
and (without duplication) property acquired through in-substance foreclosure)
on the Federal Deposit Insurance Corporation or other regulatory agency call
report ("NONPERFORMING LOANS") not to exceed 3.00% of the Consolidated
Average Assets of the Borrower and its Subsidiaries.
6.19. LOAN LOSS RESERVE RATIO. The Borrower will, and will cause
each Subsidiary to, maintain on a consolidated basis as at the last day of
each fiscal quarter of each fiscal year a ratio of loan loss reserves to
Nonperforming Loans of at least 100%.
ARTICLE VII -- DEFAULTS
The occurrence of any one or more of the following events constitutes a
Default:
7.1. Any warranty made or deemed made by or on behalf of the Borrower or
any Subsidiary to the Bank under or in connection with this Agreement, any
Loan, or any certificate or information delivered in connection with this
Agreement or the Note is materially false on the date as of which it is made.
7.2. The principal of the Note is not paid when due, or any interest or
any facility fee or other obligations under this Agreement or the Note are
not paid within five days after they become due.
7.3. The Borrower breaches any of the terms of Section 6.2, 6.3, 6.5,
6.6, 6.7, 6.8, 6.9, 6.10, 6.13, 6.14, 6.15, 6.16, 6.17, 6.18 and 6.19.
7.4. The Borrower breaches (other than a breach which constitutes a
Default under Section 7.1, 7.2 or 7.3) any of the terms of this Agreement
which is not remedied within thirty days after written notice from the Bank.
7.5. The Borrower or any Subsidiary fails to pay any debt for borrowed
money equal to or exceeding $100,000 in the aggregate when due; or the
Borrower or any Subsidiary defaults in the performance of any term contained
in any agreement under which that debt was created or is governed, the effect
of which is to cause, or to permit the holder or holders of that debt to
cause, that debt to become due prior to its stated maturity; or any debt of
the Borrower or any Subsidiary is declared to be due and payable or required
to be prepaid or repurchased (other than by a regularly scheduled payment)
prior to its stated maturity; or the Borrower or any Subsidiary does not pay,
or admits in writing its inability to pay, its debts generally as they become
due.
7.6. The Borrower or any Subsidiary (i) has an order for relief entered
with respect to it under present or future Federal bankruptcy laws, (ii)
makes an assignment for the benefit of creditors, (iii) applies for, seeks,
consents to, or acquiesces in, the appointment of a receiver,
17
custodian, trustee, examiner, liquidator or similar official for it or any
substantial part of its property, (iv) institutes any proceeding seeking an
order for relief under present or future Federal bankruptcy laws, or seeking
to adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition of it or
its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or fails to file an answer or other pleading denying
the material allegations of any such proceeding filed against it, (v) takes
any corporate action to authorize or effect any of the foregoing actions set
forth in this Section 7.6 or (vi) fails to contest in good faith any
appointment or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of the Borrower or any
Subsidiary, a receiver, trustee, examiner, liquidator or similar official is
appointed for the Borrower or any Subsidiary or any substantial part of its
property, or a proceeding described in Section 7.6(iv) is instituted against
the Borrower or any Subsidiary and that appointment continues undischarged or
those proceedings continue undismissed or unstayed for a period of 30
consecutive days.
7.8. Any reportable event (as defined in Section 4043 of ERISA) occurs
in connection with any plan (as defined in ERISA).
ARTICLE VIII - ACCELERATION; REMEDIES; AND AMENDMENTS
8.1. ACCELERATION. If any Default described in Section 7.6 or 7.7
occurs with respect to the Borrower, the obligations of the Bank to make
Loans automatically terminates and the Obligations are immediately due and
payable without any election or action on the part of the Bank. If any other
Default occurs, the Bank may terminate or suspend its obligation to make
Loans, or declare the Obligations due and payable, or both, whereupon the
Obligations are immediately due and payable, without presentment, demand,
protest or notice of any kind, all of which the Borrower expressly waives.
8.2. PRESERVATION OF RIGHTS. No delay or omission of the Bank to
exercise any right under this Agreement or the Note impairs that right nor
can it be construed to waive any Default or acquiesce in any Default, and the
making of a Loan notwithstanding the existence of a Default or the inability
of the Borrower to satisfy the conditions precedent to that Loan does not
constitute a waiver or acquiescence. Any single or partial exercise of any
right does not preclude any other or further exercise of it or the exercise
of any other right, and no waiver, amendment or other variation of the terms
of this Agreement or the Note is valid unless in writing signed by the Bank
and then only to the extent that writing specifies. All remedies contained
in this Agreement and the Note or by law afforded are cumulative and all are
available to the Bank until the Obligations have been paid in full.
8.3. AMENDMENTS. Subject to the provisions of this Article VIII, the
Bank and the Borrower may enter into agreements supplementing this Agreement
for the purpose of adding or modifying this Agreement or the Note or changing
in any manner the rights of the Bank or the Borrower or waiving any Default.
18
8.4. SETOFF. In addition to and without limiting any rights of the Bank
under applicable law, if the Borrower becomes insolvent, howsoever evidenced,
or any Default or Unmatured Default occurs, any and all deposits (including
all account balances, whether provisional or final and whether or not
collected or available) and any other debt at any time held or owing by the
Bank to or for the credit or account of the Borrower may be offset and
applied toward the payment of the Obligations owing to the Bank, whether or
all or any part of the Obligations are then due.
ARTICLE IX -- GENERAL PROVISIONS
9.1. SURVIVAL OF WARRANTIES. All warranties of the Borrower contained
in this Agreement survive the delivery of the Note and the making of the
Loans.
9.2. TAXES. Any taxes (excluding income taxes) or other similar
assessments or charges payable or ruled payable by any governmental authority
in respect of this Agreement and the Note must be paid by the Borrower,
together with interest and penalties, if any.
9.3. EXPENSES; INDEMNIFICATION. The Borrower must reimburse the Bank
for any costs, internal charges and out-of-pocket expenses (including
attorneys' fees and time charges of attorneys for the Bank, who may be
employees of the Bank) paid or incurred by the Bank in connection with the
preparation, review, execution, delivery, amendment, modification,
administration, collection and enforcement of this Agreement and the Note.
The Borrower further indemnifies the Bank, its directors, officers and
employees against all losses, claims, damages, penalties, judgments,
liabilities and expenses (including without limitation all expenses of
litigation or preparation for litigation whether or not the Bank is a party)
which any of them pay or incur arising out of or relating to this Agreement,
the Note, the transactions described in this Agreement or the direct or
indirect application or proposed application of the proceeds of any Loan. The
obligations of the Borrower under this Section survive the termination of
this Agreement.
9.4. SUCCESSORS AND ASSIGNS. The terms of this Agreement and the Note
bind and benefit the Borrower and the Bank and their respective successors
and assigns, except that the Borrower has no right to assign its rights or
obligations under this Agreement or the Note. The Bank may, in the ordinary
course of its commercial banking business and in accordance with applicable
law, at any time sell to one or more banks or other entities participating
interests in any Loan, the Note or the commitments hereunder. The Bank may,
with the consent of the Borrower, which consent may not be unreasonably
withheld, assign to one or more banks or other entities all or any part of
its rights and obligations under this Agreement or the Note, and the Borrower
releases the Bank for the amount so assigned.
9.5. GIVING NOTICE. Except as otherwise permitted by Section 2.8 with
respect to borrowing notices, all notices, requests and other communications
to any party must be in writing (including bank wire, telex, facsimile
transmission or similar writing) and must be given
19
to a party: (y) in the case of the Borrower or the Bank, at its address,
facsimile number or telex number set forth on the signature page below, or
(z) in the case of any party, whatever other address, facsimile number or
telex number that party specifies for the purpose, by notice to the other.
Each notice, request or other communication is effective (i) if given by
telex, when it is transmitted to the telex number specified in this Section
and the appropriate answerback is received, (ii) if given by facsimile
transmission, when transmitted to the facsimile number specified in this
Section and confirmation of receipt is received, (iii) if given by mail, 72
hours after that communication is deposited in the mails with first class
postage prepaid, addressed as required, or (iv) if given by any other means,
when delivered at the address specified in this Section. However, notices to
the Bank under Article II are not effective until received.
ARTICLE X -- GOVERNING LAW; JURISDICTION; JURY TRIAL WAIVER
10.1. CHOICE OF LAW. This Agreement and the Notes are to be
construed in accordance with the internal laws (but not the law of conflicts)
of Michigan.
10.2. CONSENT TO JURISDICTION. The Borrower irrevocably submits to
the non-exclusive jurisdiction of any United States federal or Michigan state
court sitting in Michigan in any action or proceeding arising out of or
relating to any Loan, and the Borrower irrevocably agrees that all such
claims may be heard and determined in any such court and irrevocably waives
any present and future objection it may have as to the venue of any action or
proceeding brought in that court, or that that court is an inconvenient
forum. Nothing in this Section limits the right of the Bank to bring any
action or proceeding against the Borrower in the courts of any other
jurisdiction. Any judicial proceeding by the Borrower against the Bank or
any affiliate of the Bank involving, directly or indirectly, any matter in
any way arising out of, related to, or connected with any Loan must be
brought only in a court in Michigan.
10.3. WAIVER OF JURY TRIAL. The Bank and the Borrower knowingly,
voluntarily and intelligently waive any right either of them have to a trial
by jury in any proceeding (whether sounding in contract or tort) which
relates to, arises out of, or is connected with this or any related
agreement, or the relationship they purport to create. This provision may
only be modified in a written instrument executed by the Bank and the
Borrower.
[Signatures of following page]
20
EXECUTED ON: December 22, 1997 which shall be the Effective Date of this
Agreement.
NATIONAL CITY BANCSHARES, INC. NBD BANK
By: /s/ βββββββ β. βββββββ By: /s/ βββββ β. ββββ
----------------------------- ---------------------------------
βββββββ β. βββββββ βββββ β. ββββ
Its: Vice Chairman Its: Vice President
ADDRESS FOR NOTICES:
βββ ββββ ββββββ, β.β. βββ βββ 611 ββββββββ Avenue
Evansville, Indiana 47705-0868 βββββββ, ββββββββ βββββ
Phone: (βββ) βββ-ββββ Phone: (313) (βββ-ββββ)
Fax: (βββ) βββ-ββββ Fax: (313) (βββ-ββββ)
Attention: βββββββ β. βββββββ
21
EXHIBIT A
REVOLVING CREDIT NOTE
$10,000,000 Detroit, Michigan
December 22, 1997
For value received, on or before the Revolving Credit Termination Date,
or at such other maturity or maturities as are set forth in the Bank's
records, National City Bancshares, Inc. (the "Borrower ") promises to pay to
the order of NBD Bank (the "Bank"), at the Bank's principal office in the
State of Michigan, in lawful money of the United States of America and in
immediately available funds, the principal sum of TEN MILLION AND 00/100
DOLLARS ($10,000,000), or such lesser amount as is indicated on the Bank's
records, together with interest computed on the balance from time to time
unpaid on the basis of the actual number of days elapsed in a year of 360
days at the rate(s) per annum determined from time to time pursuant to the
"Credit Agreement" as defined below and reflected on the Bank's records.
Interest on the unpaid principal amount is payable in accordance with the
terms of the Credit Agreement. The Borrower agrees to pay interest on
overdue principal from the date of demand or default until paid at the rate
which is three percent (3%) per annum in excess of the rate announced from
time to time by the Bank as its prime rate.
In no event may the interest rate exceed the maximum rate allowed by
law. Any interest which would for any reason be unlawful under applicable law
will be applied to principal.
Waiver: The Borrower and each endorser of this note and any other party
liable for the debt evidenced by this note severally waives demand,
presentment, notice of dishonor and protest of this note, and consents to any
extension or postponement of time of its payment without limit as to number
or period, to any substitution, exchange or release of all or any part of any
collateral securing this note, to the addition of any party, and to the
release, discharge, or suspension of any rights and remedies against any
person who is liable for the payment of this note. No delay on the part of
the holder in the exercise of any right or remedy waives that right or
remedy. No single or partial exercise by the holder of any right or remedy
precludes any future exercise of that right or remedy or the exercise of any
other right or remedy. No waiver or indulgence by the holder of any default
is effective unless it is in writing and signed by the holder, and a waiver
on one occasion does not bar or waive any right on any future occasion.
This note evidences a debt under the terms of a certain Credit Agreement
between the Bank and the Borrower contemporaneously dated, and any
amendments, (the "Credit Agreement"), which is incorporated by reference for
additional terms, including default and acceleration provisions.
22
WAIVER OF JURY TRIAL: The Borrower and the Bank waive trial by jury
in any judicial proceeding involving, directly or indirectly, any matter
(whether sounding in tort, contract or otherwise) in any way arising out of,
related to, or connected with any Loan or the relationship established under
it.
Address:
βββ ββββ ββββββ, β.β. βββ βββ NATIONAL CITY BANCSHARES, INC.
ββββββββββ, βββββββ βββββ-ββββ
By:____________________________
βββββββ β. βββββββ
Its: Vice Chairman
23
EXHIBIT B
FORM OF OPINION
_________________________, ____
NBD Bank:
We are counsel for National City Bancshares, Inc. (the "Borrower"), and
have represented the Borrower in connection with its execution and delivery
of a Credit Agreement dated as of ______________ (the "Agreement") among the
Borrower and NBD Bank, and providing for Loans in an aggregate principal
amount not exceeding $10,000,000 at any one time outstanding. All
capitalized terms used in this opinion and not otherwise defined herein shall
have the meanings attributed to them in the Agreement.
We have examined the Borrower's [described constitutive documents of
Borrower and appropriate evidence of authority to enter into the
transaction], the Loan Documents and such other matters of fact and law which
we deem necessary in order to render this opinion. Based upon the foregoing,
it is our opinion that:
1. Each of the Borrower and its Subsidiaries is a corporation,
partnership or limited liability company duly and properly incorporated or
organized, as the case may be, validly existing and (to the extent such
concept applies to such entity) in good standing under the laws of its
jurisdiction of incorporation or organization and has all requisite authority
to conduct its business in each jurisdiction in which its business is
conducted.
2. The execution and delivery by the Borrower of the Loan Documents
and the performance by the Borrower of its obligations thereunder have been
duly authorized by proper corporate proceedings on the part of the Borrower
and will not:
(a) require any consent of the Borrower's shareholders or members
(other than any such consent as has already been given and remains in full
force and effect);
(b) violate (i) any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on the Borrower or any of its
Subsidiaries or (ii) the Borrower's or any Subsidiary's articles or
certificate of incorporation, partnership agreement, certificate of
partnership, articles or certificate of organization, by-laws, or operating
or other management agreement, as the case may be, or (iii) the provisions of
any indenture, instrument or agreement to which the Borrower or any of its
Subsidiaries is a party or is subject, or by which it, or its Property, is
bound, or conflict with or constitute a default thereunder; or
24
(c) result in, or require, the creation or imposition of any Lien
in, of or on the Property of the Borrower or a Subsidiary pursuant to the
terms of any indenture, instrument or agreement binding upon the Borrower or
any of its Subsidiaries.
3. The Loan Documents have been duly executed and delivered by the
Borrower and constitute legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their terms except to the
extent the enforcement thereof may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally and
subject also to the availability of equitable remedies if equitable remedies
are sought.
[NOTE: If there are Loan Documents executed by related entities other than
the Borrower, separate provisions of the opinion or additional opinions
should cover those documents and their enforceability against such parties.]
4. There is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the best of our knowledge after due
inquiry, threatened against the Borrower or any of its Subsidiaries which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect.
5. No order, consent, adjudication, approval, license, authorization,
or validation of, or filing, recording or registration with, or exemption by,
or other action in respect of any governmental or public body or authority,
or any subdivision thereof, which has not been obtained by the Borrower or
any of its Subsidiaries, is required to be obtained by the Borrower or any of
its Subsidiaries in connection with the execution and delivery of the Loan
Documents, the borrowings under the Agreement, the payment and performance by
the Borrower of the Obligations, or the legality, validity, binding effect or
enforceability of any of the Loan Documents.
This opinion may be relied upon by NBD Bank and its participants,
assignees and other transferees.
Very truly yours,
25
EXHIBIT C
COMPLIANCE CERTIFICATE
To: NBD Bank
βββ ββββββββ ββββββ
βββββββ, ββββββββ βββββ
This Compliance Certificate is furnished pursuant to that certain Credit
Agreement dated as of _________________, ____ (as amended, modified, renewed
or extended from time to time, the "Agreement") among National City
Bancshares, Inc. (the "Borrower"), and NBD Bank. Unless otherwise defined
herein, capitalized terms used in this Compliance Certificate have the
meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ________________________ of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Borrower and its Subsidiaries during the accounting
period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which
constitute a Default or Unmatured Default during or at the end of the
accounting period covered by the attached financial statements or as of the
date of this Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain covenants of
the Agreement, all of which data and computations are true, complete and
correct.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it
has existed and the action which the Borrower has taken, is taking, or
proposes to take with respect to each such condition or event:
______________________________________________________
______________________________________________________
______________________________________________________
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The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ____, day of
________________, ____________.
______________________________
27