EXHIBIT 10.3
FEDERAL HOME LOAN BANK OF DES MOINES
DES MOINES, IOWA
AGREEMENT FOR ADVANCES, PLEDGE AND SECURITY AGREEMENT
BLANKET PLEDGE
This Agreement for Advance, Pledge and Security Agreement ("Agreement"),
effective the ___ day of ____________, 19___, is entered between
_______________, ("Member"), with principal offices at _____________________,
and the Federal Home Loan Bank of Des Moines ("Bank"), with principal offices
at 000 Xxxxxx, Xxx Xxxxxx, xxxx 00000.
WHEREAS, The Bank in accordance with the Federal Home Loan Bank Act,
regulations and directives of the Federal Housing Finance Board, and policies
promulgated by its own Board, makes available advances to its members. The
available advances set forth by the Bank in a statement of "Credit Policy,"
as may be amended from time to time.
WHEREAS, The Member may, from time to time, apply for an advance or
advances which may be available to it.
NOW THEREFORE, For valuable consideration and with respect to each and
every such advance, the Parties agree as follows:
SECTION 1. CONFIRMATlON OF ADVANCE. To be bound by the terms and
conditions set forth herein, in the confirmation of advance issued with
respect to each advance, and in the Bank's Credit Policy as may be amended
from time to time. A confirmation at advance shall mean a writing or machine
readable electronic transmission in such form or forms as may be determined
by the Bank from time to time.
SECTION 2. PAYMENT T0 THE BANK. To repay each and any advance together
with interest thereon according to the confirmation of each such advance
communicated to the Member by the Bank, together with any unpaid costs and
expenses in connection therewith. Such payment shall be made at the office
of the Bank in Des Moines, Iowa, or at such other place as the Bank, or its
successors or assigns, may from time to time appoint in writing.
The default rate on past due principal and interest may, at the option
of the Bank, be at a rate 1% per annum higher than the then current rate
being charged by the Bank for advances.
SECTION 3. ASSIGNMENT TO BANK OF SECURITY INTEREST IN BANK STOCK. The
Member hereby assigns, transfers and pledges to the Bank, its
successors or assigns, all stock of the Federal Home Loan Bank of Des Moines
owned by the Member as collateral security for payment of any and all
indebtedness, whether in the nature of an advance or otherwise, of the Member
to the Bank, its successors and assigns.
SECTION 4. ASSIGNMENT OF SECURITY INTEREST IN OTHER COLLATERAL. As
additional collateral security for any and all such advances, Member assigns,
transfers, and pledges to the Bank, its successors or assigns, each and every
note or other instrument evidencing a debt and any mortgage, deed of trust,
title, or document of title securing it; all securities (including, but not
limited to mortgage-backed securities issued or guaranteed by the Federal
Home Loan Mortgage Corporation, the Federal National Mortgage Association,
obligations of or guaranteed by the United States or an agency thereof, share
certificates or other participation interests in any securities trust,
mortgage loan participation certificates); all contract for deeds; all
chattel paper; any chose in action; all general intangibles; all deposit
accounts; certificates of deposit; and proceeds from any of the above
(hereinafter "Collateral"). With respect to such Collateral, Member
undertakes and agrees as follows:
A. That such security intent shall extend to after acquired Collateral
of a similar nature;
B. That the Member shall be at liberty to use, commingle, and dispose
of all or part of the Collateral, and to collect, compromise, and dispose of
the proceeds of the Collateral without being required to account for the
proceeds or replace the Collateral subject only to its obligation to maintain
the Collateral as herein provided;
C. To keep and maintain such Collateral free and clear of pledges,
liens, and encumbrance to others at the required collateral maintenance
level. The "required collateral maintenance level" means the amount of
collateral the member is required to maintain free and clear of pledge, liens
and encumbrance to others as set forth from time to time in the Credit Policy;
D. To assemble and deliver Collateral to the Bank or its authorized
agents immediately upon demand of the Bank; and as specified by the Bank in
its Credit Policy from time to time, and to pay for the safekeeping
collateral as established by the Bank;
E. To make, execute, and deliver to the Bank such assignments,
endorsements, listings, powers, financing statements or other instruments as
the Bank may reasonably request respecting such Collateral.
SECTION 5. DUTY TO USE REASONABLE CARE. In the event Member delivers
security to Bank or its Agency pursuant to paragraph 4 above, the duty of the
Bank with impact to said security shall be solely to use reasonable care in
the custody and preservation of the security in its possession.
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SECTION 6. ADDITIONAL SECURlTY. Member shall assign additional or
substituted Collateral for such advances at any time the Bank shall deem it
necessary for the Bank's protection.
SECTION 7. EVENTS OF DEFAULT. The Bank may consider the Member in
default hereunder upon the occurrence of any of the following events or
conditions:
A. Failure of the Member to pay any interest, or repay any principal,
of any advances herein required; or
B. Breach or failure to perform by the Member of any covenant,
promise, condition, obligation or liability contained or referred to herein,
or any other agreement to which the Member and the Bank are parties; or
C. Proof being made that any representation, statements or warranty
made or finished in any manner to the Bank by or on behalf of the Member in
connection with all or part of any advance was false in any material respect
when made or finished; or
D. Loss, theft, damage, destruction, sale or encumbrance to or at any
of the Collateral except as herein permitted, or the making of any levy,
seizure or attachment thereof or therein; or
E. Any tax levy, attachment, garnishment, levy of execution or other
process issued against the Member or the Collateral; or
F. Any suspension of payment by the Member to any creditor or any
events which result in acceleration to the maturity of any indebtedness of
the Member to others under any indenture, agreement or undertaking; or
G. Application for, or appointment of, a waiver of any part of the
property of the Member, or in case of adjudication of insolvency, or
assignment for benefit of creditors, or general transfer of assets by the
Member, or if management of the Member is taken over by any supervisory
authority, or in case of any other form of liquidation, merger, sale of
assets or voluntary dissolution, or upon termination of the membership of the
Member in the Federal Home Loan Bank of Des Moines, or in the case of
advances made under the provisions of 12 U.S.C. Section 1431(g)(4), if at
any time thereafter the creditor liabilities of the Member, expecting its
liabilities to the Bank, are increased in any manner to an amount exceeding
5% of its net assets; or
H. Determination by the Bank that a material adverse change has
occurred in the financial condition of the Member from that disclosed at the
time of the making of any advance, or from the condition of the Member as
theretofore most recently disclosed to the Bank in any manner; or
I. If the Bank reasonably and in good xxxxx xxxxx itself insecure even
though the Member is not otherwise in default.
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SECTION 8. BANK REMEDIES IN THE EVENT OF DEFAULT. At any time after
any default as herein before provided, the Bank may, at its option, declare
the entire amount of any and all advances to be immediately due and payable.
The Bank shall have all of the remedies of a secured party under the Uniform
Commercial Code of the State of Iowa. In addition thereto, the Bank may take
immediate possession of any of the Collateral or any part thereof wherever
the same may be had. The Member agrees to pay all the costs and expenses of
the Bank in the collection of the secured indebtedness and enforcement of the
Bank's rights hereunder including, without limitation, reasonable attorney's
fees. The Bank may sell the Collateral or any part thereof in such manner
and for such price as the Bank deems appropriate without any liability for
any loss due to decease in the market value of the Collateral during the
period held. The Bank shall have the right to purchase all or part of the
Collateral at public or private sale. If any notification of intended
disposition of any of the Collateral is required by law, such notification
shall be deemed reasonable and properly given if mailed, postage prepaid, at
least five days before any such disposition to the address of the Member
appearing on the records of the Bank. The proceeds of any sale shall be
applied in the following order: First, to pay all costs and expenses of every
kind for the care, collection, safekeeping, sale, foreclosure, delivery or
otherwise respecting the Collateral (including expenses incurred in the
protection of the Bank's title to or lien upon or right in any of the
Collateral, expenses for legal services of any kind in connection therewith
or in making any such sale or sales, insurance, commission for sales and
guaranty); then to interest on all indebtedness of the Member to the Bank;
then to the principal amount of any such indebtedness whether or not such
indebtedness is due or accrued. The Bank, at its discretion, may apply any
surplus to indebtedness of ember to third parties claiming a secondary
security interest in the Collateral. Any remaining surplus shall be paid to
the Member.
SECTION 9. APPOINTMENT OF BANK AS ATTORNEY-IN-FACT. In the event of
default, and without limiting any other rights the Bank might have as a
secured party under the Uniform Commercial Code of Iowa, or the laws of any
jurisdiction under which Bank might be exercising rights hereunder, and under
this Agreement, Member does hereby make, constitute and appoint Bank its true
and lawful attorney-in-fact to deal with the Collateral and, in its name and
stead to release, collect, compromise, settle and release or record any
mortgage of deed or trust which is a part at such Collateral as fully as the
Member could do if acting for itself. The powers herein granted are coupled
with an interest, and are irrevocable, and full power of satisfaction is
granted to the Bank in the premises.
SECTION 10. AUDIT AND VERIFICATION OF COLLATERAL. In extension and
not in limitation of all requirements of law respecting examination of the
Member by or on behalf of the Bank, the Member agrees that all Collateral
pledged hereunder shall always be subject to audit and verification by or on
behalf of the Bank in its corporate capacity.
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SECTION 11. RESOLUTION TO BE FURNISHED BY MEMBER. Member agrees to
furnish to the Bank from time to time a certified copy of resolution of its
Board of Directors or other governing body authorizing such of the Member's
officers, as the Member shall select, to apply for advances from the Bank.
Unless the Bank shall be otherwise notified in writing, the Bank may honor
applications made by such officers other than in writing; but, in such event
the Member shall confirm such application for advance in writing on forms
finished by the Bank. But the Member shall forever be estopped to deny its
obligation to repay such advance whether or not an application in writing is
ever received by the Bank so long only as the advance is made in good faith
by the Bank on the request of an officer or employee so authorized by the
Member.
SECTION 12. APPLICABILITY OF BANK ACT. In addition to the terms and
conditions herein specifically set forth, all advances are subject to the
rights, powers, privileges and duties conferred upon the Federal Housing
Finance Board, the Federal Home Loan Banks, and on member institutions by the
Act of Congress entitled, "Federal Home Loan Bank Act, as amended."
SECTION 13. JURISDICTION. In any action or proceeding brought by the
Bank or the Member in order to enforce any right or remedy under this
Agreement, Member will submit to the jurisdiction of the United States
District Court for the Southern District of Iowa, or if such action or
proceeding may not be brought in Federal Court, the jurisdiction of the Iowa
District Court in Polk County.
If any action or proceeding is brought by the Member seeking to obtain
relief against the Bank arising out of this Agreement and such relief is not
granted by a court of competent jurisdiction, the Member will pay all
attorney's fees and court costs incurred by the Bank in connection therewith.
SECTION 14. CHOICE OF LAW. This Agreement shall be construed and
enforced according to the laws of the State of Iowa, except that the rate of
interest on advances hereunder shall be governed by the provisions of 12
US.C. Section 1430 (as amended).
SECTION 15. AGREEMENT CONSTITUTES ENTIRE AGREEMENT. This Agreement
embodies the entire Agreement and understanding between the parties hereto
relating to the subject matter hereof and supersedes all prior agreements
between such parties that relate to the subject matter except that: The
Credit Policy as duly adopted by the Bank's Board of Directors from time to
time shall be incorporated herein, unless agreed to in writing by both
parties. Advances made by the Bank to Member prior to the execution of this
Agreement shall continue to be governed exclusively by the terms of the prior
agreements pursuant to which such advances were made, except that (i) any
default thereunder shall constitute default hereunder, (ii) Collateral
furnished as security hereunder shall also secure such prior advances and
(iii) the rights and obligations with respect to such Collateral shall be
governed by the terms of this Agreement.
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SECTION 16. SECTION HEADINGS. Section headings are not to be
considered part of this Agreement. Section headings are solely for
convenience of reference, and shall not effect the meaning or interpretation
of this Agreement or any of its provisions.
SECTION 17. SEVERABILITY OF SECTIONS. If any section or portion
thereof is deemed void in any legal proceeding the remainder of the Agreement
shall remain in full force and effect.
SECTION 18. The person signing this document on behalf of the Member
represents that its execution was authorized by appropriate action of the
directors of the Member which was completed on the 26th day of August, 1995,
and that such action is duly reflected in the records of the Member.
RUSHMORE STATE BANK FEDERAL HOME LOAN BANK OF
(Full Corporate Name of Member) DES MOINES
By: By:
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