COLLATERAL PLEDGE AGREEMENT (Knapp)
COLLATERAL
PLEDGE AGREEMENT (Xxxxx)
THIS
AGREEMENT is made March 27, 2008, between AMB FINANCIAL CORPORATION
(''Pledgor''), and First Regional Bank, custodian FBO Xxxxxxx X. Xxxxx, Xx.
XXX,
X.X.
Xxx
00000, Xxx Xxxxx, XX 00000-0000
(''Pledgee'').
Recitals:
At
the
time of the execution of this agreement, Pledgee loaned Pledgor $1,000,000.00
evidenced by Pledgor's Term Note for such amount.
To
induce
Pledgee to make the loan, Pledgor has agreed to pledge certain stock with
Pledgee as security for the repayment of the loan,
It
is
therefore agreed:
1.
Pledge.
In
consideration of the sum of $1,000,000.00 loaned to Pledgor by Pledgee, receipt
of which is acknowledged, Pledgor hereby grants a security interest to Pledgee
in instruments of the following description: 562,063 shares of AMERICAN SAVINGS,
FSB stock. The
stock
certificate for said shares and the stock power, as provided for in the
Tri-Party Escrow Agreement, shall be held in safekeeping under a Tri-Party
Escrow Agreement with an escrow agent (Escrow Depository) executed of even
date
herewith.
2.
Transfer.
During
the time that the Escrowed Documents (as defined in the Tri-Party Escrow
Agreement) remain in escrow, the Corporation, the Lender/Pledgee, and the Escrow
Depository shall agree that no sale or transfer or other disposition of the
escrowed Shares or any interest in the escrowed Shares shall be consummated,
nor
shall any consideration be received for the escrowed Shares.
3.
Duration.
The
Escrow Depository shall be authorized and instructed to hold the certificates
representing the Escrowed Documents described in Paragraph 1. in escrow until
the Escrow Depository has been furnished written notices from Lender/Pledgee
indicating that Corporation has fully paid the Term Note secured by the pledge
of said Shares as collateral, at which time said Shares shall be immediately
released and returned to Corporation/Pledgor, or until the Escrow Depository
has
been furnished written notices from Lender/Pledgee indicating that an Event
of
Default has occurred, at which time the Escrowed Documents shall be immediately
released and tendered to the Lender/Pledgee.
4.
Voting
rights.
During
the term of this pledge, and so long as Pledgor is not in default in the
performance of any term of this agreement or in the payment of the principal
or
interest of the Term Note according to its terms, Pledgor may vote the pledged
shares on all corporate questions, and Pledgee shall, if necessary, execute
due
and timely proxies in favor of Pledgor to this end. As long as Pledgor shall
not
be in default on the payment of principal and interest on the Term Note, neither
Pledgee nor Custodian shall be entitled to exercise any control over American
Savings, FSB by reason of the subject loan, pledge and related matters. If
the
Pledgor defaults on a Term Note, the Pledgee/Lender shall be entitled to vote
the pledged shares on all corporate questions so long as Company shall remain
in
default, but only to the extent permitted by applicable law and regulations,
including Part 574 of the OTS Regulations, with Pledgor retaining the remaining
voting rights.
5.
Representations.
Pledgor
warrants and represents that, except as required by applicable law or
regulations including Part 574 of the OTS Regulations, there are no restrictions
upon the transfer of any pledged shares, other than may appear on the face
of
the certificate, and that Pledgor is the sole shareholder of American Savings,
FSB and has the right to transfer such shares free of any
encumbrances.
6.
Adjustments.
If,
during the term of this pledge, any share dividend, reclassification,
readjustment, or other change is declared or made in the capital structure
of
the company not incident to American Savings, FSB’s normal operations as a
depository institution, all new, substituted, and additional shares, or other
securities, issued by reason of any such change shall be held by Escrow
Depository under the terms of this agreement in the same manner as the shares
originally pledged hereunder. Notwithstanding any other statement herein to
the
contrary, as long as Pledgor is not in default of the Term Note, (i) American
Savings, FSB shall be entitled to declare and pay such cash dividends, if and
only if said dividends are consistent with past practices, (ii) Pledgor shall
be
entitled to receive such cash dividends immediately on payments, and (iii)
Pledgee and Escrow Depository shall have no rights with respect to such
dividends.
7.
Warrants
and Rights. If,
during the term of this pledge, subscription warrants or any other rights or
options are issued in connection with the pledged shares, Pledgee shall
immediately assign the pledged warrants, rights, or options to Pledgor. If
exercised by Pledgor, all new shares or other securities so acquired by Pledgor
shall be immediately pledged as additional collateral to Pledgee and delivered
to Escrow Depository to be held under the terms of this agreement in the same
manner as the shares originally pledged hereunder.
8.
Payment
of loans. Upon
full
payment of the principal and interest of a Term Note secured by the collateral
held in escrow pursuant hereto, the respective Lender/Pledgee whose loan has
been fully repaid shall immediately (within two (2) business days) provide
written notice to Escrow Depository that said respective Term Note has been
fully repaid, and shall authorize and direct the Escrow Depository to transfer
and return to Pledgor all the pledged shares and all rights received by Pledgee,
if any, as a result of the original collateral pledge.
9.
Default.
If
Pledgor defaults in the performance of any terms of this agreement, the payment
of interest under the Term Note or in the payment at maturity of the principal
and all outstanding interest of the Term Note, said events shall constitute
an
“Event of Default” hereunder
Remedies
upon
Default.
Upon
the occurrence of an Event of Default:
a. Lender/Pledgee
may declare the entire indebtedness evidenced by the Term Note immediately
due
and payable, without notice or demand of any kind.
b. Lender/Pledgee
shall have and may exercise the rights and remedies provided in the Uniform
Commercial Code in force in the State of Indiana at the date of this Agreement,
subject to Federal banking laws and regulations as applicable. In addition
to
and in conjunction with such rights and remedies, Pledgee may, by giving five
days' notice to Pledgor by registered mail, and without liability for any
diminution in price that may have occurred, sell the pledged shares in any
commercially reasonable manner as defined under the Indiana Uniform Commercial
Code, subject to Federal banking laws and regulations as applicable. At any
bona
fide public sale Pledgee may purchase all or any part of the pledged shares.
Pledgee may retain out of the proceeds of any sale an amount equal to the
principal and interest then due on the loan, plus the expenses of the sale,
and
shall pay any balance of the proceeds to Pledgor. If the sale proceeds are
insufficient to cover the principal and interest of the loan and the sale
expenses, Pledgor shall remain liable to Pledgee for the
deficiency.
10.
Public
Disclosure.
The
parties hereto agree, subject to applicable law, to make no public disclosure
regarding the loan, pledge and related matters, without the other parties’
consent, which consent shall not be unreasonably withheld.
11.
Transferability.
This
Collateral Pledge Agreement and the rights hereunder are not assignable to
a
third party.
In
witness whereof the parties have executed this agreement.
AMB
Financial Corporation (Corporation/Pledgor)
By
_____________________________[signature] Date:_____________
Printed
Name:____________________
Title:___________________________
First
Regional Bank, custodian FBO Xxxxxxx X. Xxxxx, Xx. XXX
(Lender/Pledgee)
_____________________________[signature] Date:_____________
Address:
X.X. Xxx 00000, Xxx Xxxxx, XX 00000-0000
