EXHIBIT 10.1
TERM LOAN AGREEMENT
THIS AGREEMENT dated December 29, 2005, made by and between FIRSTFED
BANCORP, INC., a Delaware corporation ("Borrower") and ALABAMA BANKER'S BANK, an
Alabama banking corporation ("Lender").
W I T N E S S E T H:
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WHEREAS, Borrower has requested Lender to lend it the sum of
$6,190,000.00 on a term loan basis, and Lender is willing to do so upon the
terms and conditions hereinafter set forth.
WHEREAS, Borrower desires to pledge as collateral for this loan all
of Borrower's common stock in First Financial Bank (the "Bank").
NOW, THEREFORE, in consideration of the promises herein contained,
Lender and Borrower, intending to be legally bound, agree as follows:
ARTICLE I. - THE TERM LOAN
Section 1.1 General Terms. Lender hereby agrees to lend to Borrower,
and Borrower hereby agrees to borrow from Lender, upon the terms and conditions
set forth in this Agreement, the principal sum of Six Million One Hundred Ninety
Thousand and 00/100 United States dollars (U.S. $6,190,000.00) (the "Term
Loan"). Borrower's obligation to repay the Term Loan and the interest thereon
shall be evidenced by a promissory note (the "Note") in form and substance
satisfactory to Lender. The form of the original Note is attached hereto as
Exhibit A.
Section 1.2 Interest Rate. Borrower agrees to pay interest on the
Term Loan at the rate(s), on the date(s), and calculated by the method, set
forth in the Note.
Section 1.3 Payments of Principal and Interest. Unless payment is
required to be made earlier pursuant to Section 6.2 of this Agreement, Borrower
shall make to Lender such payments of principal and interest on the Term Loan as
are required by the terms of the Note.
Section 1.4 Prepayment. Borrower may, at its option, prepay the Term
Loan in part or in full at any time without premium or penalty (and upon payment
of any prepayment premium provided for in the Note); provided, however, that any
such prepayment of principal shall be accompanied by the payment of accrued
interest on the amount of such prepayment to the date thereof. Any such
prepayment shall be applied to reduce the principal installments under the Note
in the inverse order of their maturities, and shall not have the effect of
suspending or deferring payments thereunder.
ARTICLE II. - COLLATERAL
Section 2.1 Security Documents. The repayment by Borrower of the
indebtedness under the Term Loan and the Note, and the performance by Borrower
of all obligations under this Agreement, are and shall be secured by every
mortgage, deed of trust, security agreement, assignment, pledge, guaranty and
other security document (every "Security Document") which secures obligations so
defined as to include the Term Loan or the Note (including, without limitation,
those Security Documents described below), and by all property of Borrower now
or hereafter in the possession, control or custody of Lender (in which property
Borrower hereby grants Lender a security interest to secure such indebtedness
and obligations) and by all property of Borrower in which Lender has or
hereafter acquires a lien, security interest, or other right, including, without
limitation, the property described below (in which property Borrower hereby
grants Lender a security interest to secure such indebtedness and obligations):
(a) Stock Pledge Agreement, executed by Borrower, granting to
Lender a security interest in all of Borrower's capital stock in the Bank
as security for the Loan, together with irrevocable stock powers executed
in blank with respect to such shares of stock, and the original
Certificates representing such shares of stock, and a Form U-1 which
complies with the provisions of Regulation U of the Board of Governors of
the Federal Reserve System.
(The property described above and the property described in every Security
Document is individually and collectively referred to in this Agreement as the
"Collateral").
Section 2.2 Financing Statements, etc. Borrower shall execute and
deliver, or shall cause to be executed and delivered, such financing statements
(including amendments thereto and continuation statements therefore) and other
documents relating to the Collateral as Lender may from time to time request.
Borrower shall pay, or reimburse to Lender for paying, all costs and taxes of
filing or recording any financing statement or Security Document in such public
offices as Lender may designate and shall take such other steps as Lender may
from time to time direct, all to perfect and maintain the perfection of Lender's
interest in the Collateral to the satisfaction of Lender.
ARTICLE III. - REPRESENTATIONS AND WARRANTIES;
CONDITIONS PRECEDENT
To induce Lender to enter into this Agreement, Borrower represents
and warrants to Lender, as of the date hereof and except as otherwise expressly
provided, as of all times until the Agreement is terminated and all obligations
under the Term Loan are satisfied, that:
Section 3.1 Incorporation, Good Standing and Due Qualification.
Borrower is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, has the corporate power and authority
to own its assets and to transact the business in which it is now engaged or
proposes to be engaged, and is qualified to do business and in good standing in
all jurisdictions in which it conducts its business.
Section 3.2 Corporate Power and Authority. The execution and
delivery by Borrower of, and the performance by Borrower of its obligations
under, this Agreement, the Note and the Security Documents have been duly
authorized by all requisite action on the part of Borrower and do not and will
not (i) violate any provision of Borrower's articles of incorporation, by-laws,
or
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other organizational documents, any law, rule, regulation or any judgment, order
or ruling of any court or governmental agency, or (ii) be in conflict with,
result in a breach of, or constitute, following notice or lapse of time or both,
a default under, any indenture, agreement or other instrument to which Borrower
is a party or by which Borrower or any of its property may be bound or affected.
Each of this Agreement, the Note and the Security documents is the legal, valid
and binding obligation of Borrower enforceable against Borrower in accordance
with its terms.
Section 3.3 Compliance with Law; Government Approvals.
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(a) Borrower has complied and is complying with all requirements,
made all applications, and submitted all reports required by
the Bank Holding Company Act of 1956, as amended, and any
regulations or rulings issued in connection therewith, and the
transaction contemplated hereby will not violate any such
statutes, rules, rulings, or regulations, nor will the
consummation of said actions and transactions cause Borrower
to be in violation thereof. Borrower has, as required,
received all governmental approvals necessary for the
consummation of the transactions described herein, including
approval of the Board of Governors of the Federal Reserve
System.
(b) Borrower has complied and is complying with all other
applicable state or federal statutes, rules, rulings, and
regulations. The borrowing of money and pledging of such stock
is described herein, and said actions and transactions will
not violate any of such statutes, rules, rulings, or
regulations. Borrower has made all filings and received all
governmental or regulatory approvals necessary for the
consummation of the transactions described herein.
Section 3.4 Litigation. There are no pending or threatened actions
or proceedings before any court or administrative or governmental agency that
may, individually or collectively, adversely affect the financial condition,
business operations or properties of Borrower or Bank. Without limiting the
generality of the foregoing, neither Borrower nor Bank is subject to any
Supervisory Action (herein defined) by any federal or state bank regulatory
authority. As used herein, "Supervisory Action" shall mean and include the
issuance by any bank regulatory authority of a letter agreement or memorandum of
understanding(regardless of whether consented or agreed to by the party to whom
it is addressed); or the issuance by or at the behest of any bank regulatory
authority of a cease and desist order, injunction, directive, restraining order,
notice of charges or civil money penalties, against Borrower, Bank or the
directors or officers of either of them, whether temporary or permanent.
Section 3.5 Financial Statements. The financial statement dated
December 31, 2004, previously delivered by Borrower and Bank to Lender, fairly
and accurately presents the financial condition of Borrower as of such date and
has been prepared in accordance with generally accepted accounting principles
consistently applied. Since the date of that financial statement, there has been
no materially adverse change in the financial condition of Borrower, and, after
due inquiry, there exists no material contingent liability or obligation
assertable against Borrower.
Section 3.6 Other Agreements. Neither Borrower nor Bank is a party
to any indenture, loan, or credit agreement, or to any lease or other agreement
or instrument, or subject to any charter or corporate restriction which could
have a materially adverse effect on the business,
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properties, assets, operations, or conditions, financial or otherwise, of
Borrower or Bank, or the ability of Borrower to carry out its obligations under
the Agreement, the Note or the Security Documents to which it is a party.
Neither Borrower nor Bank is in default in any respect in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument material to its business.
Section 3.7 Taxes. All federal, state and other tax returns of
Borrower or Bank required by law to be filed have been completed in full and
have been duly filed, and all taxes, assessments and withholdings shown on such
returns or billed to Borrower or Bank have been paid, and Borrower and Bank
maintain adequate reserves and accruals in respect of all such federal, state
and other taxes, assessments and withholdings. There are no unpaid assessments
pending against Borrower or Bank for any taxes or withholdings, and neither
Borrower nor Bank knows of any basis therefore.
Section 3.8 Priority of Obligations. The obligations of Borrower
under this Agreement and the Note are not subordinated in right of payment to
any other obligation of Borrower.
Section 3.9 Operation of Business; Consents. Borrower and Bank
possess all permits, memberships, franchises, contracts, licenses, trademark
rights, trade names, patents, and other authorizations necessary to enable each
of them to conduct their business operations as now conducted, and no filing
with, and no consent, permission, authorization, order or license of, any
individual, entity, or governmental authority is necessary in connection with
the execution, delivery, performance or enforcement of this Agreement, the Note
or the Security Documents.
Section 3.10 No Defaults. No event has occurred and is continuing
which is, or which with the giving of notice or lapse of time or both would be,
an Event of Default (as defined in Article VI) of this Agreement.
Section 3.11 Ownership and Liens. Borrower and Bank have good and
marketable title to all of each of its properties and assets including, without
limitation, the Collateral and the properties and assets reflected in the
above-described financial statement (other than such properties and assets as
have been disposed of in the ordinary course of business since the date of that
financial statement). All such properties and assets are free and clear of all
mortgages, pledges, liens, charges, security interests and other encumbrances,
except as otherwise expressly disclosed by Borrower to Lender in writing on the
date of this Agreement.
Section 3.12 ERISA. Borrower is in compliance in all material
respects with all applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"). The minimum funding standards of
Section 302 of ERISA have been met at all times with respect to all "plans" of
Borrower to which such standards apply; Borrower has not made a "partial
withdrawal" or a "complete withdrawal" from any "multi-employer plan"; and no
"reportable event" or "prohibited transaction" has occurred with respect to any
such "plan" (as all of the quoted terms are defined in ERISA).
Section 3.13 Environment. Except as otherwise expressly disclosed by
Borrower or Bank to Lender in writing on the date of this Agreement: No
"hazardous substance" (as that term is defined in Section 101 of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended "CERCLA") has been released, discharged, disposed of, or stored
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on any of Borrower's or Bank's owned or leased real or personal property by
Borrower or Bank, by any third party, or by any predecessor in interest or title
to Borrower or Bank; Borrower and Bank, and all of Borrower's or Bank's
properties, are in compliance with all applicable local, state and federal
environmental laws and regulations; no notice has been served on Borrower or
Bank by any governmental authority or any individual or entity claiming
violation of any environmental protection law or regulation, or demanding
compliance with any environmental protection law or regulation, or demanding
payment, indemnity, or contribution for any environmental damage or injury to
natural resources; no "hazardous substance" (as defined in CERCLA) is produced
or used in Borrower's or Bank's business; and no improvement on any real
property owned or leased by Borrower or Bank contains any asbestos, including,
without limitation, asbestos insulation on ceilings, piping or structural
members or supports.
Section 3.14 Conditions Precedent. Lender shall not be obligated to
make the Term Loan until Borrower shall have furnished Lender, at Borrower's
expense and as Lender may request from time to time, such evidence as Lender
shall require regarding the truth of the foregoing representations and
warranties, including, without limitation, Uniform Commercial Code, tax and
judgment lien searches, opinions of Borrower's outside legal counsel, opinions
and certificates of Borrower's independent certified public accountants,
surveys, appraisals, environmental audits by qualified environmental engineers
approved by Lender, reports of other independent consultants approved by Lender,
and certificates of Borrower's officers. All such evidence must be in form and
content satisfactory to Lender. Borrower shall also pay to Lender, the
origination fee in the amount of $30,000, which amount shall be deemed fully
earned by Lender and not refundable for any reason.
Section 3.15 Bank Stock. The common stock of Bank owned by Borrower
is duly authorized and validly issued by Bank. The total number of shares of
common stock of Bank issued and outstanding as of the date hereof is 50,000
shares. The stock in Bank owned by Borrower is free and clear of all liens,
encumbrances, security interests or pledges, except the pledge to Lender
described herein; said common stock is fully paid and nonassessable; the Bank
stock certificates delivered to Lender pursuant to the Pledge Agreement will be
genuine and comply with all applicable laws concerning form, content, and manner
of preparation and execution; there are no outstanding warrants or options to
acquire any common stock of Bank; there are no outstanding securities
convertible or exchangeable into shares of common stock of Bank; there are no
restrictions on the transfer or pledge of any shares of common stock of Bank;
Borrower has the right to pledge and transfer the pledge stock and assign the
income therefrom without obtaining the consent of any other person or entity;
and the pledge agreement creates for the benefit of the Lender a first security
interest in the pledged bank stock, subject to no other interests or claims.
ARTICLE IV. - AFFIRMATIVE COVENANTS
Borrower and Bank covenant and agree that, so long as Borrower may
borrow under this Agreement or so long as any indebtedness remains outstanding
under the Term Loan or under the Note, Borrower and Bank shall:
Section 4.1 Maintenance of Existence. Preserve and maintain its
existence in good standing in the state of its organization or incorporation and
its qualification and good standing in all jurisdictions where such
qualification is required under applicable law, and conduct its business in the
manner in which it is now conducted subject only to changes made in the ordinary
course of business.
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Section 4.2 Financial Statements; Reports. Deliver to Lender (i)
within 30 days after each fiscal quarter an unaudited financial statement
including a balance sheet and statements of income and cash flows, certified by
Borrower's chief executive or chief financial officer to be correct and
complete, (ii) within 90 days after the end of each fiscal year a financial
statement including a balance sheet of Borrower and Bank as of the end of such
year and statements of income, cash flows and changes in equity for such year,
setting forth in each case in comparative form the corresponding figures for the
previous year, together with accompanying schedules and footnotes, audited by
the present independent certified public accountants of Borrower or by another
firm of independent certified public accountants designated by Borrower which is
satisfactory to Lender, such financial statement to be prepared in accordance
with generally accepted accounting principles applied in a manner consistent
with the financial statements previously furnished to Lender, or if not so
prepared, setting forth the manner in which such financial statement departs
from generally accepted accounting principles, or from previous financial
statements furnished to Lender by Borrower, and (iii) a copy of Borrower's FR
Y-9 parent company only (and consolidated, if applicable) financial
statement(s), (iv) a copy of Borrower's FR Y-6 annual report promptly upon the
filing of the same with the Federal Reserve Board, (v) a copy of Bank's
quarterly report of condition and income ("call report") promptly upon the
filing with the appropriate regulatory agency, and (vi) with reasonable
promptness, such other information (including, without limitation, copies of tax
returns and amendments thereto filed by Borrower) as Lender may request.
Section 4.3 Maintenance of Records; Right of Inspection. Maintain
its books, accounts and records in accordance with generally accepted accounting
principles, applied in a manner consistent with the financial statements
previously furnished to Lender, and shall, at any reasonable time and from time
to time, permit any person or entity designated in writing by Lender to visit
and inspect any of its properties, books and financial records, and to make
copies thereof and take extracts therefrom, and to discuss Borrower's and Bank's
financial affairs with Borrower's financial officers and accountants.
Section 4.4 Taxes. Pay and discharge all taxes, assessments, fees,
withholdings and other governmental charges or levies imposed upon it, or upon
its income and profits, or upon any property belonging to it, prior to the date
on which penalties attach thereto, unless the legality thereof shall be promptly
and actively contested in good faith by appropriate proceedings and adequate
reserves for such liability are maintained by Borrower and Bank pending
determination of such contest.
Section 4.5 Litigation and Default Notice. Promptly notify Lender in
writing of the occurrence of any Event of Default or of any pending or
threatened litigation claiming damages in excess of $25,000 or seeking relief
that, if granted, would adversely affect the financial condition or business
operations of Borrower or Bank.
Section 4.6 Maintenance of Insurance. Maintain and keep in force at
all times insurance of the types and in the amounts customarily carried in lines
of business similar to Borrower's and Bank's and such other insurance as Lender
may require, including, without limitation, fire, public liability, casualty,
property damage, flood damage, and worker's compensation insurance, which
insurance shall be carried with companies and in amounts satisfactory to Lender.
All casualty and property damage insurance shall name Lender as additional
insured, as appropriate, and shall provide for a minimum of thirty days' written
notice to Lender before cancellation. Borrower and Bank shall deliver to Lender
from time to time at Lender's request copies of all such insurance policies and
certificates of insurance and schedules setting forth all insurance then in
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effect. Borrower and Bank hereby appoint Lender the attorney-in-fact for
Borrower and Bank for purposes of obtaining, adjusting, settling, and canceling
such insurance and of endorsing in Borrower's and Bank's name and giving receipt
for checks and drafts issued in payment of losses and as returned premiums.
Borrower hereby assigns to Lender as additional Collateral for the Term Loan and
the Note all insurance policies at any time covering property that is Collateral
for the Term Loan or the Note and all returned and unearned premiums thereon.
Section 4.7 Maintenance of Properties. Keep all of its properties in
good repair and condition, and from time to time make necessary repairs,
renewals and replacements thereto and thereof so that Borrower's and Bank's
property shall be fully and efficiently preserved and maintained.
Section 4.8 Further Assurances. Perform or take, on request of
Lender, such action as may be necessary or advisable to perfect any lien or
security interest in the Collateral or otherwise to carry out the intent of this
Agreement and the Security Documents.
Section 4.9 Expenses of Lender. Borrower will, on demand, reimburse
Lender for all expenses, including the fees and expenses of legal counsel for
Lender, reasonably incurred in connection with the preparation, administration,
amendment, modification, renewal, extension or enforcement of the Agreement, the
Note and the Security Documents and any other documents related to this
Agreement and the collection or attempted collection of the Term Loan and any
other sum due under this Agreement, the Note, and the Security Documents after
default by Borrower in the payment thereof. Any amounts paid by Lender under
this section or any of the Security Documents shall bear interest at the rate
specified under the Note. The obligation of Borrower under this section to pay
all expenses incurred by Lender shall survive payment of the Term Loan and the
Note and termination of this Agreement.
Section 4.10 ERISA. Fund all of its "plans" to which the minimum
funding standards of Section 302 of ERISA apply in accordance with such
standards; furnish Lender, promptly upon Lender's request, copies of all reports
or other statements filed with, or received from, the United States Department
of Labor, the Internal Revenue Service, or the Pension Benefit Guaranty
Corporation with respect to all of Borrower's "plans"; and promptly advise
Lender of the occurrence of any "reportable event" or "prohibited transaction"
with respect to any such "plan" (as all of the quoted terms are defined in
ERISA).
Section 4.11 Compliance with Laws. Comply with all applicable
present and future local, state and federal laws, including, without limitation,
environmental laws and regulations; notify Lender immediately if any "hazardous
substance" (as defined in CERCLA) is released, discharged, disposed of, stored,
or discovered on any real or personal property owned or leased by Borrower or
Bank; notify Lender in writing within three days after Borrower or Bank receives
notice from any governmental authority or any individual or entity claiming
violation of any environmental protection law or regulation, or demanding
compliance with any environmental protection law or regulation, or demanding
payment, indemnity, or contribution for any environmental damage or injury to
natural resources; and permit Lender from time to time to observe Borrower's or
Bank's operations and to perform tests (including soil tests and ground water
tests) for "hazardous substances" on any real or personal property owned or
leased by Borrower or Bank.
Section 4.12 Regulatory Examinations.
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(a) Promptly notify Lender of every examination by any federal or
state regulatory body or authority, with respect to the
properties, loans, operations, and/or condition of Borrower,
Bank, or both, and of the receipt by Borrower or Bank of every
examination or other report prepared by such body or authority
with respect thereto; and
(b) if required by Lender, fully and completely assist and
cooperate with Lender in requesting approval by such
regulatory body or authority of the furnishing to Lender of
any such report, and furnish such report to Lender if such
approval is given; provided, however, that Lender shall take
such steps as may be necessary to assure that all such reports
shall remain confidential and shall be used by Lender solely
in connection with the administration of the loan in
accordance with the provisions of this agreement.
Section 4.13 Additional Information. Furnish such other information
regarding the operations, business affairs and financial condition of Borrower
and Bank as Lender may from time to time reasonably request, including but not
limited to, true and exact copies of any monthly management reports to their
respective directors, their respective tax returns, and all information
furnished to shareholders, or any governmental authority, including the results
of any stock evaluation performed.
Section 4.14 Right of Inspection. Except to the extent, if any,
prohibited by applicable law, permit any person designated by Lender to inspect
any of the properties, books and financial and other reports and records of
Borrower and Bank, including, but not limited to, all documentation and records
pertaining to Bank's loans, investments and deposits; and to discuss their
affairs, finances and accounts with Borrower's and Bank's principal officers, at
all such reasonable times and as often as Lender may reasonably request. If
required by Lender, Borrower will pay Lender all applicable loan fees in an
amount determined by Lender to be necessary to cover the cost of such
inspections, including a reasonable allowance for Lender's overhead as well as
out-of-pocket expenses in connection with such inspection.
Section 4.15 Notice of Default. At the time of Borrower's first
knowledge or notice, furnish the Lender with written notice of the occurrence of
any event or the existence of any condition which constitutes, or upon written
notice or lapse of time or both, would constitute an event of default under the
terms of this loan agreement.
Section 4.16 Compliance with Banking Regulations. At all times be in
compliance with, cause Bank to be in compliance with, all banking and bank
holding company laws, rules and regulations applicable to Borrower or Bank.
Section 4.17 Capital Ratio/Equity Capital Adequacy. With respect to
the financial statements of the Borrower and Bank, maintain at all times until
payment in full of the Loan, capital levels of both Borrower and the Bank in
full compliance with all state and federal regulatory authorities, and in no
event maintain a total capital ratio of less than seven percent (7%). For
purposes hereof, all ratios should be calculated according to federal regulatory
guidelines for capital adequacy guidelines for bank-holding companies and banks.
Section 4.18 [Intentionally Omitted].
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Section 4.19 [Intentionally Omitted].
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Section 4.20 Bank Account. Maintain its principal transaction
account with Lender.
Section 4.21 Use of Proceeds. Use the proceeds of the Term Loan only
to make a loan to a newly formed ESOP which will, in turn, use the loan to
purchase shares of stock of the Borrower.
ARTICLE V. - NEGATIVE COVENANTS
Borrower covenants and agrees that, without the prior written
consent of Lender, which may be given or withheld in Lender's sole and absolute
discretion, so long as it may borrow under this Agreement or so long as any
indebtedness remains outstanding under the Term Loan or under the Note, Borrower
shall not:
Section 5.1 Use of Proceeds. Use any proceeds of the Term Loan
except for the purposes stated in Section 4.21.
Section 5.2 Debt. Create, incur, assume, or suffer to exist any
indebtedness of any description whatsoever not existing as of the date of this
Agreement, except (i) indebtedness incurred under this Agreement.
Section 5.3 Sale of Assets, Consolidation, Merger, etc. (i) Sell,
lease, transfer or otherwise dispose of any of the Collateral (except in the
ordinary course of business and as permitted under this Agreement) or all or a
substantial part of the properties and assets of Borrower or Bank to any person
or entity; (ii) consolidate with or merge into any other entity, or permit
another entity to merge into Borrower, or acquire stock in or all or
substantially all of the properties or assets of any other person or entity or
enter into any reorganization, recapitalization or otherwise change Borrower's
corporate structure; provided, that, the Borrower may enter into such
transaction so long as ninety percent (90%) of the Borrower's retained earnings
(as shown on the prior year's audited financial statements) was retained by the
Borrower or its successor; (iii) enter into any arrangement, directly or
indirectly with any person or entity whereby Borrower shall sell or transfer any
property, real, personal or mixed, and used and useful in the business of the
Borrower, whether now owned or hereafter acquired, and thereafter rent or lease
such property or other property which Borrower intends to use for substantially
the same purpose or purposes as the property being sold or transferred; (iv)
enter into a partnership or joint venture with any person or entity; or (v)
authorize or enter into any plan, letter of intent, or agreement to do any of
the foregoing.
Section 5.4 Name; Chief Executive Office. Change its name or the
location of its chief executive office.
Section 5.5 Guaranties, etc. Guarantee or become directly or
contingently liable for any obligation or indebtedness of any other person or
entity, except that Borrower may endorse negotiable instruments for collection
in the ordinary course of business.
Section 5.6 Investments, Loans. Purchase or hold beneficially any
stock, other securities or evidences of indebtedness of, or make or permit to
exist any loans or advances to, or make any investment or acquire any interest
whatsoever in, any other person or entity except that
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Borrower may invest in any of the following if they mature within one year from
the date of acquisition thereof: (i) readily marketable direct obligations
issued or guaranteed by the United States of America or an agency thereof, (ii)
certificates of time deposit issued by commercial banks of recognized standing
organized under the laws of, and operating in, the United States of America or
one of the States of the United States and having a combined paid-in-capital and
paid-in surplus of not less than $10,000,000 in the case of each such bank and
(iii) commercial paper rated at least Prime-1 by Xxxxx'x Investors Services,
Inc., or A-1 by Standard & Poor's Corporation (or having a comparable rating by
another rating service of comparable standing).
Section 5.7 [Intentionally Omitted].
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Section 5.8 Liens. Create, incur, assume or suffer to exist any
mortgage, pledge, lien, security interest, charge, or other encumbrance of any
nature whatsoever, on any of its properties or assets including, without
limitation, the Collateral, and, except for liens in favor of Lender and liens
for taxes not yet due and payable or which are being actively contested in good
faith by appropriate proceedings and for which adequate reserves are being
maintained by Borrower and those liens disclosed to Lender by Borrower in
writing prior to the execution of this Agreement.
Section 5.9 ERISA. Take, or fail to take, any act if such act or
failure to act results in the imposition of withdrawal liability under Title IV
of ERISA.
Section 5.10 Environment. Release, discharge, dispose of, store,
accept or receive for storage or disposal, or allow to be stored or disposed of,
any "hazardous substance" (as defined in CERCLA) on or in any real or personal
property owned or leased by Borrower or Bank, except as otherwise expressly
consented to by Lender in writing; or release, discharge, use, transport, or
dispose of any "hazardous substance" in an unlawful manner.
Section 5.11 Sale of Receivables. Sell, assign or discount any of
the accounts of Borrower to any person or entity other than Lender.
Section 5.12 Other Negative Covenants. (i) Engage in any business
other than that in which Borrower is now engaged or make any material change in
the manner in which Borrower conducts Borrower's business; (ii) enter into any
transaction which materially and adversely affects Borrower's property or assets
or Borrower's ability to repay the Term Loan; (iii) enter into any transaction
with any affiliate of Borrower except in the ordinary course of business and
upon fair and reasonable terms no less favorable to Borrower than would obtain
in a comparable arm's length transaction with a person or entity not an
affiliate of Borrower; (iv) prepay any indebtedness which is subordinate to the
Note or other indebtedness of Borrower to Lender; or (v) issue, redeem, purchase
or retire any of Borrower's capital stock or grant or issue any warrant, right
or option pertaining to any of the foregoing, or permit any transfer, sale,
redemption, retirement or other change in the ownership of the outstanding
capital stock of Borrower.
Section 5.13 [Intentionally Omitted].
-----------------------
Section 5.14 Certain Financial Covenants.
---------------------------
(a) Permit the ratio of its capital to its assets to be at any
time less than seven percent (7.00%);
10
(b) Change the dates of its fiscal year now employed for financial
and accounting purposes.
Section 5.15 Relocation. Cause or permit Borrower or the Bank to
relocate its principal office, principal banking office, principal registered
office or approved charter location.
ARTICLE VI. - EVENTS OF DEFAULT AND REMEDIES
Section 6.1 Events of Default. Any one or more of the following
shall constitute an Event of Default hereunder by Borrower;
(a) Failure to pay when due any payment of principal or interest
due on the Note or any sum due hereunder; or
(b) Failure to pay when due any payment of principal or interest
due on any other obligation for money borrowed or the deferred
purchase price of goods or services; or
(c) Default under any Security Document or any other document,
note, agreement, mortgage, security agreement, instrument, or
understanding with, held by, or executed in favor of Lender;
or
(d) Should any representation or warranty contained herein or made
by or furnished on behalf of Borrower in connection herewith
be false or misleading in any material respect as of the date
made; or
(e) Failure to perform or observe any covenant or agreement
contained in Articles IV or V of this Agreement; or
(f) Failure to pay its debts generally as they become due; or
(g) Borrower's or Bank's making or taking any action to make an
assignment for the benefit of creditors, or petitioning or
taking any action to petition any tribunal for the appointment
of a custodian, receiver or any trustee for it or a
substantial part of its assets, or commencing or taking any
action to commence any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt,
dissolution, liquidation or debtor relief law or statute of
any jurisdiction, whether now or hereafter in effect,
including, without limitation, any chapter of the federal
Bankruptcy Code; or, if there shall have been filed or
commenced against Borrower or Bank any such petition,
application or proceeding which is not dismissed within 30
days or in which an order for relief is entered; or should
Borrower or Bank by any act or omission indicate its approval
of or acquiescence in any such petition, application or
proceeding or order for relief or the appointment of a
custodian, receiver or any trustee for it or any substantial
part of any of its properties; or should Borrower or Bank
suffer to exist any such custodianship, receivership or
trusteeship; or
11
(h) Borrower's or Bank's concealing, removing, or permitting to be
concealed or removed, any part of its property, with intent to
hinder, delay or defraud its creditors or any of them, or
making or suffering a transfer of any of its property which
may be fraudulent under any bankruptcy, fraudulent conveyance
or similar law; or making any transfer of its property to or
for the benefit of a creditor at a time when other creditors
similarly situated have not been paid, or suffering or
permitting, while insolvent, any creditor to obtain a lien
upon any of its property through legal proceedings or
distraint which is not vacated within 30 days after the date
thereof; or
(i) Occurrence of any of the following with respect to Borrower or
any Bank: death (if an individual), death or withdrawal of a
general partner (if a partnership), death or withdrawal of a
member (if a limited liability company), dissolution or
cessation of business (if a partnership, limited liability
company, corporation, or other organization), or insolvency.
(j) Any executive officer of Borrower or Bank, who in the
reasonable judgment of Lender, occupies a position of
substantial and material management responsibility shall, by
reason of death, permanent disability, or departure from the
employ of Borrower or Bank, or for any other reason, ceases to
be active in the management of Borrower or Bank and the
Borrower or Bank shall not, within a period of one hundred
eighty (180) days from such permanent disability, death or
departure secure a replacement for said officer (such
replacement to be, by reason of his or her experience and
credentials, satisfactory to the Lender). For purposes of this
section, permanent disability means any disability that
prevents such officer from rendering full-time services to
Borrower or Bank for sixty (60) consecutive days or in the
aggregate for ninety (90) days within a calendar year.
(k) [Intentionally Omitted].
-----------------------
(l) If there shall at any time occur, without the prior written
approval of the Lender, a change in control (including any
change in control under the Change in Bank Control Act of
1978, as amended, and any transaction or restructuring which
requires approval under the Bank-holding Company Act of 1956,
as amended) of Bank or Borrower.
(m) The issuance by, or at the request of, any bank regulatory
authority of any Supervisory Action (as defined in Section 3.4
hereof), or the taking by Borrower or Bank of any action of
the sort described in Section 3.4 to prevent or forestall the
imposition by such bank regulatory authority of any such
Supervisory Action.
Section 6.2 Remedies. Upon the occurrence of an Event of Default,
Lender may (i) terminate all obligations of Lender to Borrower, including,
without limitation, any obligations to lend money under this Agreement or the
Note, (ii) declare immediately due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are expressly waived, the
Note and any other note of Borrower held by Lender, including, without
limitation, principal, accrued interest and costs of collection (including,
without limitation, a reasonable attorney's fee if
12
collected by or through an attorney who is not a salaried employee of Lender,
whether through arbitration, in bankruptcy or in other judicial proceedings,
including appellate proceedings, which costs Borrower hereby agrees to pay) and
(iii) pursue any remedy available to it under this Agreement, the Note, the
Security Documents, or any other note or agreement made by Borrower with Lender,
or available at law or in equity. Notwithstanding the foregoing, upon the
occurrence of an Event of Default specified in Sections 6.1(g), 6.1(h) or
6.1(i), the Note and any other note of Borrower to Lender, shall immediately and
without notice become due and payable without action of any kind on Lender's
part.
ARTICLE VII. - DEFINITIONS
Section 7.1 As used in this Agreement, the following terms shall
have the meanings set forth below:
(a) Accounting terms used in this Agreement such as "net income",
"working capital", "current assets", "current liabilities",
"tangible net worth", and "total liabilities" shall have the
meanings normally given them by, and shall be calculated, both
as to amounts and classification of items, in accordance with,
generally accepted accounting principles.
(b) "Agreement" means this Term Loan Agreement, as amended or
supplemented in writing from time to time.
(c) "Lender" means the banking corporation or association named in
the first sentence of this Agreement and which executes this
Agreement below as "Lender", and its successors and assigns.
(d) "Borrower" means the person or entity named in the first
sentence of this Agreement and who executes this Agreement
below as "Borrower." For purposes of Section 3.12, 4.10, and
5.9 such term also includes any member of a "controlled group"
(as defined in ERISA) of which the named Borrower is a member.
(e) "CERCLA" is defined in Section 3.13.
(f) "Collateral" is defined in Section 2.1.
(g) "ERISA" is defined in Section 3.12
(h) "Event of Default" is defined in Section 6.1.
(i) "Fixed Charge Coverage" means a fraction in which the
numerator is the sum of the net income of Borrower (after
provision for federal and state taxes) for the 12-month period
preceding the applicable date plus the interest, lease and
rental expenses of Borrower for the period plus the sum of
non-cash expenses or allowances for such period (including,
without limitation, amortization or write-down of intangible
assets, depreciation, depletion, and deferred taxes and
expenses) and the denominator is the sum of the current
portion of the long-term debt of Borrower as of the applicable
date plus the interest, lease
13
and rental expenses for the 12-month period preceding the
applicable date. If Borrower has elected treatment as an S
Corporation under the Internal Revenue Code, however, "Fixed
Charge Coverage" means a fraction in which the numerator is
the sum of the net income of Borrower (after deduction of an
amount equal to the federal and state income taxes, calculated
at the marginal rates which would otherwise have been
applicable to Borrower at such time, which Borrower would have
been required to pay if it had not elected treatment as an S
Corporation for federal and state income tax purposes) for the
12-month period preceding the applicable date plus the
interest, lease and rental expenses of Borrower for the period
plus the sum of noncash expenses or allowances for such period
(including, without limitation, amortization or write-down of
intangible assets, depreciation, depletion, and expenses), and
the denominator is the sum of the current portion of the
long-term debt of Borrower as of the applicable date plus the
interest, lease and rental expenses for the 12-month period
preceding the applicable date.
(j) [Intentionally Omitted].
(k) "Note" is defined in Section 1.1 and includes any promissory
note or notes given in extension or renewal of, or in
substitution for, the original Note, and any amendment to the
original Note or to any promissory note or notes given in
extension or renewal of, or in substitution for, such note.
(l) "Term Loan" is defined in Section 1.1.
(m) "Security Document" is defined in Section 2.1.
ARTICLE VIII. - MISCELLANEOUS
Section 8.1 No Waiver. No delay or failure on the part of Lender in
the exercise of any right, power or privilege granted under this Agreement or
the Note, or available at law or in equity, shall impair any such right, power
or privilege or be construed as a waiver of any Event of Default or any
acquiescence therein. No single or partial exercise of any such right, power or
privilege shall preclude the further exercise of such right, power or privilege.
No waiver shall be valid against Lender unless made in writing and signed by
Lender, and then only to the extent expressly specified therein.
Section 8.2 Notices. All notices or consents required or permitted
by this Agreement shall be in writing and shall be deemed to have been given or
made (i) when actually received, if delivered by hand or sent by facsimile
transmission, or (ii) upon the earlier of actual receipt or five (5) days after
mailing, if sent by U.S. Mail, postage prepaid, and addressed as follows:
(a) If to Lender, Alabama Banker's Bank
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Facsimile Number: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Xx.
(b) If to Borrower, FirstFed Bancorp, Inc.
0000 0xx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Facsimile Number:
Attention: X.X. Xxxxxxx
14
Either Borrower or Lender, or both, may change its address for notice purposes
by notice to the other party in the manner provided herein.
Section 8.3 Governing Law. This Agreement and the Note shall be
governed by and construed and enforced in accordance with the substantive laws
of the United States and, to the extent not inconsistent therewith, the laws of
the State of Alabama, without regard to principles governing conflicts of law.
Section 8.4 Survival of Representations and Warranties. All
representations and warranties contained in this Agreement or made or furnished
on behalf of Borrower in connection herewith shall survive the execution and
delivery of this Agreement and the Note and the making of the Term Loan, and
shall survive until the Term Loan and all interest thereon are paid in full, and
thereafter as provided in Section 8.10.
Section 8.5 Successors and Assigns. This Agreement shall bind and
inure to the benefit of Borrower and Lender, and their respective successors and
assigns; provided, however, Borrower shall have no right to assign its rights or
obligations hereunder to any person or entity.
Section 8.6 Time of the Essence. Time is of the essence in the
payment and performance of every term and covenant of this Agreement and the
Note.
Section 8.7 Amendments, etc. This Agreement may be amended or
modified, and Borrower may take any action herein prohibited, or omit to perform
any action required to be performed by it, only if Borrower shall obtain the
prior written consent of Lender to such amendment, modification, action or
omission to act, and no course of dealing between Borrower and Lender shall
operate as a waiver of any right, power or privilege granted under this
Agreement, under the Note or the Security Documents, or available at law or in
equity. This Agreement, the Note and the Security Documents contain the entire
agreement between Borrower and Lender regarding the Term Loan and the
Collateral. No oral representations or statements shall be binding on Lender,
and no agent of Lender has the authority to vary the terms of this Agreement
except in writing on the face hereof or on a separate page attached hereto.
Section 8.8 Cumulative Rights. All rights, powers, privileges and
remedies granted hereunder shall be cumulative, may be exercised successively or
concurrently, and shall not be exclusive of any other rights, powers, privileges
or remedies granted by the Note, the Security Documents or any other document or
agreement, or available at law or in equity.
Section 8.9 Set-off, etc. Upon the occurrence and during the
continuation of an Event of Default, Borrower recognizes Lender's right, without
notice or demand, to apply any indebtedness due or to become due to Borrower
from Lender in satisfaction of any of the indebtedness, liabilities or
obligations of Borrower under this Agreement, under the Note, or under any other
note, instrument, agreement, document or writing of Borrower held by or executed
in favor of Lender, including, without limitation, the right to set off against
any deposits and cash collateral of Borrower held by Lender. In addition to the
right of setoff, as additional collateral for the Term
15
Loan, Borrower hereby grants to Lender a continuing lien on and security
interest in all deposit accounts of Borrower now or hereafter held by Lender,
including all certificates of deposit now or hereafter issued to Borrower by
Lender.
Section 8.10 Indemnity. Borrower hereby agrees to indemnify Lender
and its officers, directors, agents and attorneys against, and to hold Lender
and all such other persons harmless from, any claims, demands, liabilities,
costs, damages, and judgments (including, without limitation, liability under
CERCLA, the Federal Resource Conservation and Recovery Act, or other
environmental law or regulation, and costs of defense and attorneys' fees)
resulting from any Representation or Warranty made by Borrower or on Borrower's
behalf pursuant to Article III of this Agreement having been false when made, or
resulting from Borrower's breach of any of the covenants set forth in Articles
IV or V of this Agreement. This Agreement of indemnity shall be a continuing
agreement and shall survive payment of the Term Loan and the Note and
termination of this Agreement.
Section 8.11 Participations. Lender may sell undivided interests
("Participations") in the Term Loan to other financial institutions and
insurance companies ("Participants") from time to time. Borrower consents to
such sales and agrees that Lender may furnish financial and other information
regarding Borrower from time to time to actual and potential Participants.
Section 8.12 Severability. Any provision of this Agreement or any
other loan document to which Borrower is or is to be a party which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
Section 8.13 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original, but when taken
together shall constitute but one agreement, and any party may execute this
Agreement by executing and delivering any one or more of such counterparts.
Section 8.14 Section Titles. The section titles contained in this
Agreement are for convenience only, are without substantive meaning, and are not
a part of the agreement between the parties hereto.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
16
WITNESS the hands and seals of the parties hereto or their duly
authorized officers, partners, members or agents on or as of the date first
above written.
BORROWER:
FIRSTFED BANCORP, INC.
By: ____________________________________
Its: ___________________________________
ATTEST:
By: ____________________________________
Its: ___________________________________
LENDER:
ALABAMA BANKER'S BANK
By: ____________________________________
Its: ___________________________________
17
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (this "Pledge Agreement"), as of the 29th day
of December, 2005, made by FIRSTFED BANCORP, INC., a Delaware corporation (the
"Pledgor") with ALABAMA BANKER'S BANK, an Alabama banking corporation (the
"Pledgee"),
W I T N E S S E T H:
--------------------
WHEREAS, the Pledgor and the Pledgee have entered into the Note, as
defined herein; and
WHEREAS, as an inducement to the Pledgee to make the loan provided for in
the Note, the Pledgor agreed to execute this Pledge Agreement and, pursuant
hereto, to pledge the Pledged Stock, as defined in this Pledge Agreement, as
security for the prompt payment and performance of the Obligations (as defined
herein); and
WHEREAS, the obligation of the Pledgee to make the Loan is subject to the
condition, among others, that the Pledgor shall execute and deliver this Pledge
Agreement and grant the security interest hereinafter described in order to
secure the due and punctual payment, discharge and performance of each and every
Obligation of the Pledgor.
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, the Pledgor hereby agrees with the Pledgee as follows:
1. (a) The term "Event of Default" as used in this Pledge Agreement means
the occurrence of any of the following:
(i) the occurrence of any Default or Event of Default under
the Note;
(ii) the breach by the Pledgor of any of the covenants made
by the Pledgor in this Pledge Agreement; or
(iii) the material falsity of any of the representations or
warranties made by the Pledgor in this Pledge Agreement
on or as of the date when made, or at any time after the
date when made if such representation or warranty
subsequently becomes untrue and remains untrue for ten
days or longer.
(b) The term "Pledged Stock" as used in this Pledge Agreement means
the shares of stock described in Schedule I hereto, together will all
certificates, options, rights, warrants, dividends and other distributions now
existing or hereafter issued, payable or arising as an addition to, in
substitution or in exchange for, or on account of, any such shares, and all
proceeds of all the foregoing, whether now or hereafter owned or acquired by the
Pledgor.
(c) The term "Obligations" as used in this Pledge Agreement means
every loan of money and other extension of credit heretofore, now, or hereafter
made to Pledgor, including, without limitation:
(i) The principal of and all interest on that certain
promissory note of even date herewith made by Pledgor
and payable to Pledgee or its order, in the original
principal sum of $6,000,000.00 (as such promissory note
may be hereafter modified, increased, amended or
renewed, and together with any promissory note given in
substitution or renewal or amendment and restatement
thereof, the "Note"), including, but without limitation,
the payment of all interest after default and interest
on any amount withheld or refused on account of any
set-off or other deduction as provided in the Note, late
charges and all costs of collection, including
reasonable attorneys' fees; and
(ii) Every guaranty of payment or collection of the debt of
another heretofore, now, or hereafter entered into by
the Pledgor with Pledgee; and
(iii) The payment and performance of all of Pledgor's
obligations under this Pledge Agreement; and
(iv) All other indebtedness and other obligations of the
Pledgor to Pledgee, including all sums paid to Pledgee
for Pledgor's account by Pledgor or any other person
which are later recovered back from Pledgee by Pledgor
or any representative of Pledgor or of Pledgor's
creditors, such as a trustee in bankruptcy, and any
intended cash sale where the cash consideration was not
actually received by Pledgee; whether any of the
foregoing debts and other obligations are joint or
several, primary or secondary, direct or indirect,
otherwise secured or unsecured, whether originally
payable or owed to Pledgee or acquired by Pledgee from
another, and whether now existing or hereafter incurred
prior to termination of this Agreement as hereinafter
provided.
(d) The terms "Secured Obligations" as used in this Pledge Agreement
means, collectively, the "Obligations" as defined herein and all obligations of
the Pledgor to pay money or perform acts under this Pledge Agreement.
(e) All other capitalized terms used in this Pledge Agreement and
not specifically defined herein shall have the respective meanings assigned to
them in the Note.
2. (a) As security for the prompt payment and performance of the
Obligations, the Pledgor hereby assigns, transfers and pledges the Pledged Stock
to the Pledgee and grants to the Pledgee a lien thereon and security interest
therein.
2
(b) If the Pledgor shall become entitled to receive or shall
receive, in connection with any of the Pledged Stock, any:
(i) stock certificates, including, but without limitation,
any certificates representing a stock dividend or issued
in connection with any increase or reduction of capital,
reclassification, merger, consolidation, sale of assets,
combination of shares, stock split, spin-off or
split-off;
(ii) stock certificates received in connection with Pledgor's
exercise of any stock options granted to it;
(iii) options, warrants, or rights, whether as an addition to,
or in substitution or in exchange for, any of the
Pledged Stock, or otherwise;
(iv) dividends or distributions payable in property,
including securities issued by other than the issuer of
any of the Pledged Stock; or
(v) cash dividends or distributions of any sort, except as
otherwise provided in subparagraph (d) below with
respect to cash dividends paid out of earned surplus,
the Pledgor shall accept the same as the Pledgee's agent, in trust for the
Pledgee, and shall deliver the same forthwith to the Pledgee in the exact form
received with, as applicable, the Pledgor's endorsement, when necessary, or
appropriate stock powers duly executed in blank, to be held by the Pledgee,
subject to the terms hereof, as part of the Pledged Stock.
(c) Upon an event of default, the Pledgee may at its election have
any or all of the Pledged Stock registered in its name or that of its nominee,
and the Pledgor hereby covenants that, upon the Pledgee's request, the Pledgor
will cause the issuer, transfer agent, or registrar of the Pledged Stock to
effect such registration. Immediately and without further notice upon the
occurrence of an Event of Default, whether or not the Pledged Stock shall have
been registered in the name of the Pledgee or its nominee, the Pledgee or its
nominee shall have, with respect to the Pledged Stock, the right to exercise all
voting rights as to all of the Pledged Stock, to waive notice of stockholders'
meetings, to execute actions by written consent in lieu of a meeting, and all
other corporate rights, and all conversion, exchange, subscription and other
rights, privileges and options pertaining thereto as if it were the absolute
owner thereof, including, without limitation, the right to exchange any or all
of the Pledged Stock upon the merger, consolidation, reorganization,
recapitalization or other readjustment of the issuer thereof, or upon the
exercise by such issuer of any right, privilege, or option pertaining to any of
the Pledged Stock, and, in connection therewith, to deliver any of the Pledged
Stock to any committee, depository, transfer agent, registrar or other
designated agency upon such terms and conditions as it may determine, all
without liability except to account for property actually received by it; but
the Pledgee shall have no duty to exercise any of the aforesaid rights,
privileges or options and shall not be responsible for any failure to do so or
any delay in so doing.
3
(d) Unless an Event of Default shall have occurred and be
continuing, and unless otherwise prohibited by the Note, the Pledgor shall be
entitled to receive for its own use cash dividends paid out of earned surplus.
Upon the occurrence of an Event of Default, the Pledgee may at its election
require any or all such cash dividends to be delivered to the Pledgee, and the
Pledgor agrees upon request to deliver such dividends to the Pledgee as and when
received, endorsed to the order of the Pledgee or in blank, to be cashed and
held by the Pledgee as additional security hereunder or, at the Pledgee's
election, to be applied toward the payment or performance of the Secured
Obligations. Pending delivery of such cash dividends to the Pledgee, the Pledgor
agrees to hold the same as the Pledgee's agent, in trust for the Pledgee.
(e) The Pledgor warrants and will, at its own expense, defend the
Pledgee's right, title, special property and security interest in and to the
Pledged Stock against the claims of any person, firm, corporation or other
entity. This warranty and covenant shall survive the termination of this Pledge
Agreement.
(f) The Pledgor shall use its best efforts, upon the request of the
Pledgee, to cause any issuer, transfer agent, or registrar of the Pledged Stock
to take all such actions and execute all such documents as may be necessary or
appropriate to (i) remove any restrictive legends placed on the Pledged Stock
that are not legally required for such Pledged Stock held by the Pledgee; (ii)
after an Event of Default, effect any sale or sales of Pledged Stock in
accordance with Rule 144 under the Securities Act; and (iii) after an Event of
Default, effect any sale or other distribution of the Pledged Stock in any
lawful public or private sale or other disposition.
3. (a) Upon the occurrence of an Event of Default, the Pledgee may at its
election, without demand of performance or other demand, advertisement, or
notice of any kind (except the notice specified below of time and place of
public or private sale and any other notice which is required by law and cannot
be waived) to or upon the Pledgor or any other person (all of which are, to the
extent permitted by law, hereby expressly waived), realize upon the Pledged
Stock or any part thereof, and may sell or otherwise dispose of and deliver the
Pledged Stock or any part thereof or interest therein, in one or more parcels,
at public or private sale or sales, at any exchange, broker's board or at any of
the Pledgee's offices or elsewhere, at such prices and on such terms (including,
but without limitation, a requirement that any purchaser of all of any part of
the Pledged Stock purchase the shares constituting the Pledged Stock for
investment and without any intention to make a distribution thereof) as it may
deem appropriate and as shall be commercially reasonable, for cash or on credit,
or for future delivery without assumption of any credit risk, with the right in
the Pledgee or any purchaser to purchase upon any such sale the whole or any
part of the Pledged Stock free of any right or equity of redemption in the
Pledgor.
(b) Upon an occurrence of an Event of Default, the Pledgee may, at
its election, either (i) exercise any unexercised options held by Pledgor and,
in connection with the exercise thereof, require that the stock certificates
evidencing the shares received upon such exercise be issued to Pledgee, or (ii)
assign said unexercised options to any one or more third parties. The
disposition of the optioned shares or the options, as applicable, shall be made
pursuant to the terms of paragraph 3(a) hereof. The Pledgor agrees to execute
and deliver any and all such documents, instruments, certificates, directions
and other writings as may be requested by the Pledgee, in order to permit the
Pledgee to confirm and consummate the transfer or other disposition of the
options or the optioned shares pursuant to this paragraph 3(b), and the
4
Pledgor further agrees that the Pledgee may, at its election, utilize any Power
of Attorney granted to Pledgee in order to execute any and all such writings
for, and in the name, place and stead of Pledgor.
(c) The proceeds of any such disposition or other action by the
Pledgee shall be applied as follows:
(i) first, to the costs and expenses incurred in connection
therewith or incidental thereto or in the care or
safekeeping of any of the Pledged Stock or in any way
relating to the rights of the Pledgee hereunder,
including brokers' fees and commissions and reasonable
attorneys' fees and legal expenses;
(ii) second, to the payment and performance of the Secured
Obligations;
(iii) third, to the payment of any other amounts required by
applicable law (including, without limitation, Section
9-615(a)(3) of the Uniform Commercial Code); and
(iv) fourth, to the Pledgor or its transferees, to the extent
of any surplus proceeds.
(d) The Pledgee need not give more than ten days' notice of the time
and place of any public sale or of the time after which any private sale may
take place, which notice the Pledgor hereby agrees to be reasonable; provided,
however, that the Pledgee at any time, without any notice to the Pledgor, may
sell any of the Pledged Stock which is customarily sold on a recognized market.
(e) The Pledgor recognizes that the Pledgee may be unable to effect
a public sale of all or a part of the Pledged Stock and may be compelled to
resort to one or more private sales to a restricted group of purchasers who will
be obligated to agree, among other things, to acquire the Pledged Stock for
their own account, for investment and not with a view to the distribution or
resale thereof. The Pledgor acknowledges that any such private sales may be at
prices and on terms less favorable to the Pledgee than those of public sales,
and agrees that such private sales shall be deemed to have been made in a
commercially reasonable manner and that the Pledgee has no obligation to delay
sale of any Pledged Stock to permit the issuer thereof to register it for public
sale under the Securities Act.
4. The Pledgor represents and warrants that:
(a) it has, and has duly exercised, all requisite power and
authority to enter into this Pledge Agreement, to pledge the Pledged Stock for
the purposes described in paragraph 2(a), and to carry out the transactions
contemplated by this Pledge Agreement;
(b) it is the legal and beneficial owner of all of the Pledged
Stock;
5
(c) all of the shares of the Pledged Stock are owned by the Pledgor
free of any pledge, mortgage, hypothecation, lien, charge, encumbrance or
security interest in such shares or the proceeds thereof, except for that
granted hereunder; and
(d) upon delivery of the Pledged Stock to the Pledgee or its agent,
this Pledge Agreement shall create a valid first lien upon and perfected
security interest in the Pledged Stock and the proceeds thereof, subject to no
prior security interest, lien, charge or encumbrance, or agreement purporting to
grant to any third party a security interest in the property or assets of the
Pledgor which would include the Pledged Stock.
5. (a) The Pledgor will not, without the Pledgee's written consent
obtained in advance:
(i) sell, give or otherwise dispose of any of the Pledged
Stock or any interest therein or create, incur, or
permit to exist any pledge, mortgage, lien, charge,
encumbrance or any security interest whatsoever in, or
with respect to, any of the Pledged Stock or the
proceeds thereof, other than that created hereby; or
(ii) consent to or approve the issuance of any additional
shares of any class of capital stock by the issuer of
the Pledged Stock; or any securities convertible
voluntarily by the holder thereof or automatically upon
the occurrence or nonoccurrence of any event or
condition into, or exchangeable for, any such shares; or
any warrants, options, rights, or other commitments
entitling any person to purchase or otherwise acquire
any such shares.
(b) The Pledgor shall, upon the request of the Pledgee, promptly
deliver to the Pledgee all written notices, and promptly give the Pledgee
written notice of any other notices, received by the Pledgor with respect to
Pledged Stock at any time after such request is made.
(c) The Pledgor shall at any time, and from time to time, upon the
request of the Pledgee, execute and deliver such further documents and do such
further acts and things as the Pledgee may reasonably request to effect the
purposes of this Pledge Agreement.
(d) The Pledgor shall, at any time and from time to time, execute in
blank and deliver to the Pledgee an Irrevocable Stock Assignment and Power of
Attorney, in substantially the form of Exhibit A hereto, with respect to each
certificate or instrument now or hereafter evidencing the Pledged Stock.
6. (a) Upon the occurrence of an Event of Default, the Pledgee agrees to
deliver irrevocable proxies with respect to the Pledged Stock in form
satisfactory to the Pledgee, and, until receipt of such separate proxies, this
Pledge Agreement shall constitute the Pledgor's proxy to the Pledgee or its
nominee to vote all shares of Pledged Stock then registered in the Pledgor's
name at any and all such times as the Pledgee has the right to vote such shares
pursuant to the terms of this Pledge Agreement. Such power of attorney granted
hereby is coupled with an interest and is irrevocable.
6
(b) Whenever any checks, drafts or other instruments are delivered
to or come into the possession of the Pledgee and the Pledgee has the right at
such time under this Pledge Agreement or otherwise to hold such writings or the
sums evidenced thereby as additional security hereunder or to apply the same
toward the payment or performance of the Obligations, the Pledgee is authorized
to endorse such writings in the name of the Pledgor, and the Pledgor hereby
irrevocably constitutes and appoints the Pledgee, its officers and agents, as
its attorneys-in-fact for such purposes.
7. Upon the final, nonavoidable payment and performance in full of all of
the Secured Obligations, the termination of all commitments of the Pledgee to
lend money or otherwise extend credit under the Note, the payment of all
additional costs and expenses of the Pledgee as provided herein, and written
demand for termination from the Pledgor to the Pledgee, the Pledgee shall
deliver to the Pledgor a written termination of this Pledge Agreement and
thereupon this Pledge Agreement (except paragraph 2(e) hereof with respect to
any of the Pledged Stock sold or otherwise disposed of by the Pledgee) shall
terminate and the Pledgee shall deliver to the Pledgor, at the Pledgor's
expense, such of the Pledged Stock as shall not have been sold or otherwise
applied or disposed of pursuant to this Pledge Agreement. Until termination,
this Pledge Agreement shall be a continuing agreement in every respect, even if
from time to time there are no outstanding Secured Obligations.
8. Any notices or consents required or permitted by this Pledge Agreement
shall be in writing and shall be deemed delivered if delivered in person or sent
by certified mail, postage prepaid, return receipt requested, or facsimile, as
follows, unless such address is changed by written notice hereunder:
(1) If to the Pledgor:
FirstFed Bancorp, Inc.
0000 0xx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attn: X. X. Xxxxxxx
Facsimile: ___________________
(2) If to the Pledgee:
Alabama Banker's Bank
0000 Xxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Xx.
Facsimile: (000) 000-0000
9. (a) Beyond the exercise of reasonable care to assure the safe custody
of the Pledged Stock while held by it hereunder, the Pledgee shall have no duty
or liability to preserve the value of the Pledged Stock or any rights pertaining
thereto and shall be relieved of all responsibility for the Pledged Stock upon
surrendering it or tendering surrender of it to the Pledgor.
7
(b) No course of dealing between the Pledgor and the Pledgee, or any
failure to exercise or any delay in exercising any right, power or privilege of
the Pledgee hereunder or under the Note, shall operate as a waiver of the
Pledgee's rights and remedies under the Pledge Agreement, the Note, or
applicable law; nor shall any single or partial exercise of any right, power or
privilege hereunder or thereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege.
(c) The rights and remedies provided herein and in the Note and in
all other agreements, instruments, and documents delivered pursuant to or in
connection with the Note or this Pledge Agreement are cumulative and are in
addition to, and not exclusive of, any rights or remedies provided by law,
including, without limitation, the rights and remedies of a secured party under
the Uniform Commercial Code.
(d) The provisions of this Pledge Agreement are severable, and if
any clause or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision or part thereof in such jurisdiction and shall not
in any manner affect such clause or provision in any other jurisdiction or any
other clause or provision of this Pledge Agreement in any jurisdiction.
(e) This Pledge Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and assigns.
(f) If two or more persons or entities execute this Pledge Agreement
as Pledgors, such Pledgors shall be jointly and severally bound and obligated
hereunder, and the terms "the Pledgor" and "its" as used herein mean and include
each such Pledgor and also all of such Pledgors.
(g) This Pledge Agreement shall be construed in accordance with the
substantive law of the United States and the State of Alabama without regard to
principles of conflicts of law, except to the extent that the application of the
law of another jurisdiction is required to give effect to or to make enforceable
any of the provisions hereof.
(h) The Pledgor hereby waives acceptance and notice of acceptance of
this Pledge Agreement by the Pledgor and agrees that this Pledge Agreement will
be fully effective when executed by the Pledgor and delivered to the Pledgee.
(i) This Pledge Agreement is intended to take effect as an
instrument under seal.
(j) Pledgor and Pledgee hereby waive any right to trial by jury in
any litigation arising out of or relating to this Pledge Agreement or the Loan.
Pledgor certifies that no representative or agent of Pledgee or Pledgee's
counsel has represented, expressly or otherwise, that Pledgee will not seek to
enforce this waiver of jury trial. Pledgor acknowledges that the Pledgee has
been induced to enter into the Loan in part because of the provisions of this
paragraph concerning waiver of jury trial and that, but for this provision, the
interest rate on the Loan would be higher. The Pledgor and Pledgee agree that
either may file a copy of this Pledge Agreement with any court as written
evidence of the knowing, voluntary and bargained for agreement between the
parties irrevocably to
8
waive trial by jury and that any dispute or controversy of any kind whatsoever
between them shall instead be tried in a court competent jurisdiction by a judge
sitting without a jury.
[Signature Page Follows]
9
IN WITNESS WHEREOF, the Pledgor has caused this Pledge Agreement to be
duly executed and its seal to be affixed hereto on or as of the date and year
first above written.
THE PLEDGOR:
FIRSTFED BANCORP, INC.
By: ____________________________________
Its: ___________________________________
Accepted at Birmingham, Alabama
THE PLEDGEE:
ALABAMA BANKER'S BANK
By: ____________________________________
Its: ___________________________________
Date: __________________________________
10
SCHEDULE I
Certificate Number
Issuer No. Of Shares Shareholder
--------------------------------------------------------------------------------
First Financial Bank FirstFed Bancorp, Inc.
11
EXHIBIT A
(to Stock Pledge Agreement)
STOCK ASSIGNMENT AND POWER SEPARATE FROM CERTIFICATE
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned FIRSTFED BANCORP, INC.
FOR VALUE RECEIVED, has bargained, sold, assigned, and transferred, and by these
presents does bargain, sell, assign and transfer unto ___________________
({_______________}) shares, represented by certificate(s) No. {_______________}
(the "Stock"), of the common stock of FIRST FINANCIAL BANK standing in the name
of the undersigned on the books of said Corporation, AND does hereby irrevocably
constitute and appoint _________________________ the true and lawful Attorney(s)
for and in the name and stead of the undersigned, to sell, assign, and transfer
all or any part of said Stock, and for that purpose to make and execute all
necessary assignments and transfers thereof, and to substitute one or more
persons with like power, AND does hereby ratify and confirm all that said
Attorney(s) or such substitute or substitutes shall lawfully do by virtue
hereof.
IN WITNESS WHEREOF, the duly authorized officer(s) of the undersigned have
executed this instrument on its behalf and have affixed its seal hereto at
{__________________}, Alabama on or as of this _____ day of ______________,
20{____}.
FIRSTFED BANCORP, INC.
By: ____________________________________
Its: ___________________________________
SIGNATURES GUARANTEED
________________________________________
By: ____________________________________
Its: ___________________________________
12
STOCK ASSIGNMENT AND POWER SEPARATE FROM CERTIFICATE
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned FIRSTFED BANCORP, INC.
FOR VALUE RECEIVED, has bargained, sold, assigned, and transferred, and by these
presents does bargain, sell, assign and transfer unto _________________
(__________) shares, represented by certificate No. ______________ (the
"Stock"), of the common stock of FIRST FINANCIAL BANK standing in the name of
the undersigned on the books of said Corporation, AND does hereby irrevocably
constitute and appoint _________________________ the true and lawful Attorney(s)
for and in the name and stead of the undersigned, to sell, assign, and transfer
all or any part of said Stock, and for that purpose to make and execute all
necessary assignments and transfers thereof, and to substitute one or more
persons with like power, AND does hereby ratify and confirm all that said
Attorney(s) or such substitute or substitutes shall lawfully do by virtue
hereof.
IN WITNESS WHEREOF, the duly authorized officer(s) of the undersigned have
executed this instrument on its behalf and have affixed its seal hereto at
Birmingham, Alabama on or as of this 29th day of December, 2005.
FIRSTFED BANCORP, INC.
By: ____________________________________
Its: ___________________________________
SIGNATURES GUARANTEED
________________________________________
By: ____________________________________
Its: ___________________________________
13
STOCK ASSIGNMENT AND POWER SEPARATE FROM CERTIFICATE
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned FIRSTFED BANCORP, INC.
FOR VALUE RECEIVED, has bargained, sold, assigned, and transferred, and by these
presents does bargain, sell, assign and transfer unto _________________
(_______________) shares, represented by certificate(s) No. _______________ (the
"Stock"), of the common stock of FIRST FINANCIAL BANK standing in the name of
the undersigned on the books of said Corporation, AND does hereby irrevocably
constitute and appoint _________________________ the true and lawful Attorney(s)
for and in the name and stead of the undersigned, to sell, assign, and transfer
all or any part of said Stock, and for that purpose to make and execute all
necessary assignments and transfers thereof, and to substitute one or more
persons with like power, AND does hereby ratify and confirm all that said
Attorney(s) or such substitute or substitutes shall lawfully do by virtue
hereof.
IN WITNESS WHEREOF, the duly authorized officer(s) of the undersigned have
executed this instrument on its behalf and have affixed its seal hereto at
Birmingham, Alabama on or as of this 29th day of December, 2005.
FIRSTFED BANCORP, INC.
By: ____________________________________
Its: ___________________________________
SIGNATURES GUARANTEED
________________________________________
By: ____________________________________
Its: ___________________________________
14
STOCK ASSIGNMENT AND POWER SEPARATE FROM CERTIFICATE
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned FIRSTFED BANCORP, INC.
FOR VALUE RECEIVED, has bargained, sold, assigned, and transferred, and by these
presents does bargain, sell, assign and transfer unto _________________
(_______________) shares, represented by certificate(s) No. _______________ (the
"Stock"), of the common stock of FIRST FINANCIAL BANK standing in the name of
the undersigned on the books of said Corporation, AND does hereby irrevocably
constitute and appoint _________________________ the true and lawful Attorney(s)
for and in the name and stead of the undersigned, to sell, assign, and transfer
all or any part of said Stock, and for that purpose to make and execute all
necessary assignments and transfers thereof, and to substitute one or more
persons with like power, AND does hereby ratify and confirm all that said
Attorney(s) or such substitute or substitutes shall lawfully do by virtue
hereof.
IN WITNESS WHEREOF, the duly authorized officer(s) of the undersigned have
executed this instrument on its behalf and have affixed its seal hereto at
Birmingham, Alabama on or as of this 29th day of December, 2005.
FIRSTFED BANCORP, INC.
By: ____________________________________
Its: ___________________________________
SIGNATURES GUARANTEED
________________________________________
By: ____________________________________
Its: ___________________________________
15
STOCK ASSIGNMENT AND POWER SEPARATE FROM CERTIFICATE
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned FIRSTFED BANCORP, INC.
FOR VALUE RECEIVED, has bargained, sold, assigned, and transferred, and by these
presents does bargain, sell, assign and transfer unto _________________
(_______________) shares, represented by certificate(s) No. _______________ (the
"Stock"), of the common stock of FIRST FINANCIAL BANK standing in the name of
the undersigned on the books of said Corporation, AND does hereby irrevocably
constitute and appoint _________________________ the true and lawful Attorney(s)
for and in the name and stead of the undersigned, to sell, assign, and transfer
all or any part of said Stock, and for that purpose to make and execute all
necessary assignments and transfers thereof, and to substitute one or more
persons with like power, AND does hereby ratify and confirm all that said
Attorney(s) or such substitute or substitutes shall lawfully do by virtue
hereof.
IN WITNESS WHEREOF, the duly authorized officer(s) of the undersigned have
executed this instrument on its behalf and have affixed its seal hereto at
Birmingham, Alabama on or as of this 29th day of December, 2005.
FIRSTFED BANCORP, INC.
By: ____________________________________
Its: ___________________________________
SIGNATURES GUARANTEED
________________________________________
By: ____________________________________
Its: ___________________________________
16
STOCK ASSIGNMENT AND POWER SEPARATE FROM CERTIFICATE
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned FIRSTFED BANCORP, INC.
FOR VALUE RECEIVED, has bargained, sold, assigned, and transferred, and by these
presents does bargain, sell, assign and transfer unto _________________
(_______________) shares, represented by certificate(s) No. _______________ (the
"Stock"), of the common stock of FIRST FINANCIAL BANK standing in the name of
the undersigned on the books of said Corporation, AND does hereby irrevocably
constitute and appoint _________________________ the true and lawful Attorney(s)
for and in the name and stead of the undersigned, to sell, assign, and transfer
all or any part of said Stock, and for that purpose to make and execute all
necessary assignments and transfers thereof, and to substitute one or more
persons with like power, AND does hereby ratify and confirm all that said
Attorney(s) or such substitute or substitutes shall lawfully do by virtue
hereof.
IN WITNESS WHEREOF, the duly authorized officer(s) of the undersigned have
executed this instrument on its behalf and have affixed its seal hereto at
Birmingham, Alabama on or as of this 29th day of December, 2005.
FIRSTFED BANCORP, INC.
By: ____________________________________
Its: ___________________________________
SIGNATURES GUARANTEED
________________________________________
By: ____________________________________
Its: ___________________________________
17
STOCK ASSIGNMENT AND POWER SEPARATE FROM CERTIFICATE
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned FIRSTFED BANCORP, INC.
FOR VALUE RECEIVED, has bargained, sold, assigned, and transferred, and by these
presents does bargain, sell, assign and transfer unto _________________
(_______________) shares, represented by certificate(s) No. _______________ (the
"Stock"), of the common stock of FIRST FINANCIAL BANK standing in the name of
the undersigned on the books of said Corporation, AND does hereby irrevocably
constitute and appoint _________________________ the true and lawful Attorney(s)
for and in the name and stead of the undersigned, to sell, assign, and transfer
all or any part of said Stock, and for that purpose to make and execute all
necessary assignments and transfers thereof, and to substitute one or more
persons with like power, AND does hereby ratify and confirm all that said
Attorney(s) or such substitute or substitutes shall lawfully do by virtue
hereof.
IN WITNESS WHEREOF, the duly authorized officer(s) of the undersigned have
executed this instrument on its behalf and have affixed its seal hereto at
Birmingham, Alabama on or as of this 29th day of December, 2005.
FIRSTFED BANCORP, INC.
By: ____________________________________
Its: ___________________________________
SIGNATURES GUARANTEED
________________________________________
By: ____________________________________
Its: ___________________________________
18
STOCK ASSIGNMENT AND POWER SEPARATE FROM CERTIFICATE
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned FIRSTFED BANCORP, INC.
FOR VALUE RECEIVED, has bargained, sold, assigned, and transferred, and by these
presents does bargain, sell, assign and transfer unto _________________
(_______________) shares, represented by certificate(s) No. _______________ (the
"Stock"), of the common stock of FIRST FINANCIAL BANK standing in the name of
the undersigned on the books of said Corporation, AND does hereby irrevocably
constitute and appoint _________________________ the true and lawful Attorney(s)
for and in the name and stead of the undersigned, to sell, assign, and transfer
all or any part of said Stock, and for that purpose to make and execute all
necessary assignments and transfers thereof, and to substitute one or more
persons with like power, AND does hereby ratify and confirm all that said
Attorney(s) or such substitute or substitutes shall lawfully do by virtue
hereof.
IN WITNESS WHEREOF, the duly authorized officer(s) of the undersigned have
executed this instrument on its behalf and have affixed its seal hereto at
Birmingham, Alabama on or as of this 29th day of December, 2005.
FIRSTFED BANCORP, INC.
By: ____________________________________
Its: ___________________________________
SIGNATURES GUARANTEED
________________________________________
By: ____________________________________
Its: ___________________________________
19
PROMISSORY NOTE
$6,190,000.00 Birmingham, Alabama
December 29, 2005
FOR VALUE RECEIVED, the undersigned FIRSTFED BANCORP, INC., a Delaware
corporation ("Borrower"), promises to pay to the order of ALABAMA BANKER'S BANK,
an Alabama banking corporation ("Lender" or, together with any successor or any
other holder of this Note, "Holder"), at the office of the Lender at 0000 Xxxxx
Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000, or at such other place as
the Holder may designate, the principal sum of Six Million One Hundred Ninety
Thousand and 00/100 Dollars ($6,190,000.00) in legal tender of the United States
of America and immediately available funds at the place payment is due, together
with interest thereon calculated at the rate and in the manner set forth below.
Interest shall accrue on the unpaid balance of this Note at a floating per annum
rate equal to the "Prime Rate", as hereinafter defined. Interest shall be
calculated on the basis of a 360-day year and the actual number of days elapsed.
As used herein, the "Prime Rate" shall mean that per annum rate of
interest announced by Holder from time to time as its prime rate. The Prime Rate
is not necessarily the lowest rate of interest offered by Lender to any
Borrower. The Prime Rate may change from time to time, upward or downward, and
the rate of interest payable by the Borrower hereunder shall change
simultaneously with each such change in the Prime Rate. The Prime Rate as of the
date of this Note is ______________ percent, per annum (_____%), and accordingly
the rate of interest initially payable hereunder is _____________ percent, per
annum (____%).
Borrower promises to pay accrued interest on the principal sum of
this note on the 31st day of each March, June, September and December hereafter
commencing March 31, 2006, and another such installment shall be due and payable
on the same day of each March, June, September and December thereafter and at
final maturity of the principal sum. In addition to such payments of interest,
Borrower promises to pay the principal sum of this note in equal annual
installments of principal in the amount of $412,666.66 each and one final
installment in the amount of the unpaid principal amount of this note, all
accrued but unpaid interest thereon, and all other sums, if any, then due but
unpaid under this note. The first such installment shall be due and payable on
December 31, 2006, and another such installment shall be due and payable on the
same day of each year thereafter until December 31, 2020, at which time the
final installment shall be due and payable.
In relation to any payment made by Borrower to Lender, each such payment
shall be applied first to accrued but unpaid interest, next to any late charges
and other charges then due and owing under this Note, and then in reduction of
the principal sum.
If any payment of principal or interest on this Note shall become due on a
Saturday, Sunday or any day on which the Holder of this Note is legally closed
to business, such payment shall be made on the next succeeding business day, and
interest shall continue to accrue on the entire unpaid balance of the principal
sum of this Note until such payment is received by the Holder.
Borrower may prepay this Note in full or in part without premium or
penalty.
This Note is the note referred to in, and is entitled to the security of
that certain Stock Pledge Agreement from Borrower to Secured Party evidencing a
pledge of stock held by Borrower in First Financial Bank.
Borrower agrees to pay to the Lender, on demand, a late charge on any
scheduled payment hereunder that is in default 10 days or more. The late charge
shall be equal to 5% of the amount of such scheduled installment in default, but
not less than $20.00 nor greater than the maximum amount permitted by law,
whichever is less. This late charge shall be in addition to any default interest
payable hereunder, as provided for herein.
Without in any way limiting the generality of the foregoing, the
occurrence of any one or more of the following events shall constitute an Event
of Default under this Note:
(a) If Borrower fails to pay when due any installment of principal or
interest under this Note, or any other sum provided for herein, and such failure
shall continue for ten (10) days after written notice has been given to Borrower
of the same;
(b) If any default or "Event of Default" shall occur under any Security
Document (after giving effect to any applicable notice, grace and cure periods
provided for therein);
(c) If Borrower shall default in the payment when due of any other sum
owed to the Lender under any other instrument or agreement heretofore or
hereafter made by the Borrower with the Lender;
(d) [intentionally left blank]
(e) (i) If a petition in bankruptcy is filed by or against Borrower or a
receiver or trustee of any of the property of Borrower is appointed; or (ii) if
Borrower files a petition or an answer seeking reorganization under any of the
provisions of the bankruptcy law or of any other law, state or federal, or to
take advantage of any bankruptcy, reorganization, insolvency, readjustment of
debt, dissolution, or liquidation law or statute, or admitting the material
allegations of a petition filed against it in any proceeding under any such law;
or (iii) if Borrower shall take any corporate, partnership or other action for
the purpose of effecting any of the foregoing, or enters into or consents to an
arrangement with creditors, or makes an assignment for the benefit of creditors,
or is adjudged insolvent by any state or federal court of competent
jurisdiction; or (iv) if Borrower admits in writing its inability to pay its
debts as they mature; or (v) if an order,
2
judgment or decree shall be entered without the application, approval or consent
of the debtor by any court of competent jurisdiction, approving a petition
seeking reorganization of Borrower of all or a substantial part of the
properties or assets of Borrower or appointing or ordering a receiver, trustee,
or liquidation of Borrower; provided, however, that Borrower, as applicable,
shall have sixty (60) days to have dismissed of record any involuntary petition
filed against it; or
(f) If any financial statement, warranty, representation or certificate
made or furnished by Borrower in or pursuant to the Security Documents or
otherwise in connection with the indebtedness evidenced hereby should be
materially false, incorrect, or incomplete when made; or
(g) If any financial statement, warranty, representation or certificate
made or furnished by the Borrower in or pursuant to the Security Documents or
otherwise in connection with the indebtedness evidenced hereby should be
materially false, incorrect, or incomplete when made; or
(h) Except as may be permitted in the applicable Security Document, if the
Borrower sells, conveys or encumbers its interest in all or any portion of the
collateral without the prior written consent of the Lender, which consent may be
withheld in the Lender's sole discretion; or
(i) If Borrower defaults in the performance or observance of any other
covenant, condition or agreement under this Note or the Security Documents and
such default continues unremedied for as much as fifteen (15) days after written
notice thereof is given to Borrower; provided, however, that if the default is
not capable of being cured within said time period, it shall not be an event of
default hereunder unless Borrower shall fail to commence to cure the default
within the fifteen (15) day period provided or thereafter shall fail to
diligently continue to pursue curing the default.
If any one or more of the foregoing Events of Default shall occur, the entire
unpaid principal balance of this Note, together with accrued but unpaid interest
thereon, at the option of the Holder of this Note (but without requirement of
notice to or demand on any other party), shall be and become due and payable
immediately, and the Holder of this Note may proceed to exercise any remedy
available to it at law or in equity.
Notwithstanding anything to the contrary set forth elsewhere in this Note,
upon the occurrence and during the continuance of an Event of Default hereunder
or under any Security Document, this Note shall bear interest at a default
interest rate equal to two percent (2.00%) in excess of the rate of interest
that would otherwise be payable hereunder. This default interest rate shall
apply to the entire unpaid principal balance then due and payable under this
Note, and to the extent permitted by law, to any accrued and unpaid interest
thereon and other fees, charges and costs payable under the Security Documents.
3
Time is of the essence with respect to the payment of every payment of
principal and of interest hereunder and the performance of every other covenant
made by Borrower under this Note, the Security Documents and under any other
agreement which secures the payment of this Note.
Borrower hereby waives demand, presentment, dishonor, notice of dishonor
and any other requirement necessary to hold the Borrower obligated hereon.
Borrower hereby agrees that the obligations evidenced by this Note may, from
time to time, in whole or in part, be released or modified without notice to, or
reservation of rights against, Borrower, and that any collateral now or
hereafter held for the obligations of Borrower under this Note may hereafter be
released, compromised, or exchanged, and that the Holder may fail to perfect its
lien or security interest in such collateral or may permit the perfection of its
lien or security interest in such collateral to lapse, all without in any way
affecting or releasing the liability of Borrower under this Note.
Borrower agrees to pay all intangibles taxes, documentary stamp taxes,
recording fees or taxes and other taxes and fees due to any governmental
authority in connection with the execution and delivery of this Note, the
Security Documents or any other agreement which provides collateral for this
Note.
As additional collateral for the payment of this Note, Borrower transfers,
assigns, pledges, and sets over to Holder, and grants Holder a continuing lien
upon and security interest in all deposits and credits which Borrower may now or
hereafter have with the Holder. Holder is hereby authorized, at any time or
times after the occurrence of an Event of Default and without prior notice, to
apply such deposits and credits, in whole or in part and in such order as Holder
may elect, to the payment of, or as a reserve against, the obligations of
Borrower under this Note.
Borrower agrees to pay to Holder, in addition to the other amounts payable
under this Note, all costs and expenses, including without limitation, court
costs and reasonable attorneys' fees, incurred by the Holder of this Note in
collecting, securing or attempting to collect or secure this Note, including
reasonable attorneys' fees incurred in connection with any appeal or in any
bankruptcy proceedings filed by or against Borrower.
Holder shall not by any act, delay, omission or otherwise be deemed to
have waived any of its rights or remedies under the Note, any Security Document
or under any agreement which provides collateral for this Note, or under
applicable law. Holder may accept late payments and/or partial payments under
this Note without waiving or otherwise impairing its right to require strict
conformance to the terms hereof. All rights and remedies of Holder under this
Note, under any such agreement providing collateral for this Note, and under
applicable law shall be cumulative and may be exercised successively or
concurrently. Any provision of this Note which shall be deemed to be
unenforceable or invalid under any such law shall be ineffective to the extent
of such unenforceability or invalidity without affecting the enforceability or
validity of any other provision hereof.
4
Notwithstanding any provision contained in this Note or any Security
Document to the contrary, the parties intend that no provision of this Note or
the Security Documents be interpreted, construed, applied or enforced so as to
permit or require the payment or collection of interest, whether before or after
maturity of this Note, in excess of the maximum rate permitted by the law
applicable to this transaction (the "Maximum Permitted Rate"). If, however, any
such provision is so interpreted, construed, applied or enforced, then the
parties intend: (i) that such provision automatically shall be reformed nunc pro
tunc so as to require payment only of interest at the Maximum Permitted Rate,
and (ii) if the Holder of this Note has received interest payments in excess of
such Maximum Permitted Rate, that the amount of such excess be credited nunc pro
tunc in reduction of the principal amount of this obligation, together with
interest at such Maximum Permitted Rate.
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed on
the date first above written with the intention that this Note shall constitute
a sealed instrument.
BORROWER:
FIRSTFED BANCORP, INC.
By: ____________________________________
Its: ___________________________________
5
