ADVANCES, SECURITY AND DEPOSIT AGREEMENT
FEBRUARY 5, 1999
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This Advances, Security and Deposit Agreement ("Agreement") is made as
of the above date and is between the Federal Home Loan Bank of Seattle,
including its successors ("Seattle Bank"), and CENTENNIAL BANK, EUGENE, OREGON,
including its successors ("Customer"). Except as to Customers which have not
signed prior Agreements, it renews, amends and restates prior contracts between
the parties or their predecessors entitled "Advances Agreement, Pledge Agreement
and Security Agreement" and "Deposit Account Resolution."
RECITALS
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A. The Seattle Bank is authorized by the Federal home Loan Bank Act, as
amended, and related regulations and directives ("Act"), and by the
Seattle Bank's own policies, to make loans to the Customer
("Advances"). The Seattle Bank is also authorized to provide demand and
time deposit accounts to the Customer ("Accounts") and to perform
additional services, all of which may create obligations from the
Customer to the Seattle Bank ("Other Obligations"). Other Obligations
may include, without limitation, debts by reason of interest rate swap
agreements, letters of credit, overdrafts, settlements, and wire
transfers.
B. This Agreement, and related policies which are, from time to time, sent
by the Seattle Bank to its customers, specifies the terms and
conditions under which the Seattle Bank may make Advances available to
the Customer; open and use Accounts; and collateralize such Advances
and Other Obligations.
AGREEMENTS
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1. Prior to or at the time of the execution and delivery of this
Agreement, the Customer has provided the Seattle Bank with a certified
copy of a resolution adopted by the Customer's Board of Directors or
other governing body ("Resolution") approving this Agreement and
authorizing designated officers or employees of the Customer to obtain
Advances, open and use Accounts, and incur Other Obligations. The
Seattle Bank may rely upon, and the Customer is estopped from denying,
the authority of the persons designated in the Resolution.
2. The Customer may request advances from the Seattle Bank by applying to
the Seattle Bank in such form as it shall require.
3. Each Advance shall be evidenced by a promissory note ("Note") or by
another confirming document as required by the Seattle Bank. The
applicable terms and conditions of this Agreement are incorporated
therein as well as in other agreements, if any, that relate to Other
Obligations.
4. On the first day of each month or at such other times that payments of
principal and/or interest are due, the Customer agrees to pay, or to
authorize a charge to the Customer's Account for the principal and/or
interest that is due on each outstanding Advance, Note or Other
Obligation. Interest shall be charged at the rate set forth in the Note
or other instrument evidencing the Indebtedness. Delinquent principal
and/or interest may bear interest, at the option of the Seattle Bank,
equal to the Seattle Bank's then-current Flexible Balance advance rate.
5. As collateral ("Security") for the payment of all Advances, Notes or
Other Obligations (collectively, "Indebtedness") of the Customer to the
Seattle Bank, the Customer hereby assigns, pledges and grants security
interests to the Seattle Bank ("Security Interest") in the following:
(a) its stock in the Seattle Bank (which
cannot be pledged to another entity); (b) its funds on deposit with the
Seattle Bank; (c) its notes or other instruments representing
obligations of third parties, including the proceeds thereof, and any
related mortgages or deeds of trust ("Mortgages") securing any of them
and/or any securities representing an interest in such Mortgages; (d)
securities issued, insured or guaranteed by the United States
government or by any agency thereof; (e) other real estate-related
collateral; and (f) its instruments, accounts, general intangibles,
inventory, equipment and other property in which a security interest
can be granted by the Customer to the Seattle Bank. Upon the withdrawal
from membership in the Seattle Bank, and as the final part of the plan
of liquidation of the Customer's Indebtedness to the Seattle Bank, the
stock of such Customer may be redeemed and credited upon the
Indebtedness of the Customer, in whole or in part, for an amount equal
to the par value of the stock which would otherwise be paid to the
Customer by the Seattle Bank.
6. The Customer agrees that it holds the Security for the benefit of,
and subject to the direction and control of, the Seattle Bank;
including, without limitation, the following: (a) Security and Security
Interests shall include and extend to after-acquired Security; (b) the
Customer may use, commingle or dispose of all or part of the Security
or proceeds thereof if, at all times, it owns and maintains Security of
the types and kinds specified by the Act and as required to meet the
requirements thereof, free and clear of pledges, liens or other
encumbrances of third parties, in such amount of the outstanding
Indebtedness as may be specified by the Seattle Bank from time to time;
(c) at its expense and as soon as possible upon demand by the Seattle
Bank, the Customer will assemble, segregate and/or deliver such
portions of the Security as are directed by the Seattle Bank at or to a
location designated by it; will allow the Seattle Bank to participate
in such assembly, segregation or delivery and to verify or audit such
Security, including, without limitation, access to the Customer's
premises and records for such purposes; and will protect and promptly
disclose to the Seattle Bank any material change in value of the
Security so assembled, segregated or delivered; (d) the Customer
promptly will make, execute and deliver to the Seattle Bank such
assignments, listings, powers or other documents as the Seattle Bank
may reasonably request concerning the Security; (e) at its expense, the
Customer promptly will provide to the Seattle Bank such reports, audits
and confirmations regarding the Security as the Seattle Bank may
reasonably request; and (f) the Customer shall pay to the Seattle Bank
any reasonable fees associated with the processing, control, and
maintenance of such Security.
7. Upon the occurrence of any one or more of the following events
("Default"), the Seattle Bank may, without notice, declare and thereby
cause all Indebtedness of the Customer to be due and payable
immediately: (a) failure of the Customer to make any payment due on any
Indebtedness, or breach of or failure to perform any other duty as
provided herein or in any other agreement to which the Customer and the
Seattle Bank are parties; (b) any taking over of the customer or any of
its assets by a supervising agency, or an application for or the
appointment of a conservator, receiver, trustee or liquidator for it or
any of its assets; (c) an adjudication of the Customer's bankruptcy or
insolvency; (d) an assignment by the Customer for the benefit of
creditors, a general transfer of its assets for any purpose or any
other form of liquidation, merger, sale of assets or dissolution of or
by the Customer; (e) existence of facts indicating a representation,
statement or warranty made or furnished to the Seattle Bank by or on
behalf of the Customer in connection with all or part of any
Indebtedness or other transaction was or is false in any material
respect; (f) damage, loss, sale or encumbrance of any of the Security
except as permitted by this Agreement; (g) any levy, seizure,
garnishment (as the debtor), execution, attachment or other process
issued against the Customer; (h) any event which results in
acceleration of the maturity of any debt of the Customer to others; (i)
good faith determination by the Seattle Bank that the Customer's
ability to repay any Indebtedness has become impaired or that a
material adverse change has occurred in the financial condition of the
Customer from that disclosed to the Seattle Bank at the time of
creation of any Indebtedness or subsequently; (j) termination of the
Customer's membership in the Seattle Bank; or (k) good faith
determination by the Seattle Bank that there is a reasonable
possibility that the Indebtedness would not be paid in full from the
proceeds of a liquidation of the Security if the Seattle Bank did not
declare a Default.
8. At any time after Default, the Customer may not substitute Security
without permission of the Seattle Bank, and the Seattle Bank shall have
all of the rights and remedies of a secured party under the Act, the
Uniform Commercial Code of the State of Washington and/or as otherwise
provided by law, by this Agreement or by any other agreement between
the parties ("Default Rights") including, without limitation, the
Seattle Bank's
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right to take immediate possession of any or all Security wherever
located and to dispose of the Security in accordance with applicable
law. If any notice of disposition of Security is required by law, such
notification shall be deemed reasonable and properly given if mailed,
postage prepaid, at least five calendar days before such disposition to
the last address of the Customer then appearing on the records of the
Seattle Bank. The proceeds of any disposition of Security shall be
applied in the following order to payment of: (a) all reasonable
expenses incurred by or on behalf of the Seattle Bank for the
collection, care, safekeeping, sale, foreclosure, delivery or other
disposition of Security including, without limitation, insurance,
commissions, guarantees, security valuation fees, expenses, costs and
reasonable attorneys' fees incurred in connection therewith; (b)
interest on all Indebtedness, whether due or accrued; (c) the principal
amount of all Indebtedness; (d) any secondarily secured debt of the
Customer to any third party who proves its subordinate security
interest in the Security to the reasonable satisfaction of the Seattle
Bank; and (e) any remainder to the Customer. If there is a deficiency,
the Customer shall be liable to the Seattle Bank therefor. No delay by
the Seattle Bank in the exercise of its Default Rights shall operate as
a waiver, and a waiver of any specific Default Right shall not
constitute a waiver of any other Default Right not specifically waived.
The Customer hereby irrevocably appoints the Seattle Bank and/or its
designee as its true and lawful attorney in fact to deal in any manner
with the Security in the event of a Default.
9. The Customer may open Accounts with the Seattle Bank subject to the
Regulations of the Seattle Bank. Any Customer's funds deposited in
Accounts shall be subject to withdrawal or charge at any time and from
time to time upon wire transfers or any other orders for the payment of
money when made and drawn on behalf of the customer by a person or
persons authorized by the Customer. The Seattle Bank is authorized to
pay any such wire transfers or other orders, provided they are in the
form prescribed by it, and to charge the Customer's Accounts therefor,
without inquiry as to the circumstances of issue or the disposition of
the proceeds, even if drawn to the individual order of any authorized
person or payable to others for his account.
10. The Seattle Bank, if it acts in good faith and with ordinary care (and
without liability if it does so act), can charge the Accounts with
orders received by the Seattle Bank from any person acting for or
purporting to act for the Customer by telephone, or otherwise orally,
for the transfer of funds to others, including the person giving such
instructions or payable to others for his account, or between Accounts
of the Customer. All authorized Seattle Bank charges and fees will be
charged monthly to such Accounts.
11. The Customer shall maintain a net positive collected balance in all of
its Accounts. The Seattle Bank shall have the option of closing or
restricting the use of Accounts in which positive balances are not
maintained. For each day the aggregate collected balance of an Account
is negative, the Customer shall pay such charges as are consistent with
the Seattle Bank's published schedules.
12. The Customer agrees to provide to the Seattle Bank, within five days
after a request, its business plans and other financial data. In
connection with, and as an extension of, any other informational rights
of the Seattle Bank relating to examination of the Customer by a
supervising agency and reports relating thereto, the Customer agrees
that all Security shall always be subject to audit and verification, at
the Customer's expense, by or on behalf of the Seattle Bank and that
the Seattle Bank shall have access to the Customer's premises and
records for that purpose.
13. If the services of an attorney, either with or without suit, are
engaged by the Seattle Bank in connection with any Default or any
dispute relating to this Agreement, the Customer agrees to pay the
Seattle Bank's reasonable attorneys' fees, expenses and costs incurred
in connection therewith.
14. This Agreement shall be construed and enforced according to the laws of
the State of Washington and the Act. If any provision hereof is
inconsistent with the Act, this Agreement shall be deemed amended to
the end that such provision is not in conflict with the Act. In the
event any such provision cannot be so amended and is found to be
contrary to law, the balance of this Agreement shall remain in full
force and effect if so elected by the Seattle Bank.
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15. This Agreement shall continue until terminated by written notice from
one party to the other; provided that this Agreement shall remain
applicable to all then outstanding Indebtedness and duties of the
Customer and to the documents relating thereto.
Centennial Bank, Eugene, Oregon
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(Name of Customer)
By Xxx Xxxxxxxxx President/CEO
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(Name) (Title)
/s/ Xxx Xxxxxxxxx
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(Signature)
Its President/CEO Date: February 01, 1999
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(Title)
and
By Xxxxxxx Xxxxxxx Xx. V. P./Cashier
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(Name) (Title)
/s/ Xxxxxxx Xxxxxxx
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(Signature)
Its SVP/Cashier Date: February 01, 1999
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(Title)
FEDERAL HOME LOAN BANK OF SEATTLE
By Xxxxx X. Xxxx Senior Vice President
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(Name) (Title)
/s/ Xxxxx X. Xxxx
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(Signature)
Its Chief Financial Officer Date: June 14, 1999
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(Title)
Form 1991-3
(Rev. 10/98)
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