EXHIBIT 10Q
FIRST AMENDMENT TO LOAN AGREEMENT
THIS FIRST AMENDMENT ("First Amendment") dated as of the 8th day of March,
2002, to the Loan Agreement (the "Loan Agreement"), made and entered into as of
September 15, 2001, by and among SUMMIT BANCSHARES, INC., a Texas corporation,
(hereinafter called "Borrower"), SUMMIT DELAWARE FINANCIAL CORPORATION, a
Delaware corporation (hereinafter called "SDFC") and THE FROST NATIONAL BANK, a
national banking association (hereinafter called "Lender"). All capitalized
terms not otherwise defined herein shall have the meaning ascribed to each of
them in the Loan Agreement.
W I T N E S S E T H:
WHEREAS, Borrower executed the Loan Agreement to govern those two certain
promissory notes from Lender, specifically, a $10,000,000.00 Acquisition Note
and a $1,000,000.00 Liquidity Note (collectively, the "Notes").
WHEREAS, on or about December 14, 2001, the Borrower formed a wholly-owned
subsidiary (Summit Delaware Financial Corporation, a Delaware corporation) to
own the Bank and has requested that Lender consent to the formation of the
subsidiary and for Lender to exchange the stock of the Bank previously owned by
the Borrower and held as collateral by the Lender for the stock of SDFC owned by
the Borrower provided SDFC agrees to guaranty payment of the Notes and pledge to
Lender 100% of the issued and outstanding stock of Bank; and
WHEREAS, the Lender consents to the formation of the subsidiary and agrees
to exchange the stock of the Bank; provided the SDFC guarantees the Loan and
executes a Security Agreement-Pledge for the stock of the Bank.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower and Lender do hereby agree as follows:
ARTICLE I
Amendment to Loan Agreement
1.1 Consent to the formation of a new subsidiary. The Lender hereby
consents to the formation of SDFC, a wholly-owned subsidiary of Borrower, which
will own 100% of the issued and outstanding common stock of the Bank. The Lender
shall exchange the stock of
FIRST AMENDMENT TO LOAN AGREEMENT -- Page 1
the Bank previously held as collateral by the Lender for 100% of the issued and
outstanding stock of SDFC owned by the Borrower. SDFC shall pledge to Lender
100% of the issued and outstanding common stock of the Bank which it now owns.
1.2 Amendment to Definitions. The Borrower and Lender do hereby amend the
definitions by amending the definition of Bank and adding a new definition of
SDFC which shall be and hereinafter read as follows
"Bank" shall mean Summit Bank, National Association, Fort Worth,
Texas, whose principal place of business is 0000 Xxxxxx, Xxxx Xxxxx, Xxxxx
00000 and all other banks and financial institutions, whether chartered by
the federal government or any State, which are acquired after Closing Date
by Borrower or its Subsidiaries with proceeds of the Loan evidenced by the
Acquisition Note.
"SDFC" shall mean Summit Delaware Financial Corporation, a Delaware
corporation and wholly-owned subsidiary of the Borrower.
1.3 Amendment to Section 2.03. The Borrower and Lender do hereby amend
Section 2.03 by deleting same in its entirety and substituting a new Section
2.03, which shall be and hereby read as follows:
"2.03 Security for the Loan. To secure full and complete payment and
performance of the Obligations, Borrower and SDFC shall execute and
deliver the following documents (which, together with all property which
may hereafter be delivered to secure the Obligations, being herein called
"Collateral"):
(i) A Security Agreement-Pledge wherein the Borrower shall
pledge and grant to Lender a first priority security interest in
100% of the shares of common stock of SDFC and all products and
proceeds thereof. Lender shall retain possession of the
certificate(s) representing said common stock, together with stock
powers executed in blank by Borrower; and
(ii) A Security Agreement-Pledge wherein SDFC shall pledge and
grant to Lender a first priority security interest in 100% of the
shares of common stock of Bank and all products and proceeds
thereof. Lender shall retain possession of the certificate(s)
representing said common stock, together with stock powers executed
in blank by SDFC; and
(iii) A Guaranty Agreement executed by SDFC.
1.4 Guarantor's covenant. The Guarantor agrees to the terms and conditions
of this First Amendment and acknowledges that the Loan Agreement shall be
controlling over the terms of the Loan guaranteed by the Guarantor.
1.5 Prior Pledge Agreement. Lender agrees that Borrower has no further
FIRST AMENDMENT TO LOAN AGREEMENT -- Page 2
obligations to Lender under the Security Agreement-Pledge dated September 15,
2001, executed by Borrower and covering as collateral the stock of the Bank and
other property described therein.
ARTICLE II
Conditions of Effectiveness
2.1 Effective Date. This First Amendment shall become effective as and
when, and only when, Lender shall have received counterparts of this First
Amendment executed and delivered by Borrower and when each of the following
conditions shall have been met, all in form, substance, and date satisfactory to
Lender:
(a) Security Agreement-Pledge. Borrower shall have executed and
delivered to Lender a Security Agreement-Pledge. SDFC shall have executed
and delivered to Lender a Security Agreement-Pledge.
(b) Guaranty Agreement. SDFC shall have executed and delivered to
Lender the Guaranty Agreement.
(c) Additional Loan Documents. Borrower and SDFC shall have executed
and delivered to Lender such other documents as shall have been requested
by Lender to secure payment of the Obligations of Borrower, all in form
satisfactory to Lender and its counsel.
ARTICLE III
Representations and Warranties
3.1 Representations and Warranties of the Borrower. In order to induce
Lender to enter into this First Amendment, Borrower represents and warrants the
following:
(a) Borrower has the corporate power to execute and deliver this
First Amendment and the other Loan Documents executed by it and to perform
all of its obligations in connection herewith and therewith. SDFC has the
corporate power to execute and deliver this First Amendment and the other
Loan Documents executed by it and to perform all of its obligations in
connection herewith and therewith.
(b) The execution and delivery by Borrower of this First Amendment
and other Loan Documents executed by it and the performance of its
obligations in connection herewith and therewith: (i) have been duly
authorized or will be duly ratified and affirmed by all requisite
corporate action; (ii) will not violate any provision of law,
FIRST AMENDMENT TO LOAN AGREEMENT -- Page 3
any order of any court or agency of government or the Articles of
Incorporation or Bylaws of such entity; (iii) will not be in conflict
with, result in a breach of or constitute (alone or with due notice or
lapse of time or both) a default under any indenture, agreement or other
instrument; and (iv) will not require any registration with, consent or
approval of or other action by any federal, state, provincial or other
governmental authority or regulatory body.
(c) There is no action, suit or proceeding at law or in equity or by
or before any governmental instrumentality or other agency or regulatory
authority now pending or, to the knowledge of Borrower, threatened against
or affecting Borrower or any properties or rights of Borrower or involving
this First Amendment or the transactions contemplated hereby which, if
adversely determined, would materially impair the right of Borrower, to
carry on business substantially as now conducted or materially and
adversely affect the financial condition of Borrower or materially and
adversely affect the ability of Borrower to consummate the transactions
contemplated by this First Amendment.
(d) The representations and warranties of Borrower contained in the
Loan Agreement, this First Amendment and any other Loan Document securing
Borrower's Obligations and indebtedness to Lender are correct and accurate
on and as of the date hereof as though made on and as of the date hereof,
except to the extent that the facts upon which such representations are
based have been changed by the transactions herein contemplated.
3.2 Representations and Warranties of SDFC. In order to induce Lender to
enter into this First Amendment, SDFC represents and warrants the following:
(a) SDFC has the corporate power to execute and deliver this First
Amendment and the other Loan Documents executed by it and to perform all
of its obligations in connection herewith and therewith.
(b) The execution and delivery by SDFC of this First Amendment and
other Loan Documents executed by it and the performance of its obligations
in connection herewith and therewith: (i) have been duly authorized or
will be duly ratified and affirmed by all requisite corporate action; (ii)
will not violate any provision of law, any order of any court or agency of
government or the Articles of Incorporation or Bylaws of such entity;
(iii) will not be in conflict with, result in a breach of or constitute
(alone or with due notice or lapse of time or both) a default under any
indenture, agreement or other instrument; and (iv) will not require any
registration with, consent or approval of or other action by any federal,
state, provincial or other governmental authority or regulatory body.
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(c) There is no action, suit or proceeding at law or in equity or by
or before any governmental instrumentality or other agency or regulatory
authority now pending or, to the knowledge of SDFC, threatened against or
affecting SDFC or any properties or rights of SDFC or involving this First
Amendment or the transactions contemplated hereby which, if adversely
determined, would materially impair the right of SDFC, to carry on
business substantially as now conducted or materially and adversely affect
the financial condition of SDFC or materially and adversely affect the
ability of SDFC to consummate the transactions contemplated by this First
Amendment.
ARTICLE IV
Ratification of Obligations and Liens
4.1 Ratification of Obligation. The Borrower does hereby acknowledge,
ratify and confirm that it is obligated and indebted to Lender as evidenced by
the Loan Agreement (as amended by this First Amendment) and all other Loan
Documents, as modified by the transactions herein contemplated.
4.2 Valid Liens. Borrower and SDFC hereby acknowledge and agree that the
liens and security interests of the Loan Documents, as modified by the
transactions herein contemplated, are valid and subsisting liens and security
interests and are superior to all liens and security interests other than those
exceptions approved by Lender in writing. Nothing herein contained shall affect
or impair the validity or priority of the liens and security interests under the
Loan Documents.
4.3 Ratification of Agreements. The Loan Agreement, this First Amendment,
and each other Loan Document, as hereby amended, is acknowledged, ratified and
confirmed in all respects as being valid, existing, and of full force and
effect. Any reference to the Loan Agreement in any Loan Document shall be deemed
to be a reference to the Loan Agreement as amended by this First Amendment. The
execution, delivery and effectiveness of this First Amendment shall not, except
as expressly provided herein, operate as a waiver of any right, power or remedy
of Lender under the Loan Agreement, nor constitute a waiver of any provision of
the Loan Agreement. The Borrower acknowledges, ratifies and confirms that the
collateral securing the Loan secures all of the indebtedness of the Borrower,
including without limitation, the Notes.
FIRST AMENDMENT TO LOAN AGREEMENT -- Page 5
ARTICLE V
Miscellaneous
5.1 Survival of Agreements. All representations, warranties, covenants and
agreements of Borrower, herein or in any other Loan Document shall survive the
execution and delivery of this First Amendment, and the other Loan Documents and
the performance hereof and thereof, including without limitation the making or
granting of the Loan and the delivery of the Notes and all other Loan Documents,
and shall further survive until all of Borrower's Obligations to Lender are paid
in full. All statements and agreements contained in any certificate or
instrument delivered by Borrower hereunder or under the Loan Documents to Lender
shall be deemed to constitute the respective representations and warranties by
Borrower and/or respective agreements and covenants of Borrower under this First
Amendment and under the Loan Agreement.
5.2 Loan Document. This First Amendment and each other Loan Documents
executed in connection herewith are each a Loan Document and all provisions in
the Loan Agreement, as amended, pertaining to Loan Documents apply hereto and
thereto.
5.3 Governing Law. This First Amendment shall be governed by and construed
in all respects in accordance with the laws of the State of Texas and any
applicable laws of the United States of America, including construction,
validity and performance.
5.4 Counterparts. This First Amendment may be separately executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to constitute one and the same
First Amendment.
5.5 Release of Claims. Borrower by its execution of this First Amendment,
hereby declares that it has no set-offs, counterclaims, defenses or other causes
of action against Lender arising out of the Loan, the renewal, modification and
extension of the Loan, any documents mentioned herein or otherwise; and, to the
extent any such setoffs, counterclaims, defenses or other causes of action which
may exist, whether known or unknown, such items are hereby expressly waived and
released by Borrower.
5.6 Attorneys' Fees. Borrower hereby agrees to pay to Lender, upon demand,
the reasonable attorneys' fees and expenses of Lender's counsel, filing and
recording fees and other reasonable expenses incurred by Lender in connection
with this First Amendment. Borrower also agrees to provide to Lender such other
documents and instruments as Lender may reasonably request in connection with
the renewal, extension and modification of the Loans mentioned herein.
5.7 ENTIRE AGREEMENT. THIS FIRST AMENDMENT, TOGETHER WITH ANY LOAN
DOCUMENTS EXECUTED IN CONNECTION HEREWITH, CONTAINS THE ENTIRE
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AGREEMENT BETWEEN THE PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF AND
THEREOF AND ALL PRIOR AGREEMENTS RELATIVE THERETO WHICH ARE NOT CONTAINED HEREIN
OR THEREIN ARE TERMINATED. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. THIS FIRST AMENDMENT, AND THE LOAN DOCUMENTS MAY BE AMENDED, REVISED,
WAIVED, DISCHARGED, RELEASED OR TERMINATED ONLY BY A WRITTEN INSTRUMENT OR
INSTRUMENTS, EXECUTED BY THE PARTY AGAINST WHICH ENFORCEMENT OF THE AMENDMENT,
REVISION, WAIVER, DISCHARGE, RELEASE OR TERMINATION IS ASSERTED. ANY ALLEGED
AMENDMENT, REVISION, WAIVER, DISCHARGE, RELEASE OR TERMINATION WHICH IS NOT SO
DOCUMENTED SHALL NOT BE EFFECTIVE AS TO ANY PARTY.
IN WITNESS WHEREOF, this First Amendment is executed effective as of the
date first written above.
BORROWER: SUMMIT BANCSHARES, INC.
By: /s/ Xxx X. Xxxxx
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Xxx Xxxxx, Executive Vice President
LENDER: THE FROST NATIONAL BANK
By: /s/ Xxxxx X. Xxxxxxxxxx
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Xxxxx X. Xxxxxxxxxx, Senior Vice President
GUARANTOR: SUMMIT DELAWARE FINANCIAL CORPORATION
By: /s/ Xxx X. Xxxxx
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Xxx X. Xxxxx, Executive Vice President
FIRST AMENDMENT TO LOAN AGREEMENT -- Page 7
