LOAN AGREEMENT
Exhibit 10.1
THIS LOAN AGREEMENT (this “Agreement”) is made and entered into as of
January 26, 2007, by and between SUPERIOR BANCORP, formerly known as The Banc Corporation, a
Delaware corporation (“Borrower”), and U.S. BANK NATIONAL ASSOCIATION, a
national banking association
(“Lender”), and has reference to the following facts and circumstances:
A. Borrower has applied for a revolving credit loan from Lender in the principal
amount of up to $10,000,000.
B. Lender is willing to make said revolving credit loan to Borrower upon, and
subject to, the terms, provisions and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby mutually agree and promise as follows:
SECTION 1. TERM
The “Term” of this Agreement shall commence on the date hereof and shall end
on January 26, 2008, unless earlier terminated upon the occurrence of an Event of Default under this Agreement.
All representations and warranties made herein shall survive termination and termination shall
not affect a party’s rights with respect to any prior breach of any term, agreement,
covenant, representation or warranty contained herein.
SECTION 2. DEFINITIONS
In addition to the terms defined elsewhere in this Agreement or in any Exhibit or Schedule
hereto, when used in this Agreement, the following terms shall have the following meanings (such
meanings shall be equally applicable to the singular and plural forms of the terms used, as the
context requires):
Act shall have the meaning ascribed thereto in Section 9.17.
Attorneys’ Fees means the reasonable value of the services (and costs, charges and
expenses related thereto) of the attorneys employed by Lender (including, without limitation,
attorneys who are employees of Lender) from time to time to represent Lender (a) in the preparation
or amendment of this Agreement and the other Transaction Documents, (b) in any litigation, contest or proceeding or
to take any other action in or with respect to any litigation, contest or proceeding (whether
instituted by Lender, Borrower or any other Person and whether in bankruptcy or otherwise) in any
way or respect relating to this Agreement or any of the other Transaction Documents, Borrower,
Subsidiary Bank, any Subsidiary, or any other Obligor, and (c) to enforce any of Lender’s rights to
collect any of the Obligations; provided, that such Attorneys’ Fees shall be determined on the
basis of rates then generally applicable to the attorneys (and all paralegals, accountants and
other staff employed by such attorneys) employed by Lender, which may be higher than the rates such
attorneys (and all paralegals, accountants and other staff employed by such attorneys) charge
Lender in certain matters.
Business Day shall mean any day except a Saturday, Sunday or legal holiday observed
by
Lender.
Capitalized Lease shall mean any lease which, in accordance with GAAP consistently
applied, is required to be capitalized on the balance sheet of the lessee.
Change in Control shall mean any of the following events: (a) the
acquisition at any time by a
“person” or “group” (as such terms are used in Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934 [the “Exchange Act”]) of beneficial ownership (as defined in Rule
13(d)-3 under the
Exchange Act), directly or indirectly, of securities representing more than Fifty
Percent (50%) of the combined voting power in the election of directors of the then
outstanding securities of Borrower or any successor of Borrower; (b) during any period of two
(2) consecutive years or less, the individuals who at the beginning of such period
constituted a majority of the board of directors cease, for any reason other than death,
disability or retirement to constitute a majority of Borrower’s board of directors, unless
the election of or nomination for election of each new director during such period was
approved by a vote of at least a majority of the directors still in office who were
directors at the beginning of the period; (c) approval by the stockholders of Borrower of any
sale or disposition of substantially all of the assets or earning power of the Borrower;
or (d) approval by the stockholders of Borrower of any merger, consolidation, or
statutory share exchange to which Borrower is a party and as a result of which the
persons who were stockholders of Borrower immediately prior to the effective date of the
merger, consolidation or share exchange shall have beneficial ownership of less than
Fifty Percent (50%) of the combined voting power in the election of directors of the surviving
corporation.
Code shall mean the Internal Revenue Code of 1986, as amended, and any
successor statute of similar import, together with the regulations thereunder, in each
case as in effect from time to time.
References to sections of the Code shall be construed to also refer to any successor
sections.
Collateral shall have the meaning ascribed to such term in the Pledge.
Community shall mean Community Bancshares, Inc., a Delaware corporation.
Consolidated Subsidiary shall mean with respect to any Person at any date, any
Subsidiary or other entity the assets and liabilities of which are or should be consolidated with
those of such Person in its consolidated financial statements as of such date in accordance with
GAAP consistently applied.
Default shall mean an event or condition the occurrence of which would, with the lapse of
time, the giving of notice, or both, become or constitute an Event of Default as defined in Section
8 hereof.
Distribution in respect of any corporation or other entity shall mean: (a) dividends or other
distributions on or in respect of any of the capital stock or other equity interests of such
corporation or other entity; and (b) the redemption, repurchase or other acquisition of any capital
stock or other equity interests of such corporation or other entity or of any warrants, rights or
other options to purchase any such capital stock or other equity interests.
Environmental Laws shall have the meaning ascribed thereto in Section 9.04.
Environmental Lien shall have the meaning ascribed thereto in Section 6.10(g).
ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended, and
any successor statute of similar import, together with the regulations thereunder, in each case as
in effect from time to time (references to sections of ERISA shall be construed to also refer to
any successor sections).
ERISA Affiliate shall mean any corporation, trade or business that is, along with
Borrower, a member of a controlled group of corporations or a controlled group of trades or
businesses, as described in Sections 414(b) and 414(c), respectively, of the Code or Section 4001
of ERISA.
Event of Default shall have the meaning ascribed thereto in Section 8.
- 2 -
GAAP shall mean, at any time, generally accepted accounting principles
at such time in the
United States.
Indebtedness of any Person shall mean and include all obligations of such
Person which in accordance with GAAP consistently applied are or should be classified
upon a balance sheet of such Person as liabilities of such Person, including any and all
contingent obligations, indebtedness and/or liabilities of such Person, as long as they
are reflected on the balance sheet of such Person and any and all obligations of such Person
under any Capitalized Lease.
Indemnitee shall have the meaning ascribed thereto in Section 9.05.
Indemnified Liabilities shall have the meaning ascribed thereto in Section 9.05.
Interest Differential shall mean that sum equal to the greater of zero (0) or the
financial loss incurred by Lender resulting from prepayment, calculated as the difference
between the amount of interest Lender would have earned (from like investments in the
Money Markets as of the first day of the applicable LIBOR Advance) had prepayment not
occurred and the interest Lender will actually earn
(from like investments in the Money Markets as of the date of prepayment) as a result of the
redeployment of funds from the prepayment; provided, that, because of the short-term nature of the
Loan, Borrower agrees that the Interest Differential shall not be discounted to its present value.
LIBOR Advance shall have the meaning ascribed thereto in Section 3.02(a).
Lien shall mean any interest in Property securing an obligation owed to, or a claim
by, a Person other than the owner of the Property, whether such interest is based on common law,
statute or contract, including, without limitation, any security interest, mortgage, deed of trust,
pledge, lien or other encumbrance of any kind or nature whatsoever, any conditional sale or trust
receipt and any lease, consignment or bailment for security purposes.
Loan shall have the meaning ascribed thereto in Section 3.01.
Loan Period shall mean the period commencing on the advance date of the applicable
LIBOR
Advance and ending on the numerically corresponding day one (1), two (2), three (3), or six
(6) months thereafter matching the interest rate term selected by Borrower; provided, however, (a)
if any Loan
Period would otherwise end on a day which is not a New York Banking Day, then the Loan Period
shall end on the next succeeding New York Banking Day unless the next succeeding New York Banking
Day falls in another calendar month, in which case the Loan Period shall end on the immediately
preceding
New York Banking Day; or (b) if any Loan Period begins on the last New York Banking Day of a
calendar month (or on a day for which there is no numerically corresponding day in the calendar
month at the end of the Loan Period), then the Loan Period shall end on the last New York Banking
Day of the calendar month at the end of such Loan Period.
Material Adverse Effect shall mean (a) a material adverse effect on the Properties,
assets, liabilities, business, operations, prospects, income or condition (financial or otherwise)
of Borrower,
Subsidiary Bank, and/or any Subsidiary, (b) material impairment of the ability of Borrower,
Subsidiary Bank, and/or any Subsidiary to perform any of its obligations under this Agreement, the
Note or any of the other Transaction Documents or (c) material impairment of the enforceability of
the rights of, or benefits available to, Lender under this Agreement, the Note, the Pledge or any
of the other
Transaction Documents.
Money Markets shall mean one or more wholesale funding markets available to and
selected by Lender, including negotiable certificates of deposit, commercial paper, Eurodollar
deposits, bank notes, federal funds, interest rate swaps or others.
- 3 -
Multiemployer Plan shall mean a “multiemployer plan” as defined in Section
4001(a) (3) of ERISA which is maintained for employees of Borrower, any other Obligor,
any ERISA Affiliate,
Subsidiary Bank, or any Subsidiary.
New York Banking Day shall mean any day (other than a Saturday or Sunday)
on which commercial banks are open for business in New York, New York.
Note shall mean the Revolving Credit Note to be executed and delivered
to Lender pursuant to
Section 3.01, as the same may from time to time be amended, modified, extended or
renewed.
Notice of Borrowing shall have the meaning ascribed thereto in Section
3.03(a).
Obligations shall mean any and all indebtedness, liabilities and
obligations of Borrower to
Lender under this Agreement, the Note, the Pledge, any of the other Transaction
Documents, or any other agreement, instrument or document heretofore, now or hereafter executed and
delivered by Borrower to Lender, in each case in connection with or contemplated by the
Transaction Documents, now existing or hereafter arising, absolute or contingent, joint and/or
several, secured or unsecured, direct or indirect, expressed or implied in law,
contractual or tortious, liquidated or unliquidated, at law or in equity, or otherwise,
and whether created directly or acquired by Lender by assignment or otherwise, and any
and all costs of collection and/or Attorneys’ Fees incurred or to be incurred in connection
therewith.
Obligor shall mean Borrower and each other Person who is or shall become primarily or
secondarily liable on any of the Obligations or who grants Lender a Lien upon any Property
or assets of such Person as collateral for any of the Obligations.
OTS shall mean the United States Department of Treasury, Office of Thrift
Supervision.
OTS Capital Guidelines shall have the meaning ascribed thereto in Section 6.09.
PBGC shall mean the Pension Benefit Guaranty Corporation and any entity succeeding to
any or all of its functions under ERISA.
Pension Plan shall mean any “pension plan” as such term is defined in Section 3(2) of
ERISA which is subject to the provisions of Title IV of ERISA and which is established or
maintained by
Borrower, any other Obligor, any ERISA Affiliate, Subsidiary Bank, or any Subsidiary, other than a
Multiemployer Plan.
Permitted Liens shall mean (a) Liens securing government deposits at Subsidiary
Bank; (b)
Liens on Property or assets which secure loans or other extensions of credit made by
Subsidiary Bank or any Subsidiary in the ordinary course of their banking business; (c) Liens on
Property or assets acquired by Subsidiary Bank or any Subsidiary by foreclosure or by deed in lieu
of foreclosure in the ordinary course of their banking business; (d) Liens for taxes, assessments
and other governmental charges that are not yet delinquent or are being contested in good faith;
(e) purchase money Liens related to purchase of capital assets not to exceed $500,000; (f) Liens
assumed in connection with acquisitions or mergers as long as such acquisition or merger is
permitted by the terms of this
Agreement; (g) statutory Liens of landlords, carriers, warehousemen, mechanics, suppliers,
material men, or other like Liens incurred in the ordinary course of business and which are not yet
delinquent or are being contested in good faith; (h) Liens incurred in the ordinary course of
business in connection with workers’ compensation and unemployment insurance and other types of
social security; (I) Liens incurred or deposits made to secure performance or tenders, bids,
leases, statutory obligations, utility services, progress payments and the like; (j) the
refinancing of any Liens permitted by this Agreement, and (g) the Liens described on Schedule
5.12 attached hereto.
- 4 -
Person shall mean an individual, partnership, corporation, limited liability company,
trust, unincorporated organization or association, and a government or agency or
political subdivision thereof.
Pledge shall mean the Stock Pledge Agreement dated as of the date hereof to
be executed by Borrower and delivered to Lender pursuant to Section 3 hereof as the same
may from time to time be amended.
Prime Rate shall mean the interest rate announced from time to time by Lender
as its “prime rate” (which rate shall fluctuate as and when said prime rate shall
change). Borrower acknowledges that such “prime rate” is a reference rate and does not
necessarily represent the lowest or best rate offered by Lender to their customers.
Prime Rate Advance shall have the meaning ascribed thereto in Section 3.02(a).
Property shall mean any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible; and Properties shall mean
any or all of the foregoing. For purposes of this Agreement, Borrower, Subsidiary Bank, and
any Subsidiary, as the case may be, shall be deemed to be the owner of any Property which
it has acquired or holds subject to a conditional sale agreement, financing lease or other
arrangement pursuant to which title to the Property has been retained by or vested in some
other Person for security purposes.
Regulatory Agency shall mean any Federal, state or local governmental or regulatory
agency, authority, entity or official having jurisdiction over the banking or other related
activities of Borrower,
Subsidiary Bank, and/or any Subsidiary including, without limitation (to the extent applicable),
The Board of Governors of the Federal Reserve System, the OTS, and the Federal Deposit Insurance
Corporation.
Related Party shall mean any Person which directly or indirectly through one or more
intermediaries controls, or is controlled by or is under common control with, Borrower, Subsidiary
Bank, or any Subsidiary. The term “control” shall mean the possession, directly or indirectly, of
the power to vote Ten Percent (10%) or more of the capital stock of any Person or the power to
direct or cause the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
Reportable Event shall have the meaning ascribed thereto in ERISA.
SEC shall mean the United States Securities and Exchange Commission.
Subsidiary shall mean any corporation or other entity of which more than Fifty Percent
(50%) of the issued and outstanding capital stock or other equity interests entitled to vote for
the election of directors, managers or other persons performing similar functions (other than by
reason of default in the payment of dividends or other distributions) is at the time owned directly
or indirectly by Borrower,
Subsidiary Bank, or any Subsidiary; and Subsidiaries shall mean any or all of the
foregoing.
Subsidiary Bank shall mean as of the effective date of this Agreement, Superior Bank,
a Federal savings bank; provided, that, this definition may be amended in the future to reflect any
other
Subsidiary Bank that Borrower acquires.
Term shall have the meaning ascribed thereto in Section I.
Transaction Documents shall mean this Agreement, the Note, the Pledge, and all other
agreements, documents, instruments and certificates connected with or otherwise relating to this
Agreement or the Loan made hereunder, all as the same may from time to time be amended, modified,
extended or renewed.
- 5 -
SECTION 3. THE LOAN
3.01 Commitment of Lender. Lender hereby agrees to make Borrower a revolving credit
loan in the original principal amount of up to Ten Million Dollars ($10,000,000.00) (the
“Loan”), which Loan, or any portion thereof, may be repaid and, subject to the terms and
conditions hereof (and as long as no Event of Default exists), reborrowed to, but not including
the last day of the Term. The aggregate principal amount which Borrower may have outstanding under
the Loan at any one time shall not initially exceed Ten Million Dollars ($10,000,000.00),
which amount may be borrowed, paid, reborrowed and repaid in whole or in part; provided,
that, upon request prior to the last day of the Term, as long as no Default or Event of
Default has occurred and is continuing, and further subject to approval in accordance with Lender’s
credit approval policies and procedures after receipt by Lender of any such request, the Loan may
by increased to an amount not to exceed $15,000,000.00. The Loan shall be evidenced by the
Revolving Credit Note of Borrower dated the date of this Agreement, payable to the order of Lender
in the principal amount of $10,000,000.00, having a maturity date of the last day of the
Term, and in the form attached hereto and incorporated by reference as Exhibit A (as the
same may from time to time be amended, modified, extended or renewed, the “Note”).
3.02 Interest.
(a) Interest on each Loan advance shall accrue at one of the following annual rates selected
by Borrower: (a) upon notice to Lender, One and 5/10 Percent (1.5%) below the Prime Rate (each, a
“Prime Rate Advance”); or (b) upon a minimum of two (2) New York Banking Days prior notice,
One and 25/100 Percent (1.25%) above the one (1), two (2), three (3), or six (6) month LIBOR rate
quoted by Lender from Telerate Page 3750 or any successor thereto (which shall be the LIBOR rate in
effect two (2) New York Banking Days prior to commencement of the advance), adjusted for any
reserve requirement and any subsequent costs arising from a change in government regulation (each,
a
“LIBOR Advance”).
(b) In the event Borrower does not timely select another interest rate option at least two (2)
New York Banking Days before the end of the Loan Period for a LIBOR Advance, Lender may at any time
after the end of the Loan Period convert the LIBOR Advance to a Prime Rate Advance, but until such
conversion, the funds advanced under the LIBOR Advance shall continue to accrue interest at the
same rate as the interest rate in effect for such LIBOR Advance prior to the end of the Loan
Period.
(c) No LIBOR Advance may extend beyond the last day of the Term. In any event, if the
Loan Period for a LIBOR Advance should happen to extend beyond the last day of the Term, such
LIBOR Advance must be prepaid on the last day of the Term. Lender’s internal records of applicable
interest rates shall be determinative in the absence of manifest error. Each LIBOR Advance shall be
in a minimum principal amount of $100,000. The aggregate number of LIBOR Advances in effect at any
one time may not exceed five (5).
(d) After maturity of the Loan, whether by reason of acceleration or otherwise, interest shall
accrue on the Loan and be payable on demand on the entire outstanding principal balance thereof at
an annual rate equal to Three Percent (3%) over and above the then existing rate(s). Interest on
each
Loan advance shall be payable quarterly in arrears on each March 31, June 30, September 30 and
December 31, and on the last day of the Term, or earlier if maturity is accelerated pursuant
to the terms of this Agreement. All payments shall be applied first to the payment of all accrued
and unpaid interest, with the balance, if any, to be applied to the payment of principal. Lender’s
internal records of applicable interest rates shall be determinative in the absence of manifest
error.
3.03 Method of Borrowing.
- 6 -
(a) Borrower shall give Lender oral or written notice (a “Notice of
Borrowing”) by 10:00 a.m. (St. Louis time) on (i) the Business Day on
which each Prime Rate Advance shall be made, or (ii) at least a minimum
of two (2) New York Banking Days prior to which each LIBOR Advance shall be
made.
Each Notice of Borrowing shall specify: (A) the date of such advance, which shall
be a Business Day during the Term, (B) the aggregate principal amount of such advance,
and (C) with respect to each
LIBOR Advance, the Loan Period.
(b) A Notice of Borrowing shall not be revocable by Borrower.
(c) Subject to the terms and conditions of this Agreement, provided that Lender has
received the Notice of Borrowing, Lender shall (unless Lender determines that any
applicable condition specified in Section 4 has not been satisfied) make the applicable
Loan advance to Borrower by crediting the amount of such Loan advance to a demand
deposit account of Borrower at Lender specified by Borrower (or such other account mutually
agreed upon in writing between Lender and
Borrower) not later than 2:30 p.m. (St. Louis time) on the Business Day specified in
said Notice of
Borrowing.
(d) If Lender makes a new Loan advance under this Agreement on a day on which
Borrower is required to or has elected to repay all or any part of an outstanding Loan
advance, Lender shall apply the proceeds of its new Loan advance to make such repayment
and only an amount equal to the difference (if any) between the amount being borrowed
and the amount being repaid shall be made available by Lender to Borrower.
(e) Borrower hereby irrevocably authorizes Lender to rely on telephonic, telegraphic,
telecopy, telex, electronic mail, or written instructions of any individual identifying
himself or herself as one of the individuals listed on Schedule 3.03 attached hereto
(or any other individual from time to time authorized to act on behalf of Borrower pursuant to a
resolution adopted by either the Board of
Directors of Borrower and certified by the Secretary of Borrower) with respect to any request to
make a
Loan advance or a repayment under this Agreement, and on any signature which Lender believes
to be genuine, and Borrower shall be bound thereby in the same manner as if such individual were
actually authorized or such signature were genuine. Borrower also hereby agrees to defend and
indemnify
Lender and hold Lender harmless from and against any and all claims, demands, damages,
liabilities, losses and reasonable costs and expenses (including, without limitation, reasonable
attorneys’ fees and expenses) relating to or arising out of or in connection with the acceptance of
instructions for making Loan advances or repayments under this Agreement; unless such claims,
demands, damages, liabilities and losses are caused solely by Lender’s gross negligence or
intentional misconduct.
3.04 Prepayment. Borrower shall be privileged at any time to prepay all or any portion
of the Loan prior to last day of the Term, without penalty or premium, provided that: (a) partial
prepayments shall be applied to the installments of principal of the Note in the inverse order of
their stated maturities;
(b) on each prepayment date, Borrower shall pay to Lender all accrued interest on the
principal portion of the Loan being prepaid to and including the date of such prepayment; (c) no
Default or Event of
Default under this Agreement shall have occurred and be continuing; and (d) if a LIBOR Advance
is prepaid prior to the end of the applicable Loan Period for such LIBOR Advance, whether
voluntarily or because prepayment is required due to the Loan maturing, or due to acceleration of
the Loan upon default or otherwise, Borrower agrees to pay all of Lender’s costs, expenses and
Interest Differential
(as determined by Bank) incurred as a result of such prepayment. Any prepayment of a LIBOR
Advance shall be in an amount equal to the remaining entire principal balance of such LIBOR
Advance.
3.05 General Provisions as to Payments. Borrower shall make each payment of principal
of, and interest on, the Loan and all other amounts payable by Borrower under this Agreement, not
later than 12:00 noon (St. Louis time) on the date when due and payable, in Federal or other funds
immediately available in St. Louis, Missouri, to Lender at its address referred to in Section 3.06.
All
- 7 -
payments received by Lender after 12:00 noon (St. Louis time) shall be deemed to
have been received by Lender on the next succeeding Business Day. Whenever any payment
of principal of, or interest on, the Loans or of other amount shall be due on a day which is
not a Business Day, the date for payment thereof shall be extended to the next succeeding
Business Day. If the date for any payment of principal is extended by operation of law or
otherwise, interest thereon, at the then applicable rate, shall be payable for such extended
time.
3.06 Place of Payment. Both principal and interest under the Note are
payable to Lender in lawful currency of the United States in Federal or other immediately
available funds at Lender’s banking office at One US Bank Plaza, 7th Street & Xxxxxxxxxx
Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000.
3.07 Late Fees. If Borrower fails to make any payment of any principal of or
interest on any
Loan advance within ten (10) days after the same becomes due, whether by reason of
maturity, acceleration or otherwise, in addition to all of the other rights and remedies of Lender
under this
Agreement and at law or in equity, Borrower shall pay Lender on demand with respect to each such
late payment a late fee in an amount not to exceed Three Percent (3%) of each late payment.
3.08 Capital Adequacy. If, after the date of this Agreement, Lender shall have
determined in good faith that the adoption of any applicable law, rule, regulation or guideline
regarding capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any
Regulatory Agency, other governmental or regulatory authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by Lender with any request
or directive regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or will have the effect of reducing the rate of
return on
Lender’s capital in respect of its obligations under this Agreement to a level below that
which Lender could have achieved but for such adoption, change or compliance (taking into
consideration Lender’s policies with respect to capital adequacy), then from time to time Borrower
shall pay to Lender upon demand such additional amount or amounts as will compensate Lender for
such reduction. All determinations made in good faith by Lender of the additional amount or amounts
required to compensate Lender in respect of the foregoing shall be conclusive in the absence of
manifest error. In determining such amount or amounts, Lender may use any reasonable averaging and
attribution methods.
SECTION 4. PRECONDITIONS TO LOAN ADVANCES
4.01 Initial Advance under Loan. Notwithstanding any provision contained herein to the
contrary, Lender shall have no obligation to make the initial Loan advance unless Lender shall have
received the following, all in form acceptable to Lender:
(a) this Agreement and the Note, each executed by a duly authorized officer of Borrower;
(b) the Pledge, executed by a duly authorized officer of Borrower, and the collateral
schedule, stock power(s), UCC financing statement, and such other documents as Lender may
require in connection with the Pledge;
(c) 65,026 shares of the common stock of Subsidiary Bank, representing at least Fifty
One Percent (51%) of the issued and outstanding common stock of Subsidiary Bank (as verified
by the Secretary of Subsidiary Bank), said shares to be issued in Borrower’s name and
accompanied by stock powers duly executed in blank by an authorized officer of Borrower
which the signature(s) of such officer(s) guaranteed;
(d) the Certificate of President, duly executed by the President of Borrower;
- 8 -
(e) copies of resolutions of the Board of Directors of Borrower, duly
adopted, which authorize the execution, delivery and performance of this
Agreement and the other Transaction
Documents, certified by the Secretary of Borrower;
(f) copies of the Articles or Certificate of Incorporation of Borrower, including any
amendments
thereto, certified by the Secretary of State of the State of Delaware, and
copies of the Articles or Certificate of Incorporation of Subsidiary Bank, including
any amendments thereto, certified by the OTS;
(g) copies of the By-Laws of Borrower and Subsidiary Bank, including any
amendments thereto, certified by the Secretary of Borrower, and the Secretary of Subsidiary
Bank, respectively;
(h) a certificate of good standing for Borrower issued by the Secretary of State of the
State of Delaware, and a certificate of corporate existence for Subsidiary Bank issued by
the OTS;
(i) an opinion of counsel from Xxxxxxx X. Xxxxxxxx, Xx., General Counsel of Borrower,
in the form acceptable to Lender;
(j) evidence that no change in the financial condition of Borrower, Subsidiary Bank
and/or any Subsidiary shall have occurred since September 30, 2006 that could have a
Material
Adverse Effect; and
(k) such other agreements, documents, instruments, certificates and assurances as Lender
may reasonably request.
4.02 All Advances. Notwithstanding any provision contained in this Agreement to the
contrary, Lender shall have no obligation to make any Loan advance under this Agreement unless:
(a) Lender shall have received a Notice of Borrowing for such Revolving Credit Loan as
required by Section 3.03(a);
(b) both immediately before and immediately after giving effect to such Loan advance, no
Default or Event of Default shall have occurred and be continuing;
(c) no change in the Properties, assets, liabilities, business, operations, prospects,
income or condition (financial or otherwise) of Borrower, Subsidiary Bank and/or any
Subsidiary which may have a Material Adverse Effect shall have occurred since the date of
this Agreement and be continuing; and
(d) all of the representations and warranties made by Borrower and any third-parties in
this Agreement and/or in any other Transaction Document shall be true and correct in all
material respects on and as of the date of such Loan as if made on and as of the date of
such Loan advance (and for purposes of this Section 4.02(d), the representations and
warranties made by Borrower in Section 5.04 shall be deemed to refer to the most recent
financial statements of Borrower delivered to Lender pursuant to Section 6.03).
Each request for a Loan advance by Borrower under this Agreement shall be deemed to be a
representation and warranty by Borrower on the date of such Loan advance as to the facts specified
in clauses (b), (c), and (d) of this Section 4.02.
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce Lender to make the Loan, Borrower hereby represents and warrants to Lender that:
- 9 -
5.01 Corporate Existence and Power. Each of Borrower, Subsidiary Bank, and each
Subsidiary: (a) is duly incorporated or organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization; (b) has
all requisite corporate powers and all governmental licenses, authorizations, consents
and approvals required to carry on its business as now conducted; and (c) is
duly qualified to do business in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary and where failure to
so qualify would have a Material Adverse Effect on its business, financial
condition or operations. Borrower is a Delaware chartered “savings and loan
holding company” as defined in and within the meaning of 12
U.S.C. §1467a et
seq., and as such Borrower has filed all necessary reports with and received all
necessary approvals from OTS. Subsidiary Bank is a “Federal savings association” and
an “insured depository institution”, as those terms are defined in and within
the meaning of 12 U.S.C. §§1462 and 1813 and no act has occurred which could
adversely affect the status of Subsidiary Bank as an “insured depository
institution.” Subsidiary Bank is a Federal savings bank chartered under 12 U.S.C. §1464.
5.02 Corporate Authorization. The execution, delivery and performance by Borrower
of this Agreement, the Note, the Pledge, and the other Transaction Documents are
within the corporate powers of Borrower and have been duly authorized by all necessary
corporate action.
5.03 Binding Effect. This Agreement, the Note, the Pledge, and the other
Transaction
Documents have been duly authorized, executed and delivered and constitute the legal, valid
and binding obligations of Borrower enforceable in accordance with their respective terms, except
as such enforceability may be limited by bankruptcy, insolvency or other similar laws affecting
creditors’ rights in general.
5.04 Financial Statements. Borrower has furnished Lender with the following
financial statements, identified by the principal financial officer of Borrower: (a) consolidated
and consolidating balance sheets and profit and loss statements of Borrower and its Consolidated
Subsidiaries as of December 31, 2005, all certified by Borrower’s independent certified public
accountants, which financial statements have been prepared in accordance with GAAP; and (b) the
Thrift Financial Report (OTS Form 1313) of Subsidiary Bank as of September 30, 2006, certified
by the President or Chief Financial Officer of Subsidiary Bank. Borrower further represents that:
(1) said financial statements fairly present the condition of Borrower and its Consolidated
Subsidiaries as of the dates thereof, (2) there has been no change in the condition or operation,
financial or otherwise, of Borrower or any of its Consolidated Subsidiaries since September 30,
2006 that could have a Material Adverse Effect, and (3) neither Borrower nor any of its
Consolidated Subsidiaries has any direct or contingent liabilities which are not disclosed on said
financial statements which could have a Material Adverse Effect.
5.05
Litigation. Except as disclosed in Schedule 5.05 attached hereto, there is no
action or proceeding pending or, to the knowledge of Borrower, threatened against or affecting
Borrower, Subsidiary Bank or any Subsidiary, before any court, arbitrator or governmental,
regulatory or administrative body, agency or official which could result in any change in the
condition or operation, financial or otherwise, of Borrower, Subsidiary Bank, or any Subsidiary
which may have a Material Adverse Effect, and neither Borrower, Subsidiary Bank nor any Subsidiary
is in default with respect to any order, writ, injunction, decision or decree of any court,
arbitrator or governmental, regulatory or administrative body, agency or official which could have
a Material Adverse Effect.
5.06 Pension and Welfare Plans. Each Pension Plan complies in all material respects
with all applicable statutes and governmental rules and regulations; no Reportable Event has
occurred and is continuing with respect to any Pension Plan; neither Borrower, Subsidiary Bank, any
Subsidiary, nor any ERISA Affiliate has withdrawn from any Multiemployer Plan in a “complete
withdrawal” or a “partial withdrawal” as defined in sections 4203 or 4205 of ERISA, respectively;
no steps have been instituted by Borrower, Subsidiary Bank, any Subsidiary, or any ERISA Affiliate
to terminate any Pension Plan; no condition exists or event or transaction has occurred in
connection with any Pension Plan or Multiemployer Plan which could result in the incurrence by
Borrower, Subsidiary Bank, any Subsidiary,
- 10 -
or any ERISA Affiliate of any material liability, fine or penalty; and neither Borrower,
Subsidiary Bank, any Subsidiary, nor any ERISA Affiliate is a “contributing sponsor” as defined in
Section 4001 (a) (13) of ERISA of a “single-employer plan” as defined in Section 4001 (a) (15) of
ERISA which has two or more contributing sponsors at least two of whom are not under common
control. Neither Borrower, Subsidiary Bank, nor any Subsidiary, has any contingent liability
with respect to any “employee welfare benefit plans”, as such term is defined in Section 3(a)
of ERISA, which covers retired employees and their beneficiaries.
5.07 Tax Returns. Borrower, Subsidiary Bank, and each Subsidiary have filed all
Federal, state and local income tax returns and all other tax returns which are required to be
filed and has paid all taxes due pursuant to such returns or pursuant to any assessment received by
Borrower, Subsidiary
Bank, and each Subsidiary, except for the filing of such returns, if any, in respect of which an
extension of time for filing is in effect.
5.08 Subsidiaries. Subsidiary Bank and the other Subsidiaries set forth on
Schedule 5.08 are the only Subsidiaries of Borrower. Except as disclosed herein, neither
Borrower nor Subsidiary Bank, individually or collectively, owns or holds, directly or indirectly,
any capital stock of or equity interest in any corporation, partnership, limited liability company
or other entity. Borrower may at any time amend, modify or supplement this Section 5.08 and
Schedule 5.08 by notifying Lender in writing of any changes thereto, including any
formation, acquisition, merger or liquidation of any Subsidiary or any change in the capitalization
of any Subsidiary, in each case, in accordance with the terms of this
Agreement, and thereby the representations and warranties contained in this Section 5.08 shall be
amended accordingly so long as such amendment, modification or supplement is made within thirty
(30) days after the occurrence of any such changes in the facts stated therein and that such
changes reflect transactions that are permitted under this Agreement.
5.09 Compliance with Laws. Borrower, Subsidiary Bank, and each Subsidiary have
complied in all material respects with and will continue to comply with all applicable federal and
state laws and regulations that: (a) regulate or are concerned in any way with its or their banking
and trust business, including without limitation those laws and regulations relating to the
investment of funds, lending of money, collection of interest, extension of credit, and location
and operation of banking facilities; or
(b) otherwise relate to or affect the business or assets of Borrower, Subsidiary Bank, and each
Subsidiary, or the assets owned, used or occupied by them.
5.10 Compliance With Other Instruments. None of the execution and delivery by Borrower
of the Transaction Documents, the consummation of the transactions therein contemplated or the
compliance with the provisions thereof will violate any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on Borrower, or any of the provisions of Borrower’s
Certificate of Incorporation or By-Laws or any of the provisions of any indenture, agreement,
document, instrument or undertaking to which Borrower is a party or subject, or by which it or its
Property is bound. No order, consent, approval, license, authorization or validation of, or filing,
recording or registration with, the exemption by, any governmental, regulatory, administrative or
public body or authority, or any subdivision thereof, is required to authorize, or is otherwise
required in connection with, the execution, delivery or performance of, or the legality, validity,
binding effect or enforceability of, any of the
Transaction Documents.
5.11 Other Loans and Guarantees. Except as disclosed on Schedule 5.11 attached
hereto, neither Borrower, Subsidiary Bank, nor any Subsidiary (except in the ordinary course of the
banking business) is a borrower, guarantor or obligor with respect to any loan transaction,
guarantee or other indebtedness for borrowed money.
5.12 Title to Property. Borrower, Subsidiary Bank, and each Subsidiary are each the
sole and absolute owner of, or has the legal right to use and occupy, all Property it claims to own
or which is necessary for Borrower, Subsidiary Bank, and each Subsidiary to conduct its business.
Neither
- 11 -
Borrower, Subsidiary Bank, nor any Subsidiary has signed or authorized the filing of any
financing statements, security agreements or chattel mortgages with respect to any of its
respective Property, has granted or permitted any Liens with respect to any of its Property
or has any knowledge of any Liens with respect to any of its Property, except as
disclosed on Schedule 5.12 attached hereto.
5.13
Regulation U. No part of the proceeds of the Loan will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately (a) to
purchase or carry margin stock or to extend credit to others for the purpose of
purchasing or carrying margin stock, or to refund or repay indebtedness originally
incurred for such purpose or (b) for any purpose which entails a violation of, or which
is inconsistent with, the provisions of the Regulations of The Board of Governors of the
Federal Reserve System, including, without limitation, Regulations G, U, T or X thereof, as
amended.
5.14 Environmental Matters. There are no disputes pending (nor, to the knowledge of
Borrower, are there any disputes threatened nor, to the knowledge of Borrower, is there any
basis therefor) affecting Borrower, Subsidiary Bank, or any Subsidiary, whether or not in
or before any court or arbitrator of any kind or involving any governmental or regulatory
body, which, if adversely determined could, singly or in the aggregate, have a Material
Adverse Effect on the business, Properties, assets, liabilities, financial condition,
results of operations or business prospects of Borrower, Subsidiary Bank, or any Subsidiary
or on the ability of Borrower to perform its obligations hereunder or under the Note or any
of the other Transaction Documents, relating to environmental matters, including, without
limitation, any notice from any agency, state or Federal, that Borrower, Subsidiary Bank,
or any Subsidiary is a potentially responsible party for the cleanup of any environmental
waste site, that Borrower, Subsidiary Bank, or any Subsidiary is in violation of any
environmental permit or regulation, that Borrower, Subsidiary Bank, or any Subsidiary has
been placed on any registry of solid or hazardous waste disposal sites, or of the
expiration, revocation or denial of any environmental permit or other loss of interim
status or other current authorization to operate any unit or portion of the facilities of
Borrower, Subsidiary Bank, or any Subsidiary.
5.15 Shares of Subsidiary Bank. The authorized capital of Subsidiary Bank consists
solely of 200,000 shares of common stock, $1.00 par value. As of the date hereof, Borrower
is the sole legal and beneficial owner of 127,501 shares of common stock, $1.00 par value,
of Subsidiary Bank, representing all of the outstanding and issued shares of common stock
of Subsidiary Bank, subject to no Liens, warrants, options, proxies, restrictions on
transfer, resale or other disposition; and that all of such shares are all validly issued,
fully paid and nonassessable. As of the date hereof, there are no warrants or options, or
any agreements to issue any warrants or options, outstanding with respect to any class of
capital stock of Subsidiary Bank.
SECTION 6. AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, so long as any of Obligations are outstanding, it will,
and will cause Subsidiary Bank, or any Subsidiary to:
6.01 Insurance. Keep adequately insured, by financially sound and reputable insurers
acceptable to Lender and in amounts reasonably acceptable to Lender, all Property of Borrower,
Subsidiary Bank, and each Subsidiary of the character usually insured by corporations and other
entities engaged in the same or similar businesses similarly situated, against loss or damage of
the kind customarily insured against by such corporations and acceptable to Lender, and (b) cause
Subsidiary Bank to maintain coverage under a banker’s blanket bond in an amount equal to the
greater of the amount of coverage currently maintained by Subsidiary Bank or the minimum coverage
recommended by the applicable Regulatory Agencies, plus such excess fidelity coverage as Lender may
reasonably request from time to time. Promptly after Lender’s request therefor, Borrower shall
provide Lender with evidence that Borrower maintains, and that Subsidiary Bank maintain, the
insurance required under this Section 6.01, and evidence of the payment of all premiums therefor.
- 12 -
Notice
Required by Section 427.120(3) X.X.Xx.: “Unless you provide evidence of the insurance
coverage required by your agreement with us, we may purchase insurance at your expense to
protect our interests in your collateral. This insurance may, but need not, protect your
interests. The coverage that we purchase may not pay any claim that you make or any claim that is
made against you in connection with the collateral. You may later cancel any insurance purchased by
us, but only after providing evidence that you have obtained insurance as required by our
agreement. If we purchase insurance for the collateral, you will be responsible for the costs of
that insurance, including the insurance premium, interest and any other charges we may impose in
connection with the placement of the insurance, until the effective date of the cancellation or
expiration of the insurance. The costs of the insurance may be added to your total outstanding
balance or obligation. The costs of the insurance may be more than the cost of insurance you may be
able to obtain on your own.”
6.02 Payment of Taxes. Duly file all Federal, state and local income tax returns and
all other tax returns and reports which are required to be filed; and pay before the same become
delinquent, all taxes and governmental charges assessed against or upon Borrower, Subsidiary Bank,
and each Subsidiary, as the case may be, or upon their respective Properties, assets, income or
franchises, except to the extent any failure to do so would not have a Material Adverse Effect.
6.03 Financial Data. Deliver to Lender:
(a) As soon as practicable and in any event within sixty (60) days after the end of each
fiscal quarter (other than the last fiscal quarter of each fiscal year of Borrower) an unaudited
consolidated statement of earnings and retained earnings of Borrower and its Consolidated
Subsidiaries for the period from the beginning of the current fiscal year to the end of such fiscal
quarter, and an unaudited consolidated balance sheet of Borrower and its Consolidated Subsidiaries
as at the end of such fiscal quarter, setting forth in each case in comparative form figures for
the corresponding period in the preceding fiscal year, all in reasonable detail and certified to
Lender by the principal financial officer of Borrower, subject to changes resulting from normal
year-end adjustments; all such statements to be prepared in accordance with GAAP consistently
applied (provided that as long as Borrower timely files its SEC Form
10-Q for any applicable fiscal
quarter, this reporting requirement shall be deemed to be satisfied for such fiscal quarter);
(b) As soon as practicable and in any event within ninety (90) days after the end of each
fiscal year, consolidated and consolidating statements of earnings and retained earnings of
Borrower and its Consolidated Subsidiaries for such year, consolidated and consolidating statements
of cash flow of Borrower and its Consolidated Subsidiaries for such year, and consolidated and
consolidating balance sheets of Borrower and its Consolidated Subsidiaries as at the end of such
year, setting forth in each case in comparative form corresponding figures from the preceding
fiscal year, all such statements to be prepared in accordance with GAAP consistently applied and
reported and accompanied by the unqualified opinion of independent certified public accountants
selected by Borrower and acceptable to Lender (provided that as long as Borrower timely files its
SEC Form 10-K for any applicable fiscal year, this reporting requirement shall be deemed to be
satisfied for such fiscal year);
(c) As soon as practicable and in any event within sixty (60) days after the end of each
fiscal quarter, a certificate in substantially the form of that attached hereto and made a part
hereof as Exhibit B (with appropriate insertions), executed by the principal financial
officer of Borrower;
(d) Promptly after filing with any Regulatory Agency, and in any event within fifteen (15)
days after the filing thereof, copies of all financial statements, call reports, filings and other
documents
- 13 -
which Borrower, Subsidiary Bank, or any Subsidiary shall file with the SEC and any Regulatory
Agency and which are otherwise not publicly available; and
(e) With reasonable promptness, such other financial information and data as Lender may from
time to time reasonably request.
Lender shall keep such information confidential in compliance with applicable law, provided that
Lender is hereby authorized to deliver a copy of any financial statement or other information made
available by
Borrower, Subsidiary Bank, or any Subsidiary to any regulatory authority having jurisdiction over
Lender, pursuant to any request therefor.
6.04 Maintenance of Property. Maintain all Property, plants and equipment (except
obsolete equipment) in good operating order, and from time to time make all needful and proper
repairs, renewals, replacements, additions, betterments and improvements thereto so that at all
times the efficiency thereof shall be fully preserved and maintained.
6.05 Inspection. Permit any employee or contractor designated by Lender to visit,
inspect and audit any of the Properties, corporate books, loan documentation, loan portfolios, loan
files and financial records of Borrower, Subsidiary Bank, and any Subsidiary and to discuss the
affairs, finances and accounts of Borrower, Subsidiary Bank, and any Subsidiary with the principal
officers of Borrower, Subsidiary Bank, and any Subsidiary, all at such reasonable times and at such
reasonable intervals as Lender may request. Lender shall keep such information confidential in
compliance with applicable law, provided that Lender is hereby authorized to deliver a copy of any
such information made available by Borrower, Subsidiary Bank, or any Subsidiary to any regulatory
authority having jurisdiction over Lender, pursuant to any request therefor.
6.06 Corporate Existence. Do or cause to be done all things necessary to (a) preserve
and keep in full force and effect its corporate existence, rights and franchises to the extent the
failure to do so could reasonably be expected to have a Material Adverse Effect, (b) duly qualify
to do business in all jurisdictions where the nature of Property or the nature of the business
requires such qualification to the extent the failure to do so could reasonably be expected to have
a Material Adverse Effect, (c) maintain its status as a “savings and loan holding company” under
and within the meaning of 12 U.S.C. §1467a, (d) cause Subsidiary Bank to preserve and keep in full
force and effect its existence, franchise and right to do business as a Federal savings bank under
the laws of the United States, and (e) maintain Subsidiary Bank’s status as an “insured depository
institution” as defined in, or within the meaning of, 12 U.S.C. §1813, and to otherwise maintain
Subsidiary Bank’s eligibility for federal deposit insurance.
6.07 Compliance with Law. Comply with any and all laws, ordinances and governmental
and regulatory rules and regulations to which it is subject, and obtain any and all licenses,
permits, franchises and other governmental and regulatory authorizations necessary to the ownership
of the Properties, or to the conduct of the business, which violation or failure to obtain might
have a Material
Adverse Effect.
6.08 ERISA Compliance. If Borrower, Subsidiary Bank, or any Subsidiary shall have, or
in the future create, any Pension Plan, Borrower shall comply in all material respects with, and
shall cause Subsidiary Bank, and each Subsidiary to comply with, all requirements of ERISA relating
to such plan. Without limiting the generality of the foregoing, Borrower will not: (a) permit, or
cause or allow Subsidiary Bank, and each Subsidiary to permit, any Pension Plan maintained by it,
Subsidiary Bank, or any Subsidiary, as the case may be, to engage in any nonexempt “prohibited
transaction”, as such term is defined in Section 4975 of the Internal Revenue Code of 1986, as
amended; (b) permit, or cause or allow Subsidiary Bank, or any Subsidiary to permit, any Pension
Plan maintained by it, Subsidiary Bank, or any Subsidiary, as the case may be, to incur any
“accumulated funding deficiency,” as such term is defined in Xxxxxxx 000 xx XXXXX, 00 X.X.X. §0000,
whether or not waived; (c) terminate, or cause or allow Subsidiary Bank, or any Subsidiary to
terminate, any such Pension Plan in
- 14 -
a manner which could result in the imposition of a Lien on the Property of Borrower,
Subsidiary Bank, or any Subsidiary, as the case may be, pursuant to section 4068 of XXXXX, 00
X.X.X. §0000; or (d) take, or cause or allow Subsidiary Bank, or any Subsidiary to take, any
action which would constitute or give rise to a complete or partial withdrawal from a
multi-employer plan within the meaning of Sections 4203 and 4205 of Title IV of ERISA.
Notwithstanding any provision contained in this Section 5.08 to the contrary, an act by
Borrower, Subsidiary Bank, or any Subsidiary shall not be deemed to constitute a violation of
subparagraphs (a) through (d) hereof unless Lender determines in good faith that said action,
individually or cumulatively with other acts of Borrower, Subsidiary Bank, or any Subsidiary, does
have or is likely to cause a significant adverse financial effect upon Borrower, Subsidiary Bank,
or any Subsidiary. Borrower shall have the affirmative obligation hereunder to report to Lender any
of those acts identified in subparagraphs (a) through (d) hereof, regardless of whether said act
does or is likely to cause a significant adverse financial effect upon Borrower, Subsidiary Bank,
or any Subsidiary, and failure by Borrower to report such act promptly upon Borrower’s becoming
aware of the existence thereof shall constitute an Event of Default hereunder.
6.09 Risk-Based Capital Adequacy Guidelines. Comply with, to the extent applicable,
the capital guidelines for savings associations of the OTS as set forth in 12 C.F.R. §565.4 (the
“OTS Capital Guidelines”), as from time to time amended, or in any successor law, rule or
regulation of similar import. In addition, Borrower will cause Subsidiary Bank to maintain at all
times during the Term of this Agreement a “well-capitalized” rating under the OTS Capital
Guidelines.
6.10 Notices. To the extent not described in any public document filed by Borrower
with the SEC or any Regulatory Agency (or to be described in the next applicable SEC or Regulatory
Agency filing), notify Lender in writing of any of the following promptly after learning of the
occurrence thereof, describing the same and, if applicable, the steps being taken by the Person(s)
affected with respect thereto:
(a) Default. The occurrence of (i) any Default or Event of Default under this
Agreement, or
(ii) any default or event of default by Borrower, Subsidiary Bank, or any Subsidiary (which could
reasonably be expected to have a Material Adverse Effect), under any note, indenture, loan
agreement, mortgage, deed of trust, security agreement, lease or other similar agreement, document
or instrument to which Borrower, Subsidiary Bank, or any Subsidiary, as the case may be, is a party
or by which it is bound or to which it is subject;
(b) Litigation. The institution of any litigation, arbitration proceeding or
governmental or regulatory proceeding affecting Borrower, Subsidiary Bank, or any Subsidiary,
whether or not considered to be covered by insurance, which could reasonably be expected to have a
Material Adverse Effect;
(c) Judgment. The entry of any judgment or decree against Borrower, Subsidiary Bank,
or any Subsidiary which could reasonably be expected to have a Material Adverse Effect;
(d) Pension Plans. The occurrence of a Reportable Event (which could reasonably be
expected to have a Material Adverse Effect) with respect to any Pension Plan; the filing of a
notice of intent to terminate a Pension Plan by Borrower, any ERISA Affiliate, any other Obligor or
Subsidiary Bank; the institution of proceedings to terminate a Pension Plan by the PBGC or any
other Person to terminate any Pension Plan; the withdrawal in a “complete withdrawal” or a “partial
withdrawal” as defined in Sections 4203 and 4205, respectively, of ERISA by Borrower, any ERISA
Affiliate, any other Obligor or Subsidiary Bank from any Multiemployer Plan; or the incurrence of
any material increase in the contingent liability of Borrower, any other Obligor or Subsidiary Bank
with respect to any “employee welfare benefit plan” as defined in Section 3(1) of ERISA which
covers retired employees and their beneficiaries;
- 15 -
(e) Change of Name. Any change in the name of Borrower, Subsidiary Bank, or any
Subsidiary which could reasonably be expected to have a Material Adverse Effect;
(f) Change in Place(s) of Business. Any proposed opening, closing or other
change of any place of business of Borrower, Subsidiary Bank, or any Subsidiary which could
reasonably be expected to have a Material Adverse Effect;
(g) Environmental Matters. Receipt of any notice that the operations of Borrower,
Subsidiary Bank, or any Subsidiary are not in full compliance with any of material
requirements of any applicable Federal, state or local environmental, health or safety law,
rule or regulation; receipt of notice that Borrower, Subsidiary Bank, or any Subsidiary
is subject to any Federal, state or local investigation evaluating whether any remedial
action is needed to respond to the material release of any hazardous or toxic waste,
substance or constituent or other substance into the environment; or receipt of notice that
any of the Properties or assets of Borrower, Subsidiary Bank, or any Subsidiary are subject
to an “Environmental Lien.” For purposes of this Section 6.10, “Environmental Lien” shall
mean a Lien in favor of any governmental or regulatory agency, entity, authority or official for
(1) any liability under Federal, state or local environmental laws, rules or regulations which
could reasonably be expected to have a Material Adverse Effect or (2) damages arising from or costs
incurred by any such governmental or regulatory agency, entity, authority or official in response
to a release of a hazardous or toxic waste, substance or constituent or other substance into the
environment which could reasonably be expected to have a Material Adverse Effect;
(h) Material Adverse Effect. The occurrence of any change in the business, operations
or condition, financial or otherwise, of Borrower, Subsidiary Bank, or any Subsidiary which could
reasonably be expected to have a Material Adverse Effect; and
(i) Regulatory Matters. The issuance of any cease and desist order against
Borrower,
Subsidiary Bank, or any Subsidiary by any Regulatory Agency and/or the entry of any memorandum of
understanding or other agreement between Borrower, Subsidiary Bank, or any Subsidiary and any
Regulatory Agency, regardless of whether the same is voluntary or involuntary.
6.11 Utilization of Loan Proceeds. Utilize the proceeds of any advance made under the
Loan solely for working capital purposes, for payment of the outstanding stock options of Community
exercised in connection with its merger into Borrower, for the repurchase of Borrower’s stock, and
for providing liquidity to Subsidiary Bank.
SECTION 7. NEGATIVE COVENANTS
Borrower covenants and agrees that, as long as any of the Obligations are outstanding, it will
not, and it will not cause or permit Subsidiary Bank, or any Subsidiary to, without the prior
written consent of Lender:
7.01 Indebtedness. Create or incur any Indebtedness except (a) to Lender, (b) the
Indebtedness described in Schedule 5.11 attached hereto, (c) Indebtedness of Subsidiary Bank
to creditors in the ordinary course of its banking business, (d) other Indebtedness
consisting of trust preferred securities or other subordinate Indebtedness having minimum
maturities of twenty five (25) years, and (e) such other Indebtedness incurred after written
approval from Lender.
7.02 Merger or Consolidation, etc. Merge into or consolidate with any other Person, or
cause or permit any change in the ownership of Borrower, Subsidiary Bank, or any Subsidiary, or any
Change in Control; provided however, that the foregoing restriction shall not apply (a) to any
merger or consolidation between or among any one or more of Borrower, Subsidiary, Bank and/or any
other Subsidiary, and (b) to any other merger or consolidation in which Borrower, Subsidiary Bank
or any other Subsidiary, as the case may be, is the surviving entity if, at the effective time of
or immediately
- 16 -
after the consummation such merger or consolidation no Event of Default has occurred and is
continuing.
7.03 Sale of Property. Sell, lease, transfer or otherwise dispose of any Property or
assets, except in the ordinary course of business; provided, however, that the foregoing shall not
preclude Borrower, Subsidiary Bank, or any Subsidiary from selling, leasing, transferring or
otherwise disposing of less than substantially all of its assets so long as the purchase price for
said assets shall be equal to or greater than the depreciated book value of said assets.
7.04 Distributions. Declare or incur any liability to make any Distribution in respect
of the capital stock of Borrower, Subsidiary Bank, or any Subsidiary, except that: (a) Subsidiary
Bank shall be permitted to pay cash dividends to Borrower to the extent necessary to pay (i) the
Obligations then due and payable to Lender and which are actually applied toward payment of the
Obligations, and (ii) the normal operating expenses of Borrower; and (b) so long as no Default or
Event of Default under this Agreement has occurred and is continuing or is created thereby Borrower
shall be permitted to declare and pay cash dividends on its capital stock.
7.05 Issuance of Stock, etc. Authorize or issue any new types, varieties or classes of
capital stock, either preferred or common, voting or nonvoting, or any bonds or debentures,
subordinated or otherwise, or any stock warrants or options, or authorize or issue any additional
shares of stock of any existing class of stock, or grant any person other than Lender any proxy for
existing shares, or cause or allow, or declare any stock splits or take any other action which
could, directly or indirectly, decrease Borrower’s ownership interest in Subsidiary Bank; provided
that such restriction shall not apply to any such transaction that does not cause a Change of
Control or Event of Default.
7.06 Default. Allow to occur, or to continue unremedied, any act, event or condition
which constitutes an event of default, or which, with the passage of time or giving of notice, or
both, would constitute an event of default under, any agreement, document or instrument to which
Borrower, Subsidiary Bank, or any Subsidiary is a party or by which Borrower, Subsidiary Bank, or
any Subsidiary may be bound.
7.07 Investments. Make any advances or loans or extensions of credit to, purchase any
stock or other ownership interests, bonds, notes, debentures or other securities of, make any
expenditures on behalf of or in any manner assume liability (direct, contingent or otherwise) for
the Indebtedness of, any Person, except (a) such guarantees, letters of credit, loans, advances
and/or investments made by Subsidiary Bank or any Subsidiary in the ordinary course of their
banking businesses, (b) loans or advances from Borrower to Subsidiary Bank, or any Subsidiary, (c)
the acquisition by Borrower, Subsidiary Bank or any other Subsidiary, as the case may be, shares of
stock, obligations and/or other securities received in settlement of claims arising in the ordinary
course of business, (d) the acquisition by Borrower, Subsidiary Bank or any other Subsidiary, as
the case may be, of the stock or other ownership interests of any Person if, at the effective time
of or immediately after the consummation such acquisition, no Event of Default has occurred and is
continuing, (e) such investments by Borrower, Subsidiary Bank or any other Subsidiary, as the case
may be, that are permitted under applicable law to be made by bank holding companies, financial
institutions and their subsidiaries, (f) the loan by Borrower to the Superior Bancorp Employee
Stock Ownership Plan, formerly known as the Community Bancshares, Inc. Employee Stock Ownership
Plan, and (g) such other investments which have been approved by Lender.
7.08 Liens. Create, incur, assume, permit the imposition of or allow the continuance
of any Lien on any Properties except for Permitted Liens. Borrower shall not create, incur,
assume, permit the imposition of or allow the continuance of any Liens on the capital stock
of Subsidiary Bank except Liens in favor of Lender.
- 17 -
7.09 Subsidiaries and Related Companies. (a) Transfer any Property to any Related
Party other than the transfer of Property between or among Borrower, Subsidiary Bank or
other Subsidiaries, (b) purchase or sign any agreement to purchase any securities of any
Related Party (whether debt, equity or otherwise), underwrite or guarantee the same, or
otherwise become obligated with respect thereto in the aggregate amount greater than
$ 500,000, or (c) take any other action or permit any action to be taken with
respect to any Related Party which would jeopardize either Borrower’s ability to repay the
Loan, or any portion thereof, as the same becomes due and payable, or the security given to Lender
with respect to the Loan.
7.10 Use of Proceeds. Without Lender’s prior written consent, use or permit any
proceeds of any Loan advance to be used by Borrower, Subsidiary Bank, or any Subsidiary, to either
directly or indirectly for the purpose (whether immediate, incidental or ultimate) of “purchasing
or carrying any margin stock” within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System, as from time to time amended.
7.11 Nature of Business. Conduct or engage in any business if, as a result thereof,
the general nature of the business which would thereafter be engaged in by Borrower or Subsidiary
Bank, as the case may be, would be substantially changed from the general nature of the business
engaged in on the date of this Agreement by Borrower or Subsidiary Bank, as the case may be;
provided, however, that the business conducted by any former Subsidiary of Community shall be
permitted after the merger of Community into Borrower.
7.12 Other Agreements. Enter into any agreement containing any provision which would
be violated or breached by the performance of its obligations hereunder or under any instrument or
document delivered or to be delivered by it hereunder or in connection herewith.
SECTION 8. EVENTS OF DEFAULT
If any of the following (each an “Event of Default”) shall occur and be continuing:
8.01 Borrower shall fail to pay any of the Obligations as and when the same shall become due
and payable, whether by reason of demand, maturity, acceleration or otherwise, and such failure
shall be unremedied for five (5) days;
8.02 Any material representation or warranty of Borrower made in this Agreement or in any of
the other Transaction Documents or in any certificate, agreement, instrument or statement furnished
or made or delivered pursuant hereto or thereto or in connection herewith or therewith, shall prove
to have been untrue or incorrect when made or effected;
8.03 Borrower shall fail to perform or observe any term, covenant or provision contained in
sections 6.09, 6.10, or Section 7 hereof;
8.04 Borrower shall fail to perform or observe any other term, covenant or provision contained
in this Agreement and any such failure remains unremedied for thirty (30) days after the earlier of
(a) written notice of default is given to Borrower by Lender, or (b) any officer of Borrower
obtaining actual knowledge of such failure;
8.05 This Agreement or any of the other Transaction Documents shall at any time for any reason
cease to be in full force and effect or shall be declared to be null and void by a court of
competent jurisdiction, or if the validity or enforceability hereof or thereof shall be contested
or denied by Borrower or any Obligor, or if Borrower or any Obligor shall deny that it has any
further liability or obligation hereunder or thereunder or if Borrower or any Obligor shall fail to
comply with or observe any of the terms, provisions or conditions contained in any of the
Transaction Documents (other than this
Agreement);
- 18 -
8.06 Borrower, Subsidiary Bank or any Subsidiary shall (a) voluntarily commence any proceeding
or file any petition seeking relief under Title 11 of the United States Code or any other
Federal, state or foreign bankruptcy, insolvency, receivership, liquidation or
similar law, (b) consent to the institution of, or fail to contravene in a timely and
appropriate manner, any such proceeding or the filing of any such petition, (c) apply
for or consent to the appointment of a receiver, trustee, custodian, sequestrator or
similar official of itself, himself or herself or of a substantial part of its Property or
assets, (d) file an answer admitting the material allegations of a petition filed against itself,
himself or herself in any such proceeding, (e) make a general assignment for the benefit of
creditors, (f) become unable, admit in writing its, his or her inability or fail generally to
pay its, his or her debts as they become due, (g) become insolvent in either the equity or
bankruptcy sense of the term or (h) take any corporate or other action for the purpose of effecting
any of the foregoing;
8.07 An involuntary proceeding shall be commenced or an involuntary petition shall be filed in
a court of competent jurisdiction seeking (a) relief in respect of Borrower, Subsidiary Bank or any
Subsidiary, or of a substantial part of the Property or assets of Borrower, Subsidiary Bank or any
Subsidiary, under Title 11 of the United States Code or any other Federal, state or foreign
bankruptcy; insolvency, receivership, liquidation or similar law, (b) the appointment of a receiver,
trustee, custodian, sequestrator or similar official of Borrower, Subsidiary Bank or any Subsidiary
or of a substantial part of the Property or assets of Borrower, Subsidiary Bank or any Subsidiary
or (c) the winding-up or liquidation of Borrower, Subsidiary Bank or any Subsidiary; and any such
proceeding or petition shall continue undismissed for sixth (60) consecutive days or an order or
decree approving or ordering any of the foregoing shall continue unstayed and in effect for sixty
(60) consecutive days;
8.08 Subsidiary Bank shall be placed in receivership by any Regulatory Agency;
8.09 Any Regulatory Agency shall notify Subsidiary Bank that its capital has been impaired;
8.10 Subsidiary Bank shall cease to be an “insured depository institution” under or within the
meaning of 12 U.S.C. §1813, as amended, or a cease and desist order, memorandum of understanding
or other agreement shall be issued by any Regulatory Authority against or affecting Borrower,
Subsidiary Bank, or any Subsidiary which (in Lender’s opinion) has or could have a Material Adverse
Effect;
8.11 Any litigation or governmental or regulatory proceeding is instituted against
Borrower, Subsidiary Bank or any Subsidiary which, in Lender’s reasonable opinion, will
have a Material Adverse
Effect, after taking into account insurance coverage and reserves therefor (if any);
8.12 Any Property of Borrower, Subsidiary Bank or any Subsidiary, shall be seized, attached or
levied upon, the value of which could reasonably be expected to have a Material Adverse Effect, and
such Property, is not released within sixty (60) days after being seized, attached or levied upon;
8.13 Borrower, Subsidiary Bank or any Subsidiary shall have a judgment entered against it by a
court having jurisdiction in the premises, in an amount which could reasonably be expected to have
a Material Adverse Effect, and such judgment shall not be appealed in good faith or satisfied
within sixty
(60) days after the entry of such judgment;
8.14 Borrower, Subsidiary Bank or any Subsidiary shall fail (and such failure shall not have
been cured or waived) to perform or observe any term, provision or condition of, or any other
default or event of default shall occur under, any agreement, document or instrument evidencing or
securing any outstanding indebtedness of Borrower, Subsidiary Bank or any Subsidiary, as the case
may be, for borrowed money in the amount of at least $100,000 (other than the Obligations), if the
effect of such failure or default is to cause or permit such indebtedness to be declared to be due
and payable or otherwise accelerated, or required to be prepaid (other than by a regularly
scheduled required prepayment), prior to the stated maturity thereof;
- 19 -
8.15 The institution by Borrower, any ERISA Affiliate or Subsidiary Bank of steps
to terminate any Pension Plan if, in order to effectuate such termination, Borrower, any
ERISA Affiliate or Subsidiary Bank would be required to make a contribution to such
Pension Plan or would incur a liability or obligation to such Pension Plan in excess of
$ 500,000; or the institution by the PBGC of steps to terminate any Pension Plan; or
8.16 Borrower, Subsidiary Bank or any Subsidiary shall be declared by Lender to be in default
on, or pursuant to the terms of, (a) any other present or future obligation to Lender, including,
without limitation, any other loan, line of credit, revolving credit, guaranty or letter
of credit reimbursement obligation, or (b) any other present or future agreement purporting to
convey to Lender a Lien upon any of the Property or assets of Borrower, Subsidiary Bank
or any Subsidiary, and such default has not been cured within any applicable cure period;
THEN, and in each such event (other than an event described in Sections 8.06, 8.07, 8.08, 8.09
or 8.10), Lender may declare the entire outstanding principal balance of and all accrued and
unpaid interest on the Note issued under this Agreement and all other amounts payable by Borrower
hereunder to be immediately due and payable, whereupon all of such outstanding principal balance
and accrued and unpaid interest and all such other amounts shall become and be immediately due and
payable, without presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by Borrower, and Lender may exercise any and all other rights and remedies
which it may have under any of the other Transaction Documents or under applicable law; provided,
however, that upon the occurrence of any event described in Sections 8.06, 8.07, 8.08, 8.09 or
8.10, the entire outstanding principal balance of and all accrued and unpaid interest on the Note
issued under this Agreement and all other amounts payable by Borrower hereunder shall automatically
become immediately due and payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by Borrower, and Lender may exercise any and all
other rights and remedies which it may have under any of the other Transaction Documents or under
applicable law.
SECTION 9. GENERAL
9.01 No Waiver. No failure or delay by Lender or the holder of the Note in exercising
any right, remedy, power or privilege hereunder or under any other Transaction Document shall
operate as a waiver thereof; nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or privilege. The
remedies provided herein and in the other Transaction Documents are cumulative and not exclusive of
any remedies provided by law. Nothing herein contained shall in any way affect the right of Lender
to exercise any statutory or common law right of banker’s lien or set-off.
9.02 Right of Set-Off. Upon the occurrence and during the continuance of any Event
of Default under this Agreement, Lender is hereby authorized at any time and from time to
time to set-off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and any and all other indebtedness at any time owing
by Lender to or for the credit or the account of Borrower against any and all of the
Obligations irrespective of whether or not Lender shall have made any demand hereunder or
thereunder. Lender agrees promptly to notify Borrower after any such set-off and
application made by Lender, provided, however, that the failure to give such notice shall
not affect the validity of such set-off and application. The rights of Lender under this
Section 9.02 are in addition to any other rights and remedies (including, without
limitation, other rights of set-off) which Lender may have. Nothing contained in this
Agreement or any other Transaction Document shall impair the right of Lender to exercise
any right of set-off or counterclaim it may have against Borrower and to apply the amount
subject to such exercise to the payment of indebtedness of Borrower unrelated to this
Agreement or the other Transaction Documents.
9.03 Cost and Expenses. Borrower agrees to pay (a) all reasonable legal expenses
(including Attorneys’ Fees), recording and filing fees incurred in connection with the preparation
and
- 20 -
amendment of this Agreement and the other Transaction Documents (b) if an Event of
Default occurs, all out-of-pocket costs and expenses incurred by Lender, including, without
limitation, reasonable
Attorneys’ Fees, in connection with such Event of Default and collection and other enforcement
proceedings resulting therefrom and (c) all other reasonable Attorneys’ Fees incurred by Lender
relating to or arising out of or in connection with this Agreement or any of the other
Transaction
Documents.
9.04 Environmental Indemnity. Borrower hereby agrees to indemnify Lender and hold
Lender harmless from and against any and all losses, liabilities, damages, injuries, costs,
expenses and claims of any and every kind whatsoever (including, without limitation, court costs
and Attorneys’ Fees) which at any time or from time to time may be paid, incurred or suffered by,
or asserted against, Lender for, with respect to or as a direct or indirect result of the
violation by Borrower, Subsidiary Bank or any Subsidiary of any laws or regulations relating
to solid waste and/or hazardous waste treatment, storage, disposal, generation and transportation,
air, water and/or noise pollution, soil or ground or water contamination, the handling, storage or
release into the environment of hazardous materials or hazardous substances, and the transportation
of hazardous materials (“Environmental Laws”); or with respect to, or as a direct or
indirect result of the presence on or under, or the escape, seepage, leakage, spillage, discharge,
emission or release from, properties utilized by Borrower and/or Subsidiary Bank in the conduct of
their respective businesses into or upon any land, the atmosphere or any watercourse, body of water
or wetland, of any hazardous material or substances (including, without limitation, any losses,
liabilities, damages, injuries, costs, expenses or claims asserted or arising under the
Environmental Laws); and the provisions of and undertakings and indemnification set out in this
Section 9.04 shall survive the satisfaction and payment of the Obligations and termination of this
Agreement.
9.05 General Indemnity. In addition to the payment of expenses pursuant to Section
9.03, whether or not the transactions contemplated hereby shall be consummated, Borrower hereby
agrees to indemnify, pay and hold Lender and any holder of any of the Note, and the officers,
directors, employees, agents and affiliates of Lender and such holder(s) (each, and
“Indemnitee”; and collectively, “Indemnitees”) harmless from and against any and
all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including, without limitation,
the reasonable fees and disbursements of counsel for such indemnities in connection with any
investigative, administrative or judicial proceeding commenced or threatened, whether or not such
Indemnitees shall be designated a party thereto), that may be imposed on, incurred by or asserted
against Indemnitees, in any manner relating to or arising out of this Agreement or other agreements
executed and delivered by Borrower or any other Obligor in connection herewith, the statements
contained in any commitment letters delivered by Lender, Lender’s agreement to make the Loan
hereunder or the use or intended use of the proceeds of the Loan hereunder (the “Indemnified
Liabilities”); that Borrower shall have no obligation to an Indemnitee hereunder with respect
to Indemnified Liabilities arising from the negligence or willful misconduct of that Indemnitee as
determined by a court of competent jurisdiction. To the extent that the undertaking to indemnify,
pay and hold harmless set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, Borrower shall contribute the maximum portion that it is
permitted to pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnities or any of them. The provisions of the
undertakings and indemnification set out in this Section 9.05 shall survive satisfaction and
payment of the Obligations and termination of this
Agreement.
9.06 Authority to Act. Lender shall be entitled to act on any notices and
instructions (telephonic or written) reasonably believed by Lender to have been delivered by
any Person authorized to act on behalf of Borrower pursuant hereto, regardless of whether
such notice or instruction was in fact delivered by a Person authorized to act on behalf of
Borrower, and Borrower hereby agrees to indemnify Lender and hold Lender harmless from and
against any and all losses and expenses, if any,
- 21 -
ensuing from any such action; provided, however, that Borrower shall have no obligation to
indemnify Lender against any such losses or expenses arising solely from Bank’s gross negligence or
intentional misconduct as determined by a court of competent jurisdiction.
9.07 Notices. Except as otherwise specifically set forth in this Agreement, each
notice, request, demand, consent, confirmation or other communication under this Agreement shall be
in writing and delivered in person or sent by telecopy, recognized overnight courier or
registered or certified mail, return receipt requested and postage prepaid, to the applicable
party at its address or telecopy number set forth on the signature page(s) of this Agreement, or at
such other address or telecopy number as any party hereto may designate as its address for
communications under this Agreement by notice so given. Such notices shall be deemed effective on
the day on which delivered or sent if delivered in person or sent by telecopy (with answerback
confirmation received), on the first (1st) Business Day after the day on which sent, if
sent by recognized overnight courier or on the third (3rd) Business Day after the day on
which mailed, if sent by registered or certified mail.
9.08 CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. BORROWER IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY MISSOURI STATE COURT LOCATED IN ST. LOUIS COUNTY,
MISSOURI, OR ANY UNITED STATES OF AMERICA COURT SITTING IN THE EASTERN DISTRICT OF
MISSOURI, AS LENDER MAY ELECT, IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT. BORROWER HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT TO SUCH SUIT, ACTION OR PROCEEDING MAY BE HELD AND DETERMINED IN
ANY OF SUCH COURTS. BORROWER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION WHICH BORROWER MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT, AND BORROWER FURTHER IRREVOCABLY
WAIVES ANY CLAIM THAT SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. BORROWER HEREBY EXPRESSLY WAIVES ALL RIGHTS OF ANY OTHER
JURISDICTION WHICH BORROWER MAY NOW OR HEREAFTER HAVE BY REASON OF ITS PRESENT OR
SUBSEQUENT DOMICILES. BORROWER AUTHORIZES THE SERVICE OF PROCESS UPON BORROWER BY
REGISTERED MAIL SENT TO BORROWER AT ITS ADDRESS SET FORTH IN SECTION 9.08. BORROWER AND
LENDER IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION IN WHICH
BORROWER AND LENDER ARE ADVERSE PARTIES.
9.09 Lender’s Books and Records. Lender’s books and records showing the account
between Borrower and Lender shall be admissible in evidence in any action or proceeding and
shall constitute prima facie proof thereof.
9.10 Governing Law; Amendments. This Agreement, the Note, and all of the other
Transaction Documents shall be governed by and construed in accordance with the internal
laws of the State of Missouri, and this Agreement and the other Transaction Documents may
not be changed, nor may any term, condition or Event of Default be waived, modified or
discharged orally but only by an agreement in writing, signed by the party against whom
enforcement of any waiver, change, modification or discharge is sought.
9.11 References; Headings for Convenience. Unless otherwise specified herein, all
references herein to Section numbers refer to section numbers of this Agreement, and all references
herein to Exhibits A and B, and Schedules 3.03, 5.05,
5.08, 5.11, and 5.12 refer to annexed Exhibits A and B and
Schedules 3.03, 5.05, 5.08, 5.11, and 5.12 which
are hereby incorporated herein by reference. The section headings are furnished for the convenience
of the parties and are not to be considered in the construction or interpretation of this
Agreement.
- 22 -
9.12 Binding Agreement. This Agreement shall be binding upon and inure to the
benefit of Borrower and its successors and Lender and its successors and assigns. Borrower
may not assign or delegate any of its rights or obligations under this Agreement.
9.13 Severability. In the event any one or more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable in any respect the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way be affected or
impaired thereby.
9.14 Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together shall constitute one and the same
instrument.
9.15 Resurrection of Obligations. To the extent that Lender receives any payment on
account of any of the Obligations, and any such payment(s) or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, subordinated and/or required to
be repaid to a trustee, receiver or any other Person under any bankruptcy act, state or Federal
law, common law or equitable cause, then, to the extent of such payment(s) received, the
Obligations or part thereof intended to be satisfied and any and all liens, security interests,
mortgages, deeds of trust and/or other encumbrances upon or pertaining to any assets of Borrower
and theretofore created and/or existing in favor of Lender as security for the payment of such the
Obligations shall be revived and continue in full force and effect, as if such payment(s) had not
been received by Lender and applied on account of the Obligations.
9.16
Notice Required by Section 432.047 R.S. Mo.; Entire Agreement. This notice
is provided pursuant to Section 432.047 X.X.Xx. As used herein, “creditor” means Lender and “this
writing” means this Agreement and the other Transaction Documents. ORAL AGREEMENTS OR COMMITMENTS
TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO
EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS
BASED THAT IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT. TO PROTECT YOU (BORROWER(S)) AND US
(CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE
AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT. This Agreement embodies
the entire agreement and understanding between the parties hereto and supersedes all prior
agreements and understandings (oral or written) relating to the subject matter hereof.
9.17 USA PATRIOT Act. Lender hereby notifies Borrower that pursuant to the
requirements of the USA PATRIOT Act, Title Ill of Pub. L. 107-56 (signed into law October 26, 2001)
(the “Act”), it is required to obtain, verify and record information that identifies Borrower,
which information includes the name and address of Borrower and other information that will allow
Lender to identify Borrower in accordance with the Act.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
above written.
(SIGNATURES ON FOLLOWING PAGE)
- 23 -
SIGNATURE PAGE-
LOAN AGREEMENT
LOAN AGREEMENT
| Borrower: | ||||||
| SUPERIOR BANCORP | ||||||
| By: | /s/ Xxxx X Xxxxxxx | |||||
| Print Name: | Xxxx X. Xxxxxxx | |||||
| Title: | Chief Operating Officer | |||||
| Address: | ||||||
| 00 Xxxxx 00xx Xxxxxx Xxxxxxxxxx, Xxxxxxx 00000 |
||||||
| Attention: | Xxxx X. Xxxxxxx | |||||
| Telecopier: (000) 000-0000 | ||||||
| Lender: | ||||||
| U.S. BANK NATIONAL ASSOCIATION | ||||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||||
| Xxxxxx X. Xxxxxx, Vice President | ||||||
| Address: | ||||||
| One US Bank Plaza (Mail Code SL-MO-T11S) 0xx Xxxxxx & Xxxxxxxxxx Xxxxxx Xx. Xxxxx, Xxxxxxxx 00000 |
||||||
| Attention: Correspondent Banking Department |
||||||
| Telecopier: (000) 000-0000 | ||||||
- 24 -
EXHIBIT A
(Form of Note)
REVOLVING
CREDIT NOTE
| $10,000,000.00 | St. Louis, Missouri | |
| January 26, 2007 |
FOR VALUE RECEIVED, on the last day of the Term (as defined in the Loan Agreement [defined
below]), the undersigned, SUPERIOR BANCORP, a Delaware corporation (“Borrower”), hereby
promises to pay to the order of U.S. BANK NATIONAL ASSOCIATION, a national banking association
(“Lender”), the principal sum of Ten Million Dollars ($10,000,000.00), or such lesser sum
as may then constitute the aggregate unpaid principal amount of all Loan advances made by Lender to
Borrower pursuant to the Loan Agreement. The aggregate principal amount of Loan advances which
Lender shall be committed to have outstanding under this Revolving Credit Note (this
“Note”) at any one time shall not exceed Ten Million Dollars ($10,000,000.00), which amount
may be borrowed, paid, reborrowed and repaid, in whole or in part, subject to the terms and
conditions of this Note and of the
Loan Agreement.
Borrower further promises to pay to the order of Lender interest on the unpaid principal
balance from time to time outstanding under this Note at the rate(s) and on the dates set forth in
the Loan
Agreement.
All payments received by Lender under this Note shall be allocated among the principal,
interest, collection costs and expenses and other amounts due under this Note in such order and
manner as Lender shall elect. The amount of interest accruing under this Note shall be computed on
an actual day, 360-day year basis.
All payments of principal and interest under this Note shall be made in lawful currency of
the
United States in Federal or other immediately available funds at the office of Lender situated at
One XX Xxxx Xxxxx, 0xx Xxxxxx & Xxxxxxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, or at such
other place as Lender may from time to time designate in writing.
Lender shall record in its books and records the date and amount of each Loan advance made by
it to Borrower under this Note and the date and amount of each payment of principal and/or interest
made by Borrower with respect thereto; provided, however, that the obligation of Borrower to repay
each Loan advance made to Borrower under this Note shall be absolute and unconditional,
notwithstanding any failure of Lender to make any such recordation or any mistake by Lender in
connection with any such recordation. The books and records of Lender showing the account between
Lender and Borrower shall be admissible in evidence in any action or proceeding and shall
constitute prima facie proof of the items therein set forth.
This Note is the Note referred to in the Loan Agreement dated as of the date hereof by and
between Borrower and Lender, as the same may from time to time be amended, modified, extended,
renewed or restated (the “Loan Agreement”; all capitalized terms used and not otherwise
defined in this
Note shall have the respective meanings ascribed to them in the Loan Agreement). The Loan
Agreement, among other things, contains provisions for acceleration of the maturity of this Note
upon the occurrence of certain stated events and also for prepayments on account of the principal
of this
Note and interest on this Note prior to the maturity of this Note upon the terms and
conditions specified therein.
If Borrower shall fail to make any payment of any principal of or interest on this Note as and
when the same shall become due and payable, or if any Event of Default shall occur under or within
the
meaning of the Loan Agreement, then Lender’s obligation to make additional Loan advances under this
Note may be terminated in the manner and with the effect as provided in the Loan Agreement and
the entire outstanding principal balance of this Note and all accrued and unpaid interest
thereon may be declared to be immediately due and payable in the manner and with the effect
as provided in the Loan
Agreement.
In the event that any payment of any principal of or interest on this Note is not paid when
due, whether by reason of maturity, acceleration or otherwise, and this Note is placed in the hands
of an attorney or attorneys for collection, or if this Note is placed in the hands of an attorney
or attorneys for representation of Lender in connection with bankruptcy or insolvency proceedings
relating to or affecting this Note, Borrower hereby promises to pay to the order of Lender, in
addition to all other amounts otherwise due on, under or in respect of this Note, the costs and
expenses of such collection, foreclosure and representation, including, without limitation,
Attorneys’ Fees and expenses (whether or not litigation shall be commenced in aid thereof). All
parties hereto severally waive presentment for payment, demand for payment, protest, notice of
protest and notice of dishonor.
This Note shall be governed by and construed in accordance with the substantive laws of the
State of Missouri (without reference to conflict of law principles).
| Borrower: | ||||||
| SUPERIOR BANCORP | ||||||
| By: | ||||||
| Print Name: | Xxxx X. Xxxxxxx | |||||
| Title: | Chief Operating Officer |
|||||
- 2 -
EXHIBIT B
(Form of Certificate)
, 200
U.S. Bank National Association
One XX Xxxx Xxxxx
0xx Xxxxxx & Xxxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Correspondent Banking Department
One XX Xxxx Xxxxx
0xx Xxxxxx & Xxxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Correspondent Banking Department
Ladies and Gentlemen:
Reference is hereby made to the Loan Agreement dated as of January 26, 2007, by and between
you and the undersigned (as from time to time amended, the “Agreement”; all capitalized
terms used and not otherwise defined herein shall have the respective
meanings ascribed to them in the Agreement).
The undersigned hereby certifies that as of the date hereof:
(a) all of the representations and warranties set forth in Section 5 of the Agreement are true
and correct;
(b) no violation or breach of any of the affirmative covenants set forth in Section 6 of the
Agreement has occurred and is continuing;
(c) no violation or breach of any of the negative covenants set forth in Section 7 of the
Agreement has occurred and is continuing;
(d) no Default or Event of Default under the Agreement has occurred and is continuing;
(e) the financial statements of Borrower and its Subsidiaries delivered to you with this
letter or filed with the Securities and Exchange Commission are true, correct and complete and have
been prepared in accordance with GAAP consistently applied; and
(f) the financial covenant information set forth in Schedule 1 to this letter is
true and correct.
| Very truly yours, | ||||||
| SUPERIOR BANCORP | ||||||
| By: | ||||||
| Print Name: | ||||||
| Title: | ||||||
SCHEDULE 1
Financial Covenant information
as of ,
as of ,
Financial Covenant
|
Actual | Required |
