EXHIBIT 10.2.3
Fourth Amendment and Loan Modification Agreement
between Xxxxxxxxxx Financial Group, Inc. and
Xxxx Xxxxx Kansas City Bank (now FIRSTAR Bank Midwest, N.A.), dated June
30, 2000 (modifies version set forth in
Exhibits 10.2, 10.2.1 and 10.2.2)
FOURTH AMENDMENT AND LOAN MODIFICATION AGREEMENT
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This Agreement ("Fourth Amendment") is entered into on June 30, 2000,
by and among FIRSTAR BANK MIDWEST, N.A., a national banking association and
successor-in-interest to Xxxx Xxxxx Kansas City Bank ("Lender") and XXXXXXXXXX
FINANCIAL GROUP, INC., formerly known as Financial Research Corporation, an
Indiana corporation ("Borrower").
RECITALS
A. Borrower is presently indebted to Lender as evidenced by that
certain Third Amended and Restated Promissory Note (1 of 2) dated January 13,
1997 in the original maximum principal amount of $10,000,000, executed by
Borrower in favor of Lender, and by that certain Third Amended and Restated
Promissory Note (2 of 2) dated January 13, 1997 in the original maximum
principal amount of $5,000,000 executed by Borrower in favor of Lender
(collectively the "Third Amended Note").
B. The Third Amended Note was issued pursuant to that certain Third
Amendment and Loan Modification Agreement dated January 13, 1997 (the "Third
Amendment"), among Borrower and Lender, which amended that certain Second
Amendment and Loan Modification Agreement dated July 26, 1996 (the "Second
Amendment") among Borrower and Lender, which amended that certain First
Amendment and Loan Modification Agreement dated July 21, 1995 among Borrower,
Lender, Xxxxx Xxxxxxx Associates, Inc., a Kansas corporation, and Xxxxxxx X.
Xxxxxxx (the "First Amended Loan Agreement") and that certain Loan Agreement
dated April 14, 1994, between Borrower and Lender (collectively, the "Loan
Agreement"). The Third Amended Note, the Third Amendment, Second Amended Note,
the Second Amendment, the First Amended Loan Agreement and the Loan Agreement
are sometimes collectively referred to herein as the "Loan Documents."
C. The Loan Documents are secured by (i) a General Pledge Agreement
from Borrower, pledging 100% of the outstanding stock of Xxxxxxxxxx Bank, FSB
("Xxxxxxxxxx") to Lender ("Pledge Agreement"); (ii) a Security Agreement from
Borrower in favor of Lender providing a blanket security interest in all of
Borrower's assets ("Security Agreement"); (iii) an Assignment of Life Insurance
Policy, dated July 21, 1995, on the life of Xxxxxxx X. Xxxxxxx in the amount of
$1,000,000 from Borrower ("Xxxxxxx Life Insurance Assignment"); and (iv) an
Assignment of Life Insurance Policy, dated June 13, 1994, on the life of Xxxxx
Xxxxx in the amount of $250,000 from Borrower ("Xxxxx Life Insurance
Assignment"). The Pledge Agreement, the Security Agreement, the Xxxxxxx Life
Insurance Assignment and the Xxxxx Life Insurance Assignment are collectively
referred to as the "Security Documents."
D. The outstanding principal balance of the Third Amended Note as of
the date hereof is $14,995,180.54, but shall be paid down to an outstanding
principal balance of $13,000,000 concurrently with the execution of this Fourth
Amendment.
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NOW, THEREFORE, the parties hereby agree as follows:
1. Conditions Precedent. The modifications described in this Fourth
Amendment and the obligations of Lender set forth in this Fourth Amendment will
not be effective unless and until each of the following conditions precedent
have been satisfied, in form, manner and substance satisfactory to Lender:
a. Documents to be Delivered. Borrower shall have delivered or
caused to be delivered to Lender the following documents, all of which
shall be properly completed, fully executed, and otherwise satisfactory
to Lender:
i. this Fourth Amendment;
ii. the Fourth Amended and Restated Promissory Note in
the form attached hereto as Exhibit "A" (the "Fourth Amended
Note");
iii. a copy of resolutions of the Board of Directors of
Borrower, duly adopted, which authorize the execution, delivery
and performance of this Fourth Amendment and the Fourth Amended
Note, certified by the Secretary of Borrower;
iv. an incumbency certificate, executed by the
Secretary of Borrower, which shall identify by name and title
and bear the signatures of all of the officers of Borrower
executing this Fourth Amendment and the Fourth Amended Note;
v. a Federal Reserve Form U-1 purpose statement from
Borrower.
b. Fees. Upon the execution of this Fourth Amendment Borrower,
agrees to pay to Lender a loan renewal fee of $19,000 from which Lender
shall pay attorney's fees incurred by Lender up to $5,000 in connection
with this Fourth Amendment.
2. Amendments to Loan Agreement. The Loan Agreement is hereby amended
as follows:
a. Maximum Facility. Section 2.01 of the Loan Agreement is
hereby amended and restated in its entirety as follow:
Maximum Facility. The total principal amount to be advanced by
Lender to Borrower under this Agreement shall be Thirteen
Million Dollars ($13,000,000) (the "Loan Facility"). The Loan
Facility shall be evidenced by a $13,000,000 non-revolving
loan which has been fully funded prior to the date of this
Fourth Amendment (the "Term Loan") and evidenced by that
certain
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Promissory Note of even date herewith in the original
principal amount of $13,000,000 (the "Term Note").
b. Note. Section 2.04 of the Loan Agreement is hereby amended
and restated in its entirety as follows:
2.04 Note. The Loan shall be evidenced by and repaid
in accordance with a promissory note in the form attached
hereto as Exhibit "A", and incorporated herein by this
reference (as the same may from time to time be amended or
modified (the "Note").
c. Principal and Interest Payments. Section 2.06 (a) of the
Loan Agreement is hereby amended and restated in its entirety as
follows:
(a) Beginning October 31, 2000, and on the last day
of each quarter thereafter (January 31, April 30, July 31 and
October 31) Borrower shall make quarterly interest payments
to Lender at the place designated in Section 2.09 hereof.
d. 2.07 Maturity Date. The maturity date of the Loan shall be
January 31, 2001 (the "Maturity Date"). The rights of Lender and the
Obligations of Borrower shall nonetheless survive the Maturity Date of
the Loan and continue until all amounts due under the Note and all
Obligations of Borrower to Lender have been paid and discharged in
full.
e. Payments. Section 2.09 of the Loan Agreement is hereby
amended and restated in its entirety as follows:
2.09 Payments. All payments of interest, principal,
fees, expenses and other amounts payable by Borrower
hereunder shall be made promptly when due in
immediately available funds and lawful money of the
United States of America, at Lender's commercial
banking office located at 0000 Xxxxxx, Xxxxx 000,
Xxxxxx Xxxx, Xxxxxxxx 00000, or at such other office
as Lender shall direct in writing. If the date for
any payment by Borrower falls on a day that is not a
Banking Day, payment shall be due on the next Banking
Day and interest shall be payable for the duration of
the extension.
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f. Affirmative Covenants. Section 5 of the Loan Agreement is
hereby amended to add the following:
5.13 Equity Capital Floor. Cause Xxxxxxxxxx to
maintain at all times during the term of this Agreement,
Equity Capital in an amount which equals or exceeds the amount
of Equity Capital required, directly or indirectly, of
Xxxxxxxxxx by reason of any law, regulation, rule or order of
any Regulatory Agency having jurisdiction over Borrower or
Xxxxxxxxxx (whether such law, regulation, rule or order deals
with Equity Capital as herein defined or with some other
definition), all as determined in accordance with generally
accepted accounting principles consistently applied.
Xxxxxxxxxx shall at all times while any of the Obligations are
outstanding maintain Tangible Equity Capital of at least
Twenty-Seven Million Dollars ($27,000,000); provided, however,
the Tangible Equity Capital may be reduced one dollar for each
dollar paid to Lender to satisfy the Obligations. For purposes
hereof, "Equity Capital" shall mean the sum of the common
stock, perpetual preferred stock (i.e. preferred stock with no
maturity date and which may not be reduced at the option of
the holder), paid-in surplus and undivided profits, all
determined in accordance with generally acceptable accounting
principals consistently applied, less the sum of the total
good will and other intangible assets, if any.
5.14 Ratio of Tangible Equity Capital to Average
Quarterly Assets. Cause Xxxxxxxxxx to maintain at all times
during the term of this Agreement a ratio of total Equity
Capital divided by average quarterly assets, determined in
accordance with generally accepted accounting principles
consistently applied, which equals or exceeds the greater of
(a) six percent (6%) or (b) the percentage required to be
maintained by Xxxxxxxxxx by or by reason of any law,
regulation, rule or order of any Regulatory Agency having
jurisdiction over Borrower or Xxxxxxxxxx. If any Regulatory
Agency having jurisdiction over Borrower or Xxxxxxxxxx
hereafter employ at any time or from time to time measurements
of capital other than Equity Capital as a percentage of total
tangible assets, then Borrower will, and will cause Xxxxxxxxxx
to, comply with such capital guidelines or requirements then
in effect in addition to, and not in lieu of, the Equity
Capital to average quarterly assets ratio described above.
5.15 Total Loan and Lease Loss Reserve. On a
consolidated basis, cause Xxxxxxxxxx to maintain at all times
during the term of this Agreement an allowance for possible
loan and lease losses is an amount which equals or exceeds the
greater of: (a) one percent (1%) of the average quarterly
total loans of Xxxxxxxxxx, limited to commercial, industrial
and consumer loan portfolios, determined under generally
accepted accounting principles consistently applied or (b) the
amount required by or by reason of any law, regulation, rule
or order of any Regulatory Agency having jurisdiction over
Borrower or Xxxxxxxxxx.
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5.16 Non-performing Assets. On a consolidated basis,
cause Xxxxxxxxxx to maintain a ratio of non-performing assets
divided by total tangible primary capital (including reserves
for loan losses) equal to or less than fifteen percent (15%),
determined in accordance with generally accepted accounting
principles consistently applied. For purposes of this
calculation, the term "Non-performing Assets" means with
reference to Xxxxxxxxxx, as of any time the same is to be
determined, the sum of all non-performing assets of Xxxxxxxxxx
as determined in accordance with regulatory accounting
principles applicable to Xxxxxxxxxx, but in any event
including, without limitation, (i) loans or other extensions
of credit on which any payment (whether principal or interest
or otherwise) is not made within 90 days of its original due
date, (ii) loans which have been placed on a non-accrual basis
and (iii) property acquired by repossession or foreclosure.
5.17 Regulatory Matters. Notify Lender in writing upon
learning of the occurrence of the issuance of any cease and
desist order against Borrower or Xxxxxxxxxx by any Regulatory
Agency and/or the entry of any Memorandum of Understanding or
other agreements between Borrower or Xxxxxxxxxx and any
Regulatory Agency, regardless of whether the same is voluntary
or involuntary. Borrower shall also describe in detail the
contents of any such order, memorandum or agreement and, if
applicable, the steps being taken by Xxxxxxxxxx or Borrower
affected with respect thereto.
g. Notices. Section 9.05 of the Loan Agreement is hereby
amended and restated in its entirety as follows:
9.05 Notices. Any notice, request, demand, consent,
confirmation or other communication hereunder shall be in
writing and delivered in person or sent by telegram, telex, or
by nationally recognized overnight delivery (including Federal
Express), or registered or certified mail, return receipt
requested and postage prepaid.
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If to Borrower at: Xxxxxxxxxx Financial Group, Inc.
00000 Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxx
With a copy to: Elias, Matz, Xxxxxxx &
Xxxxxxx, L.L.P.
000 00xx Xx., X.X., 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxx, Esq.
If to Lender at: FIRSTAR Bank Midwest, N.A.
0000 Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Attn: Xx. Xxxxxx XxXxxxxxx
With a copy to: Polsinelli, White, Xxxxxxxx & Xxxxxxx
0000 Xxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxx 00000
Attn: Xxxxx X. Xxxxx, Esq.
or at such other address as either party may designate as its
address for communications hereunder by notice so given. Such
notices shall be deemed effective on the day on which
delivered or sent if delivered or sent in person or sent by
telegram or telex, or nationally recognized overnight
delivery, or on the third (3rd) Business Day after the day on
which mailed, if sent by registered or certified mail.
3. No Default. Borrower hereby represents and warrants that it is not
in default under any of the terms or provisions of the Loan Documents or
Security Documents, and no "Event of Default" (as such term is defined in any of
the Loan Documents), nor any condition, event, act or omission which would
constitute, with notice, or the passage of time, or both, an "Event of
Default," exits as of the date of this Fourth Amendment.
4. Due Authorization, Valid and Binding on Borrower. Borrower
represents and warrants to Lender that the execution and delivery by Borrower of
this Fourth Amendment and the Fourth Amended Note has been duly and properly
made and authorized, and the Loan Documents and Security Documents, as modified
by this Fourth Amendment, and the Fourth Amended Note constitute the valid and
binding obligations of Borrower, enforceable in accordance with their respective
terms.
5. Ratification of Loan Documents. Except as specifically modified
hereby, the Loan Documents, the Security Documents and all of the terms,
conditions, and covenants contained therein shall remain in full force and
effect, and Borrower hereby fully ratify and confirm such Loan Documents and
Security Documents. Without limiting the generality of
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the forgoing, Borrower (i) hereby confirm that the Security Documents continue
to secure the Fourth Amended Note, the Loan Agreement (as modified by this
Fourth Amendment) and the other Security Documents, and (ii) hereby ratifies and
reaffirms, as if made on the date of this Fourth Amendment, each of the
representations and warranties contained in the Loan Documents and the Security
Documents.
6. Release of Lender. Borrower for itself and for its heirs, executors,
successors and assigns, hereby releases, acquit and forever discharges Lender
and all of Lender's stockholders, directors, officers, employees, agents and
representatives (collectively, the "Released Parties") from any and all actions,
causes of action, claims, counterclaims, debts, demands, liabilities,
obligations, and setoffs of any kind and character, whether known or unknown,
which arise out of acts or omissions of the Released Parties prior to or on the
date hereof, and relating in any manner whatsoever to Borrower's dealings and
communications with Lender, the Loan Documents, the Security Documents and/or
the negotiation and execution of this Fourth Amendment.
7.Governing Law. This Fourth Amendment shall be construed and enforced
in accordance with the laws of the State of Kansas.
8.Defined Terms. Except as otherwise specifically defined herein, all
capitalized terms shall have the same meaning given to such term in the Loan
Agreement.
9.Entire Agreement. THE PARTIES AGREE THAT THIS ENTIRE AGREEMENT IS
NONSTANDARD AND CONTAINS SUFFICIENT SPACE FOR THE PLACEMENT OF NONSTANDARD
TERMS. THIS AGREEMENT (AND THE EXHIBITS AND SCHEDULES ATTACHED HERETO) CONTAIN
ALL OF THE AGREEMENTS AND IS INTENDED TO BE THE FINAL EXPRESSION OF THE CREDIT
AGREEMENT OF BORROWER AND LENDER, AND SUPERSEDES ANY AND ALL PRIOR DISCUSSIONS
AND/OR AGREEMENTS RELATIVE THERETO. THIS AGREEMENT MAY NOT BE CONTRADICTED BY
EVIDENCE OF ANY PRIOR ORAL CREDIT AGREEMENT OR OF A CONTEMPORANEOUS ORAL CREDIT
AGREEMENT BETWEEN BORROWER AND LENDER. BORROWER AND LENDER HEREBY INITIAL THIS
PROVISION AS AN AFFIRMATION THAT NO UNWRITTEN, ORAL CREDIT AGREEMENTS BETWEEN
THE PARTIES EXIST.
Borrower's Initials CJC
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Lender's Initials CGH
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IN WITNESS WHEREOF, the parties have executed this Fourth Amendment on
the day and year first above written.
XXXXXXXXXX FINANCIAL GROUP, INC., an
Indiana corporation (formerly known as
Financial Research Corporation)
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: President and CEO
FIRSTSTAR BANK MIDWEST, N.A., a national
banking association (successor-in-interest
to Xxxx Xxxxx Kansas City Bank)
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: SR. Vice President
