Exhibit 10.16
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF JULY 23, 1999,
BETWEEN HEARTLAND FINANCIAL USA, INC.
AND
THE NORTHERN TRUST COMPANY
TABLE OF CONTENTS
1. Amended and Restated Credit Agreement, dated July 23, 1999;
2. Revolving Credit Note;
3. Term Note;
4. Borrower's Certificate of No Default and No Change to
Original Documents;
5. Borrower's Opinion of Counsel, (Xxxxx X. Xxxxxx);
6. Borrower's Certificate (Borrowing Resolution and
Incumbency);
7. Guaranty of ULTEA, Inc.;
8. Guaranty of Citizens Finance Co.;
9. ULTEA, Inc. Certificate (Guarantor Resolution and
Incumbency);
10. ULTEA, Inc. - Guarantor Counsel's Opinion (Xxxxx X. Xxxxxx);
11. Citizens Finance Co. Certificate (Guarantor Resolution and
Incumbency);
12. Citizens Finance Co. - Guarantor Counsel's Opinion (Xxxxx X.
Xxxxxx).
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 23, 1999
This Amended and Restated Agreement is between HEARTLAND
FINANCIAL USA, INC., a corporation formed under the laws of the
State of Delaware ("Borrower"), and THE NORTHERN TRUST COMPANY,
an Illinois banking corporation ("Lender"), with a banking office
at 00 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
WHEREAS, Borrower is a party with Lender to that certain Credit
Agreement dated October 31, 1997, as amended (the "Existing
Agreement");
WHEREAS, Borrower has requested and Lender has agreed, subject
to the conditions set forth herein, to amend and restate the
Existing Agreement in certain respects as further set forth
herein;
WHEREAS, this Agreement amends and restates the Existing
Agreement in its entirety, provided that nothing herein or in any
other Loan Documents shall be deemed to constitute a novation or
to have extinguished or discharged the indebtedness and
obligations under the Existing Agreement and the documents
executed and delivered therewith, all of which shall continue
under and be governed by this Agreement and the other Loan
Documents.
NOW, THEREFORE, in consideration of the promises and the
agreements hereinafter set forth, and intending to be legally
bound hereby, the parties hereby agree as follows:
SECTION 1. LOANS
1.1 REVOLVING CREDIT LOANS. Subject to the terms and
conditions of this Agreement, Lender agrees to make loans to
Borrower, from time to time from the date of this Agreement
through July 23, 1000, at such times and in such amounts, not to
exceed FIFTEEN MILLION UNITED STATES DOLLARS ($15,000,000),
provided, subject to the mandatory prepayment required under
Section 3.2 hereof, such amount shall be reduced to FIVE MILLION
DOLLARS on December 31, 1999, (the "Revolving Loan Commitment")
at any one time outstanding, as Borrower may request (the
"Revolving Credit Loan(s)"). During such period Borrower may
borrow, repay and reborrow hereunder. Each borrowing shall be in
the amount of at least $500,000.00 or the remaining unused amount
of the Revolving Commitment.
1.2. REVOLVING CREDIT NOTE. The Revolving Credit Loans shall
be evidenced by a promissory note (the "Revolving Credit Note"),
substantially in the form of Exhibit A, with appropriate
insertions, dated the date hereof, payable to the order of Lender
and in the principal amount of the Revolving Credit Commitment.
Lender may at any time and from time to time at Lender's sole
option attach a schedule (grid) to the Revolving Credit Note and
endorse thereon notations with respect to each Revolving Credit
Loan specifying the date and principal amount thereof, the
Interest Period (as defined below) (if applicable), the
applicable interest rate and rate option, and the date and amount
of each payment of principal and interest made by Borrower with
respect to each such Revolving Credit Loan. Lender's endorsements
as well as its records relating to Revolving Credit Loans shall
be rebuttably presumptive evidence of the outstanding principal
and interest on the Revolving Credit Loans, and, in the event of
inconsistency, shall prevail over any records of Borrower and any
written confirmations of Revolving Credit Loans given by
Borrower. The principal of the Revolving Credit Note shall be
payable on or before June 30, 2000 ("Initial Maturity Date"),
provided, however, Borrower may give to Lender written notice
sixty (60) days prior to July 23, 2000 and each annual
anniversary thereafter of its intention to renew the Revolving
Loan and extend the Initial Maturity Date for an additional One
year period commencing on July 23, 2000 or such annual
anniversary thereafter and ending on the next succeeding annual
anniversary of the then current Initial Maturity Date, provided,
further, Lender gives its consent to such renewal in writing
thirty (30) days prior to each such anniversary data, as
applicable (the Initial Maturity Date or extension thereof shall
be referred to as the "Maturity Date"). "Closing Date" means the
date upon which Borrower executes and delivers this Agreement and
complies with the terms of Section 6 of this Agreement.
1.3. TERM LOAN. Subject to the terms and conditions of this
Agreement, Lender agrees to make a loan (the "Term Loan"; the
Revolving Credit Loans and the Term Loan being together
hereinafter collectively called the "Loan(s)") to Borrower on
July 23, 1999, in an amount not to exceed TWENTY-FIVE MILLION
U.S. DOLLARS ($25,000,000) (the "Term Loan Commitment").
1.4. TERM NOTE. The Term Loan shall be evidenced by a
promissory note substantially in the form of Exhibit B, (the
"Term Note"; the Term Note and the Revolving Credit Note being
together hereinafter collectively called the "Note(s)"), with
appropriate insertions, dated the date of the Term Loan, payable
to the order of Lender, and in the original principal amount of
the Term Loan; Borrower shall execute and deliver the Term Note
as a precondition to Lender's obligation to make the Term Loan.
The Term Loan shall be payable in fifteen (15) equal consecutive
quarterly principal installments of $1,000,000 each, each payable
on the last day of September, December, March and June; beginning
March 31, 2000 with a final principal payment in the amount of
$10,000,000 payable on December 31, 2003 ("Term Loan Maturity
Date").
SECTION 2. INTEREST AND FEES
2.1. INTEREST RATE. Borrower agrees to pay interest on the
unpaid principal amount from time to time outstanding hereunder
at the following rates per annum:
a. before maturity of any Loan, whether by acceleration or
otherwise, at the option of Borrower, subject to the terms hereof
at a rate equal to:
(i) The "Prime-Based Rate", which shall mean the
Prime Rate (as hereinafter defined) plus the
Applicable Margin;
(ii) The "Bank Offered Rate" plus the Applicable
Margin. The "Bank Offered Rate" shall be equal to
that rate of interest offered by Lender and
accepted by Borrower and fixed for the period from
the date of Borrower's acceptance of such rate to
the end of any Interest Period of any duration
chosen by Borrower, provided such Interest Period
designated by Borrower and agreed to by Bank shall
end on or prior to the Maturity Date or Term Loan
Maturity Date, as the case may be;
(iii) "LIBOR", which shall mean that fixed
rate of interest per year for deposits with
Interest Periods of 1, 2, or 3 months (which
Interest Period Borrower shall select subject to
the terms stated herein) in United States dollars
offered to Lender in or through the London
interbank market at or about 11:00 A.M., London
time, three days (during which banks are generally
open in both Chicago and London) before the rate
is to take effect in an amount corresponding to
the amount of the requested Loan or portion
thereof and for the London deposit Interest Period
requested, DIVIDED BY one minus any applicable
amount and Interest Period as determined by Lender
in its sole discretion, PLUS the Applicable Margin
provided any Interest Period designated by
Borrower and agreed to by Lender shall end on or
prior to the Maturity Date or Term Loan Maturity
Date, as the case may be; or
(iv) "Federal Funds Rate" plus the Applicable
Margin. "Federal Funds Rate", shall mean the
weighted average of the rates on overnight Federal
funds transactions, with members of the Federal
Reserve System only, arranged by Federal funds
brokers. The Federal Funds Rate shall be
determined by the Lender on the basis of reports
by Federal funds brokers to, and published daily
by, the Federal Reserve Bank of New York in the
Composite Closing Quotations for U.S. Government
Securities. If such publication is unavailable or
the Federal Funds Rate is not set forth therein,
the Federal Funds Rate shall be determined on the
basis of any other source reasonably selected by
the Lender. The Federal Funds Rate applicable each
day shall be the Federal Funds Rate reported as
applicable to Federal funds transactions on that
date. In the case of Saturday, Sunday or legal
holiday, the Federal Funds Rate shall be the rate
applicable to Federal funds transactions on the
immediately preceding day for which the Federal
Funds Rate is reported,
(v) The Applicable Margin for any Loan shall be
based on the Total Debt to Tangible Net Worth
Ratio in accordance with the table below. The
Total Debt to Tangible Net Worth Ratio shall be
determined as of the Closing Date from the
financial statements delivered by the Borrower
pursuant to Sections 4.2(a) and (b), and,
thereafter, determined from the financial
statements delivered quarterly pursuant to Section
5.2. The adjustment, if any, to the Applicable
margin shall be effective on the fifth Business
Day after the delivery of such financial
statements.
INTEREST RATE TABLE
Federal Bank
Prime Funds LIBOR Offered
Total Debt to Tangible Rate Rate Rate Rate
Net Worth Ratio Loans Loans Loans Loans
---------------------- ----- ------ ------ ------
Less than or equal to 15% -1.00% +0.60% +0.50% 0
Less than or equal to 30% -1.00% +0.75% +0.65% 0
but above 15%
Less than or equal to 45% -1.00% +0.90% +0.80% 0
but above 30%
(b) After the maturity of any Loan, whether by acceleration or
otherwise, such Loan shall bear interest until paid at a rate
equal to two percent (2%) in addition to the rate in effect
immediately prior to maturity (but not less than the Prime Based
Rate in effect at maturity).
2.2. RATE SELECTION. Borrower shall select and change its
selection of the interest rate as among the Bank Offered Rate,
LIBOR, the Federal Funds Rate and the Prime-Based Rate, as
applicable, to apply to at least $500,000 and in integral
multiples of $100,000 thereafter of any Loan or portion thereof,
subject tot he requirements herein stated:
(a) At the time any Loan is made;
(b) At the expiration of a particular Bank Offered Rate or
LIBOR Interest Period selected for the outstanding principal
balance of any Loan or portion of any Loan currently bearing
interest at the Bank Offered Rate or LIBOR; and
(c) At any time for the outstanding principal balance of any
Loan or portion thereof currently bearing interest at the Prime-
Based Rate or the Federal Funds Rate.
2.3. RATE CHANGES AND NOTIFICATIONS.
(a) BANK OFFERED RATE. If the Loans may bear interest at the
Bank Offered Rate (pursuant to Section 2.1 hereinabove) and
Borrower wishes to borrow funds at the Bank Offered Rate or to
change the rate of interest on any Loan or portion thereof to the
Bank Offered Rate, it shall, at or before 10:00 A.M., Chicago
time on the date such borrowing or change is to take effect,
which shall be a Banking Day (as hereinafter defined) of the
Lender, give written or telephonic notice thereof, which shall be
irrevocable. Such notice shall specify the Loan or portion
thereof to which the Bank Offered Rate is to apply and the
desired Interest Period (but not to exceed the maturity date of
this Agreement). The Lender shall then in its sole discretion
offer or decline to offer a Bank Offered Rate (and if it offers a
Bank Offered Rate, the rate of such Bank Offered Rate shall be in
the Lender's sole discretion), and the Borrower shall irrevocably
accept or decline such particular Bank Offered Rate and the
related Loan or portion thereof and confirm such acceptance in
writing by letter or other written communication dated and sent
the date of such borrowing or change. Without limiting the
Borrower's obligations under any other document or instrument,
the Lender may in offering such Bank Offered Rate and the related
Loan or portion thereof rely without inquiry upon any person whom
it reasonably believes to be a party authorized to accept or
decline such Bank Offered Rate and the related Loan or portion
thereof.
(b) LIBOR. If the Loans may bear interest at the LIBOR Rate
(pursuant to Section 2.1 hereinabove) and the Borrower wishes to
borrow funds at LIBOR or Borrower wishes to change the rate of
interest on any Loan or portion thereof, within the limits
described above, from any other rate to LIBOR, it shall, not less
than three Banking Days of the Lender prior to the Banking Day of
the Lender on which such rate is to take effect, give Lender
written or telephonic notice thereof, which shall be irrevocable.
Such notice shall specify the Loan or portion thereof to which
LIBOR is to apply, and, in addition, the desired LIBOR Interest
Period of one, two or three months (but not to exceed the
maturity date of this Agreement.)
(c) FEDERAL FUNDS RATE. If the Loans may bear interest at the
Federal Funds Rate (pursuant to Section 2.1 hereinabove) and
Borrower wishes to borrow funds or to change the rate of interest
on any Loan, it shall, at or before 10:00 A.M., Chicago time on
the date such borrowing or change is to take effect, which shall
be a Banking Day (as hereinafter defined) of the Lender, give
written or telephonic notice thereof, which shall be irrevocable.
Such notice shall specify the Loan or portion thereof to which
the Federal Funds Rate shall apply.
(d) FAILURE TO NOTIFY. If Borrower does not notify Lender at
the expiration of a selected Interest Period with respect to any
principal outstanding at the Bank Offered Rate or LIBOR, then in
the absence of such notice Borrower shall be deemed to have
elected to have such principal accrue interest after the
respective Bank Offered Rate or LIBOR Interest Period at the
Prime-Based Rates. If Borrower does not notify Lender as to its
selection of the interest rate option with respect to any new
Loan, then in the absence of such notice Borrower shall be deemed
to have elected to have such initial advance accrue interest at
the Prime-Based Rate.
2.4. INTEREST PAYMENT DATES. Accrued interest shall be paid
in respect of each portion of principal (i) to which the Prime-
Based Rate applies quarterly on the last day of each March, June,
September and December; (ii) to which the Federal Funds Rate
applies monthly on the last day of each month of each year,
beginning with the first of such dates to occur after the date of
the first Loan or portion thereof, at maturity, and upon payment
in full, and (iii) to which any other interest rate option
applies, the end of each respective Interest Period, every three
months, at maturity, and upon payment in full, whichever is
earlier or more frequent. After maturity of any installment,
interest shall be payable upon demand.
2.5. ADDITIONAL PROVISIONS WITH RESPECT TO BANK OFFERED RATE,
FEDERAL FUNDS RATE, AND LIBOR LOANS.
The selection by borrower of the Bank Offered Rate, the Federal
Funds Rate or LIBOR and the maintenance of Loans or portions
thereof at such rate shall be subject to the following additional
terms and conditions:
(a) AVAILABILITY OF DEPOSITS AT A DETERMINABLE RATE. If,
after a Borrower has elected to borrow or maintain any Loan or
portion thereof at the Federal Funds Rate or LIBOR, Lender
notifies Borrower that:
(i) United States dollar deposits in the amount and for
the maturity requested are not available to Lender (in
the case of LIBOR, in the London interbank market); or
(ii) Reasonable means do not exist for Lender to
determine the Federal Funds Rate or LIBOR for the amount
and maturity requested, all as determined by the Lender
in its sole discretion, then the principal subject to the
Federal Funds Rate or LIBOR shall accrue or shall
continue to accrue interest at the Prime-Based Rate.
(b) PROHIBITION OF MAKING, MAINTAINING, OR REPAYMENT OF
PRINCIPAL AT THE FEDERAL FUNDS RATE OR LIBOR. If any treaty,
statute, regulation, interpretation thereof, or any directive,
guideline, or otherwise by a central bank or fiscal authority
(whether or not having the force of law) shall either prohibit or
extend the time at which any principal subject to the Federal
Funds Rate or LIBOR may be purchased, maintained, or repaid, then
on and as of the date the prohibition becomes effective, the
principal subject to that prohibition shall continue at the Prime-
Based Rate.
(c) PAYMENTS OF PRINCIPAL AND INTEREST TO BE INCLUSIVE OF ANY
TAXES OR COSTS. All payments of principal and interest shall
include any taxes and costs incurred by Lender resulting from
having principal outstanding hereunder at the LIBOR. Without
limiting the generality of the preceding obligation,
illustrations of such taxes and costs are:
(i) With respect only to LIBOR, Taxes (or the
withholding of amounts for taxes) of any nature
whatsoever including income, excise, and interest
equalization taxes (other than income taxes imposed by
the United States or any state thereof on the income of
Lender), as well as all levies, imposts, duties, or fees
whether now in existence or resulting from a change in,
or promulgation of, any treaty, statute, regulation,
interpretation thereof, or any directive, guideline, or
otherwise, by a central bank or fiscal authority (whether
or not having the force of law) or a change in the basis
of, or time of payment of, such taxes and other amounts
resulting therefrom;
(ii) With respect only to LIBOR, any reserve or special
deposit requirements against or liabilities of, or
deposits with or for the account of, Lender with respect
to principal outstanding at LIBOR (including those
imposed under Regulation D of the Federal Reserve Board)
or resulting from a change in, or the promulgation of,
such requirements by treaty, statute, regulation,
interpretation thereof, or any directive, guideline, or
otherwise by a central bank or fiscal authority (whether
or not having the force of law);
(iii) With respect only to LIBOR, any other costs
resulting from compliance with treaties, statutes,
regulations, interpretations, or any directives or
guidelines, or otherwise by a central bank or fiscal
authority (whether or not having the force of law);
(iv) Any loss (including loss of anticipated profits) or
expense incurred by reason of the liquidation or re-
employment of deposits acquired by Lender:
(A) To make any Loan or portion thereof or
maintain principal outstanding at LIBOR, or
(B) As the result of a voluntary prepayment at a
date other than the Maturity Date selected for
principal outstanding at LIBOR; or
(C) As the result of a mandatory repayment at a
date other than that Maturity Date selected for
principal outstanding at the LIBOR as a result of
Borrower exceeding any applicable borrowing base or
as the result of the occurrence of an Event of
Default and the acceleration of any portion of the
indebtedness hereunder; or
(D) As the result of a prohibition on making,
maintaining, or repaying principal outstanding at
LIBOR.
If Lender incurs any such taxes or costs, Borrower, upon
demand in writing specifying such taxes and costs, shall
promptly pay them; save for manifest error Lender's
specification shall be presumptively deemed correct.
2.6. BASIS OF COMPUTATION. Interest shall be computed for the
actual number of days elapsed on the basis of a year consisting
of 360 days, including the date a Loan is made and excluding the
date a Loan or any portion thereof is paid is prepaid.
2.7. COMMITMENT FEE, REDUCTION OF COMMITMENT. Borrower agrees
to pay Lender a commitment fee (the "Commitment Fee") of one-
eighth of one percent (0.125%) per annum on the average daily
unused amount of the Revolving Loan Commitment. The Commitment
Fee shall commence to accrue on the date of this Agreement and
shall be paid on the last day of each March, June, September and
December; in each year, beginning with the first of such dates to
occur after the date of this Agreement, at maturity and upon
payment in full. At any time or from time to time, upon at least
ten days prior written notice, which shall be irrevocable,
Borrower may reduce the Revolving Loan Commitment in the amount
of at least $500,000 or in full. Upon any such reduction of any
part of the unused Revolving Loan Commitment, the Commitment Fee
on the part reduced shall be paid in full as of the date of such
reduction.
SECTION 3. PAYMENTS AND PREPAYMENTS
3.1. OPTIONAL PREPAYMENTS. Borrower may prepay without
penalty or premium any principal bearing interest at the Prime-
Based Rate or the Federal Funds Rate and may prepay any principal
bearing interest at the Bank Offered Rate or LIBOR at the end of
the Interest Period chosen or agreed to by Borrower applicable to
such Loan or portion of such Loan. If Borrower prepays any
principal bearing interest at the Offered Rate or LIBOR in whole
or in part prior to the expiration of an Interest Period, or if
the maturity of any such Bank Offered Rate, or LIBOR principal is
accelerated, then, to the fullest extent permitted by law
Borrower shall also pay Lender for all losses (including but not
limited to interest rate margin and any other losses of
anticipated profits) and expenses incurred by reason of the
liquidation or re-employment of deposits acquired by Lender to
make the Loan or maintain principal outstanding at the Bank
Offered Rate or LIBOR. Upon Lender's demand in writing
specifying such losses and expenses, Borrower shall promptly pay
them; Lender's specification shall be deemed correct in the
absence of manifest error. All Loans or portions thereof made at
the Bank Offered Rate or LIBOR shall be conclusively deemed to
have been funded by or on behalf of Lender (in the case of LIBOR,
in the London interbank market) by the purchase of deposits
corresponding in amount and maturity to the amount and interest
periods selected (or deemed to have been selected) by Borrower
under this Agreement. Any partial repayment or prepayment shall
be in an amount of at least $500,000, and, in the case of the
Term Loan, shall be applied to the unpaid installments in the
inverse order of maturity.
3.2. MANDATORY PREPAYMENT. Borrower, on December 31, 1999,
shall make a mandatory prepayment in an amount sufficient to
reduce the aggregate outstanding principal amount of the
revolving Loans to $5,000,000. Such prepayment shall include
accrued interest and fees due and owing thereon.
3.3. FUNDS. All payments of principal, interest and
Commitment Fee shall be made in immediately available funds to
Lender at its banking office indicated above or as otherwise
directed by Lender.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce to make each of the Loans, Borrower
represents and warrants to Lender that:
4.1. ORGANIZATION. Borrower and any Subsidiary (as defined
below) are existing and in good standing under the laws of their
state of formation, and are duly qualified, in good standing and
authorized to do business in each jurisdiction where failure to
do so might have a material adverse impact on the consolidated
assets, condition or prospects of Borrower. Borrower and any
Subsidiary have the power and authority to own their properties
and to carry on their businesses as now being conducted.
4.2. AUTHORIZATION; NO CONFLICT. The execution, delivery and
performance of this Agreement and all related documents and
instruments: (a) are within Borrower's powers; (b) have been
authorized by all necessary corporate action; (c) have received
any and all necessary governmental approval; and (d) do not and
will not contravene or conflict with any provision of law or
charter or by-laws of Borrower or any agreement affecting
Borrower or its property.
4.3. FINANCIAL STATEMENTS. Borrower has supplied copies of the
following financial or other statements to Lender:
(a) The Borrower's unaudited consolidated financial statements
as at March 31, 1999;
(b) The Borrower's audited consolidated financial statements
as at December 31, 1998; and
Such statements have been furnished to Lender, have been prepared
in conformity with generally accepted accounting principles
applied on a basis consistent with that of the preceding fiscal
year, and fairly present the financial condition of Borrower and
any Subsidiary as at such dates and the results of their
operations for the respective periods then ended. Since the date
of those financial statements, no material, adverse change in the
business, condition, properties, assets, operations, or prospects
of Borrower or any Subsidiary has occurred of which Lender has
not been advised in writing before this Agreement was signed.
There is no known contingent liability of Borrower or any
Subsidiary which is known to be in an amount in excess of $10,000
(excluding loan commitments, letters of credit, and other
contingent liabilities incurred in the ordinary course of the
banking business) in excess of insurance for which the insurer
has confirmed coverage in writing which is not reflected in such
financial statements or of which Lender has not been advised in
writing before this Agreement was signed.
4.4. TAXES. Borrower and any Subsidiary have filed or caused
to be filed all federal, state and local tax returns which, to
the knowledge of Borrower or any Subsidiary, are required to be
filed, and have paid or have caused to be paid all taxes as shown
on such returns or on any assessment received by them, to the
extent that such taxes have become due (except for current taxes
not delinquent and taxes being contested in good faith and by
appropriate proceedings for which adequate reserves have been
provided on the books of Borrower or the appropriate Subsidiary,
and as to which no foreclosure, sale or similar proceedings have
been commenced). Borrower and any Subsidiary have set up
reserves which are adequate for the payment of additional taxes
for years which have not been audited by the respective tax
authorities.
4.5. LIENS. None of the assets of Borrower or any Subsidiary
are subject to any mortgage, pledge, title retention lien, or
other lien, encumbrance or security interest: except: (a) for
current taxes not delinquent or taxes being contested in good
faith and by appropriate proceedings; (b) for liens arising in
the ordinary course of business for sums not due or sums being
contested in good faith and by appropriate proceedings, but not
involving any deposits or Loan or portion thereof or borrowed
money or the deferred purchase price of property or services; (c)
to the extent specifically shown in the financial statements
referred to above; (d) for liens in favor of Lender; and (e)
liens and security interests securing deposits of public funds,
repurchase agreements, Federal funds purchased, trust assets, and
other similar liens granted in the ordinary course of the banking
business; (f) liens granted by Citizens Finance Company and ULTEA
Inc. in favor of Subsidiary Banks; (g) liens granted by any
Subsidiary Bank to a Federal Home Loan Bank in connection with a
loan secured by assets of such Subsidiary Bank made by such Home
Loan Bank to any Subsidiary Bank; and (h) liens granted by ULTEA
Inc. in connection with indebtedness described in Section
5.5(a)(iii).
4.6. ADVERSE CONTRACTS. Neither Borrower nor any Subsidiary
is a party to any agreement or instrument or subject to any
charter or other corporate restriction, nor is it subject to any
judgment, decree or order of any court or governmental body,
which may have a material and adverse effect on the business,
assets, liabilities, financial condition, operations or business
prospects of Borrower and its Subsidiaries taken as a whole or on
the ability of Borrower to perform its obligations under this
Agreement or the Note. Neither Borrower nor any Subsidiary has,
nor with reasonable diligence should have had, knowledge of or
notice that it is in default in the performance, observance or
fulfillment of any of the obligations, convenants or conditions
contained in any such agreement, instrument, restriction,
judgment, decree or order.
4.7. REGULATION U. Borrower is not engaged principally in,
nor is one of borrower's important activities, the business of
extending credit for the purpose of purchasing or carrying
"margin stock" within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to
time hereinafter in effect.
4.8. LITIGATION AND CONTINGENT LIABILITIES. No litigation
(including derivative actions), arbitration proceedings or
governmental proceedings are pending or threatened against
Borrower which would (singly or in the aggregate), if adversely
determined, have a material and adverse effect on the financial
condition, continued operations or prospects of Borrower or any
Subsidiary, except as and if set forth (including estimates of
the dollar amounts involved) in a schedule furnished by Borrower
or Lender before this Agreement was signed.
4.9. FDIC INSURANCE. The deposits of each Subsidiary Bank of
the Borrower are insured by the FDIC and no act has occurred
which would adversely affect the status of such Subsidiary Bank
as an FDIC insured bank.
4.10. SUBSIDIARIES. Attached hereto as Exhibit C is a correct
and complete list of all Subsidiaries of Borrower.
SECTION 5. COVENANTS
Until all obligations of Borrower hereunder and under the
Note are paid and fulfilled in full, Borrower agrees that it
shall, and shall cause any Subsidiary to, comply with the
following covenants, unless Lender consents otherwise in writing:
5.1. EXISTENCE, MERGERS, ETC. Borrower and any Subsidiary
shall preserve and maintain their corporate, partnership or joint
venture (as applicable) existence, and will not liquidate,
dissolve, or merge, or consolidate with or into any other entity,
or sell, lease, transfer or otherwise dispose of all or a
substantial part of their assets other than in the ordinary
course of business as now conducted, except that:
(a) Any Subsidiary may merge or consolidate with or into
Borrower or any one or more wholly-owned Subsidiaries;
(b) Any Subsidiary may sell, lease, transfer or otherwise
dispose of any of its assets to Borrower or one or more wholly-
owned Subsidiaries;
(c) ULTEA, Inc. may sell or lease assets to Banks other than
the Subsidiary Banks in an amount not to exceed 50% of its total
lease assets; and
(d) Any merger where Borrower or any Subsidiary will own a
majority of the capital stock of the resulting company.
Borrower and any Subsidiary shall take all steps to become
and remain duly qualified, in good standing and authorized to do
business in each jurisdiction where failure to do so might have a
material adverse impact on the consolidated assets, condition or
prospects of Borrower.
5.2. REPORTS, CERTIFICATES AND OTHER INFORMATION. Borrower
shall furnish (or cause to be furnished) to Lender:
(a) INTERIM REPORTS. Within forty-five (45) days after the
end of each quarter of each fiscal year of Borrower, a copy of an
unaudited financial statement of Borrower and any Subsidiary
prepared on a consolidated basis consistent with the consolidated
financial statements of Borrower and any Subsidiary referred to
above, signed by an authorized officer of Borrower and consisting
of at least: (i) a balance sheet as at the close of such
quarter; and (ii) a statement of earnings and source and
application of funds for such quarter and for the period from the
beginning of such fiscal year to the close of such quarter.
(b) AUDIT REPORT. Within 90 days after the end of each fiscal
year of Borrower, a copy of an annual report of Borrower and any
Subsidiary prepared on a consolidated basis and in conformity
with generally accepted accounting principles applied on a basis
consistent with the consolidated financial statements of Borrower
and any Subsidiary referred to above, duly audited by independent
certified public accountants of recognized standing satisfactory
to Lender, accompanied by an opinion without significant
qualification.
(c) CERTIFICATES. Contemporaneously with the furnishing of a
copy of each annual report and of each quarterly statement
provided for in this Section, a certificate dated the date of
such annual report or such quarterly statement and signed by
either the President, the Chief Financial Officer or the
Treasurer of Borrower, to the effect that no Event of Default or
Unmatured Event of Default has occurred and is continuing, or, if
there is any such event, describing it and the steps, if any,
being taken to cure it, and containing (except in the case of the
certificate dated the date of the annual report) a computation
of, and showing compliance with, any financial ratio or
restriction contained in this Agreement.
(d) REPORTS TO SEC AND TO SHAREHOLDERS. Copies of each filing
and report made by Borrower or any Subsidiary with or to any
securities exchange or the Securities and Exchange Commission,
except in respect of any single shareholder, and of each
communication from Borrower or any Subsidiary to shareholders
generally, promptly upon the filing or making thereof.
(e) NOTICE OF DEFAULT, LITIGATION AND ERISA MATTERS.
Immediately upon learning of the occurrence of any of the
following, written notice describing the same and the steps being
taken by Borrower or any Subsidiary affected in respect thereof:
(i) the occurrence of an Event of Default or an Unmatured Event
of Default; (ii) the institution of, or any adverse determination
in, any litigation, arbitration or governmental proceeding which
is material to Borrower or any Subsidiary on a consolidated
basis; (iii) the occurrence of a reportable event under, or the
institution of steps by Borrower or any Subsidiary to withdraw
from, or the institution of any steps to terminate, any employee
benefit plans as to which Borrower or any of its Subsidiaries may
have any liability and which may have a material adverse impact
on the ability of Borrower to repay the Loans in full on a timely
basis; or (iv) the issuance of any crease and desist order,
memorandum of understanding, cancellation of insurance, or
proposed disciplinary action from the Federal Deposit Insurance
Corporation or other regulatory entity.
(f) OTHER INFORMATION. From time to time such other
information, financial or otherwise, concerning Borrower, any
Subsidiary or any Guarantor as Lender may reasonably request,
including without limitation personal financial statements of any
individual Guarantor (as defined below) on Lender's then-current
form on and as of such dates as Lender may reasonably request.
5.3. INSPECTION. At Borrower's expense if an Event of Default
or Unmatured Event of Default has occurred or is continuing,
Borrower and any Subsidiary shall permit Lender and its agents at
any time during normal business hours to inspect their properties
and to inspect and make copies of their books and records.
5.4. FINANCIAL REQUIREMENTS
(a) TOTAL DEBT TO NET WORTH. The Borrower's total
indebtedness for borrowed money (specifically excluding the
indebtedness for borrowed money of the Borrower's Subsidiaries)
shall not at any time exceed forty-five percent (45%) of its
Tangible Net Worth (provided that nothing in this paragraph shall
permit the Borrower to borrow except as specifically permitted
elsewhere in this Agreement).
(b) LEVERAGE RATIO. The Borrower shall maintain at all times
a ratio of Tier l Capital to average quarterly assets less all
non-qualified intangible assets of at least five percent (5%),
calculated on a consolidated basis as at the last day of each
fiscal quarter of Borrower. Each Subsidiary Bank shall maintain
at all times a ratio of Tier 1 Capital to average quarterly
assets less all non-qualified intangible assets of at least five
percent (5%) as at the last day of each fiscal quarter of such
Subsidiary Bank.
(c) RISK-BASED CAPITAL RATIO. The Borrower shall maintain at
all times a ratio of Total Capital to risk-weighted assets of not
less than ten percent (10%), at least sixty percent (60%) of
which shall consist of Tier 1 Capital. Each Subsidiary Bank
shall maintain at all times a ratio of Total Capital to risk-
weighted assets of not less than ten percent (10%), at least
sixty percent (60%) of which shall consist of Tier 1 Capital.
(d) RETURN ON AVERAGE ASSETS. The Borrower's consolidated net
income shall be at least three quarters of one percent (0.75%) of
its average assets, calculated on an annualized basis as at the
last day of each fiscal quarter of the Borrower.
(e) NONPERFORMING ASSETS. All assets of all Subsidiary Banks
and other Subsidiaries classified as "non-performing" (which
shall include all loans in non-accrual status, more than ninety
(90) days past due in principal or interest, restructured or
renegotiated, or listed as "other restructured" or "other real
estate owned") on the Federal Deposit Insurance Corporation or
other regulatory agency call report shall not exceed at any time
three percent (3%) of the loans of the Borrower and its
Subsidiaries on a consolidated basis.
(f) LOAN LOSS RESERVES RATIO. The Borrower shall maintain at
all times on a consolidated basis a ratio of loan loss reserves
to non-performing loans (not including "other real estate owned")
of not less than one hundred percent (100%).
5.5 INDEBTEDNESS, LIENS AND TAXES. Borrower and any
Subsidiary shall:
(a) INDEBTEDNESS. Not incur, permit to remain outstanding,
assume or in any way become committed for indebtedness in respect
of borrowed money (specifically including but not limited to
indebtedness in respect of money borrowed from financial
institutions but excluding deposits), except: (i) indebtedness
incurred hereunder or to Lender; (ii) indebtedness existing on
the date of this Agreement shown on the financial statements
furnished to Lender before this Agreement was signed; (iii)
indebtedness of any Subsidiary arising in the ordinary course of
the business of such Subsidiary; and (iv) indebtedness incurred
in connection with an offering of trust preferred or similar
securities of any Subsidiary, provided that the aggregate amount
of such offering shall not exceed $25,000,000.
(b) LIENS. Not create, suffer or permit to exist any lien or
encumbrance of any kind or nature upon any of their assets now or
hereafter owned or acquired (specifically including but not
limited to the capital stock of any of the Subsidiary Banks), or
acquire or agree to acquire any property or assets of any
character under any conditional sale agreement or other title
retention agreement, but this Section shall not be deemed to
apply to: (i) liens existing on the date of this Agreement of
which Lender has been advised in writing before this Agreement
was signed; (ii) liens of landlords, contractors, laborers or
supplement, tax liens, or liens securing performance or appeal
bonds, or other similar liens or charges arising out of
Borrower's business, provided that tax liens are removed before
related taxes become delinquent and other liens are promptly
removed, in either case unless contested in good faith and by
appropriate proceedings, and as to which adequate reserves shall
have been established and no foreclosure, sale or similar
proceedings have commenced; (iii) liens in favor of Lender; (iv)
liens on the assets of any Subsidiary arising in the ordinary
course of the business of such Subsidiary; and (v) liens granted
by any Subsidiary Bank to a Federal Home Loan Bank in connection
with a loan secured by assets of such Subsidiary Bank made by
such Home Loan Bank to any Subsidiary Bank.
(c) TAXES. Pay and discharge all taxes, assessments and
governmental charges or levies imposed upon them, upon their
income or profits or upon any properties belonging to them, prior
to the date on which penalties attached thereto, and all lawful
claims for labor, materials and supplies when due, except that no
such tax, assessment, charge, levy or claim need be paid which is
being contested in good faith by appropriate proceedings as to
which adequate reserves shall have been established, and no
foreclosure, sale or similar proceedings have commenced.
(d) GUARANTIES. Not assume, guarantee, endorse or otherwise
become or be responsible in any manner (whether by agreement to
purchase any obligations, stock, assets, goods or services, or to
supply or loan or any portion thereof any funds, assets, goods or
services, or otherwise) with respect to the obligation of any
other person or entity, except: (i) by the endorsement of
negotiable instruments for deposit or collection in the ordinary
course of business, issuance of letters of credit or similar
instruments or documents in the ordinary course of business; (ii)
as permitted by this Agreement; and (iii) in connection with an
offering of trust preferred or similar securities of any
Subsidiary as described in and subject to Section 5.5(a)(iv).
5.6. INVESTMENTS AND LOANS. Neither Borrower nor any
Subsidiary shall make any loan, advance, extension of credit or
capital contribution to, or purchase or otherwise acquire for a
consideration, evidences of indebtedness, capital stock or other
securities of any legal entity, except that Borrower and any
Subsidiary may:
(a) purchase or otherwise acquire and own short-term money
market items (specifically including but not limited to preferred
stock mutual funds);
(b) invest, by way of purchase of securities or capital
contributions, in the Subsidiary Banks or any other bank or
banks, and upon Borrower's purchase or other acquisition of fifty
percent (50%) or more of the stock of any bank, such bank shall
thereupon become "Subsidiary Bank" for all purposes under this
Agreement;
(c) invest, by way of loan, advance, extension of credit
(whether in the form of lease, conditional sales agreement, or
otherwise), purchase of securities, capital contributions, or
otherwise, in Subsidiaries other than banks or Subsidiary Banks;
and
(d) make any investment permitted by applicable governmental
laws and regulations.
Nothing in this Section 5.6 shall prohibit the Borrower or any
Subsidiary Bank from making loans, advances, or other extensions
of credit in the ordinary course of banking upon substantially
the same terms as heretofore extended by them in such business or
upon such terms as may at the time be customary in the banking
business.
5.7 CAPITAL STRUCTURE AND DIVIDENDS. Neither Borrower nor any
Subsidiary shall declare or pay any dividend (other than
dividends payable in its own common stock or to Borrower) or make
any other distribution in respect of such shares or interest
other than to Borrower, except that Borrower may declare or pay
cash dividends to holders of the stock of Borrower in any fiscal
year in an amount not to exceed 50% of Borrower's consolidated
net income for the immediately preceding fiscal year; provided
that no Event of Default or Unmatured Event of Default exists as
of the date of such declaration or payment or would result
therefrom. Borrower shall continue to own, directly or
indirectly, the same (or greater) percentage of the stock and
partnership, joint venture, or other equity interest in each
Subsidiary that it held on the date of this Agreement, and no
Subsidiary shall issue any additional stock or partnership, joint
venture or other equity interests, options or warrants in respect
thereof, or securities convertible into such securities or
interests, other than to Borrower.
5.8 MAINTENANCE OF PROPERTIES. Borrower and any subsidiary
shall maintain, or cause to be maintained, in good repair,
working order and condition, all their properties (whether owned
or held under lease), and from time to time make or cause to be
made all needed and appropriate repairs, renewals, replacements,
additions, and improvements thereto, so that the business carried
on in connection therewith may be properly and advantageously
conducted at all times.
5.9 INSURANCE. Borrower and any Subsidiary shall maintain
insurance in responsible companies in such amounts and against
such risks as is required by law and such other insurance, in
such amount and against such hazards and liabilities, as is
customarily maintained by bank holding companies and banks
similarly situated. Each Subsidiary Bank shall have deposits
insured by the Federal Deposit Insurance Corporation.
5.10. USE OF PROCEEDS
(a) GENERAL. Borrower and any Subsidiary shall not use or
permit any proceeds of the Loans to be used, either directly or
indirectly, for the purpose, whether immediate, incidental or
ultimate, of "purchasing or carrying any margin stock" within the
meaning of Regulations U or X of the Board of Governors of the
Federal Reserve System, as amended from time to time. If
requested by Lender, Borrower and any Subsidiary will furnish to
Lender a statement in conformity with the requirements of Federal
Reserve Form U-1. No part of the proceeds of the Loans will be
used for any purpose which violates or is inconsistent with the
provisions of Regulation U or X of the Board of Governors.
(b) TENDER OFFERS AND GOING PRIVATE. Neither Borrower nor any
Subsidiary shall use (or permit to be used) any proceeds of the
Loans to acquire any security in any transaction which is subject
to Section 13 or 14 of the Securities Exchange Act of 1934, as
amended, or any regulations or rulings thereunder.
5.11. WELL CAPITALIZED. Each Subsidiary Bank shall at all
times be at least "well capitalized" as defined in the Federal
Deposit Insurance Corporation Improvement Act of 1991 and any
regulations to be issued thereunder, as such statute or
regulation may be amended or supplemented from time to time.
5.12. COMPLIANCE WITH LAW. The Borrower and each Subsidiary
shall be in compliance with all laws and regulations (whether
federal, state or local and whether statutory, administrative,
judicial or otherwise) and with every lawful governmental order
or similar actions (whether administrative or judicial),
specifically including but not limited to all requirements of the
Bank Holding Company Act of 1956, as amended, and with the
existing regulations of the Board of Governors of the Federal
Reserve System relating to bank holding companies.
SECTION 6. CONDITIONS OF LENDING
6.1 DOCUMENTATION; NO DEFAULT. The obligations of Lender to
make any Revolving Credit Loan or the Term Loan is subject to the
following conditions precedent:
(a) INITIAL DOCUMENTATION. Lender shall have received all of
the following promptly upon the execution and delivery hereof,
each duly executed and dated the date hereof, in form and
substance satisfactory to Lender and its counsel, at the expense
of Borrower, and in such number of signed counterparts as Lender
may request (except for the Revolving Credit Note and Term Note,
of which only the original shall be signed):
(i) NOTES. The Revolving Credit Note in the form of
Exhibit A and Term Note in the form of Exhibit B, each
with appropriate insertions;
(ii) RESOLUTION; CERTIFICATE OF INCUMBENCY. A copy of a
resolution of the Board of Directors of Borrower
authorizing or ratifying the execution, delivery and
performance, respectively, of this Agreement, the Notes
and the other documents provided for in this Agreement,
certified by an appropriate officer of Borrower, together
with a certificate of an appropriate officer of
Borrower, certifying the names of the officer(s) of
Borrower authorized to sign this Agreement, the Notes and
the other documents provide for in this Agreement,
together with a sample of the true signature of each such
person (Lender may conclusively rely on such certificate
until formally advised by a like certificate of any
changes therein);
(iii) GOVERNING DOCUMENTS. A certificate signed by an
appropriate officer of Borrower to the effect that since
October 31, 1997 either (i) no change has occurred or
(ii) changes have occurred (with accompanying
description) to the articles of incorporation and by-laws
of Borrower.
(iv) CERTIFICATE OF NO DEFAULT. A certificate signed by
an appropriate officer of Borrower to the effect that:
(A) no Event of Default or Unmatured Event of Default has
occurred and is continuing or will result from the making
of the first Loan; and (B) the representations and
warranties of borrower contained herein are true and
correct as at the date of the first Loan as though made
on that date.
(v) OPINION OF COUNSEL TO BORROWER. An opinion of
counsel to Borrower to such effect as Lender may require;
and
(vi) GUARANTY AGREEMENTS. A Guaranty Agreement in the
form of Exhibit D attached hereto, signed by each
Guarantor;
(vii) GUARANTOR RESOLUTIONS AND CERTIFICATE OF
INCUMBENCY. A copy of a resolution of the Board of
Directors of each Guarantor authorizing or ratifying the
execution, delivery and performance, respectively, of the
Guaranty Agreement and any other documents provided for
in this Agreement, certified by an appropriate officer of
each Guarantor, certifying the names of the officer(s) of
each Guarantor authorized to sign the Guaranty Agreement
and any other documents provided for in this Agreement,
together with a sample of the true signature of each such
person (Lender may conclusively rely on such certificate
until formally advised by a like certificate of any
changes therein);
(viii) OPINION OF COUNSEL TO GUARANTOR. An opinion of
counsel to Guarantor in the form of Exhibit E attached
hereto.
(ix) MISCELLANEOUS. Such other documents and
certificates as Lender may reasonably request.
(b) REPRESENTATIONS AND WARRANTIES TRUE. At the date of each
Revolving Credit Loan and the Term Loan, Borrower's
representations and warranties set forth herein shall be true and
correct as of such date as though made on such date.
(c) NO DEFAULT. At the time of each Revolving Credit Loan and
the Term Loan, and immediately after giving effect to such Loan,
no Event of Default or Unmatured Event of Default shall have
occurred and be continuing at the time of such Loan, or would
result from the making of such Loan.
(d) TERM NOTE. At the time the Term Loan is made, Borrower
shall have executed and delivered the Term Note with appropriate
insertions, together with any supporting documentation (such as
an updated certificate of incumbency or borrowing resolution) as
Lender may reasonably request.
6.2. AUTOMATIC UPDATE OF REPRESENTATIONS AND WARRANTIES AND NO-
DEFAULT CERTIFICATE; CERTIFICATE AT LENDER'S OPTION. The request
by Borrower for any Revolving Credit Loan or for the Term Loan
shall be deemed a representation and warranty by Borrower that
the statements in subsections (b) and (c) of Section 6.1 are true
and correct on and as at the date of each succeeding Revolving
Credit Loan or the Term Loan, as the case may be. Upon receipt of
each Loan request Lender in its sole discretion shall have the
right to request that Borrower provide to Lender, prior to
Lender's funding of the Loan, a certificate executed by
Borrower's President, Treasurer, or Chief Financial Officer to
such effect.
SECTION 7. DEFAULT
7.1 EVENTS OF DEFAULT. The occurrence of any of the following
shall constitute an "Event of Default":
(a) failure to pay, when and as due, any principal, interest
or other amounts payable hereunder; or failure to furnish (or
cause to be furnished to)Lender when and as requested by Lender
(but not more often than once every twelve months) fully
completed financial statement(s) of any individual Guarantor on
Lender's then-standard form together with such supporting
information as Lender may reasonably request; or
(b) any default, event of default, or similar event shall
occur or continue under any other instrument, document, note,
agreement, or guaranty delivered to Lender in connection with
this Agreement, or any such instrument, document, note,
agreement, or guaranty shall not be, or shall cease to be,
enforceable in accordance with its term; or
(c) there shall occur any default or event of default, or any
event or condition that might become such with notice or the
passage of time or both, or any similar event, or any event that
requires the prepayment of borrowed money or the acceleration of
the maturity thereof, under the terms of any evidence of
indebtedness or other agreement issued or assumed or entered into
by Borrower, any Subsidiary or any Guarantor, or under the terms
of any indenture, agreement, or instrument under which any such
evidence of indebtedness or other agreement is issued, assumed,
secured, or guaranteed, and such event shall continue beyond any
applicable period of grace; or
(d) any representation, warranty, schedule, certificate,
financial statement, report, notice, or other writing furnished
by or on behalf of Borrower, any Subsidiary or any Guarantor to
Lender is false or misleading in any material respect on the date
as of which the facts therein set forth are stated or certified;
or
(e) any guaranty of or pledge of collateral security for the
Loans shall be repudiated or become unenforceable or incapable of
performance; or
(f) Borrower or any Subsidiary shall fail to comply with
Section 5.1 hereof; or failure to comply with or perform any
agreement or covenant of Borrower contained herein, which failure
does not otherwise constitute an Event of Default, and such
failure shall continue unremedied for ten (10) days after notice
to Borrower by Lender; or
(g) Any Guarantor shall dissolve, liquidate, merge,
consolidate, or cease to be in existence for any reason except as
permitted under Section 5.1 thereof; or
(h) any person or entity presently not in control of Borrower
or any Guarantor, shall obtain control directly or indirectly of
Borrower or any Guarantor, whether by purchase or gift of stock
or assets, by contract, or otherwise; or
(i) any proceeding (judicial or administrative) shall be
commenced against Borrower, any Subsidiary or any Guarantor, or
with respect to any assets of Borrower, any Subsidiary or any
Guarantor which shall threaten to have a material and adverse
effect on the assets, condition or prospects of Borrower, any
Subsidiary or any Guarantor; or final judgment(s) and/or
settlement(s) in an aggregate amount in excess of FIVE MILLION
UNITED STATES DOLLARS ($5,000,000) in excess of insurance for
which the insurer has confirmed coverage in writing, a copy of
which writing has been furnished to Lender, shall be entered or
agreed to in any suit or action commenced against Borrower, any
Subsidiary or any Guarantor; or
(j) Borrower shall grant or any person (other than Lender)
shall obtain a security interest in any assets of Borrower or any
Subsidiary other than as permitted under Section 5.5(b) hereof;
Borrower or any other person shall perfect (or attempt to
perfect) such a security interest; or any notice of a federal tax
lien against Borrower shall be filed with any public recorder; or
(k) the Federal Deposit Insurance Corporation or other
regulatory entity shall issue or agree to enter into a letter
agreement, memorandum of understanding, or a cease and desist
order with or against the Borrower or any Subsidiary; or the
Federal Deposit Insurance Corporation or other regulatory entity
shall issue or enter into an agreement, order, or take any
similar action with or against the Borrower or any Subsidiary
materially adverse to the business or operation of the Borrower
or any Subsidiary; or
(l) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, liquidation, dissolution, or similar proceeding,
domestic or foreign, is instituted by or against Borrower, any
Subsidiary or any Guarantor; or Borrower, any Subsidiary or any
Guarantor shall take any steps toward, or to authorize, such a
proceeding; or
(m) Borrower, any Subsidiary or any Guarantor shall become
insolvent, generally fail or be unable to pay its debts as they
mature, shall admit in writing its inability to pay its debts as
they mature, shall make a general assignment for the benefit of
its creditors, shall enter into any composition or similar
agreement, or shall suspend the transaction of all or a
substantial portion of its usual business.
7.2. DEFAULT REMEDIES
(a) Upon the occurrence and during the continuance of any
Event of Default specified in Section 7.1(a)-(k), Lender at its
option may declare the Note (principal, interest and other
amounts) and any other amounts owed to the Lender, including
without limitation any accrued but unpaid Commitment Fee,
immediately due and payable without notice or demand of any kind.
Upon the occurrence of any Event of Default specified in Section
7.1 (l)-(m), the Note (principal, interest and other amounts) and
any other amounts owed to the Lender, including without
limitation any accrued but unpaid Commitment Fee, shall be
immediately and automatically due and payable without action of
any kind on the part of Lender. Upon the occurrence and during
the continuance of any Event of Default, any obligation of Lender
to make any Loan shall immediately and automatically terminate
without action of any kind on the part of Lender, and Lender may
exercise any rights and remedies under this Agreement, the Note,
any related document or instrument (including without limitation
any pertaining to collateral), and at law or in equity.
(b) Lender may, by written notice to Borrower, at any time and
from time to time, waive any Event of Default or Unmatured Event
of Default, which shall be for such period and subject to such
conditions as shall be specified in any such notice. In the case
of any such waiver, Lender and Borrower shall be restored to
their former position and rights hereunder, and any Event of
Default or Unmatured Event of Default so waived shall be deemed
to be cured and not continuing; but no such waiver shall extend
to or impair any subsequent or other Event of Default or
Unmatured Event of Default. No failure to exercise, and no delay
in exercising, on the part of Lender of any right, power or
privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
The rights and remedies of Lender herein provided are cumulative
and not exclusive of any rights or remedies provided by law.
SECTION 8. DEFINITIONS
8.1. GENERAL. As used herein:
(a) The term "Banking Day" means a day on which Lender is open
at its main office for the purpose of conducting a commercial
banking business and is not authorized to close.
(b) "Closing Date" has, for purposes of this Agreement, the
meaning assigned to such term in Section 1.2 hereof.
(c) The term "Guarantor" means any person or entity, or any
persons or entities severally, now or hereafter guarantying
payment or collection of all or any part of the Loans or any
other liabilities owed by Borrower to Lender, including, without
limitation, Citizens Finance Co. and ULTEA, Inc.
(d) The term "FDIC" means the Federal Deposit Insurance
Corporation and any successor thereof.
(e) The term "Interest Rate Period" means, with regard to Bank
Offered Rate, Certificate of Deposit Rate and LIBOR Loans, the
amount of days from the date an interest rate is to be in effect
to the date such interest period matures according to its terms.
(f) The term "Interim Maturity Date" means the last day of any
Interest Period.
(g) The term "Net Chargeoffs" shall mean for any given fiscal
year the consolidated total of gross loan charges for such fiscal
year net of recoveries made during such fiscal year.
(h) The term "Prime Rate" means that rate of interest
announced from time to time by Lender called its prime rate,
which rate may not at any time be the lowest rate charged by
Lender. Changes in the rate of interest on the Loans resulting
from a change in the Prime Rate shall take effect on the date set
forth in each announcement of a change in the Prime Rate.
(i) The term "Subsidiary" means any corporation, partnership,
joint venture, trust, or other legal entity of which Borrower
owns directly or indirectly fifty percent (50%) or more of the
outstanding voting stock or interest, or of which Borrower has
effective control, by contract or otherwise. The term Subsidiary
includes each Subsidiary Bank unless stated otherwise explicitly.
(j) The term "Subsidiary Bank" means each Subsidiary which is
a bank, including without limitation, Dubuque Bank and Trust
Company, Galena State Bank and Trust Company, First Community
Bank, FSB, Riverside Community Bank, Wisconsin Community Bank,
and New Mexico Bank & Trust.
(k) The term "Tangible Net Worth" shall mean at any date the
total shareholders' equity (including all classes of capital
stock, capital surplus, additional paid-in capital, retained
earnings, contingencies, and capital reserves), MINUS the cost of
common stock reacquired by the Borrower and other capital
accounts of the Borrower at such date, MINUS goodwill, patents,
trademarks, service marks, trade names, copyrights, and all
intangible assets (including without limitation "core-deposit
intangibles" and unidentifiable intangibles resulting from
acquisitions) and all items that are treated as intangible assets
under generally accepted accounting principles or that otherwise
fit within the definition of "intangible assets" in the
instructions for the call report of the Federal Deposit Insurance
Corporation.
(l) The term "Tier 1 Capital" means the same as that
determined under the capital formula currently used by the
Federal Reserve Board.
(m) The term "Total Capital" means the same as that determined
under the capital formula currently used by the Federal Reserve
Board.
(n) The term "Unmatured Event of Default" means an event or
condition which would become an Event of Default with notice or
the passage of time or both.
(o) Except as and unless otherwise specifically provided
herein, all accounting terms shall have the meanings given to
them by generally accepted accounting principles and shall be
applied and all reports required by this Agreement shall be
prepared, in a manner consistent with the financial statements
referred to above.
8.2 APPLICABILITY OF SUBSIDIARY REFERENCES. Terms hereof
pertaining to any Subsidiary shall apply only during such times
as Borrower has any Subsidiary.
SECTION 9. NO INTEREST OVER LEGAL RATE.
Borrower does not intend or expect to pay, nor does Lender
intend or expect to charge, accept or collect any interest which,
when added to any fee or other charge upon the principal which
may legally be treated as interest, shall be in excess of the
highest lawful rate. If acceleration, prepayment or any other
charges upon the principal or any portion thereof, or any other
circumstance, result in the computation or earning of interest in
excess of the highest lawful rate, then any and all such excess
is hereby waived and shall be applied against the remaining
principal balance. Without limiting the generality of the
foregoing, and not withstanding anything to the contrary
contained herein or otherwise, no deposit of funds shall be
required in connection herewith which will, when deducted from
the principal amount outstanding hereunder, cause the rate of
interest hereunder to exceed the highest lawful rate.
SECTION 10. PAYMENTS, ETC.
All payments hereunder shall be made in immediately available
funds, and shall be applied first to accrued interest and then to
principal; however, if an Event of Default occurs, Lender may, in
its sole discretion, and in such order as it may choose, apply
any payment to interest, principal and/or lawful charges and
expenses then accrued. Borrower shall receive immediate credit
on payments received during Lender's normal banking hours if made
in cash, immediately available funds, or by debit to available
balances in an account at Lender; otherwise payments shall be
credited after clearance through normal banking channels.
Borrower authorizes Lender to charge any account of Borrower
maintained with Lender for any amounts of principal, interest,
taxes, duties, or other charges or amounts due or payable
hereunder, with the amount of such payment subject to
availability of collected balances in Lender's discretion; unless
Borrower instructs otherwise, all Loans shall be credited to an
account(s) of Borrower with Lender. LENDER AT ITS OPTION MAY
MAKE LOANS HEREUNDER UPON TELEPHONIC INSTRUCTIONS AND IN SO DOING
SHALL BE FULLY ENTITLED TO RELY SOLELY UPON INSTRUCTIONS,
INCLUDING INSTRUCTIONS TO MAKE TRANSFERS TO THIRD PARTIES,
REASONABLY BELIEVED BY LENDER TO HAVE BEEN GIVEN BY AN AUTHORIZED
PERSON, WITHOUT INDEPENDENT INQURY OF ANY TYPE. All payments
shall be made without deduction for or on account of any present
or future taxes, duties or other charges levied or imposed on
this Agreement, the Note, the Loans or the proceeds, Lender or
Borrower by any government or political subdivision thereof.
Borrower shall request of Lender pay all such taxes, duties or
other charges in addition to principal and interest, including
without limitation all documentary stamp and intangible taxes,
but excluding income taxes based solely on Lender's income.
SECTION 11. SETOFF.
At any time and without notice of any kind, any account ,
deposit or other indebtedness owing by Lender to Borrower, and
any securities or other property of Borrower delivered to or left
in the possession of Lender or its nominee or bailee, may be set
off against and applied in payment of any obligation hereunder,
whether due or not.
SECTION 12. NOTICES.
All notices, requests and demands to or upon the respective
parties hereto shall be deemed to have been given or made when
deposited in the mail, postage prepaid, addressed if to Lender to
its office indicated above (Attention: Division Head,
Correspondent Services Division), and if to Borrower to its
address set forth below, or to such other address as may be
hereafter designated in writing by the respective parties hereto
or, as to Borrower, may appear in Lender's records.
SECTION 13. MISCELLANEOUS.
This Agreement and any document or instrument executed in
connection herewith shall be governed by and construed in
accordance with the internal law of the State of Illinois, and
shall be deemed to have been executed in the State of Illinois.
Unless the context requires otherwise, wherever used herein the
singular shall include the plural and vice versa, and the use of
one gender shall also denote the other. Captions herein are for
convenience of reference only and shall not define or limit any
of the terms or provisions hereof; references herein to Sections
or provisions without reference to the document in which they are
contained are references to this Agreement. This Agreement shall
bind Borrower successors and assigns, and shall inure to the
benefit of Lender, its successors and assigns, except that
Borrower may not transfer or assign any of its rights or interest
hereunder without the prior written consent of Lender. Borrower
agrees to pay upon demand all expenses (including without
limitation attorneys' fees, legal costs and expenses, and time
charges of attorneys who may be employees of Lender, in each case
whether in or out of court, in original or appellate proceedings
or in bankruptcy) incurred or paid by Lender or any holder hereof
in connection with the enforcement or preservation of its rights
hereunder or under any document or instrument executed in
connection herewith. Borrower expressly and irrevocably waives
presentment, protest, demand and notice of any kind in connection
herewith. Lender may, by written notice to Borrower, at any time
and from time to time, waive any Event of Default or Unmatured
Event of Default, which shall be for such period and subject to
such conditions as shall be specified in any such notice. In the
case of any such waiver, Lender and Borrower shall be restored to
their former position and rights hereunder and under the Note,
respectively, and any Event of Default or Unmatured Event of
Default so waived shall be deemed to be cured and not continuing;
but no such waiver shall extend to or impair any subsequent or
other Event of Default or Unmatured Event of Default. No failure
to exercise, and no delay in exercising, on the part of Lender of
any right, power or privilege hereunder shall preclude any other
or further exercise thereof or the exercise of any other right,
power or privilege. The rights and remedies of Lender herein
provided are cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 14. WAIVER OF JURY TRIAL, ETC.
BORROWER HEREBY IRREVOCABLY AGREES THAT, SUBJECT TO LENDER'S
SOLE AND ABSOLUTE ELECTION, ALL SUITS, ACTIONS OR OTHER
PROCEEDINGS WITH RESPECT TO, ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT OR ANY DOCUMENT OR INSTRUMENT EXECUTED IN
CONNECTION HEREIWTH SHALL BE SUBJECT TO LITIGATION IN COURTS
HAVING SITUS WITHIN OR JURISDICTION OVER XXXX COUNTY, ILLINOIS.
BORROWER HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY
LOCAL, STATE OR FEDERAL COURT LOCATED IN OR HAVING JURISDICTION
OVER SUCH COUNTY, AND HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE TO REQUEST OR DEMAND TRIAL BY JURY, TO TRANSFER OR CHANGE
THE VENUE OF ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT BY
LENDER IN ACCORDANCE WITH THIS PARAGRAPH, OR TO CLAIM THAT ANY
SUCH PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the day and year first above written.
HEARTLAND FINANCIAL USA, INC.
By: /s/ Xxxx X. Xxxxxxx
-----------------------
Title: EVP-CFO
-----------------------
Address for notices:
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxx 00000-0000
Attention: Xxxx X. Xxxxxxx
THE NORTHERN TRUST COMPANY
By: /s/ X. X. Xxxxxxxxx
-----------------------
Title: VP
-----------------------
Address: 00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Division Head,
Correspondent Services
EXHIBIT A
REVOLVING CREDIT NOTE
$15,000,000 Chicago, Illinois
July 23, 1999
FOR VALUED RECEIVED, on or before July 23, 2000, the
scheduled maturity date hereof, HEARTLAND FINANCIAL USA, INC., a
corporation formed under the laws of the State of Delaware
("Borrower"), promises to pay to the order of THE NORTHERN TRUST
COMPANY, an Illinois banking corporation (hereafter, together
with any subsequent holder hereof, called "Lender"), at its main
banking office at 00 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000, or at such other place as Lender may direct, the aggregate
unpaid principal balance of each advance (a "Loan" and
collectively the "Loans") made by Lender to Borrower hereunder.
The total principal amount of Loans outstanding at any one time
hereunder shall not exceed FIFTEEN MILLION UNITED STATES DOLLARS
($15,000,000).
Lender is hereby authorized by Borrower at any time and from
time to time at Lender's sole option to attach a schedule (grid)
to this Note and to endorse thereon notations with respect to
each Loan specifying the date and principal amount thereof, and
the date and amount of each payment of principal and interest
made by Borrower with respect to each such Loan. Lender's
endorsements as well as its records relating to Loans shall be
rebuttably presumptive evidence of the outstanding principal and
interest on the Loans, and, in the event of inconsistency, shall
prevail over any records of Borrower and any written
confirmations of Loans given by Borrower.
Borrower agrees to pay interest on the unpaid principal
amount from time to time outstanding hereunder on the dates and
at the rate or rates as set forth in the Credit and Agreement (as
hereinafter defined).
Payments of both principal and interest are to be made in
immediately available funds in lawful money of the United States
of America.
This Note evidences indebtedness incurred under an Amended
and Restated Agreement dated as of the date hereof executed by
and between the Borrower and Lender (and, if amended, restated or
replaced, all amendments, restatements and replacements thereto
or therefor, if any) (the "Credit Agreement"), to which Credit
Agreement reference is hereby made for a statement of its terms
and provisions, including without limitation those under which
this Note may be paid prior to its due date or have its due date
accelerated.
This Note issued pursuant to the Credit Agreement replaces,
supersedes, amends and restates the promissory note executed and
delivered by Borrowers pursuant to the Existing Agreement (as
defined in the Credit Agreement) (the "Prior Note"); provided,
that this Note shall not constitute a novation, and nothing
herein or therein shall be deemed to have extinguished or
discharged the indebtedness and obligations under the Prior Note,
all of which shall continue under and be governed by the Note and
the Credit Agreement.
This Note and any document or instrument executed in
connection herewith shall be governed by and construed in
accordance with the internal law of the State of Illinois, and
shall be deemed to have been executed in the State of Illinois.
Unless the context requires otherwise, wherever used herein the
singular shall include the plural and vice versa, and the use of
one gender shall also denote the other. Captions herein are for
conveniences of reference only and shall not defined or limit any
of the terms or provisions hereof; references herein to Sections
or provisions without reference to the document in which they are
contained are references to this Note. This Note shall bind
Borrower successors and assigns, and shall inure to the benefit
of Lender, its successors and assigns, except that Borrower may
not transfer or assign any of its rights or interest hereunder
without the prior written consent of Lender. Borrower agrees to
pay upon demand all expenses (including without limitation
attorneys' fees, legal costs and expenses, and time charges of
attorneys who may be employees of Lender, in each case whether in
or out of court, in original or appellate proceedings or in
bankruptcy) incurred or paid by Lender or any holder hereof in
connection with the enforcement or preservation of its rights
hereunder or under any document or instrument executed in
connection herewith. Borrower expressly and irrevocably waives
presentment, protest, demand and notice of any kind in connection
herewith.
HEARTLAND FINANCIAL USA, INC.
By:
-----------------------
Title:
--------------------
EXHIBIT B
TERM NOTE
$ $25,000,000 Chicago, Illinois
July 23, 1999
FOR VALUE RECEIVED, HEARTLAND FINANCIAL USA, INC., a
corporation formed under the laws of the State of Delaware
("Borrower"), promises to pay to the order of THE NORTHERN TRUST
COMPANY, an Illinois banking corporation (hereafter, together
with any subsequent holder hereof, called "Lender"), at its main
banking office at 00 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000, or at such other place as Lender may direct, the principal
sum of TWENTY FIVE MILLION UNITED STATES DOLLARS
($25,000,000)(The "Loan"), payable in fifteen (15) consecutive
quarterly principal installment(s) of $1,000,000 and a final
principal installment of $10,000,000, each installment payable on
the last day of each March, June, September, and December of each
year, beginning March 31, 2000, provided that, notwithstanding
the foregoing, any and all remaining outstanding principal shall
be due and payable in full on December 31, 2003, the scheduled
maturity date of this Note.
Borrower agrees to pay interest on the unpaid principal
amount from time to time outstanding hereunder on the dates and
at the rate or rates as set forth in the Agreement (as
hereinafter defined).
Payments of both principal and interest are to be made in
immediately available funds in lawful money of the United States
of America.
This Note evidences indebtedness incurred under a Amended
and Restated Credit Agreement dated as of the date hereof
executed by and between the Borrower and Lender (and, if amended,
restated or replaced, all amendments, restatements and
replacements thereto or therefor, if any)(the "Credit
Agreement"), to which Credit Agreement reference is hereby made
for a statement of its terms and provisions, including without
limitation those under which this Note may be paid prior to its
due date or have its due date accelerated.
This Note and any document or instrument executed in
connection herewith shall be governed by and construed in
accordance with the internal law of the State of Illinois, and
shall be deemed to have been executed in the State of Illinois.
Unless the context requires otherwise, wherever used herein the
singular shall include the plural and vice versa, and the use of
one gender shall also denote the other. Captions herein are for
convenience of reference only and shall not define or limit any
of the terms or provisions hereof; references herein to Sections
or provisions without reference to the document in which they are
contained are references to this Note. This Note shall bind
Borrower successors and assigns, and shall inure to the benefit
of Lender, its successors and assigns, except that Borrower may
not transfer or assign any of its rights or interest hereunder
without the prior written consent of Lender. Borrower agrees to
pay upon demand all expenses (including without limitation
attorney's fees, legal costs and expenses, and time charges of
attorneys who may be employees of Lender, in each case whether in
or out of court, in original or appellate proceedings or in
bankruptcy) incurred or paid by Lender or any holder hereof in
connection with the enforcement or preservation of its rights
hereunder or under any document or instrument executed in
connection herewith. Borrower expressly and irrevocably waives
presentment, protest, demand and notice of any kind of connection
herewith.
HEARTLAND FINANCIAL USA, INC.
By:
-----------------------
Title:
--------------------
EXHIBIT C
The following is a complete list of Subsidiaries of
Heartland Financial USA, Inc. as of July 23, 1999.
1.
2.
3.
4.
EXHIBIT D
GUARANTY
1. GUARANTY OF PAYMENT. For value received, and in
consideration of any loan or other financial accommodation
heretofore or hereafter at any time made or granted to HEARTLAND
FINANCIAL USA, INC., a Delaware Corporation (hereinafter
collectively called the "Debtor") by THE NORTHERN TRUST COMPANY
(hereinafter, together with its successors and assigns, called
the "Bank"), 00 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000,
the undersigned hereby unconditionally guarantees the full and
prompt payment when due, whether by acceleration or otherwise,
and at all times thereafter, of all obligations of the Debtor to
the Bank, howsoever created, arising or evidenced, whether direct
or indirect, absolute or contingent, or now or hereafter
existing, or due or to become due including, without limitation,
such obligations of Debtor as arise out of or in connection with
the Amended and Restated Credit Agreement, dated as of July 23,
1999 (all such obligations, together with any extensions or
renewals thereof, being hereinafter collectively called the
"Liabilities"), and the undersigned further agrees to pay all
expenses (including, attorneys' and legal assistants' fees (which
attorneys and legal assistants may be employees of the Bank) and
legal expenses) paid or incurred by the Bank in endeavoring to
collect the liabilities, or any part thereof, and in enforcing
this guaranty. The right of recovery against the undersigned
under this guaranty is, however, limited to the amount of FORTY
MILLION DOLLARS ($40,000,000), plus: (a) any other additional
amounts loaned by the Bank to the Debtor provided, however that
the right of recovery against the undersigned for any such
original or additional amounts in the aggregate shall not exceed
FORTY MILLION DOLLARS ($40,000,000); (b) interest on any such
amount or additional amounts; and (c) all expenses of enforcing
this guaranty, provided that in no event shall Guarantor's
liability under this Agreement exceed 95% of its net worth on the
date of this Agreement or the date of determination, whichever is
greater.
2. ACCELERATION OF THE TIME OF PAYMENT OF AMOUNT PAYABLE
UNDER GUARANTY. The undersigned agrees that, in the event of the
dissolution or insolvency of the Debtor or the undersigned, or
the inability of the Debtor or the undersigned to pay debts as
they mature, or an assignment by the Debtor or the undersigned
for the benefit of creditors, or the institution of any
proceeding by or against the Debtor or the undersigned alleging
that the Debtor or the undersigned is insolvent or unable to pay
debts as they mature, and if such event shall occur at a time
when any of the Liabilities may not then be due and payable, the
undersigned will pay to the Bank forthwith the full amount which
would be payable hereunder by such undersigned if all of the
Liabilities were then due and payable.
3. SECURITY INTEREST IN DEPOSITS AND OTHE PROPERTY. To
secure all obligations of the undersigned hereunder, the Bank
shall have a lien upon and security interest in (and may, without
demand or notice of any kind, at any time and from time to time
when any amount shall be due and payable by such undersigned
hereunder, appropriate and apply toward the payment of such
amount, in such order of application as the Bank may elect) any
and all balances, credits, deposits (general or special, time or
demand, provisional or final), accounts or moneys of or in the
name of such undersigned now or hereafter with the Bank and any
and all property of every kind or description of or in the name
of such undersigned now or hereafter, for any reason or purpose
whatsoever, in the possession or control of, or in transit to,
the Bank or any agent or bailee for the Bank. All obligations of
the undersigned shall also be secured by any and all other
property in which the Bank now or hereafter has a lien or
security interest and which may be or become collateral for the
payment of such obligations by reason of the general description
of secured obligations contained in the security agreement or
other agreement or instrument creating such lien or security
interest.
4. CONTINUING GUARANTY. This guaranty shall in all
respects be a continuing, absolute and unconditional guaranty,
and shall remain in full force and effect (notwithstanding,
without limitation, the dissolution of the undersigned or that at
any time or from time to time all of the Liabilities may have
been paid in full), subject to discontinuance as to the
undersigned only upon actual receipt by the Bank of written
notice from such undersigned, or any person duly authorized and
acting on behalf of such undersigned, of the discontinuance
hereof as to such undersigned; provided, however, that no such
notice of discontinuance shall affect or impair any of the
agreements and obligations of the undersigned hereunder with
respect to any and all Liabilities existing prior to the time of
actual receipt of such notice by the Bank, any and all
Liabilities created or acquired thereafter pursuant to any
previous commitments made by the Bank, any and all extensions or
renewals of any of the foregoing, any and all interest on any of
the foregoing, and any and all expenses paid or incurred by the
Bank in endeavoring to collect any of the foregoing and in
enforcing this guaranty against such undersigned; and all of the
agreements and obligations of such undersigned under this
guaranty shall, notwithstanding any such notice of
discontinuance, remain fully in effect until all such Liabilities
(including any extensions or renewals of any thereof) and all
such interest and expenses shall have been paid in full.
5. RESCISSION OR RETURN OF PAYMENT ON LIABILITIES. The
undersigned further agrees that, if at any time all or any part
of any payment theretofore applied by the Bank to any of the
Liabilities is or must be rescinded or returned by the Bank for
any reason whatsoever (including, without limitation, the
insolvency, bankruptcy or reorganization of the Debtor), such
Liabilities shall, for the purposes of this guaranty, to the
extent that such payment is or must be rescinded or returned, be
deemed to have continued in existence, notwithstanding such
application by the Bank, and this guaranty shall continue to be
effective or be reinstated, as the case may be, as to such
Liabilities, all as though such application by the Bank had not
been made.
6. BANK PERMITTED TO TAKE CERTAIN ACTIONS. The Bank may,
from time to time (but shall not be obligated to), whether before
or after any discontinuance of this guaranty, at its sole
discretion and without notice to the undersigned, take any or all
of the following actions: (a) retain or obtain a security
interest in any property to secure any of the Liabilities or any
obligation hereunder; (b) retain or obtain the primary or
secondary obligation of any obligor or obligors, in addition to
the undersigned, with respect to any of the Liabilities; (c)
extend or renew for one or more periods (whether or not longer
than the original period), alter or exchange any of the
Liabilities, or release or compromise any obligation of any of
the undersigned hereunder or any obligation of any nature of any
other obligor with respect to any of the Liabilities; (d) release
its security interest in, or surrender, release or permit any
substitution or exchange for, all or any part of any property
securing any of the Liabilities or any obligation hereunder, or
extend or renew for one or more periods (whether or not longer
than the original period) or release, compromise, alter or
exchange any obligations of any nature of any obligor with
respect to any such property; and (e) resort to the undersigned
for payment of any of the Liabilities, whether or not the Bank
(i) shall have resorted to any property securing any of the
Liabilities or any obligation hereunder or (ii) shall have
proceeded against any other obligor primarily or secondarily
obligated with respect to any of the Liabilities (all of the
actions referred to in preceding clauses (i) and (ii) being
hereby waived by the undersigned).
7. APPLICATION OF PAYMENTS. Any amounts received by the
Bank from whatsoever source on account of the Liabilities may be
applied by it toward the payment of such of the Liabilities, and
in such order of application, as the Bank may from time to time
elect.
8. SUBROGATION. Until such time as this guaranty shall
have been discontinued as to the undersigned and the Bank shall
have received payment of the full amount of all of the
Liabilities and of all obligations of the undersigned hereunder,
no payment made by or for the account of the undersigned pursuant
to this guaranty shall entitle the undersigned by subrogation or
otherwise to any payment by the Debtor or from or out of any
property of the Debtor, and the undersigned shall not exercise
any right or remedy against the Debtor or any property of the
debtor by reason of any performance by such undersigned of this
guaranty.
9. WAIVER OF NOTICE AND OTHER MATTERS. The undersigned
waives: (a) notice of the acceptance by the Bank of this
guaranty; (b) notice of the existence or creation or non-payment
of all or any of the Liabilities; (c) presentment, demand, notice
of dishonor, protest, and all other notices whatsoever; and (d)
all diligence in collection or protection of or realization upon
the Liabilities or any thereof, any obligation hereunder, or any
security for or guaranty of any of the foregoing.
10. ADDITIONAL LIABILITIES OF THE DEBTOR AUTHORIZED. The
creation or existence from time to time of Liabilities in excess
of the amount to which the right of recovery under this guaranty
is limited is hereby authorized, without notice to the
undersigned, and shall in no way affect or impair the rights of
the Bank and the obligations of the undersigned under this
guaranty.
11. ASSIGNMENT OF LIABILITIES. The Bank may, from time to
time, whether before or after any discontinuance of this
guaranty, without notice to the undersigned, assign or transfer
any or all of the Liabilities or any interest therein; and,
notwithstanding any such assignment or transfer or any subsequent
assignment or transfer thereof, such Liabilities shall be and
remain Liabilities for the purposes of this guaranty, and each
and every immediate and successive assignee or transferee of any
of the Liabilities or of any interest therein shall, to the
extent of the interest of such assignee or transferee in the
Liabilities, be entitled to the benefits of this guaranty to the
same extent as if such assignee or transferee were the Bank;
provided, however, that, unless the Bank shall otherwise consent
in writing, the Bank shall have an unimpaired right, prior and
superior to that of any such assignee or transferee, to enforce
this guaranty, for the benefit of the Bank, as to those of the
Liabilities which the Bank has not assigned or transferred.
12. INFORMATION CONCERNING DEBTOR; NO RELIANCE ON
REPRESENTATION BY BANK. The undersigned hereby warrants to the
Bank that such undersigned now has and will continue to have
independent means of obtaining information concerning the
affairs, financial condition and business of the Debtor. The Bank
shall not have any duty or responsibility to provide the
undersigned with any credit or other information concerning the
affairs, financial condition or business of the Debtor which may
come into the Bank's possession. The undersigned has executed and
delivered this guaranty without reliance upon any representation
by the Bank with respect to (a) the due execution, validity,
effectiveness or enforceability of any instrument, document or
agreement evidencing or relating to any of the Liabilities or any
loan or other financial accommodation made or granted to the
Debtor; (b) the validity, genuineness, enforceability, existence,
value or sufficiency or any property securing any of the
Liabilities or the creation, perfection or priority of any lien
or security interest in such property; or (c) the existence,
number, financial condition or creditworthiness of other
guarantors or sureties with respect to any of the Liabilities.
13. WAIVER AND MODIFICATIONS. No delay on the part of the
Bank in the exercise of any right or remedy shall operate as a
waiver thereof, and no single or partial exercise by the Bank of
any right or remedy shall preclude other or further exercise
thereof or the exercise of any other right or remedy; nor shall
any modification or waiver of any of the provisions of this
guaranty be binding upon the Bank except as expressly set forth
in a writing duly signed and delivered on behalf of the Bank.
14. OBLIGATIONS UNDER GUARANTY. No action of the Bank
permitted hereunder shall in any way affect or impair the rights
of the Bank and the obligations of the undersigned under this
guaranty. For the purposes of this guaranty, Liabilities shall
include all obligations of the Debtor to the Bank,
notwithstanding any right or power of the Debtor or anyone else
to assert any claim or defense as to the invalidity or
unenforceability of any such obligation, and no such claim or
defense shall affect or impair the obligations of the undersigned
hereunder. The obligations of the undersigned under this guaranty
shall be absolute and unconditional irrespective of any
circumstance whatsoever which might constitute a legal or
equitable discharge or defense of the undersigned. The
undersigned acknowledges that there are no conditions to the
effectiveness of this guaranty.
15. SUCCESSORS. This guaranty shall be binding upon the
undersigned, and upon the heirs, legal representatives,
successors and assigns of the undersigned.
16. LAW. THIS GUARANTY HAS BEEN DELIVERED AT CHICAGO,
ILLINOIS, AND SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS.
17. SEVERABILITY. Wherever possible, each provision of
this guaranty shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of
this guaranty shall be prohibited by or invalid under such law,
such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this guaranty.
18. CAPTIONS. Section captions used in this guaranty are
for convenience only, and shall not affect the construction of
this guaranty.
19. WAIVER OF JURY TRIAL. THE UNDERSIGNED WAIVES, AND, BY
ACCEPTING THIS GUARANTY, THE BANK SHALL BE DEEMED TO WAIVE, ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE
OR DEFEND ANY RIGHTS (A) UNDER THIS GUARANTY OR UNDER ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR (B)
ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH
THIS GUARANTY, AND THE UNDERSIGNED AGREES, AND, BY ACCEPTING THIS
GUARANTY, THE BANK SHALL BE DEEMED TO AGREE, THAT ANY SUCH ACTION
OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
JURY.
20. SUBMISSION TO JURISDICTION. The Bank may enforce any
claim arising out of this guaranty in any state or federal court
having subject matter jurisdiction and located in Chicago,
Illinois. For the purpose of any action or proceeding instituted
with respect to any such claim, the undersigned hereby
irrevocably submits to the jurisdiction of such courts. Nothing
herein contained shall preclude the Bank from bringing an action
or proceeding in respect hereof in any other country, state or
place having jurisdiction over such action. The undersigned
irrevocably waives, to the fullest extent permitted by law, any
objection which it may have or hereafter have to the laying of
venue of any such suit, action or proceeding brought in such a
court located in Chicago, Illinois and any claim that any such
suit, action or proceeding brought in such court has been brought
in an inconvenient forum.
EXHIBIT E
Legal Opinion
[Letterhead of counsel for each Guarantor]
[Date]
The Northern Trust Company
00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx Xxxxxx Xxxxxxxxx
Vice President
RE: Guaranty, dated as of July 23, 1999, executed by
[Citizens Finance Co./ULTEA, Inc.], a corporation
formed under the laws of the State of [Iowa], in favor
of The Northern Trust Company (the "Lender") relating
to the Amended and Restated Credit Agreement, dated as
of July 23, 1999, between the Lender and Heartland
Financial USA, Inc. and related agreements (including
without limitation any loan, security or pledge
agreement), documents and filings (such Guaranty and
related agreements, documents and filings being
referred to collectively as the "Guaranty Documents")
Dear Sir/Ms.:
We have acted as counsel for the Guarantor in connection
with the authorization, execution and delivery of the Guaranty
Documents.
We have reviewed the corporate proceedings of the Guarantor
in connection with the authorization, execution, and delivery of
the Guaranty Documents. We have examined originals (or copies
certified to our satisfaction) of such records of the Guarantor
and its subsidiaries and such other instruments and certificates
of public officials, officers and representatives of the
Guarantor and any subsidiaries, and such other persons, as we
have deemed appropriate as a basis for the opinions hereinafter
expressed. We have relied on the accuracy of the facts set forth
in such records, instruments and certificates. In particular, in
respect of the opinion expressed in subparagraph (a) below
concerning qualification to transact business, we have relied on
officers of the Guarantor as to those matters of fact, including
the jurisdictions in which the Guarantor and any subsidiaries
conduct business activities or own or lease property, that we
deemed relevant to such opinion.
On the basis of the foregoing and of such investigations of
law as we have deemed appropriate, it is our opinion as follows:
(a) Each of the Guarantor and its subsidiaries is a
corporation duly formed and validly existing under the laws of
its state of formation as indicated in the Guaranty Documents, in
good standing therein, and duly qualified (licensed) to transact
business in all places where failure to do so might have a
material adverse effect on the financial conditions, prospects or
business of the Guarantor and its subsidiaries on a consolidated
basis. The Guarantor has power to execute the Guaranty Documents
and to incur and perform its obligations thereunder.
(b) The making and performance by the Guarantor of the
Guaranty Documents and the transactions contemplated thereby have
been duly authorized by all necessary action on the part of the
Guarantor and, if applicable, its shareholders and will not
violate any provision of law or of the Guarantor's articles of
incorporation or bylaws or result in the breach of or constitute
a default or require a consent under any indenture or other
agreement or instrument, known to us after due inquiry of the
Guarantor and its subsidiaries, to which the Guarantor or any
subsidiary is a party or by which the Guarantor or its property,
or any subsidiary or its property, may be bound or affected.
(c) The Guaranty Documents have been duly executed and
delivered by the Guarantor and (assuming their due authorization,
execution and delivery by the Lender) constitute the legal, valid
and binding obligations of the Guarantor enforceable in
accordance with their terms (subject to limitations as to
enforceability which might result from bankruptcy, insolvency, or
other similar laws affecting creditors' rights generally, and
from the discretionary nature of equitable remedies).
(d) We have no knowledge, after due inquiry of the
Guarantor and its subsidiaries, of any suits or proceedings
pending, or to the knowledge of the Guarantor or any subsidiary
threatened, against or affecting the Guarantor or any subsidiary
which, if adversely determined, would have a material adverse
effect on the financial condition, prospects or business of the
Guarantor and its subsidiaries on a consolidated basis.
(e) There is no requirement for the Guarantor to obtain any
authorization or approval by any public regulatory body of the
transactions contemplated by the Guaranty Documents.
(f) To the best of our knowledge, after examination of the
stock records of the subsidiaries and due inquiry of the
Guarantor and its subsidiaries, the Guarantor owns, directly or
indirectly through subsidiaries, all the issued and outstanding
shares of its subsidiaries, and all such shares are validly
issued and fully paid and are free and clear of all liens,
charges, encumbrances and rights of other whatsoever.
We express no opinion as to the applicability to the
Guaranty Documents, or as to the effect, of any laws of the State
of Illinois which limit rates of interest which may be charged or
collected by the Lender.
Very truly yours,
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[COUNSEL FOR GUARANTOR]
