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Exhibit 10.1
LOAN AGREEMENT
This LOAN AGREEMENT (the ,"Agreement") , dated as of September 1,
1996, is entered into between WINTRUST FINANCIAL CORPORATION, an Illinois
corporation (the "Borrower") , and LASALLE NATIONAL BANK, a national banking
association ("LaSalle").
RECITALS
WHEREAS, the Borrower desires to borrow from LaSalle up to the sum of
TWENTY FIVE MILLION DOLLARS ($25,000,000) in order to refinance existing debt
and to provide for Borrower's working capital needs;
WHEREAS, as a prerequisite for making such loans, LaSalle has
requested and the Borrower has agreed to pledge to LaSalle and grant a security
interest in favor of LaSalle with respect to the capital stock of Hinsdale
Bancorp ("Hinsdale") , Lake Forest Bancorp ("Lake Forest") , North Shore
Community Bank & Trust ("North Shore") and Libertyville Bancorp
("Libertyville") (Hinsdale, Lake Forest, North Shore and Libertyville are
referred to herein individually as a "Holding Company" and collectively as the
"Holding Companies"; the capital stock of such Holding Companies shall be
collectively referred to herein as the "Holding Company Stock"), as set forth
in the Pledge and Security Agreement of the Borrower of even date herewith (the
"Borrower Pledge Agreement");
WHEREAS, the Holding Company Stock constitutes 100% of the issued and
outstanding capital stock of the Holding Companies;
WHEREAS, as a further prerequisite for making such loans, LaSalle has
requested and the Holding Companies have agreed to pledge to LaSalle and grant
a security interest in favor of LaSalle with respect to the capital stock of
each of their respective subsidiaries (individually a "Subsidiary" and
collectively, the "Subsidiaries"; the capital stock of such Subsidiaries shall
be collectively referred to herein as the "Subsidiary Stock") as set forth in
the Pledge and Security Agreement of the Holding Companies of even date
herewith (the "Holding Company Pledge Agreement" and collectively with the
Borrower Pledge Agreement, the "Pledge Agreements");
WHEREAS, the Subsidiary Stock constitutes 100% of the issued and
outstanding capital stock of the Subsidiaries; and
WHEREAS, LaSalle is willing to make a loan to the Borrower in
accordance with the terms, subject to the conditions and in reliance upon the
representations, warranties and covenants set forth herein and in the other
documents and instruments entered into or delivered in connection with or
relating to the loan contemplated in this Agreement.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements hereinafter set forth, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
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AGREEMENT:
1. Commitment of LaSalle.
LaSalle agrees to extend a loan (the "Loan") to the Borrower in the
principal amount of TWENTY FIVE MILLION, DOLLARS ($25,000,000), evidenced by a
promissory note (the "Note") and secured by the Pledge Agreements, in
accordance with terms and subject to the conditions set forth in this
Agreement, the Note and the Pledge Agreements.
2. Conditions of Borrowing.
Notwithstanding any other provision of this Agreement, LaSalle shall
not be required to extend the Loan:
(a) if, since the date of this Agreement and up to the
agreed upon date of the Loan, there has occurred, in LaSalle's sole and
complete discretion, a material adverse change in the financial condition or
affairs of the Borrower, any Holding Company or any Subsidiary;
(b) if any Default (as such term is defined below) has
occurred or any event which, with the giving of notice or lapse of time, or
both, would constitute such a Default;
(c) if any litigation or governmental proceeding has been
instituted or threatened against the Borrower, any Holding Company, any
Subsidiary or any of their respective officers or shareholders which, in the
sole discretion of LaSalle, could materially adversely affect the financial
condition or operations of the Borrower or such Holding Company or Subsidiary;
(d) if all necessary or appropriate actions and
proceedings shall not have been taken in connection with, or relating to the
transactions contemplated hereby and all documents incident thereto shall not
have been completed and tendered for delivery, in form and substance
satisfactory to LaSalle, including, but not limited to, LaSalle's failure to
have received evidence that: (i) the Borrower has received all necessary
regulatory approvals to acquire the Holding Company Stock; and (ii) the
Borrower has provided such notices to all appropriate federal banking agencies
as to satisfy the requirements of 12 U.S.C. Section 1817(j)(9)(E);
(e) if the Borrower shall not have tendered for delivery
the Note and the Borrower Pledge Agreement, together with all of the Pledged
Security (as such term is defined in the Borrower Pledge Agreement) all in form
and substance satisfactcry to LaSalle;
(f) if the Holding Companies shall not have tendered for
delivery the Holding Company Pledge Agreement, together with all of the
Pledged Security (as such term is defined in the Holding Company Pledge
Agreement) in form and substance satisfactory to LaSalle;
(g) if the Borrower shall not have tendered for delivery
a legal opinion from the Borrower's counsel in form and substance satisfactory
to LaSalle and LaSalle's legal counsel;
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or
(h) if LaSalle shall not have received, in form and
substance satisfactory to LaSalle, all certificates, affidavits, schedules,
resolutions, opinions, notes and other documents which are provided for
hereunder, or which it may reasonably request.
3. Note Evidencing Borrowing.
The Loan shall be evidenced by the Note executed by the Borrower in
the Principal amount of TWENTY FIVE MILLION DOLLARS ($25,000,000) , which Note
shall be in the form set forth as Exhibit A hereto.
(a) Interest on amounts outstanding under the Note shall
be payable quarterly, in arrears, commencing on December 1, 1996 and continuing
on the first day of each March, June, September and December thereafter. A
final payment of all outstanding amounts due under the Note; including, but not
limited to Principal, interest and any amounts owing under Subsection 10(m) of
this Agreement, if not payable earlier, shall be due and payable on September
1, 1997. The amounts outstanding under the Note from time to time shall bear
interest calculated on the actual number of days elapsed on the basis of a 360
day year, at a rate equal, at the Borrower's option, to either (a) the London
Inter- Bank Offered Rate ("LIBOR") plus 150 basis points, or (b) the Prime Rate
(whichever rate is so selected, the "Interest Rate").
For purposes of this Agreement, the term "Prime Rate" shall mean the
floating prime rate in effect from time to time as set by LaSalle, and referred
to by LaSalle as its Prime Rate. The Borrower acknowledges that the Prime Rate
is not necessarily LaSalle's lowest or most favorable rate of interest at any
one time. The effective date of any change in the Prime Rate shall for
purposes hereof be the date the rate change is publicly announced by LaSalle.
For purposes of this Agreement, "LIBOR" shall mean the per annum rate
of interest at which U.S. dollar deposits in an amount comparable to the amount
of the relevant LIBOR Loan and for a period equal to the relevant "Interest
Period" (hereinafter defined) are offered generally to LaSalle (rounded upward
if necessary, to the nearest 1/16 of 1.00%) in the London Interbank Eurodollar
market at 11:00am (London time) two banking days prior to the commencement of
each Interest Period, such rate to remain fixed for such interest period.
"Interest Period" shall mean successive one, two, three or six month periods as
selected from time to time by the Borrower by notice given to LaSalle not less
than three banking days prior to the first day of each respective Interest
Period; provided that: (i) each such one, two, three or six month period
occurring after such initial period shall commence on the day on which the next
preceding period expires; (ii) the final Interest Period shall be such that its
expiration occurs on or before the stated maturity date hereof; and (iii) if
for any reason the Borrower shall fail to select timely a period, then it shall
be deemed to have selected a one month period. Interest shall be payable on the
last banking day of each interest Period, commencing on the first such date to
occur after the date hereof, at maturity, after maturity on demand, and on the
date of any payment hereon on the amount paid. The Borrower hereby further
promises to pay to the order of LaSalle, on demand, interest on the unpaid
principal amount hereof after maturity (whether by acceleration or
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otherwise) at a rate of two per cent per annum in excess of the rate in effect
at the time of maturity.
LaSalle's determination of LIBOR as provided above shall be
conclusive, absent manifest error. Furthermore, if LaSalle determines, in good
faith (which determination shall be conclusive, absent manifest error), prior
to the commencement of any Interest Period that (a) U.S. dollar deposits of
sufficient amount and maturity for funding any LIBOR Loan are not available to
LaSalle in the London Interbank Eurodollar market in the ordinary course of
business, or (b) by reason of circumstances affecting the London Interbank
Eurodollar market, adequate and fair means do not exist for ascertaining the
rate of interest to be applicable to the relevant LIBOR Loan, LaSalle shall
promptly notify the Borrower and such LIBOR Loan shall be immediately due and
payable on the last banking day of the then existing Interest Period, without
further demand, presentment, protest or notice of any kind, all of which are
hereby waived by the Borrower.
If, after the date hereof, the introduction of, or any change in any
applicable law, treaty, rule, regulation or guideline or in the interpretation
or administration thereof by any governmental authority or any central bank or
other fiscal, monetary or other authority having jurisdiction over LaSalle or
its lending office (a "Regulatory Change"), shall, in the opinion of counsel to
LaSalle, makes it unlawful for LaSalle to make or maintain any LIBOR Loan
evidenced hereby, then LaSalle shall promptly notify the Borrower and such
LIBOR Loan shall be immediately due and payable on the last banking day of the
then existing Interest Period or on such earlier date as required by law, all
without further demand, presentment, protest or notice of any kind, all of
which are hereby waived by the Borrower.
If, for any reason, any LIBOR Loan is paid prior to the last banking
day of its then current Interest Period, the Borrower agrees to indemnify
LaSalle against any loss (including any loss on redeployment of the funds
repaid), cost or expense incurred by LaSalle as a result of such prepayment.
If any Regulatory Change (whether or not having force of law) shall
(a) impose, modify or deem applicable any assessment, reserve, special deposit
or similar requirement against assets held by, or deposits in or for the
account of or loans by, or any other acquisition of funds or disbursements by,
LaSalle; (b) subject LaSalle or any LIBOR Loan to any tax, duty, charge, stamp
tax or fee or change the basis of taxation of payments to LaSalle of principal
or interest due from the Borrower to LaSalle hereunder (other than a change in
the taxation of the overall net income of LaSalle) ; or (c) impose on LaSalle
any other condition regarding such LIBOR Loan or LaSalle's funding thereof, and
LaSalle shall determine (which determination shall be conclusive, absent
manifest error) that the result of the foregoing is to increase the cost to
LaSalle of making or maintaining such LIBOR Loan or to reduce the amount of
principal or interest received by LaSalle hereunder, then the Borrower shall
pay to LaSalle, on demand, such additional amounts as LaSalle shall, from time
to time, determine are sufficient to compensate and indemnify LaSalle for such
increased cost or reduced amount.
(b) Any amount of principal or interest on the Note which
is not paid when due, whether at stated maturity, by acceleration or otherwise
shall bear interest payable on
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demand at an interest rate equal at all times to two percent (2%) above the
Interest Rate.
(c) Each Loan shall be made available to the Borrower
upon its written or verbal request, from any person whose authority to so act
has not been revoked by the Borrower in writing previously received by LaSalle.
Such request must be received by no later than 11:00 a.m. Chicago, Illinois
time, on the day it is to be funded. The Proceeds of each Revolving Loan shall
be made available at the office of LaSalle by credit to the account of the
Borrower or by other means requested by the Borrower and acceptable to LaSalle.
LaSalle is authorized to rely on the telephonic, telecopy or telegraphic loan
requests which LaSalle believes in its good faith judgment to emanate from a
properly authorized representative of the Borrower, whether or not that is in
fact the case. The Borrower does hereby irrevocably confirm, ratify and approve
all such advances by LaSalle and does hereby indemnify LaSalle against losses
and expenses (including court costs, attorneys' and Paralegals fees) and shall
hold LaSalle harmless with respect thereto.
(d) If any payment to be made by the Borrower hereunder
shall become due on a Saturday, Sunday or bank holiday under the laws of the
State of Illinois, such payment shall be made on the next succeeding business
day and such extension of time shall be included in computing any interest in
respect of such payment.
4. Principal Prepayments.
Prepayments of Prime Rate Loans are permitted at any time, and shall
be applied to the next succeeding principal payment due. Any prepayments of
LIBOR Loans shall be subject to the terms of Section 3(a), above.
5. Representations and Warranties.
To induce LaSalle to make the Loan provided for herein, the Borrower
represents and warrants as follows:
(a) The Borrower: (i) is a corporation duly organized and
validly existing and in good standing under the laws of the State of Illinois;
(ii) is duly qualified as a foreign corporation and is in good standing in all
states in which it is doing business except where the failure to so qualify
would not have a material adverse effect on the Borrower or its business; and
(iii) has all requisite power and authority, corporate or otherwise, to own,
operate and lease its property and to carry on its business as now being
conducted. Each Holding Company is an Illinois corporation (except for Lake
Forest, which is a Delaware corporation) , and has all requisite power and
authority, corporate or otherwise, to own, operate and lease its property and
to carry on its business as now being conducted. Each Subsidiary is an
Illinois banking corporation, and has all requisite Dower a-id authority,
corporate or otherwise, to own, operate and lease its property and to carry on
its business as now being conducted. The Borrower, the Holding Companies and
the Subsidiaries have made payment of all franchise and similar taxes in the
State of Illinois and in all of the respective jurisdictions in which they are
incorporated or qualified, insofar as such taxes are due and payable at the
date of this Agreement, except for any
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such taxes the validity of which is being contested in good faith and for which
proper reserves have been set aside on the books of the Borrower or such
Holding Company or Subsidiary, as the case may be.
(b) The Borrower is the owner of 100%; of the issued and
outstanding capital stock of the Holding Companies.
(c) The Holding Company Stock has been duly authorized,
legally and validly issued, fully paid and nonassessable, and is owned by the
Borrower free and clear of all pledges, liens, security interests, charges or
encumbrances, except, upon consummation of the transactions contemplated
herein, for the security interest granted by the Borrower to LaSalle. There
are, as of the date hereof, no outstanding options, rights or warrants
obligating the Borrower to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of the capital stock of any Holding
Company or obligating the Borrower to grant, extend or enter into any such
agreement or commitment, except for such agreements or commandments existing as
of the date of this Agreement and disclosed to LaSalle.
(d) The Holding Companies are the owners of 100% of the
issued and outstanding capital stock of the Subsidiaries.
(e) The Subsidiary Stock has been duly authorized,
legally and validly issued, fully paid and nonassessable, and is owned by the
Holding Companies free and clear of all pledges, liens, security interests,
charges or encumbrances, except, upon consummation of the transactions
contemplated herein, for the security interest granted by the Holding Companies
to LaSalle. There are, as of the date hereof, no outstanding options, rights
or warrants obligating any Holding Company to issue, deliver or sell, or cause
to be issued, delivered or sold, additional shares of the Capital stock of any
Subsidiary or obligating any Holding Company to grant, extend or enter into any
such agreement or commitment, except for such agreements or commitments
existing as of the date of this Agreement and disclosed to LaSalle.
(f) The financial statements of:
(i) the Borrower, all of which have heretofore
been furnished to LaSalle, have been prepared in accordance with generally
accepted accounting principles consistently applied ("GAAP") and maintained by
the Borrower throughout the periods involved, and fairly present the financial
condition of the Borrower individually and on a consolidated basis at such
dates specified therein and the results of its operations for the periods then
ended; and
(ii) each Holding Company and Subsidiary, all of
which have heretofore been furnished to LaSalle, to the best knowledge of the
Borrower have been prepared in accordance with GAAP and maintained by such
Holding Company or Subsidiary throughout the periods involved, and fairly
present the financial condition of such Holding Company or Subsidiary at such
dates specified therein and the results of its operations for the periods then
entered.
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(g) To the best knowledge of the Borrower, since the
latest date of the financial statements referred to in Section 5(f) above,
there have been no material changes in the assets, liabilities, or condition,
financial or otherwise, of the Borrower, any Holding Company or any subsidiary
other than changes arising from transactions in the ordinary course of
business, and no such changes have been materially adverse, whether in the
ordinary course of business or otherwise. To the best knowledge of the
Borrower, neither the business nor the properties of the Borrower , any Holding
Company or Subsidiary have been materially and or adversely affected in any
way, including, without limitation, as a result of any fire, explosion,
accident, strike, lockout, labor dispute, flood, drought, embargo, imposition
of governmental restrictions, confiscation by a governmental agency or acts of
God.
(h) There are no actions, suits, proceedings or written
agreements pending, nor to the best of the knowledge of the Borrower threatened
or proposed, against the Borrower or, to the best knowledge of the Borrower,
any Holding Company or Subsidiary, at law or in equity or before or by any
federal, state, municipal or other governmental department, commission, board
or other administrative agency, domestic or foreign, which are of a material
nature. Neither of the Borrower nor, to the best knowledge of the Borrower,
any Holding Company or Subsidiary is in default with respect to any order,
writ, injunction or decree of, or any written agreement with, any court,
commission, board or agency, domestic or foreign.
(i) All tax returns and reports of the Borrower and, to
the best knowledge of the Borrower, each Holding Company and Subsidiary,
required by law to be filed have been duly filed, and all taxes, assessments,
fees and other governmental charges upon the Borrower and the Holding Companies
and Subsidiaries or upon any of their properties or assets which are due and
payable have been paid, and the Borrower knows of no additional assessment of a
material nature against the Borrower, the Holding Companies or the Subsidiaries
for taxes, or, except as disclosed on the final statements referred to in
Section 5(f) above, of any basis for any such additional assessment.
(j) The Borrower's primary business is that of a
financial holding company. All necessary regulatory approvals have been
obtained for the Borrower to conduct its business.
(k) The deposit accounts of the Subsidiaries are insured
by the Federal Deposit Insurance Corporation ("FDIC").
(l) None of the Pledged Security constitutes margin
stock, as defined in Regulation U of the Board of Governors of the Federal
Reserve System ("FRS").
The foregoing representations and warranties shall survive the making
of this Agreement, and execution and delivery of the Note and the Pledge
Agreements, and shall be deemed to be continuing representations and warranties
until such time as the Borrower has satisfied all of its obligations to
LaSalle; including, but not limited to the obligation to pay in full all
principal, interest and other amounts in accordance with the terms of this
Agreement, the Note and the Pledge Agreements.
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6. Negative Covenants
The Borrower agrees that until the Borrower satisfies all of its
obligations to LaSalle, including, but not limited to its obligations to pay in
full all principal, interest and other amounts owing in accordance with the
terms of this Agreement, the Note and the Pledge Agreements, the Borrower shall
not, nor shall the Borrower cause, Permit or allow any, Holding Company or
Subsidiary to:
(a) create, assume, incur, have outstanding, or in any
manner become liable in respect of any indebtedness for borrowed money, except
in the case of Borrower, secured indebtedness under Section 6 (b)(vi) and, in
the case of the Subsidiaries, indebtedness incurred in the ordinary course of
the business of banking and in accordance with applicable laws and regulations
and safe and sound banking practices. For purposes of this Agreement , the
phrase "indebtedness" shall mean and include:
(i) all items arising from the borrowing of
money, which according to generally accepted accounting principles now in
effect, would be included in determining total liabilities as shown on the
balance sheet;
(ii) all indebtedness secured by any lien in
property owned by the Borrower whether or not such indebtedness shall have been
assumed;
(iii) all guarantees and similar contingent
liabilities in respect to indebtedness of others; and
(iv) all other interest-bearing obligations
evidencing indebtedness in others;
(b) create, assume, incur, suffer or permit to exist any
mortgage, pledge, deed of trust, encumbrance (including the lien or retained
security title of a conditional vendor.), security interest, assignment, lien
or charge of any kind or character upon or with respect to property whether
owned at the date hereof or hereafter acquired by the Borrower or a Subsidiary,
or assign or otherwise convey any right to receive income, except:
(i) liens for taxes, assessments or other
Governmental charges for the then current year or which are not yet due or
delinquent;
(ii) liens for taxes, assessments or other
governmental charges already due, but the validity of which is being contested
in good faith in such a manner as not to make the property forfeitable;
(iii) liens and charges incidental to current
operations which are not due or delinquent;
(iv) liens for workmen's compensation awards not
due or delinquent;
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(v) pledges or deposits to secure obligations
under workmen's compensation laws or similar legislation;
(vi) purchase money mortgages or other liens on
real property including those incurred for the construction of a banking
facility, and bank furniture and fixtures acquired or held in the ordinary
course of business to secure the purchase price of such property or to secure
the indebtedness incurred solely for the purpose of financing the acquisition,
construction or improvement of any such property to be subject: to such
mortgages or other 'liens, or mortgages or other liens existing on any such
property at the time of acquisition, or extensions, renewals, or replacements
of any of the foregoing for the same or a lesser amount; provided that no such
mortgage or other !liens shall extend to or cover any property other than the
property being acquired, constructed or improved, and no such extension,
renewal or replacement shall extend to or cover any property not theretofore
subject to the mortgage or lien being extended, renewed or replaced, and
provided further that no such mortgage or lien shall exceed 75% of the price of
acquisition, construction or improvement at the time of acquisition,
construction or improvement; and provided further that the aggregate principal
amount of consolidated indebtedness at any one time outstanding and secured by
mortgages, liens, conditional sale agreements and other security interests
permitted by this clause (vi) shall not exceed 10% of the consolidated capital
of the Borrower or a Subsidiary, as the case may be;
(vii) liens existing on the date hereof as shown on
the financial statements; and
(viii) in the case of a Subsidiary, liens incurred
in the ordinary course of the business of banking and in accordance with
applicable laws and regulations and safe and sound banking practices;
(c) dispose by sale, assignment, lease or otherwise
property or assets now owned or hereinafter acquired, outside the ordinary
course of business in excess of 10% of its consolidated assets in any fiscal
year;
(d) merge into or consolidate with or into any other
person, firm or corporation, except for such corporations or banks as set forth
in Exhibit B hereto;
(e) make any loans or advances whether secured or
unsecured to any person, firm or corporation, other than loans or advances made
by a Subsidiary in the ordinary course of its banking business and in
accordance with applicable laws and regulations and safe and sound banking
practices or such loans and advances made by a Subsidiary to First Premium, a
subsidiary of Xxxxxxxx Capital Corporation;
(f) engage in any business or activity not permitted by
all applicable laws and regulations, including without limitation, the Bank
Holding Company Act of 1954, the Illinois Banking Act, the Federal Deposit
Insurance Act and any regulations promulgated thereunder;
(g) make any loan or advance secured by the capital stock
of another bank or depository institution (except for loans made in the
ordinary course of business) , or acquire the
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capital stock, assets or obligations of or any interest in another bank or
depository institution, without prior written approval of LaSalle, except or
such banks or deposit institutions as provided in Exhibit B hereto;
(h) directly or indirectly create, assume, incur, suffer
or permit to exist any pledge, encumbrance, security interest, assignment,
lien or charge of any kind or character on the Holding Company Stock or any
other capital stock owned by the Borrower, nor permit the Holding Companies, to
directly or indirectly create, assume, incur, suffer or permit to exist any
pledge, encumbrance, security interest, assignment, lien or charge of any kind
or character on the Subsidiary Stock;
(i) cause or allow the percent of Holding Company Stock
to diminish as a percentage of the outstanding capital stock of the Holding
Companies, nor permit the Holding Companies to cause or allow the percent of
Subsidiary Stock to diminish as a percentage of the outstanding capital stock
of the Subsidiaries;
(j) sell, transfer, issue, re-issue, exchange or grant
any option with respect to the Holding Company Stock, nor permit the Holding
Companies to sell, transfer, issue, reissue, exchange or grant any option with
respect to the Subsidiary Stock, except pursuant to such agreements or
commitments therefor existing as of the date of this Agreement and disclosed to
LaSalle;
(k) redeem any of its capital stock, declare a stock
dividend or split or otherwise change the capital structure of Borrower, any
Holding Company or any Subsidiary without prior written approval of the Bank,
if such redemption, dividend, split or other action would result in any change
in the identity of the individuals or entities previously in control of the
Borrower, any Holding Company or any Subsidiary or grant a security interest in
any ownership interest of any individual or entity, directly or indirectly
controlling the Borrower, any Holding Company or any Subsidiary, which could
result in a change in the identity of the individuals or entities previously in
control of the Borrower, any Holding Company or any Subsidiary. For the purpose
hereof, the terms "control" or "controlling" shall mean the possession of the
power to direct, or cause the direction of, the management and policies of the
Borrower, a Holding Company or a Subsidiary, as applicable, by contract or
voting of securities;
(l) breach or fail to perform or observe any of the terms and
conditions of the Note, the Pledge Agreements or any other document or
agreement entered into or delivered in connection with, or relating to, the
Loan;
(m) engage in any unsafe or unsound banking practices; or
(n) violate any law or regulation, or any condition
imposed by or undertaking provided to the FRS, the FDIC or the Illinois
Commissioner of Banks and Trust Companies in connection with the Borrower's
ownership of the Holding Company Stock or the ownership by the Holding
Companies of the Subsidiary Stock.
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7. Affirmative Covenants.
The Borrower agrees that until the Borrower satisfies all of its
obligations to LaSalle; including, but not limited to its obligations to pay in
full all principal, interest and other amounts in accordance with the terms of
the Agreement, the Note and the Pledge Agreements, it shall:
(a) furnish and deliver to LaSalle:
(i) as soon as practicable, and in no event later
than forty-five (45) days after the end of each of the first three calendar
quarters of the Borrower and each Holding Company and Subsidiary, a copy of:
(1) the balance sheet, profit and loss statement, surplus statement and any
supporting schedules prepared in accordance with GAAP and signed by the
presidents and chief financial officers of the Borrower, the Holding Companies
and the Subsidiaries; and (2) all financial statements, including, but not
limited to, all call reports, filed with any state or federal bank regulatory
authority;
(ii) as soon as practicable, and in no event later
than one hundred twenty (120) days after the end of each calendar year, a copy
of: (1) the consolidated balance sheets as of -the end of such year and the
consolidated profit and loss and surplus statements for the Borrower, the
Holding Companies and each Subsidiary for such year, audited by independent
certified public accountants satisfactory to LaSalle and accompanied by an
unqualified opinion; and (2) all financial statements and reports, including,
but not limited to call reports and annual reports filed annually with any
state or federal regulatory authority;
(iii) as soon as practicable, and in no event later
than forty-five (45) days after the end of each calendar quarter, copies of the
then current loan/asset watch list, the substandard loan/asset list, the
nonperforming loan/asset list and other real estate owned list of the
Subsidiaries;
(iv) immediately after receiving knowledge
thereof, notice in writing of all charges, assessment, actions, suits and
proceedings that are proposed or initiated by, or brought before, any court or
governmental department, commission, board or other administrative agency, in
connection with the Borrower, any Holding Company or any Subsidiary (other than
litigation in the ordinary course of business not involving the FRS, the FDIC
or the Illinois Commissioner of Banks and Trust Companies, which, if adversely
decided, would not have a material effect on the financial condition or
operations of the Borrower or such Holding Company or Subsidiary); and
(v) promptly after the occurrence thereof, notice
of any other matter which has resulted in a materially adverse change in the
financial condition or operations of the Borrower, any Holding Company or any
Subsidiary;
(b) contemporaneously with the furnishing of a copy of
each annual report and of each quarterly statement provided Pursuant to Section
7(a)(I) and (ii) above, deliver to LaSalle, a certificate signed by the
President and the Treasurer of the Borrower, containing a
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computation of the then current financial ratios specified in Subsections 7(d)
through (h) of this Agreement, and stating that no Default or unmatured Default
has occurred cr is continuing, or, if such event exists, describing such event
and the steps, if any, that are being taken to cure it, and the time within
,which such cure will occur;
(c) maintain such capital as is necessary to cause the
Borrower to have adequate capital in accordance with the regulations of the FRS
and any requirements or conditions that the FRS has or may impose on the
Borrower;
(d) maintain such capital as is necessary to cause each
Subsidiary to be classified as a "well capitalized" institution in accordance
with the regulations of the FDIC, currently measured on the basis of
information filed by Borrower in its quarterly Consolidated Report of Income
and Condition (the "Call Report"l) as follows:
(i) Total Capital to Risk Weighted Assets of not
less than 10%;
(ii) Tier I Capital to Risk-Weighted Assets of not
less than 6%; and
(iii) Tier 1 Capital to average Total Assets of not
less than 5% (For the purposes of this subsection (d)(iii), the average Total
Assets shall be determined on the basis of information contained in the
preceding four (4) Call Reports);
(e) cause the Borrower, on a consolidated basis, to
maintain tangible equity capital of no less than $37,000,000. For the purposes
of this Section 7(e), "tangible equity capital", shall mean the sum of the
common stock, surplus and retained earning accounts of the Borrower, reduced by
the amount of any goodwill;
(f) cause the ratio of nonperforming loans to the primary
capital of the Subsidiaries, on a consolidated basis, to be not more than
twenty percent (20%) at all times. For purposes of this Section 7(f), "primary
capital", shall mean the sum of he common stock, surplus and retained earning
accounts plus the reserve for loan and lease losses, and "non-performing loans"
shall mean the sum of all non-accrual loans and loans on which any payment is
ninety (90) or more days past. due;
(g) cause the ratios of the loan and lease loss reserve
to the total loans of the Subsidiaries, on a consolidated basis, to be not less
than one half of one percent (.50%) at all times;
(h) cause the Borrower's return on assets, determined on
the basis of information filed in the Borrower's Call Report to be at least
zero (0) during 1997 and one quarter of one percent (.25%) during 1998;
(i) promptly pay and discharge all taxes, assessments and
other governmental charges imposed upon the Borrower, the Holding Companies or
the Subsidiaries or upon the income, profits, or property of the Borrower, the
Holding Companies or the Subsidiaries and all
13
claims for labor, material or supplies which, if unpaid, may by law become a
lien or charge upon the property of the Borrower, the Holding Companies or the
Subsidiaries. Neither the Borrower, the Holding Companies nor the Subsidiaries
shall he required to pay any such tax, assessment, charge or claim, so long as
the validity thereof shall be contested in good faith by appropriate
Proceedings, and reserves therefor shall be maintained on the book's of the
Borrower or any such Holding Company or Subsidiary as are deemed reasonably
adequate by LaSalle;
(j) maintain bonds and insurance and cause each Holding
Company or Subsidiary to maintain bonds and insurance with responsible and
reputable insurance companies or associations in such amounts and covering such
risk as is usually carried by owners of similar businesses and Properties in
the same general area in which the Borrower or such Holding Company or
Subsidiary respectively operate, and such additional bonds and insurance as may
be reasonably required by LaSalle;
(k) permit and cause the Holding Companies and
Subsidiaries to permit LaSalle, through its employees, attorneys, accountants
or other agents, to inspect any of the properties, corporate books and
financial books and records of the Borrower, the Holding Companies and the
Subsidiaries at such times and as often as LaSalle reasonably may request; and
(l) promptly provide and cause the Holding Companies and
the Subsidiaries promptly to provide LaSalle with such other information
concerning the business, operations, financial condition and regulatory status
of the Borrower, the Holding companies and the Subsidiaries as LaSalle may from
time to time reasonably request.
8. Collateral.
Pursuant to the Borrower Pledge Agreement, the Borrower has
concurrently herewith assigned, transferred, pledged and delivered to LaSalle
as collateral for all of the Borrower's obligations from time to time to
LaSalle the Holding Company Stock and any other Pledged Security (as defined in
the Borrower Pledge Agreement) whether not or hereafter pledged. Pursuant to
the Holding Company Pledge Agreement, the Holding Companies have concurrently
herewith assigned, transferred, pledged and delivered to LaSalle as collateral
for all of the Borrower's obligations from time to time the Subsidiary Stock
and any other Pledged Security (as defined in the Holding Company Pledge
Agreement) whether now or hereafter pledged.
9. Events of Default; Default; Rights Upon Default.
The happening or occurrence of any of the following events or acts
shall each constitute a default hereunder (each, a "Default") , and any such
default shall also constitute a Default under the Note, the Pledge Agreements
and any other loan document, without right to notice or time to cure in favor
of the Borrower except as indicated below:
(a) if the Borrower fails to make any payment, as
provided for herein;
14
(b) if there continues to exist any breach under any
obligation of any other documents executed pursuant to this Agreement
including, without limitation, the Note and the Pledge Agreements and such
breach remains uncured beyond the applicable time period, if any, specifically
provided therefor;
(c) if any representation or warranty made in this
Agreement shall be false when made or be false at any time during the term of
this Agreement or any extension hereof, or if the Borrower fails to perform or
observe any covenant or agreement contained in this agreement within thirty
(30) days after notice thereof by LaSalle;
(d) if the Borrower fails to perform or observe any
covenant or agreement contained in any other agreement between the Borrower or
any Holding Company or Subsidiary and LaSalle, or if any condition contained in
any agreement between the Borrower or any Holding Company or Subsidiary and
LaSalle is not fulfilled and such failure remains uncured beyond the cure
period, if any, specifically provided therefor;
(e) if the Borrower shall continue to fail to perform and
observe, or cause or permit any Holding Company or Subsidiary to fail to
perform and observe any covenants under this Agreement, without limitation, all
affirmative and negative covenants set forth in Sections 6 and 7 of this
Agreement for fifteen (15) days after notice thereof by LaSalle;
(f) if the FRS, the FDIC, the Illinois Commissioner of
Banks and Trust Companies or other governmental agency charged with the
regulation of bank holding companies or depository institutions: (i) issues to
the Borrower, any Holding Company or Subsidiary, or initiates any action, suit
or proceeding to obtain against, impose on or require from the Borrower, any
Holding Company or any Subsidiary, a cease and desist order or similar
regulatory order, the assessment of Civil Monetary Penalties, articles of
agreement, a memorandum of understanding, a capital directive, a capital
restoration plan, restrictions that prevent or as a practical matter impair the
payment of dividends by any Holding Company or Subsidiary or the payments of
any debt by the Borrower, restrictions that make the payment of dividends by
any Holding Company or Subsidiary or the payment of debt by the Borrower
subject to prior regulatory approval, a notice or finding under Section 51 or
Section 52 of the Illinois Banking Act or Section 8(a) of the Federal Deposit
Insurance Act, or any similar enforcement action, measure or proceeding; or
(ii) issues to any officer or director of the Borrower, any Holding Company or
any Subsidiary, or initiates any action, suit or proceeding to obtain against,
impose on or require from any such officer or director, a cease and desist
order or similar regulatory order, a removal order, a suspension order, or the
assessment of civil monetary penalties;
(g) if any Subsidiary is notified that it is considered
an institution in "troubled condition" within the meaning of 12 U.S.C. Section
1831i and the regulations promulgated thereunder, or if a conservator or
receiver is appointed for any Subsidiary;
(h) if the Borrower, any Holding Company or any
Subsidiary (i) becomes insolvent or is unable to pay its debts as they mature;
(ii) makes an assignment for the benefit of creditors or admits in writing its
inability to pay its debts as they mature; (iii) suspends
15
transaction of its usual business; or (iv) if a trustee of any substantial part
of the assets of the Borrower, any Holding Company or any Subsidiary is applied
for or appointed, and if appointed in a proceeding brought against the
Borrower, the Borrower by any action or failure to act indicates its approval
of, consent to, or acquiescence in such appointment, or within thirty (30) days
such appointment is not vacated or stayed on appeal or otherwise, or shall not
otherwise have ceased to continue in effect;
(i) if any proceedings involving the Borrower, any
Holding Company or any Subsidiary are commenced by or against the Borrower, any
Holding Company or any Subsidiary under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation law
or statute of the federal government or any state government and if such
proceedings are instituted against the Borrower, the Borrower by any action or
failure to act indicates its approval of, consent to or acquiescence therein,
or an order shall be entered approving the petition in such proceedings and
within thirty (30) days after the entry thereof such order is not vacated or
stayed on appeal or otherwise, or shall not otherwise have ceased to continue
in effect; or
(j) if the Borrower, any Holding Company or any
Subsidiary continues to be in default in any payment of principal or interest
for any other obligation or in the performance of any other term, condition or
covenant contained in any agreement including, but not limited to, an agreement
in connection with the acquisition of capital equipment on a title retention or
net lease basis), under which any such obligation is created, the effect of
which default is to cause or permit the holder of such obligation to cause such
obligation to become due prior to its stated maturity.
Upon the occurrence of a Default, LaSalle shall have all rights and
remedies provided by applicable law and, without limiting the generality of the
foregoing, may, at its option, declare its commitments to be terminated and the
Note shall thereupon be and become forthwith, due and payable, without any
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower, anything contained herein, in the Note
or the Pledge Agreements to the contrary notwithstanding, and may, also
without limitation, appropriate and apply toward the payment of the Note any
indebtedness of LaSalle to the Borrower however created or arising, and may,
also without limitation exercise any and all rights in and to the Pledged
Security referred to in Section 8 above and in the Pledge Agreements. There
shall be no obligation to liquidate the Pledged Security nor any other
collateral pledged hereunder in any order or with any priority or to exercise
any remedy available to LaSalle in any order.
10. Miscellaneous.
(a) No -failure or delay on the part of LaSalle in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof. No single or partial exercise of any such right, power or remedy
shall preclude any other or further exercise thereof or the exercise of any
other right, power or remedy hereunder. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law. Time is of the
essence in the performance of the covenants, agreements and obligations of the
Borrower, the Holding Companies and the
16
Subsidiaries.
(b) This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements between LaSalle and the
Borrower with respect to the subject matter hereof. No amendment,
modification, termination or waiver of any provision of this Agreement, the
Pledge Agreements or the Note, or consent to any departure by the Borrower
therefrom, shall be effective unless in writing and signed by LaSalle, and then
such waiver or consent shall be effective only for the specific purpose for
which given. No notice to or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances.
(c) All notices, requests, demands and other
communications provided or hereunder shall be: (i) in writing, (ii) made in one
of the following manners, and (iii) shall be deemed given (A) if and when
personally delivered; (B) on the next business day if sent by nationally
recognized overflight courier addressed to the appropriate party as set forth
below; or (C) on the second business day after being deposited in United States
certified or registered mail, and addressed as follows:
If to Borrower: Wintrust Financial Corporation
000 Xxxx Xxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
If to LaSalle: LaSalle National Bank
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
or, as to each party, at such other address as shall be designated by such
party in a written notice to each other party complying as to delivery with the
terms of this subsection.
(d) This Agreement may be executed in any number of
counterparts and by different Parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which taken together shall constitute but one and the same instrument.
(e) This Agreement shall become effective when it shall
have been executed by the Borrower and LaSalle and hereafter shall be binding
upon and inure to the benefit of the Borrower, LaSalle and their respective
successors and assigns; provided, that the Borrower shall not assign its rights
hereunder or any interest herein without the prior written consent of LaSalle.
(f) This Agreement and the Note shall be governed by the
internal laws of the State of Illinois, and for all purposes shall be construed
in accordance with the laws of said State without giving effect to the choice
of law provisions of such State.
(g) Any provision of this Agreement which is prohibited
or unenforceable in
17
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or lack of enforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction. Wherever possible, each Provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law.
(h) All covenants, agreements, representations and
warranties made by the Borrower herein shall, notwithstanding any investigation
by or knowledge on the part of LaSalle, be deemed material and relied on by
LaSalle and shall survive the execution and delivery to LaSalle of this
Agreement and the Note.
(i) This Agreement shall govern the terms of any
extensions or renewals of the Note, subject to any additional terms and
conditions imposed by LaSalle in connection with any such extension or renewal.
(j) The Borrower hereby represents that the indebtedness
evidenced hereby constitutes a loan made by LaSalle to enable the Borrower to
carry on a commercial enterprise for the purpose of investment or profit; and
that such loan is a loan for business purposes under the intent and purview of
Ill. Rev. Stat. Ch. 17, Section 6404(c).
(k) LASALLE AND THE BORROWER, AFTER CONSULTING OR HAVING
HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE IRREVOCABLY THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY
LEGAL PROCEEDING BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT, THE NOTE, THE COLLATERAL, OR ANY OTHER AGREEMENT EXECUTED OR
CONTEMPLATED TO BE EXECUTED IN CONJUNCTION WITH THIS AGREEMENT, OR ANY COURSE
OF CONDUCT OR COURSE OF DEALING IN WHICH LASALLE AND THE BORROWER ARE ADVERSE
PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LASALLE GRANTING ANY
FINANCIAL ACCOMMODATION TO THE BORROWER.
(l) INDUCE LASALLE TO MAKE THE LOAN, THE BORROWER
IRREVOCABLY AGREES THAT ALL ACTIONS ARISING DIRECTLY OR INDIRECTLY AS A
RESULT OR CONSEQUENCE OF THIS AGREEMENT, THE NOTE, THE PLEDGE AGREEMENTS OR ANY
OTHER AGREEMENT WITH LASALLE SHALL BE INSTITUTED AND LITIGATED ONLY IN COURTS
HAVING SITUS IN THE CITY OF CHICAGO, ILLINOIS. THE BORROWER HEREBY CONSENTS TO
THE EXCLUSIVE AND VENUE OF ANY STATE OR FEDERAL COURT HAVING ITS SITUS IN
CHICAGO, AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS. THE BORROWER
HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND CONSENTS THAT ALL
SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, DIRECTED TO THE BORROWER AS SET FORTH HEREIN IN THE MANNER PROVIDED
BY APPLICABLE STATUTE, LAW, RULE OF COURT OR OTHERWISE.
18
(m) The Borrower will pay all reasonable costs and
expenses (including, without limitation, reasonable attorneys' fees) in
connection with the preparation, negotiation, documentation, execution and
delivery of this Agreement; provided, that such costs and expenses shall not
exceed $2,500, and shall have all reasonable costs and expenses (including,
without limitation, reasonable attorneys, fees) for the administration,
amendment, modification, collection and enforcement of this Agreement, the
Note, the Pledge Agreements and the other instruments and documents to be
delivered hereunder. In addition, the Borrower shall pay, and save LaSalle
harmless from any liability for, any and all stamp and other taxes determined
to be payable in connection with the execution and delivery of this Agreement,
the borrowings hereunder, or the Note and the other instruments and documents
to be delivered hereunder, and agrees to save LaSalle harmless from and against
any and all liabilities with respect to or resulting from any delay in paying
or emitting to pay such taxes. The foregoing obligations shall survive any
termination of this Agreement, the Note or the Pledge Agreements. Any of the
foregoing amounts incurred by LaSalle and not paid by the Borrower upon demand
shall bear interest from the date incurred at the Interest Rate plus two
percent (2%) per annum and shall be deemed part of the indebtedness hereunder.
(n) Any accounting term not specifically defined herein
shall be construed in accordance with generally accepted accounting principles
and all financial data submitted pursuant to this Agreement shall be prepared
in accordance with such principles,
(o) LaSalle reserves the right to sell participations in
this Loan or otherwise assign, transfer or hypothecate all or any part of this
Loan.
(p) All covenants, agreements, warranties and
representations of the Borrower herein shall be deemed to have been made
jointly and severally by the Borrower, the Holding Companies and the
Subsidiaries.
(q) The Borrower agrees to do such further acts and
things and to execute and deliver to LaSalle such additional assignments,
agreements, powers and instruments as LaSalle may reasonably require or deem
advisable to carry into effect the purpose of this Agreement, the Note, the
Pledge Agreements or any agreement or instrument in connection herewith, or to
better assure and confirm unto the LaSalle its rights, powers and remedies
hereunder or under such other loan documents.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
WINTRUST FINANCIAL CORPORATION
By: /s/Xxxxx X. Xxxxxxx
------------------------------------
Its: Executive Vice President
-----------------------------------
19
LASALLE NATIONAL BANK
By:______________________________________________
Its:______________________________________________
September 17, 1996
51567.1
20
Exhibit A
REVOLVING NOTE
$25,000,000 Dated: September 1, 1996
FOR VALUE RECEIVED, WINTRUST FINANCIAL CORPORATION, an Illinois corporation
(the "Maker") promises to pay to the order of LASALLE NATIONAL BANK, a national
banking association (the "Bank") the lesser of: the principal sum of TWENTY
FIVE MILLION DOLLARS ($25,000,000) , or the aggregate unpaid principal amount
outstanding under the Loan Agreement dated September 1, 1996 (as amended from
time to time, the "Loan Agreement") between the Bank and the Maker at the
maturity or maturities and in the amount or amounts as stated on the records of
the Bank together with interest (computed on actual days elapsed on the basis
of a 360 day year) on any and all principal amounts outstanding hereunder from
time to time from the date hereof until maturity. Interest shall be parable at
the rates of interest and the times set forth in the Loan Agreement. In no
event shall any principal amount have a maturity later than September 1, 1997.
This Note shall be available for direct advances.
Principal and interest shall be paid to the Bank at its office at 000
Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, or at such other place as the
holder of this Note may designate in writing to the Maker. This Note may be
prepaid in whole or in part as provided for in the Loan Agreement.
This Note evidences indebtedness incurred under the Loan Agreement,
to which reference is hereby made for a statement of the terms and conditions
under which the due date of the Note or any payment thereon may be accelerated.
The holder of this Note is entitled to all of the benefits provided for in the
Loan Agreement.
The Maker agrees that in action or proceeding instituted to collect
or enforce collection of this Note, the amount on the Bank's records shall be
conclusive and binding evidence, absent demonstrable error, of the unpaid
principal balance of this Note.
WINTRUST FINANCIAL CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Its: Executive Vice President
---------------------------------
September 17, 1996
51567.3
21
Exhibit B
The acquisition of Wolflhoya Investments, Inc.
22
REVOLVING NOTE
$25,000,000 Dated: September 1, 1996
FOR VALUE RECEIVED, WINTRUST FINANCIAL CORPORATION, an Illinois
corporation (the "Maker") promises to pay to the order of LASALLE NATIONAL
BANK, a national banking association (the "Bank") the lesser of: the principal
sum of TWENTY FIVE MILLION DOLLARS ($25,000,000) , or the aggregate unpaid
principal amount outstanding under the Loan Agreement dated September 1, 1996
(as amended from time to time, the "Loan Agreement") between the Bank and the
Maker at the maturity or maturities and in the amount or amounts as stated on
the records of the Bank together with interest (computed on actual days elapsed
on the basis of a 360 day year) on any and all principal amounts outstanding
hereunder from time to time from the date hereof until maturity. Interest
shall be payable at the rates of interest and the times set forth in the Loan
Agreement. In no event shall any principal amount have a maturity later than
September. 1, 1997.
This Note shall be available for direct advances.
Principal and interest shall be paid to the Bank at its office at 000
Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, or at such other place as the
holder of this Note may designate in writing to the Maker. This Note may be
prepaid in whole or in part as provided for in the Loan Agreement.
This Note evidences indebtedness incurred under the Loan Agreement, to
which reference is hereby made for a statement of the terms and conditions
under which the due date of the Note or any payment thereon may be accelerated.
The holder of this Note is entitled to all of the benefits provided for in the
Loan Agreement.
The Maker agrees that in action or proceeding instituted to collect or
enforce collection of this Note, the amount on the records shall be conclusive
and binding evidence, absent Bank's demonstrable error, of the unpaid principal
balance of this Note.
WINTRUST FINANCIAL CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Its: Executive Vice President
-------------------------------
23
PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT (the "Pledge Agreement") dated as
of September 1, 1996, is made by WINTRUST FINANCIAL CORPORATION, an Illinois
corporation (the "Pledgor") , whose address is 000 Xxxx Xxxx, Xxxx Xxxxxx,
Xxxxxxxx 00000, for the benefit of LASALLE NATIONAL BANK, a national banking
association (the "Bank") whose address is 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000.
RECITALS:
WHEREAS, the Pledgor is the owner of the capital stock of each
subsidiary listed on Exhibit A hereto (each is referred to herein as a
"Subsidiary" and collectively as the "Subsidiaries");
WHEREAS, the capital stock of the Subsidiaries owned by the Pledgor
constitutes 100% of the issued and outstanding capital stock of the
Subsidiaries;
WHEREAS, the Pledgor desires to borrow from the Bank the sum of TWENTY
FIVE MILLION DOLLARS ($25,000,000);
WHEREAS, the Bank is willing to lend to the Pledgor TWENTY FIVE
MILLION DOLLARS ($25,000,000) in accordance with the terms, subject to the
conditions and in reliance on the representations, warranties and covenants set
forth in the Loan Agreement dated the date hereof between the Pledgor and the
Bank (the "Loan Agreement") and in all of the other documents and instruments
entered into or delivered in connection with or relating to the loan
contemplated in the Loan Agreement; and
WHEREAS, the Pledgor has agreed to provide security for the loan
contemplated in the Loan Agreement in accordance with the terms of this Pledge
Agreement;
NOW, THEREFORE, in order to induce the Bank to make the loan
contemplated in the Loan Agreement and in consideration of the mutual
representations, warranties, covenants and agreements hereinafter set forth,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereto hereby agree as follows:
AGREEMENT
1. Grant of Security Interest. To secure the Obligations (as defined
below), the Pledgor hereby pledges and grants to the Bank a security interest
in and transfers and delivers to the Bank the following: (a) the number of
shares of capital stock of each of the Subsidiaries set forth on Schedule A
hereto, which constitute one hundred percent (100%) of the issued and
outstanding capital stock of the Subsidiaries, and any and all shares of the
capital stock of any Subsidiary that Pledgor subsequently acquires, directly or
indirectly, including all substitutions of, and
24
additions to, such stock; (b) executed and undated stock powers for the capital
stock described in (a) above, in form and content satisfactory to the Bank duly
executed in blank, containing all requisite federal and state stock transfer
tax stamps, if any (the items described in (a) and (b) above may collectively
be referred to as the "Pledged Stock"); (c) all income and profits therefrom,
all distributions thereon, all other proceeds therefrom and all rights,
benefits and privileges pertaining to or arising from the Pledged Stock; and
(d) such other collateral that may be provided after the date hereof to secure
the Obligations. All property at any time pledged to the Bank hereunder or in
which the Bank is granted a security interest hereunder (whether described
herein or not, subject to the provisions of Paragraph 3 (c) below) , all income
therefrom and proceeds therefrom, may be referred to collectively as the
"Pledged Security."
2. Obligations. The obligations secured by this Pledge Agreement are the
following (referred to collectively hereafter as the "Obligations",):
(a) all obligations and agreements of Pledgor contained in
(including, without limitation, the payment of all indebtedness of the Pledgor
in respect of) the Loan Agreement, and any and all amendments, modifications or
renewals thereof;
(b) all amounts due to the Bank under that certain promissory note
of even date herewith in the principal amount of TWENTY FIVE MILLION DOLLARS
($25,000,000) from the Pledgor to the Bank and any and all modifications,
extensions, renewals or refinancings thereof (the "Note"), including, but not
limited to, all Principal, interest and other amounts due under the Note;
(c) all sums advanced by, or on behalf of, the Bank in connection
with, or relating to, the Loan Agreement, the Note or the Pledged Security
including, but not limited to, any and all sums advanced to preserve the
Pledged Security, or to perfect the Bank's security interest in the Pledged
Security;
(d) in the event of any proceeding to enforce the satisfaction of
the Obligations, or any of them, or to preserve and protect the Bank's rights
under the Loan Agreement, the Note, this Pledge Agreement or any other
agreement, document or instrument relating to the transactions contemplated in
the Loan Agreement, the reasonable expenses of retaking, holding, preparing for
sale, selling or otherwise disposing of or realizing on the Pledged Security,
or of any exercise by the Bank of its rights, together with reasonable
attorney's fees, expenses and court costs; and
(e) any indebtedness, obligation or liability of the Pledgor or
the Subsidiaries to the Bank, weather direct or indirect, joint or several,
absolute or contingent, now or
hereafter existing, however created or arising and however evidenced.
3. Additional Terms.
(a) The Pledgor agrees that the Bank shall have full and
irrevocable right, power and authority, to collect, withdraw or receipt for all
amounts due or to become due and payable upon, in connection with, or relating
to, the Pledged Security, to execute any withdrawal receipts
25
respecting the Pledged Security, and to endorse the name of the Pledgor on any
or all documents, instruments or commercial paper given in payment thereof, and
at the Bank's discretion to take any other action, including, without
limitation, the transfer of any Pledged Security into the Bank's own name or
the name of any nominee for the Bank, which the Bank may deem necessary or
appropriate to preserve or protect the Bank's interest in any of the Pledged
Security.
(b) Unless a Default (as hereinafter defined) shall have occurred,
the Pledgor shall be entitled to vote any and all shares of the Pledged Stock
and to give consents, waivers and ratifications in respect thereof, provided
that no vote shall be cast, no consent, waiver or ratification shall be given
and no action shall be taken by the Pledgor which would violate or be
inconsistent with any of the terns of the Loan Agreement, the Note or this
Pledge Agreement, or which would have the effect of impairing the position or
interests of the Pledgor or any holder of the Note. All such rights of the
Pledgor to vote and to give consents, waivers and ratifications shall cease
upon the occurrence of a Default.
(c) unless a Default shall have occurred, all dividends and other
distributions payable in respect of the Pledged Security shall be paid to the
Pledgor. Upon the occurrence of a Default, all such dividends and other
distributions and payments shall be paid to the Bank. After a Default shall
have occurred, all such amounts paid in respect of the Pledged Security shall,
until paid or delivered to the Bank, be held in trust for the benefit of the
Bank as additional Pledged Security to secure the Obligations.
4. Representations, Warranties and Covenants. The Pledgor further
represents, warrants and agrees that:
(a) The Pledgor is the legal, record and beneficial owner of, and
has good and marketable title to, the Pledged Security, subject to no lien,
claim, security interest or other encumbrance, except the security interest
created by this Pledge Agreement.
(b) without the prior written consent of the Bank, the Pledgor
will not sell, assign, transfer, exchange, or otherwise dispose of, or grant
any option with respect to, the Pledged Security, nor will it create, incur or
permit to exist any lien, claim, security interest or other encumbrance with
respect to any of the Pledged Security, or any interest therein, or any
proceeds thereof, except for the security interest provided for by this Pledge
Agreement. Without the prior written consent of the Bank, the Pledgor agrees
that it will not, and it will not permit any Subsidiary to. (i) issue or
reissue any capital stock or other securities (or warrants therefor or other
rights with respect thereto) in addition to or issue other securities of any
nature in exchange or substitution for any of the Pledged Security; (ii) redeem
any of the Pledged Security, or (iii) declare any stock dividend or split or
otherwise change the capital structure of any Subsidiary.
(c) The Pledged Security is genuine and in all respects represents
what it purports to be and all the shares of the Pledged Stock have been duly
and validly issued, and are fully paid and non-assessable.
26
(d) The pledge, assignment and delivery of the Pledged Security
pursuant to this Pledge Agreement creates a valid perfected security interest
in the Pledged Security, and the proceeds thereof, subject to no prior lien,
claim, security interest or other encumbrance or to any agreement purporting to
grant to any third party a perfected security interest in the assets of the
Pledgor which would include any of the Pledged Security. The Pledgor will at
all times defend the Bank's right, title and security interest in and to the
Pledged Security and the proceeds thereof against any and all claims and
demands of any person adverse to the claims of the Bank.
(e) The Pledgor will take, and will cause the subsidiaries to
take, such action and to execute such documents as the Bank may from time to
time reasonably request relating to the Pledged Security or the proceeds
thereof.
(f) The Pledgor has full right, power and authority to enter into,
to execute and to deliver this Pledge Agreement and this Pledge Agreement is
binding upon, and enforceable against the Pledgor in accordance with its terms.
(g) The Pledgor shall pay any fees, assessments, charges or taxes
arising with respect to the Pledged Security. In case of failure by the Pledgor
to pay any such fees, assessments, charges or taxes, the Bank shall have the
right, but shall not be obligated, to any such fees, assessments, charges or
taxes, as the case may be, and, in that event, the cost thereof shall be
payable by the Pledgor to the Bank immediately upon demand together with
interest at the rate equal to the Prime Rate (or, after the occurrence of a
Default, the Prime Rate plus 2%) (Prime Rate shall have the meaning provided in
the Note) from the date of disbursement by the Bank to the date of payment by
the Pledgor.
(h) None of the Pledged Stock constitutes margin stock, as defined
in Regulation U of the Board of Governors of the Federal Reserve System.
5. Events of Default. The Pledgor shall be in default under this Pledge
Agreement upon the occurrence of any one or more of the following events or
conditions (each, a "Default"):
(a) nonpayment of any of the obligations, whether by acceleration
or otherwise;
(b) the nonperformance of any obligation or any breach of any
warranty, representation or covenant made by the Pledgor in this Pledge
Agreement, and the same is not cured within fifteen(15)days after notice
thereof by the Bank;
(c) the nonperformance of any obligation in any other instrument,
document or agreement relating to the Obligations, including, without
limitation, the Loan Agreement and the Note, which nonperformance continues
beyond the applicable cure period, if any, specifically provided therefor;
(d) any breach of any warranty, representation or covenant made by
the Pledgor in any other instrument, document or agreement between the Pledgor
and Bank which breach remains uncured beyond any applicable time period, if
any, specifically provided therefor;
27
(e) any oral or written misrepresentation is made by the Pledgor
in this Pledge Agreement or in any document furnished by the Pledgor, or on the
Pledgor's behalf, to the Bank in connection with this Pledge Agreement or the
Pledged Security;
(f) the claim or creation of any lien, claim, security interest or
other encumbrance upon any of the Pledged Security or the making of any levy,
judicial seizure, or attachment thereof; or
(g) the dissolution, bankruptcy, insolvency or failure of the
Pledgor or any Subsidiary.
6. Rights of, Parties upon Default.
(a) Upon the occurrence of a Default, in addition to all the
rights, power and remedies the Bank shall be entitled to exercise, whether
vested in the Bank by the terms of this Pledge Agreement, the terms of the Loan
Agreement, the terms of the Note, by law, in equity, by statute (including,
without limitation, Article 9 of the Illinois Uniform Commercial Code) or
otherwise, for the protection and enforcement of the Bank's rights in. respect
of the Pledged Security, the Bank may be entitled to, without limitation (but
is under no obligation to the Pledgor so to do)
(i) transfer all or any part of the Pledged Security into
the Bank's name or the name of its nominee or nominees;
(ii) after first obtaining all necessary regulatory
approvals, vote all or any part of the Pledged Security (whether or not
transferred into the name of the Bank or any nominee) and give all consents,
waivers and ratifications in respect of the Pledged Security and otherwise act
with respect thereto as though it were the outright owner thereof;
(iii) at any time or from time to time to sell, assign and
deliver, or grant options to purchase, all or any part of the Pledged Security,
or any interest therein, at any public or private sale, without demand of
performance, advertisement or notice of intention to sell or of the time or
place of sale or adjournment thereof or to redeem or otherwise (all of which
are hereby waived by the Pledgor), for cash, on credit or for other property,
for immediate or future delivery without any assumption of credit risk and for
such price or prices and on such terms as the Bank in its absolute discretion
may determine, provided that unless, in the sole discretion of the Bank, any of
the Pledged Security threatens to decline in value or is or becomes a type sold
on a recognized market, the Bank will give the Pledgor reasonable notice of the
time and place of any public sale thereof, or of the time after which any
private sale or other intended disposition is to be made. Any requirements of
reasonable notice shall be met if such notice is mailed to the Pledgor as
Provided in Paragraph 14 below, at least fifteen (15) days before the time of
the sale or disposition. Any sale of any of the Pledged Security conducted in
conformity with customary practices of banks, insurance companies or other
financial institutions disposing of property similar to the Pledged Security
shall be deemed to be commercially reasonable. Any remaining Pledged Security
shall remain subject to the terms of this Pledge Agreement; and
(iv) collect any and all money due or to become due and
enforce in the Pledgor's name all rights with respect to the Pledged Security.
28
(b) Pledgor agrees to cause each Subsidiary to give the Bank, any
prospective purchaser of the Pledged Security (pursuant to Section 6(a)(iii))
and their respective representatives, reasonable access to further information
(including, but not limited to, records, files, correspondence, tax work papers
and audit work papers) relating to or concerning the Pledgor or such
Subsidiary.
7. Remedies Cumulative. Each right, power and remedy of the Bank
provided in this Pledge Agreement or now or hereafter existing at law or in
equity or by statute or otherwise shall be cumulative and concurrent and shall
be in addition to every other right, power or remedy provided for in this
Pledge Agreement or now or hereafter existing at law or in equity or by statute
or otherwise. The exercise or partial exercise by the Bank of any one or more
of such rights, powers or remedies shall not preclude the simultaneous or later
exercise by the Bank of all such other rights, powers or remedies, and no
failure or delay on the part of the Bank to exercise any such right, power or
remedy shall operate as a waiver thereof.
8. Waiver of Defenses. No renewal or extension of the time of payment of
the Obligations, nor any release, surrender of, or failure to perfect or
enforce any security interest for the Obligations; no release of any person
primarily or secondarily liable on the Obligations (including any maker,
endorser, or guarantor); no delay in enforcement of payment of the obligations;
and no delay or omission in exercising any right or power with respect of the
Obligations or any security agreement securing the Obligations shall affect the
rights of the Bank in the Pledged Security.
9. Waiver. Waiver by the Bank of any Default hereunder, or of any breach
of the provisions of this Pledge Agreement by the Pledgor, or any right of the
Bank hereunder, shall not constitute a waiver of any other Default or breach or
right, nor the same Default or breach or right on a future occasion.
10. Law Governing. This Pledge Agreement and the rights and obligations
of the parties hereunder shall be construed and interpreted in accordance with
the law of the State of Illinois applicable to agreements made and to be wholly
Performed in such state. Whenever possible, each provision of this Pledge
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law; provided, if any provision of this Pledge Agreement shall
be held to be prohibited or invalid under applicable law, such provision shall
be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining Provisions of
this Pledge Agreement.
11. The Pledgor's Obligations Absolute. The Obligations of the Pledgor
under this Pledge Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
discharged or in any way impaired by any circumstance whatsoever, including
without limitation: (a) any amendment or modification of the Note, the Loan
Agreement or any other document or instrument provided for herein or therein or
related thereto, cr any assignment, transfer or other disposition of any
thereof; (b) any waiver, consent, extension, indulgence or other action or
inaction under or in respect of any such document or instrument or any exercise
or on exercise of any right, remedy, power or privilege under or in respect of
any such document or instrument or this Pledge Agreement; (c) any bankruptcy,
insolvency, reorganization, arrangement, readjustment, composition,
liquidation, or similar proceeding with respect to the
29
Pledgor or any of its properties or creditors; or (d) any limitation on the
Pledgor's liabilities or obligations under any such instrument or any
invalidity or lack of enforceability, in whole or in part, of any such document
or instrument or any term thereof; whether or not the Pledgor shall have notice
or knowledge of the foregoing.
12. Termination. This Pledge Agreement shall terminate upon the receipt
by the Bank of evidence satisfactory to the Bank, in the Bank's sole and
absolute discretion, of the payment in full of the obligations. At the time of
such termination the Bank, at the request and expense of the Pledgor, will
execute and deliver to the Pledgor a proper instrument or instruments
acknowledging the satisfaction and termination of this Pledge Agreement, and
will duly assign, transfer and deliver to the Pledgor such of the Pledged
Security as has not yet theretofore been sold or otherwise applied or released
pursuant to this Pledge Agreement.
13. Further Assurances. The Pledgor shall, at its expense, duly execute,
acknowledge and deliver all such instruments and take all such action as the
Bank from time to time may request in order to further effectuate the Purposes
of this Pledge Agreement and to carry out the terms hereof. The Pledgor, at its
expense, at all times cause this Pledge Agreement (or a proper notice or
statement, in respect hereof) to be duly recorded, published and filed and
rerecorded, republished and refiled in such manner and in such places, if any,
and shall pay or cause to be paid all such recording, filing and other taxes,
fees and charges, if any, and will comply with all such statutes and
regulations, if any, as may be required by law in order to establish, perfect,
preserve and protect the rights and security interests of the Bank hereunder.
14. Notices. All communications provided for or related hereto shall be
given in accordance with Paragraph 10(c) of the Loan Agreement.
15. Amendments. Any term of this Pledge Agreement may be amended only
with the written consent of the Pledgor and the Bank. Any amendment effected
in accordance with this Paragraph 15 shall be binding upon (i) each holder of
the Note at the time outstanding; (ii) each future holder of the Note; and
(iii) the Pledgor.
16. Assigns. This Pledge Agreement and all rights and liabilities
hereunder and in and to any and all Pledged Security shall inure to the benefit
of the Bank and its successors and assigns, and shall be binding on the
Pledgor. and the Pledgor's successors and assigns; provided, however, the
Pledgor may not assign its rights or liabilities hereunder or to any of the
Pledged Security without the written consent of the Bank.
17. Miscellaneous. This Pledge Agreement embodies the entire agreement
and understanding between the Bank and the Pledgor and supersedes all prior
agreements and understandings relating to the subject matter hereof. The
headings in this Pledge Agreement are for purposes of reference only and shall
not limit or otherwise affect the meaning hereof.
30
The Pledgor acknowledges that this Pledge Agreement is and shall be
effective upon execution by the Pledgor and delivery to and acceptance hereof
by the Bank, and it shall not be necessary for the Bank to execute any
acceptance hereof or otherwise to signify or express its acceptance hereof to
the Pledgor.
WINTRUST FINANCIAL CORPORATION
By: /S/Xxxxx X. Xxxxxxx
--------------------------------
Its: Executive Vice President
--------------------------------
31
SCHEDULE A
Subsidiary Number Of Shares Owned
---------- ----------------------
Hinsdale Bancorp 198,295
Lake Forest Bancorp 164,009
Libertyville Bancorp 210,851
North Shore Community Bank Trust Co. 142,500
32
PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT (the "Pledge Agreement") dated as
of September 1, 1996, is made by HINSDALE BANCORP, an Illinois corporation,
LAKE FOREST BANCORP, a Delaware corporation and LIBERTYVILLE BANCORP, an
Illinois corporation (each a "Pledgor" and collectively, the "Pledgors") ,
whose address is 000 Xxxx Xxxx, Xxxx Xxxxxx, Xxxxxxxx 00000, for the benefit of
LASALLE NATIONAL BANK, a national banking association (the "Bank") whose
address is 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
RECITALS:
WHEREAS, each Pledgor is the owner of the capital stock of the bank
set forth opposite its name on Exhibit A hereto (each is referred to herein as
a "Subsidiary" and collectively as the "Subsidiaries");
WHEREAS, the capital stock of the Subsidiaries owned by the Pledgors
constitutes 100% of the issued and outstanding capital stock of the
Subsidiaries;
WHEREAS, the Wintrust Financial Corporation (the "Borrower"), the
owner of 100% of the issued and outstanding capital stock of Pledgors, desires
to borrow from the Bank the sum of TWENTY FIVE MILLION DOLLARS ($25,000,000);
WHEREAS, the Bank is willing to lend to the Borrower TWENTY FIVE
MILLION DOLLARS ($25,000,000) in accordance with the terms, subject to the
conditions and in reliance on the representations, warranties and covenants set
forth in the Loan Agreement dated the date hereof between the Borrower and the
Bank (the "Loan Agreement") and in all of the other documents and instruments
entered into or delivered in connection with or relating to the loan
contemplated in the Loan Agreement; and
WHEREAS, the Pledgors have agreed to provide security for the loan
contemplated in the Loan Agreement in accordance with the terms of this Pledge
Agreement;
NOW, THEREFORE, in order to induce the Bank to make the loan
contemplated in the Loan Agreement and in consideration of the mutual
representations, warranties, covenants and agreements hereinafter set forth,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereto hereby agree as follows:
AGREEMENT
1. Grant of Security Interest. To secure the Obligations (as defined
below), the Pledgors hereby pledge and grant to the Bank a security interest in
and transfer and deliver to the Bank the following: (a) the number of shares of
capital stock of each of the Subsidiaries set forth on Schedule A hereto, which
constitute one hundred percent (100%) of the issued and outstanding capital
stock of the Subsidiaries, and any and all shares of the capital stock of any
Subsidiary that Pledgors subsequently
33
acquire, directly or indirectly, including all substitutions of, and additions
to, such stock; (b) executed and undated stock powers for the capital stock
described in (a) above, in form and content satisfactory to the Bank duly
executed in blank, containing all requisite federal and state stock transfer
tax stamps, if any (the items described in (a) and (b) above may collectively
be referred to as the "Pledged Stock"); (c) all income and profits therefrom,
all distributions thereon, all other proceeds therefrom and all rights,
benefits and privileges pertaining to or arising from the Pledged Stock; and
(d) such other collateral that may be provided after the date hereof to secure
the Obligations. All property at any time pledged to the Bank hereunder or in
which the Bank is granted a security interest hereunder (whether described
herein or not, subject to the provisions of Paragraph 3 (c) below) , all income
therefrom and proceeds therefrom, may be referred to collectively as the
"Pledged Security."
2. Obligations. The obligations secured by this Pledge Agreement are the
following (referred to collectively hereafter as the "Obligations",):
(a) all obligations and agreements of Borrower contained in
(including, without limitation, the payment of all indebtedness of the Borrower
in respect of) the Loan Agreement, and any and all amendments, modifications or
renewals thereof;
(b) all amounts due to the Bank under that certain promissory note
of even date herewith in the principal amount of TWENTY FIVE MILLION DOLLARS
($25,000,000) from the Borrower to the Bank and any and all modifications,
extensions, renewals or refinancings thereof (the "Note"), including, but not
limited to, all Principal, interest and other amounts due under the Note;
(c) all sums advanced by, or on behalf of, the Bank in connection
with, or relating to, the Loan Agreement, the Note or the Pledged Security
including, but not limited to, any and all sums advanced to preserve the
Pledged Security, or to perfect the Bank's security interest in the Pledged
Security;
(d) in the event of any proceeding to enforce the satisfaction of
the Obligations, or any of them, or to preserve and protect the Bank's rights
under the Loan Agreement, the Note, this Pledge Agreement or any other
agreement, document or instrument relating to the transactions contemplated in
the Loan Agreement, the reasonable expenses of retaking, holding, preparing for
sale, selling or otherwise disposing of or realizing on the Pledged Security,
or of any exercise by the Bank of its rights, together with reasonable
attorney's fees, expenses and court costs; and
(e) any indebtedness, obligation or liability of the Borrower,
Pledgors or the Subsidiaries to the Bank, weather direct or indirect, joint or
several, absolute or contingent, now or hereafter existing, however created or
arising and however evidenced.
3. Additional Terms.
(a) The Pledgors agree that the Bank shall have full and
irrevocable right, power and authority, to collect, withdraw or receipt for all
amounts due or to become due and payable upon, in connection with, or relating
to, the Pledged Security, to execute any withdrawal receipts
34
respecting the Pledged Security, and to endorse the name of the Pledgors on any
or all documents, instruments or commercial paper given in payment thereof, and
at the Bank's discretion to take any other action, including, without
limitation, the transfer of any Pledged Security into the Bank's own name or
the name of any nominee for the Bank, which the Bank may deem necessary or
appropriate to preserve or protect the Bank's interest in any of the Pledged
Security.
(b) Unless a Default (as hereinafter defined) shall have occurred,
the Pledgors shall be entitled to vote any and all shares of the Pledged Stock
and to give consents, waivers and ratifications in respect thereof, provided
that no vote shall be cast, no consent, waiver or ratification shall be given
and no action shall be taken by the Pledgors which would violate or be
inconsistent with any of the terns of the Loan Agreement, the Note or this
Pledge Agreement, or which would have the effect of impairing the position or
interests of the Pledgors or any holder of the Note. All such rights of the
Pledgors to vote and to give consents, waivers and ratifications shall cease
upon the occurrence of a Default.
(c) unless a Default shall have occurred, all dividends and other
distributions payable in respect of the Pledged Security shall be paid to the
Pledgors. Upon the occurrence of a Default, all such dividends and other
distributions and payments shall be paid to the Bank. After a Default shall
have occurred, all such amounts paid in respect of the Pledged Security shall,
until paid or delivered to the Bank, be held in trust for the benefit of the
Bank as additional Pledged Security to secure the Obligations.
4. Representations, Warranties and Covenants. The Pledgors further
represent, warrant and agree that:
(a) The Pledgors are the legal, record and beneficial owner of,
and has good and marketable title to, the Pledged Security, subject to no lien,
claim, security interest or other encumbrance, except the security interest
created by this Pledge Agreement.
(b) without the prior written consent of the Bank, the Pledgors
will not sell, assign, transfer, exchange, or otherwise dispose of, or grant
any option with respect to, the Pledged Security, nor will it create, incur or
permit to exist any lien, claim, security interest or other encumbrance with
respect to any of the Pledged Security, or any interest therein, or any
proceeds thereof, except for the security interest provided for by this Pledge
Agreement. Without the prior written consent of the Bank, the Pledgors agrees
that it will not, and it will not permit any Subsidiary to. (i) issue or
reissue any capital stock or other securities (or warrants therefor or other
rights with respect thereto) in addition to or issue other securities of any
nature in exchange or substitution for any of the Pledged Security; (ii) redeem
any of the Pledged Security, or (iii) declare any stock dividend or split or
otherwise change the capital structure of any Subsidiary.
(c) The Pledged Security is genuine and in all respects represents
what it purports to be and all the shares of the Pledged Stock have been duly
and validly issued, and are fully paid and non-assessable.
35
(d) The pledge, assignment and delivery of the Pledged Security
pursuant to this Pledge Agreement creates a valid perfected security interest
in the Pledged Security, and the proceeds thereof, subject to no prior lien,
claim, security interest or other encumbrance or to any agreement purporting to
grant to any third party a perfected security interest in the assets of the
Pledgors which would include any of the Pledged Security. The Pledgors will at
all times defend the Bank's right, title and security interest in and to the
Pledged Security and the proceeds thereof against any and all claims and
demands of any person adverse to the claims of the Bank.
(e) The Pledgors will take, and will cause the subsidiaries to
take, such action and to execute such documents as the Bank may from time to
time reasonably request relating to the Pledged Security or the proceeds
thereof.
(f) The Pledgors have full right, power and authority to enter
into, to execute and to deliver this Pledge Agreement and this Pledge Agreement
is binding upon, and enforceable against the Pledgors in accordance with its
terms.
(g) The Pledgors shall pay any fees, assessments, charges or taxes
arising with respect to the Pledged Security. In case of failure by the
Pledgors to pay any such fees, assessments, charges or taxes, the Bank shall
have the right, but shall not be obligated, to any such fees, assessments,
charges or taxes, as the case may be, and, in that event, the cost thereof
shall be payable by the Pledgors to the Bank immediately upon demand together
with interest at the rate equal to the Prime Rate (or, after the occurrence of
a Default, the Prime Rate plus 2%) (Prime Rate shall have the meaning provided
in the Note) from the date of disbursement by the Bank to the date of payment
by the Pledgors.
(h) None of the Pledged Stock constitutes margin stock, as defined
in Regulation U of the Board of Governors of the Federal Reserve System.
5. Events of Default. The Pledgors shall be in default under this Pledge
Agreement upon the occurrence of any one or more of the following events or
conditions (each, a "Default"):
(a) nonpayment of any of the obligations, whether by acceleration
or otherwise;
(b) the nonperformance of any obligation or any breach of any
warranty, representation or covenant made by the Pledgors in this Pledge
Agreement, and the same is not cured within fifteen(15)days after notice
thereof by the Bank;
(c) the nonperformance of any obligation in any other instrument,
document or agreement relating to the Obligations, including, without
limitation, the Loan Agreement and the Note, which nonperformance continues
beyond the applicable cure period, if any, specifically provided therefor;
(d) any breach of any warranty, representation or covenant made by
any Pledgor in any other instrument, document or agreement between such Pledgor
and Bank which breach remains uncured beyond any applicable time period, if
any, specifically provided therefor;
36
(e) any oral or written misrepresentation is made by any Pledgor
in this Pledge Agreement or in any document furnished by the Pledgor, or on the
Pledgor's behalf, to the Bank in connection with this Pledge Agreement or the
Pledged Security;
(f) the claim or creation of any lien, claim, security interest or
other encumbrance upon any of the Pledged Security or the making of any levy,
judicial seizure, or attachment thereof; or
(g) the dissolution, bankruptcy, insolvency or failure of the
Pledgor or any Subsidiary.
6. Rights of, Parties upon Default.
(a) Upon the occurrence of a Default, in addition to all the
rights, power and remedies the Bank shall be entitled to exercise, whether
vested in the Bank by the terms of this Pledge Agreement, the terms of the Loan
Agreement, the terms of the Note, by law, in equity, by statute (including,
without limitation, Article 9 of the Illinois Uniform Commercial Code) or
otherwise, for the protection and enforcement of the Bank's rights in. respect
of the Pledged Security, the Bank may be entitled to, without limitation (but
is under no obligation to the Pledgors so to do)
(i) transfer all or any part of the Pledged Security into
the Bank's name or the name of its nominee or nominees;
(ii) after first obtaining all necessary regulatory
approvals, vote all or any part of the Pledged Security (whether or not
transferred into the name of the Bank or any nominee) and give all consents,
waivers and ratifications in respect of the Pledged Security and otherwise act
with respect thereto as though it were the outright owner thereof;
(iii) at any time or from time to time to sell, assign and
deliver, or grant options to purchase, all or any part of the Pledged Security,
or any interest therein, at any public or private sale, without demand of
performance, advertisement or notice of intention to sell or of the time or
place of sale or adjournment thereof or to redeem or otherwise (all of which
are hereby waived by the Pledgors), for cash, on credit or for other property,
for immediate or future delivery without any assumption of credit risk and for
such price or prices and on such terms as the Bank in its absolute discretion
may determine, provided that unless, in the sole discretion of the Bank, any of
the Pledged Security threatens to decline in value or is or becomes a type sold
on a recognized market, the Bank will give the Pledgors reasonable notice of
the time and place of any public sale thereof, or of the time after which any
private sale or other intended disposition is to be made. Any requirements of
reasonable notice shall be met if such notice is mailed to the Pledgors as
Provided in Paragraph 14 below, at least fifteen (15) days before the time of
the sale or disposition. Any sale of any of the Pledged Security conducted in
conformity with customary practices of banks, insurance companies or other
financial institutions disposing of property similar to the Pledged Security
shall be deemed to be commercially reasonable. Any remaining Pledged Security
shall remain subject to the terms of this Pledge Agreement; and
(iv) collect any and all money due or to become due and
enforce in the Pledgor's name all rights with respect to the Pledged Security.
37
(b) Pledgors agrees to cause each Subsidiary to give the Bank, any
prospective purchaser of the Pledged Security (pursuant to Section 6(a)(iii))
and their respective representatives, reasonable access to further information
(including, but not limited to, records, files, correspondence, tax work papers
and audit work papers) relating to or concerning the Pledgors or such
Subsidiary.
7. Remedies Cumulative. Each right, power and remedy of the Bank
provided in this Pledge Agreement or now or hereafter existing at law or in
equity or by statute or otherwise shall be cumulative and concurrent and shall
be in addition to every other right, power or remedy provided for in this
Pledge Agreement or now or hereafter existing at law or in equity or by statute
or otherwise. The exercise or partial exercise by the Bank of any one or more
of such rights, powers or remedies shall not preclude the simultaneous or later
exercise by the Bank of all such other rights, powers or remedies, and no
failure or delay on the part of the Bank to exercise any such right, power or
remedy shall operate as a waiver thereof.
8. Waiver of Defenses. No renewal or extension of the time of payment of
the Obligations, nor any release, surrender of, or failure to perfect or
enforce any security interest for the Obligations; no release of any person
primarily or secondarily liable on the Obligations (including any maker,
endorser, or guarantor); no delay in enforcement of payment of the obligations;
and no delay or omission in exercising any right or power with respect of the
Obligations or any security agreement securing the Obligations shall affect the
rights of the Bank in the Pledged Security.
9. Waiver. Waiver by the Bank of any Default hereunder, or of any breach
of the provisions of this Pledge Agreement by the Pledgors, or any right of the
Bank hereunder, shall not constitute a waiver of any other Default or breach or
right, nor the same Default or breach or right on a future occasion.
10. Law Governing. This Pledge Agreement and the rights and obligations
of the parties hereunder shall be construed and interpreted in accordance with
the law of the State of Illinois applicable to agreements made and to be wholly
Performed in such state. Whenever possible, each provision of this Pledge
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law; provided, if any provision of this Pledge Agreement shall
be held to be prohibited or invalid under applicable law, such provision shall
be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining Provisions of
this Pledge Agreement.
11. Each Pledgor's Obligations Absolute. The Obligations of each Pledgor
under this Pledge Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
discharged or in any way impaired by any circumstance whatsoever, including
without limitation: (a) any amendment or modification of the Note, the Loan
Agreement or any other document or instrument provided for herein or therein or
related thereto, cr any assignment, transfer or other disposition of any
thereof; (b) any waiver, consent, extension, indulgence or other action or
inaction under or in respect of any such document or instrument or any exercise
or on exercise of any right, remedy, power or privilege under or in respect of
any such document or instrument or this Pledge Agreement; (c) any bankruptcy,
insolvency, reorganization, arrangement, readjustment, composition,
liquidation, or similar proceeding with respect to any
38
Pledgor or any of its properties or creditors; or (d) any limitation on the
Pledgor's liabilities or obligations under any such instrument or any
invalidity or lack of enforceability, in whole or in part, of any such document
or instrument or any term thereof; whether or not the Pledgor shall have notice
or knowledge of the foregoing.
12. Termination. This Pledge Agreement shall terminate upon the receipt
by the Bank of evidence satisfactory to the Bank, in the Bank's sole and
absolute discretion, of the payment in full of the obligations. At the time of
such termination the Bank, at the request and expense of the Pledgors, will
execute and deliver to the Pledgors a proper instrument or instruments
acknowledging the satisfaction and termination of this Pledge Agreement, and
will duly assign, transfer and deliver to the Pledgors such of the Pledged
Security as has not yet theretofore been sold or otherwise applied or released
pursuant to this Pledge Agreement.
13. Further Assurances. The Pledgors shall, at its expense, duly execute,
acknowledge and deliver all such instruments and take all such action as the
Bank from time to time may request in order to further effectuate the Purposes
of this Pledge Agreement and to carry out the terms hereof. The Pledgors, at
its expense, at all times cause this Pledge Agreement (or a proper notice or
statement, in respect hereof) to be duly recorded, published and filed and
rerecorded, republished and refiled in such manner and in such places, if any,
and shall pay or cause to be paid all such recording, filing and other taxes,
fees and charges, if any, and will comply with all such statutes and
regulations, if any, as may be required by law in order to establish, perfect,
preserve and protect the rights and security interests of the Bank hereunder.
14. Notices. All communications provided for or related hereto shall be
given in accordance with Paragraph 10(c) of the Loan Agreement.
15. Amendments. Any term of this Pledge Agreement may be amended only
with the written consent of the Pledgors and the Bank. Any amendment effected
in accordance with this Paragraph 15 shall be binding upon (i) each holder of
the Note at the time outstanding; (ii) each future holder of the Note; and
(iii) the Pledgors.
16. Assigns. This Pledge Agreement and all rights and liabilities
hereunder and in and to any and all Pledged Security shall inure to the benefit
of the Bank and its successors and assigns, and shall be binding on the
Pledgors and the Pledgor's successors and assigns; provided, however, the
Pledgor may not assign its rights or liabilities hereunder or to any of the
Pledged Security without the written consent of the Bank.
17. Miscellaneous. This Pledge Agreement embodies the entire agreement
and understanding between the Bank and the Pledgors and supersedes all prior
agreements and understandings relating to the subject matter hereof. The
headings in this Pledge Agreement are for purposes of reference only and shall
not limit or otherwise affect the meaning hereof.
39
The Pledgors acknowledges that this Pledge Agreement is and shall be
effective upon execution by the Pledgors and delivery to and acceptance hereof
by the Bank, and it shall not be necessary for the Bank to execute any
acceptance hereof or otherwise to signify or express its acceptance hereof to
the Pledgors.
HINSDALE BANCORP
By: /s/Xxxxx X. Xxxxxxx
Its: Executive Vice President & CFO
LAKE FOREST BANCORP
By: /s/Xxxxx X. Xxxxxxx
Its: Executive Vice President & CFO
LIBERTYVILLE BANCORP
By: /s/Xxxxx X. Xxxxxxx
Its: Executive Vice President & CFO
40
SCHEDULE A
Pledgor Subsidiary Number Of Shares Owned
------- ---------- ----------------------
Hinsdale Bancorp Hinsdale Bank & Trust 107,500
Lake Forest Bancorp Lake Forest Bank & Trust 210,780
Libertyville Bancorp Libertyville Bank & Trust 125,000
