EXHIBIT 10.3
LOAN AGREEMENT
THIS AGREEMENT made and entered into this 16th day of May, 1997, by and
between UNION PLANTERS NATIONAL BANK, a national banking association with
offices at 0000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000 (hereinafter referred to
as the "Lender"), and OZARK BANKSHARES, INC., an Arkansas corporation
(hereinafter referred to as the "Borrower"), having as an address for purposes
of notice of TCBY Tower Building, Suite 3100, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxx
Xxxx, Xxxxxxxx, 00000.
W I T N E S S E T H:
WHEREAS, the Borrower has applied to the Lender for a loan and the
Lender is willing to make available such funds to the Borrower subject to the
terms, provisions and conditions provided for herein; and
WHEREAS, this Agreement has been entered into by the parties for the
purpose of confirming the terms and conditions under which funds will be
advanced to Borrower; and
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties do hereby agree as follows:
SECTION 1.0 DEFINITION OF TERMS
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As used herein, the following terms shall have those meanings ascribed
thereto below:
1.1 "Agreement" shall mean this Loan Agreement.
1.2 "Bank Stock" shall, unless otherwise indicated, mean the common stock
of Bank of the Ozarks, wca, X.X. Xxx 000, Xxxxx, Xxxxxxxx 00000 and Bank of the
Ozarks, nwa, X.X. Xxx 000, Xxxxxx, Xxxxxxxx.
1.3 "Capital" shall mean the average of all equity capital, surplus,
undivided profits and 50% of reserves for loan losses shown on quarterly call
reports of the Subsidiary Banks during or for each calendar year.
1.4 "Closing" shall mean that date on which the Lender and Borrower
execute this Loan Agreement and the Lender advances the proceeds of the Loan to
Borrower.
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1.5 "Collateral" shall mean 80% of the common stock of Bank of the Ozarks,
nwa, and Bank of the Ozarks, wca, now owned by Borrower, and any additional
common stock now or hereafter owned or acquired by the Borrower necessary to
maintain 80% of the outstanding stock of Subsidiary Banks.
.
1.6 "Debt" shall mean the Loan and all liabilities, obligations and
indebtedness (primary, secondary, direct, contingent, sole, joint or several)
due or to become due, or which may hereafter be contracted or acquired, of the
Borrower to the Lender incurred under or pursuant to this Loan Agreement, and
including without limitation the Loan, the Notes, and any security agreement or
other agreement, instrument or document executed to evidence, secure or govern
the terms of the Loan.
1.7 "Event of Default" shall mean the occurrence of any one of those
events described in Section 11.1 hereof
1.8 "Line of Credit Note" shall mean that certain promissory note of the
Borrower, and any promissory note delivered in substitution or replacement
thereof, evidencing the Line of Credit and incorporating the terms of Section 3
of this Agreement.
1.9 "Line of Credit" shall mean the revolving credit facility and any
Advances made by Lender in accordance with the terms of Section 3 hereof.
1.10 "Loans" shall mean borrowings and advances to the Borrower by the
Lender pursuant to the terms of this Loan Agreement and shall include all sums
advanced to or for the benefit of the Borrower pursuant hereto under the Line of
Credit or the Term Loan.
1.11 "Notes" shall mean the promissory notes of the Borrower executed and
delivered to the Lender pursuant to this Loan Agreement, including the Line of
Credit Note, the Term Note, and any Additional Term Notes, as well as any
replacements thereof, to evidence the Borrower's obligation to repay the Loans.
1.12 "Prime Rate" shall mean the average prime lending rate reported from
time to time by the Wall Street Journal under its column "Money Rates".
Effective on the date on which any change in the prime rate shall occur, any
interest adjustment required hereby shall be adjusted upward or downward by a
number of percentage points (and fractional parts thereof) equal to the
adjustment upward or downward in the Wall Street Journal reported Prime Rate;
provided however, that the rate of interest, as adjusted, shall not exceed the
maximum rate of interest which the Lender, as a national bank, is permitted by
law to contract for and charge. Interest shall be calculated on the basis of a
365 day year unless calculations on that basis would result in Lender receiving
interest at a rate in excess of the maximum rate of interest which Lender is
permitted by law to contract for and charge, in which case the principal debt
evidenced hereby shall bear interest at such maximum rate.
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1.13 "Security Agreement" shall mean that certain security agreement of
even date herewith executed by the Borrower and Lender providing for the pledge
of and the grant of a security interest by the Borrower to Lender in the
Collateral.
1.14 "Subsidiary Banks" shall mean the Bank of the Ozarks, wca, Ozark,
Arkansas and the Bank of the Ozarks, nwa, Jasper, Arkansas.
1.15 "Term Loan" shall mean the term loan made by the Lender to the
Borrower in accordance with the terms of Section 2 hereof.
1.16 "Term Note" shall mean the term promissory note executed by the
Borrower and delivered to the Lender incorporating the terms of Section 2
hereof.
1.17 All accounting terms used herein shall have such meaning ascribed
thereto by application of generally accepted accounting principles applied
consistently.
1.17.1 "Assets", as that term is used herein, or as any
computation shall be made with reference thereto, shall not include
goodwill.
1.17.2 "Liabilities", as that term is used herein, or as any
computation shall be made with reference thereto, shall include, (a)
guaranties, repurchase agree ments and endorsements (other than for
purposes of collection in the ordinary course of Borrower's business); and
(b) indebtedness secured by assets of the Borrower, regardless of any
limitation on recourse against Borrower.
1.17.3 "Net Worth" shall mean Assets minus Liabilities.
.
SECTION 2.0 THE TERM LOAN
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2.1 The Term Loan. Subject to the conditions provided for herein, the
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Lender agrees to lend and the Borrower agrees to borrow from the Lender the
principal sum of $5,000,000.00 (the "Term Loan").
2.2 Promissory Note. The Term Loan and the Borrower's obligation to repay
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the Term Loan shall be evidenced by the Borrower's promissory note in form and
content acceptable to the Lender and payable, together with interest at a fixed
rate of interest equal to 8.804% per annum, as follows:
As to Interest: Accrued interest on the principal balance outstanding
shall be due and payable annually commencing on December 21, 1997 and
continuing on the same day of each year thereafter. Interest shall be
calculated on the basis of a 365 day year unless calculations on that basis
would result in Lender receiving interest at a rate in
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excess of the maximum rate of interest which Lender is permitted by law to
contract for and charge, in which case the principal debt evidenced hereby
shall bear interest at such maximum rate.
As to Principal: The outstanding principal balance of the Term Loan shall
be repaid in annual installments of $500,000.00 each commencing on December
21, 1998 and continuing on the same day of each year thereafter.
Each payment received shall be applied first to the payment of all accrued and
unpaid interest under the Note, and the balance shall be applied to the
outstanding principal balance.
2.3 Maturity. The entire outstanding principal balance of the Term Loan
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together with accrued but unpaid interest shall be due and payable in full on
December 21, 2007.
2.4 Late Payment Charge. The Borrower shall pay a late payment charge
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equal to one-half of one percent of the amount of any payment that is more than
fifteen (15) days past the due date thereof.
SECTION 3.0 TERMS OF THE LINE OF CREDIT.
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3.1 The Revolving Line of Credit. Upon the terms and conditions set forth
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in this Agreement, Lender agrees to fund advances from time to time requested by
Borrower in an aggregate outstanding amount not to exceed at any time Five
Million Dollars ($5,000,000.00), subject however to any reductions for
Additional Term Loans extended by Lender to Borrower and any reductions required
by Section 8.5 hereof.
3.2 Making the Revolving Loans. Each advance shall be made either: (i)
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on written notice given by the Borrower to the Lender; or (ii) in a telephonic
request, which request shall be followed by written notice from the Borrower to
Lender within five days from the telephonic request; and in either event not
later than noon (Central Standard Time) one business day prior to the business
day upon which the advance is to be made.
3.3 Funding of Revolving Loans. The Lender agrees on each advance date
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to make available to the Borrower the amount of the requested advance (provided
that the aggregate amount of all Advances does not exceed the limitation set
forth in Section 3.1) by transfer of immediately available funds to a deposit
account maintained by Borrower. The revolving credit advances made by the
Lender from time to time to the Borrower under this Agreement shall be made
against, evidenced by and repaid with interest thereon in accordance with the
Line of Credit Note of the Borrower.
3.4 Interest. Interest shall accrue on the outstanding balance of all
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advances made under the Line of Credit at a per annum rate of one-quarter of
one percentage point
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(.25%) less than the Prime Rate. Accrued interest shall be payable quarterly
commencing on the twenty-first day of June, 1997 and continuing on the same day
of each September, December, March and June thereafter.
3.5 Term. Lender's commitment to fund advances under the Line of Credit
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shall terminate on December 21, 2007. Lender shall have the opportunity on each
anniversary date of the execution of this Agreement to review the terms and
agreements applicable to the Line of Credit, provided however that Lender will
not require the modification of such terms and agreements unless: (i) there has
been a material adverse change in the financial condition of the Borrower or the
Subsidiary Banks; or (ii) the occurrence of any other Event of Default and the
expiration of any applicable cure period under Section 11.1 of this Agreement.
3.6 Additional Term Loans. Advances under the Line of Credit remaining
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unpaid for a period of three hundred sixty-five (365) days shall thereafter be
administered as an additional term loan hereunder (each an "Additional Term
Loan"). Additional Term Loans shall be evidenced by a term promissory note of
the Borrower having a maturity date of December 21, 2007. Interest shall accrue
on an Additional Term Loan at a per annum rate of one-quarter of one
percentage point (.25%) less than the Prime Rate and shall be payable in the
full amount thereof on each December 21 during the term of an Additional Term
Loan. The principal balance of an Additional Term Loan shall be repaid in equal
annual installments, calculated to fully amortize the Additional Term Loan on
the maturity date thereof, payable on each December 21 during the term thereof.
3.7 One Obligation. All Loans, whether denominated as the Line of Credit
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or the Term Loan or the Additional Term Loans for administrative purposes,
shall constitute one general obligation of Borrower, and shall be secured by
Lender's security interest in and lien upon all of the Collateral, and by all
other security interests and liens heretofore, now or at any time or times
hereafter granted by any Borrower to Lender.
SECTION 4.0 PREPAYMENT
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4.1 Voluntary Prepayment of the Line of Credit. The Borrower shall have
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the right and privilege of prepaying the Line of Credit and any Additional Term
Loans, in whole or in part, at any time and from time to time without penalty.
4.2 Voluntary Prepayment of the Term Loan. The Borrower shall have the
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right and privilege of prepaying the Term Loan in whole but not in part, at any
time upon prior written notice to Lender. Borrower acknowledges that the Term
Loan has been funded in part by certain advances obtained by participating
lenders (the "Participating Lenders") from the Federal Home Loan Bank of Dallas,
as follows:
Participating Lender: First National Bank of Mena, Mena, Arkansas
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Federal Home Loan Bank of Dallas
Advance Number: 55004568
Amount: $836,000.00
Date of Advance: December 21, 1995
Interest Rate: 6.304%
Term: Twelve years
Participating Lender: Bank of Xxxxxxxxxx County, Mt. Xxx, Arkansas
Federal Home Loan Bank of Dallas
Advance Number: 55004570
Amount: $570,000.00
Date of Advance: December 21, 1995
Interest Rate: 6.304%
Term: Twelve years
Participating Lender: Caddo First National Bank, Glenwood, Arkansas
Federal Home Loan Bank of Dallas
Advance Number: 55004571
Amount: $570,000.00
Date of Advance: December 21, 1995
Interest Rate: 6.304%
Term: Twelve years
In the event that a prepayment of any of the foregoing Federal Home Loan Bank
advances requires the payment by a Participating Lender of a prepayment penalty
or premium (the "FHLB Premium"), Borrower shall, at its option, either: (i) pay
a prepayment penalty or premium to Lender in an amount equal to the applicable
FHLB Premium, or (ii) assume, or cause one or more of the Subsidiary Banks to
assume, the Participating Lender's obligation to the Federal Home Loan Bank to
repay the advance without further obligation on the part of any Participating
Lender. In the event that the Borrower cannot obtain a release from the Federal
Home Loan Bank for the Participating Lenders, Borrower shall pay the prepayment
premium to Lender. Notwithstanding the foregoing, the Participating Banks may
elect, following notice from the Lender of the Borrower's intent to prepay the
Term Loan, not to repay the Federal Home Loan Bank advances and, in such event,
no prepayment penalty or premium shall be payable by Borrower.
4.3 Effect of Prepayment. Each prepayment of the Line of Credit or
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Additional Term Loan shall be applied, first to the payment of all accrued and
unpaid interest to the date of prepayment, and the balance shall be applied (i)
if the Line of Credit, to the outstanding principal balance; or (ii) if an
Additional Term Loan in reduction of the unpaid principal installments on the
Loan, in inverse order of their maturity.
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SECTION 5.0 COLLATERAL
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The Loans and Notes shall be secured by a pledge of and a first and prior
security interest in not less than 80% of the Bank of the Ozarks, wca, capital
stock and not less than 80% of the Bank of the Ozarks, nwa, capital stock,
whether such capital stock is now owned directly or indirectly, or hereafter
acquired by Borrower.
SECTION 6.0 REPRESENTATIONS AND WARRANTIES
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To induce the Lender to make the Loan provided for herein, the Borrower
represents and warrants unto the Lender (which representations and warranties
will survive the delivery of the Notes and the making of the Loans) that:
6.1 Non-Violation. The execution, delivery and performance of this
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Agreement, the borrowings hereunder, and the execution and delivery of the Notes
executed pursuant hereto will not violate any provision of law, or any order of
any court or governmental agency, any provision of any trust agreement,
indenture, agreement or other instrument to which the Borrower or any Subsidiary
Bank is a party, or be in conflict with, result in a breach of, or constitute
(with or without notice and/or lapse of time) a default under any such
indenture, agreement or other instrument, or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of the properties or assets of the Borrower or any Subsidiary Bank, except as
otherwise expressly granted to Lender pursuant hereto.
6.2 Binding Obligation. This Agreement and the Notes, when executed and
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delivered pursuant hereto for value received, will constitute the valid and
legally binding obligation of the Borrower in accordance with their terms
(subject, as to enforcement of remedies, to applicable bankruptcy, moratorium,
or other laws affecting the enforcement of creditors' rights).
6.3 Financial Condition. All financial statements or information
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furnished to the Lender in connection herewith are, to the best of the
Borrower's knowledge, in all material respects, true and correct and accurately
represent the financial condition and operations of the person or corporation
shown therein including the statements of the Subsidiary Banks furnished
herewith, as of their date, and since such date there has been no material or
adverse changes in the said financial condition or operations.
6.4 Litigation. There is no action, suit or proceeding at law or in
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equity, or by or before any governmental instrumentality or other agency, now
pending, or, to the knowledge of the Borrower, threatened against or affecting
the Borrower, the collateral described in Section 5 hereof, or the Subsidiary
Banks which, if adversely determined, would materially impair the right,
capacity, ability or authority of Borrower or the Subsidiary Banks to carry on
business
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substantially as now conducted, or would materially adversely affect the
condition, financial or otherwise, of the Borrower, or of the Subsidiary Banks.
6.5 Existing Defaults. Borrower has no knowledge of the existence of any
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condition or event which would, with or without notice and/or lapse of time,
constitute an Event of Default hereunder.
6.6 Taxes. Except as to the pending tax dispute with the State of
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Arkansas for tax years 1992 through 1995, which has been disclosed to Lender and
Lender has agreed has been adequately provided for, the Borrower and the
Subsidiary Banks have filed all required federal, state and local tax returns
and have paid all taxes as shown on such returns as they have become due.
6.7 Priority of Liens. The liens to be provided the Lender pursuant to
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the provisions of Section 5 and the Security Agreement shall be of such dignity
and priority as may be provided for herein, and there shall hereafter be no
additional lien, charge, or encumbrance at any time existing with respect
thereto without the prior written consent of Lender, which consent shall not be
unreasonably withheld.
6.8 Use of Proceeds. The proceeds of the Loan shall be used exclusively
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as set forth in Section 10 hereof.
6.9 Ownership of Shares. The shares of stock pledged to secure the Loan
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shall, at the time of delivery to the Lender of certificates evidencing same, be
owned by the Borrower free and clear of any lien, charge, security interest or
restriction. The Borrower shall be the registered owner of not less than 100%
of the common stock of each Subsidiary Bank, except for directors qualifying
shares, on the date of Closing, all of which are validly issued, fully paid and
non-assessable.
SECTION 7.0 AFFIRMATIVE COVENANTS
----------------------------------
Unless waived by the Lender in writing, Borrower covenants and agrees that
from the date hereof until payment in full of the principal of and interest on
the Note:
7.1 Corporate Existence and Properties. The Borrower will do or cause to
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be done all things necessary to preserve and keep in full force and effect the
corporate existence, rights and franchises of both itself and of the Subsidiary
Banks, and comply, in all material respects, with all laws applicable thereto;
and continue to conduct and operate the business of the Subsidiary Banks in
accordance with sound banking practices.
7.2 Financial Reports. The Borrower will furnish or cause to be furnished
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to the Lender the following:
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7.2.1 Within ninety (90) days after each fiscal year of each
Subsidiary Bank, a copy of the Subsidiary Bank's operating and financial
statements, including a copy of the Consolidated Report of Condition and
Income.
7.2.2 Within ten (10) days after their preparation, a copy of all
quarterly call reports, quarterly balance sheets and operating statements
and such other information regarding the operations, properties, capital,
condition and business affairs of each Subsidiary Bank as the Lender may
reasonably request.
7.2.3 Within ninety (90) days after each fiscal year of the Borrower,
a copy of the Borrower's audited consolidated financial statements, with
details of consolidation reflecting the Subsidiary Banks and parent only.
7.2.4 Promptly, from time to time, such other information regarding
the operations, properties, business affairs and conditions, financial or
otherwise, of the Subsidiary Banks or of the Borrower as the Lender may
reasonably request including copies of any examinations conducted by
federal or state bank regulatory agencies, which Lender agrees shall be
furnished to it in accordance with applicable rules and regulations of the
regulatory agency compiling such report.
7.3 Taxes and Other Liens. The Borrower will duly pay and discharge, and
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cause to be discharged, all taxes, assessments and governmental charges in any
material amount upon it or its properties or upon the Subsidiary Banks or its
property prior to the date on which penalties are attached thereto, and shall
pay all claims for labor, supplies, rent and other obligations which, if unpaid,
might become a lien against the property unless and to the extent only that the
same shall be contested in good faith by appropriate proceedings and adequate
reserves are set aside with respect thereto. The Borrower shall maintain the
collateral provided for herein to secure the Debt free and clear of all liens,
charges and encumbrances of any nature whatsoever except those granted and
conveyed to the Lender pursuant to the terms hereof.
7.4 Expenses. The Borrower will pay all out-of-pocket expenses incurred
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by the Lender in connection with the preparation of Loan Documents and taking of
collateral, and in the event of default, in connection with the enforcement of
the rights of the Lender under this Agreement and the Notes, including without
limitation reasonable attorney fees owing to Lender counsel by reason thereof.
7.5 Inspections. The Borrower will permit the Lender, and will cause the
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Subsidiary Banks from time to time during reasonable business hours to permit
the Lender to inspect any business properties or premises of the Borrower or the
Subsidiary Banks or inspect books and records relating to any thereof, as well
as those relating to their general business affairs and financial condition.
7.6 Loan Loss Reserves. Borrower shall cause the Subsidiary Banks to
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maintain a reserve for loan losses in an amount acceptable to all applicable
regulatory agencies.
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7.7 Financial Requirement of Borrower. The Borrower shall conduct the
---------------------------------
affairs of the Subsidiary Banks in a businesslike and lawful manner, and shall
(based on sound accounting principles consistently applied) cause the Subsidiary
Banks to continuously meet the following required standards:
7.7.1 Borrower shall cause the Subsidiary Banks to maintain a return
on average assets for each year (beginning with calendar year 1997, and
recomputed at the close of each calendar year thereafter) equal to at least
1.0%.
7.7.2 Borrower shall cause each Subsidiary Bank to maintain a ratio of
primary capital to assets at a level at all times acceptable to the
applicable bank regulatory authorities but in no event shall such ratio be
less than seven percent (7.0%) at each calendar year-end.
7.7.3 Net charges to the Subsidiary Bank' reserve for loan losses
shall not exceed one percent (1.0%) of Net Loans during any calendar year.
7.8 Compliance with Regulatory Agencies. Borrower shall comply and shall
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also cause the Subsidiary Banks to comply with all notices, orders, and
memoranda of applicable regulatory agencies. Borrower shall and shall also
cause the Subsidiary Banks to furnish to Lender copies of any cease and desist
orders, memoranda of understanding, or any other regulatory actions or orders
against Borrower, the Subsidiary Banks or any officer, director or shareholder
of same upon Borrower or the Subsidiary Banks' receipt of same.
SECTION 8.0 NEGATIVE COVENANTS
-------------------------------
From the date hereof until payment in full of the principal of, and
interest on, the Notes, the Borrower shall not and shall not allow the
Subsidiary Banks to, without the Lender's prior written consent which consent
shall not be unreasonably withheld:
8.1 Contingent Liabilities. Assume, guarantee, endorse, contingently
----------------------
agree to purchase or to provide funds for the payment of, agree to maintain or
otherwise become liable upon, the obligations for borrowed money of any other
person, firm or corporation, except by the endorsement of negotiable instruments
for deposit or collection or similar transactions in the ordinary course of its
banking business.
8.2 Redemptions and Recapitalization of Borrower or the Subsidiary Banks.
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Make or commit to make any purchase or acquisition of shares of its outstanding
capital stock, with the exception of redemptions of shares of stock required
under the terms of Borrower's Employee Stock Ownership Plan, or in any way to
modify Borrower's capital structure or the capital structure of any Subsidiary
Bank. Borrower may, however, purchase additional stock of the Subsidiary Banks
and issue additional shares of its common stock.
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8.3 Loans and Advances. Other than in the normal course of business, make
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any loans, advances or extensions of credit to, or purchase or make any
commitment to purchase any stock, bonds, notes, debentures or other securities
of, any person, firm, corporation or enterprise except (a) purchases of
certificates of deposit issued by a national bank or otherwise insured by a
federal agency; (b) deposits required by government agencies or public
utilities; (c) obligations fully guaranteed by the U.S. government; (d) tax
exempt securities; and (e) such other financial instruments or securities as the
applicable federal and state regulatory agencies may approve from time to time.
8.4 Consolidation, Merger or Sale. Consolidate with or merge into any
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other corporation or entity, or sell all or a substantial part of its assets.
Lender agrees that Borrower may merge its Subsidiary Banks, provided that the
Net Worth of the surviving bank following the merger transaction is equal to the
combined Net Worth of the Subsidiary Banks. In the event of the merger of the
Subsidiary Banks, Borrower agrees to substitute not less than 80% of the capital
stock of the surviving bank for the Bank Stock pledged to Lender.
8.5 Indebtedness. Incur, create, assume or permit to exist any
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indebtedness for borrowed money except Indebtedness evidenced by the Notes, if
such indebtedness would cause the aggregate indebtedness of the Borrower to
exceed sixty percent (60%) of the Borrower's Net Worth, provided further that
Loans hereunder shall at not time exceed fifty percent (50%) of the tangible
book value (Net Worth) of the Collateral.
8.6 Liens. Incur, assume or permit to exist any encumbrance, pledge or
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lien against any of its profits, property or assets, except:
a. An encumbrance provided to secure the Loans and Notes.
b. Pledges or deposits made in connection with or to secure deposits
of public funds, deposits of trust accounts, workmen's compensation,
unemployment insurance, pensions or other employee benefits, performance
and payment bonds or appeal bonds.
c. Liens of judgments which are discharged and released within
thirty (30) days from their date.
d. Tax liens or mechanics', materialmen's or furnisher's liens which
are being contested in good faith by appropriate proceedings with adequate
reserves set aside therefor.
e. An encumbrance on stock of the Subsidiary Banks not pledged to
Lender under the Security Agreement.
8.7 Loan Participations. Borrower will allow Lender to review
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participations from unaffiliated financial institutions, from time to time, and
Lender, at its discretion, may limit the
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Subsidiary Banks' purchase of participations from unaffiliated financial
institutions as Lender may deem advisable under sound banking practices.
8.8 Insider Transactions. Neither Borrower, any corporation, firm or
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association owned by the Borrower, nor any officer, director, or shareholder of
the foregoing shall hereafter obtain or maintain, directly or indirectly: (a)
any loan or extension of credit from a Subsidiary Bank, if such loan or
extension of credit is criticized by any applicable regulatory agency unless
payment is made in full within ninety (90) days; or (ii) any unsecured loan or
extension of credit in an amount exceeding 3% of the Subsidiary Bank's capital,
as to any one borrower, or 10% when aggregated with all such unsecured credits
extended by the Subsidiary Banks.
SECTION 9.0 CONDITIONS OF LENDING
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The obligation of the Lender to make the Loans is and shall be subject to
existence of the following conditions precedent on the date of Closing:
9.1 Warranties. Representations and warranties of the Borrower herein
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contained shall be true and accurate in all material respects on and as of the
date of Closing (except to the extent that such representations and warranties
relate solely to an earlier date in which event no material adverse change shall
have occurred with respect thereto).
9.2 No Default. No condition or event shall have occurred or be
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continuing which would constitute an Event of Default hereunder or which, after
notice or lapse of time, or both, would constitute an Event of Default
hereunder, or with respect to any indebtedness for borrowed money secured by a
lien or security interest upon any property of Borrower.
9.3 Loan Documents. The Borrower shall deliver, or shall have delivered,
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to the Lender such documents, certificates, instruments, resolutions and
opinions, in form and content required by the Lender, including without
limitation the following:
a. Notes of Borrower.
b. This Agreement.
c. The Pledge and Security Agreement.
d. Such financial statements of the Borrower and of the Subsidiary
Banks as the Lender may require.
e. A certificate signed by the Borrower dated the date of Closing
that, to the best of its knowledge no Event of Default or event which might
(with or without the
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giving of notice and/or lapse of time) mature into an Event of Default
exists or is imminent.
f. Certificates evidencing 21,919 shares of the common stock of the
Bank of the Ozarks, WCA, and 1,872 shares of the common stock of the Bank
of the Ozarks, NWA, together with stock powers signed by the Borrower.
g. Federal Reserve Form U-1 (Statement of Purpose).
h. Corporate resolutions of Borrower authorizing the borrowing
described herein, together with the Secretary's certificate setting forth
the officers and authorized signatories for the Borrower.
i. A Certificate of Existence/Good Standing issued by the Secretary
of State for the state of Arkansas.
j. Copies of the Borrower's and Subsidiary Bank's corporate charters
and bylaws, certified by the respective corporate secretaries as being true
and copies of each.
SECTION 10.0 USE OF PROCEEDS
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The Borrower covenants, represents and warrants unto the Lender that the
proceeds of the Loan shall be used for the refinance of certain existing loans
and additional capital contributions to the Subsidiary Banks.
SECTION 11.0 DEFAULT AND REMEDIES
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11.1 Events of Default. Upon the occurrence of any of the following, and
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the expiration of applicable periods for notice and cure, there shall be deemed
to have occurred an Event of Default:
a. Any representation or warranty made herein, or any report,
certificate, financial statement or other instrument furnished in
connection with any of the foregoing, shall prove to be false and
misleading in any material respect; or
b. Default in payment when due of the principal of or interest on
any promissory note of Borrower to Bank within ten (10) days after the due
date thereof and failure to cure same within ten (10) days from the date on
which notice of default is given by Lender to Borrower; or
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c. Failure to duly observe or perform any covenant, agreement, or
condition to be observed or performed in connection with this Agreement,
any agreement executed herewith as security for the Debt and failure to
cure same within thirty days (30) from the date on which notice of default
is given by Lender to Borrower; or
d. The Borrower or any Subsidiary Bank shall (i) apply for or
consent to the appointment of a receiver, trustee or liquidator of itself
or its properties or assets; (ii) admit in writing its inability to pay its
debts as they mature; (iii) make a general assignment for the benefit of
creditors; (iv) be adjudicated a bankrupt or insolvent; or, (v) file a
voluntary petition in bankruptcy or a petition seeking reorganization or an
arrangement with creditors or to take advantage of any bankruptcy,
reorganization, insolvency, readjustment of debt, dissolution or
liquidation under law or statute, or file an answer admitting the material
allegations of a petition filed against it in any such proceeding; or
e. An order, judgment or decree shall be entered without the
application, approval or consent of the Borrower or the Subsidiary Banks by
any court of competent jurisdiction approving a petition seeking
reorganization thereof, or of all or a substan tial part of its properties
or assets, or a receiver, trustee or liquidator thereof; or
f. The occurrence of a material adverse change in the financial
condition of the Borrower and the failure to take measures reasonably
demanded by Lender to cure same within thirty days (30) from the date of
notice of same from Lender to Borrower; or
g. Any Subsidiary Bank shall surrender, forfeit or otherwise lose
its charter as a state chartered bank (except upon the merger of the two
Subsidiary Banks as permitted hereunder), or shall have any portion of its
properties or operations sold or seized by or at the direction of any
regulatory or governmental agency; or
h. Failure by the Borrower to take such measures reasonably demanded
by Lender to cure any cease and desist orders or memoranda of understanding
or any other regulatory actions or orders between the Borrower or any
Subsidiary Bank and its regulatory agencies, within thirty (30) days from
the date of written notice of the same from Lender to Borrower; or
i. The Borrower shall surrender, forfeit or otherwise lose its
charter, or shall fail to maintain its status as an Arkansas corporation in
good standing, or shall have any portion of its properties or operations
sold or seized by or at the direction of any regulatory or governmental
agency; or
j. The Borrower shall fail to lawfully continue to be a bank holding
company within the meaning of the Bank Holding Company Act, 12 U.S.C.
Section 1841 et seq.
-- ---
k. Any event of default in any promissory note or loan agreement
evidencing or governing any additional indebtedness of the Borrower
permitted hereunder.
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11.2 Acceleration and Remedies Upon Default. Upon the occurrence of an
--------------------------------------
Event of Default the indebtedness arising hereunder shall at the absolute option
of Lender, become immediately due and payable, or upon the non-performance by
Borrower of any of the agreements or conditions contained in any of the
documents or instruements related to the indebtedness arising hereunder or in
connection herewith, the said Loans and indebtedness shall at the absolute
option of the Lender become immediately due and payable, and in any such event
Lender shall have full power and authority at any time or times thereafter to
exercise all or any one or more of the remedies and shall have all of the rights
of a secured party under the applicable law, including the Uniform Commercial
Code of Tennessee (Code), if applicable, and is hereby authorized immediately to
sell the whole or any part of the collateral for the indebtedness evidenced
hereby and by the Note or any substitute therefor or additions thereto or at
public or private sale, at the option of Lender without notice of the amounts
due or claimed to be due, in accordance with the provisions of the Code, and to
apply the net proceeds of such sale after deduction of expenses for collection,
sale or delivery to the payment of the indebtedness to Lender specifically
secured hereby and of any other liability or liabilities, whether due or not
due, of Borrower to Lender, returning the surplus, if any to Borrower unless
other disposition thereof is required by said Code. Upon any sale by virtue
hereof, Lender may repurchase, unless otherwise prohibited by said Code, the
whole or any part of the aforesaid collateral discharged from any statutory
right of redemption, equity of redemption exemption from execution, or similar
rights all of which are hereby expressly waived and released. Any requirement
of said Code for reasonable notice shall be met if such notice is mailed,
postage prepaid, to Borrower at the address of Borrower as shown on the records
of Lender at least ten (10) days prior to the time of the sale, disposition or
other event or thing giving rise to the requirement of notice.
11.3 Offset of Deposits. Upon the occurrence of an Event of Default,
------------------
Lender may apply toward payment of the Debt all balances of any deposit accounts
of the Borrower with the Lender then or any time thereafter existing.
SECTION 12.0 MISCELLANEOUS
----------------------------
12.1 Closing. Subject to the terms and conditions set forth herein,
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closing of the Loan and other matters required herein will take place at the
offices of Lender on or before May 31, 1997.
12.2 Non-Waiver. No omission or delay by the Lender in exercising any
----------
right, remedy or power it may have under this Agreement, the Notes, the loan
documents or governing law will impair such right, remedy or power, or be
construed to be a waiver of any default or an acquiescence therein, and any
single or partial exercise of any such right or power will not preclude other or
further exercise thereof or the exercise of any right or power, and no waiver
will be valid unless in writing and signed by the Lender, and then only to the
extent specified. All remedies herein and by law afforded will be cumulative
and available to Lender until the Debt is paid or satisfied in full.
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12.3 Binding Effect. Whenever any of the parties to this Agreement are
--------------
referred to, such reference shall be deemed to include the successors, assigns
and personal representatives of said parties, and all covenants by or on behalf
of the Borrower shall bind and inure to the benefit of successors and assigns of
the Lender.
12.4 Notices. Any notice permitted or required by this Agreement shall be
-------
in writing and delivered by hand delivery or by depositing it in the U.S. Mail,
postage prepaid, or by telegram, charges prepaid, addressed to the parties as
follows:
If to Borrower:
Xxxxxx Xxxxxxx
Chairman
Ozark Bankshares, Inc.
TCBY Tower Building, Suite 3100
000 Xxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
If to Lender:
Xxxxx Xxxxxxx
Vice President
Union Planters National Bank
X.X. Xxx 000
Xxxxxxx, Xxxxxxxxx 00000
Any party may designate in writing any other person or address in which such
notice or demand shall be delivered and such shall become effective upon receipt
by the other party.
12.5 Expenses of Enforcement. Borrower agrees to pay all reasonable
-----------------------
attorneys' fees and other costs and charges incurred in collection of any
indebtedness arising under this Agreement, in the enforcement of the Bank's
rights hereunder, in the protection and preserva tion of any property securing
any indebtedness hereunder and in the perfection of any security interest or
lien contemplated hereby and in maintaining the perfected status of the same.
12.6 Headings. Whenever in this Agreement headings are used to denote
--------
para graphs, such headings shall not be referred to in interpreting the terms
thereof or hereof, but are used merely for convenience.
12.7 Governing Law. This Agreement, the Notes and associated documents,
-------------
will be governed by and construed in accordance with the laws of the State of
Tennessee, except with respect to interest which shall be governed by applicable
provisions of federal law.
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IN WITNESS WHEREOF, the parties hereunto have executed this Agreement as of
the day and year first above written.
UNION PLANTERS NATIONAL BANK
By:/s/ Xxxxx X. Xxxxxxx
--------------------------------
Xxxxx Xxxxxxx
Vice President
OZARK BANKSHARES, INC.
By:/s/ Xxxxxx X Xxxxxxx
--------------------------------
Xxxxxx Xxxxxxx
Chairman
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