EXHIBIT 10(g)
PLEDGE AGREEMENT
AGREEMENT dated December 20, 2001, by and between CITY NATIONAL BANCSHARES
CORPORATION, a New Jersey corporation ("Pledgor"), and the NATIONAL COMMUNITY
INVESTMENT FUND, a trust ("Pledgee").
Pledgor desires to borrow from Pledgee the principal sum of $1,000,000 in
accordance with the terms and conditions set forth in the Loan Agreement dated
the date hereof (the "Loan Agreement") between Pledgor and Pledgee, which is
being executed and delivered by the parties thereto simultaneously with the
execution and delivery of this Agreement. Pledgee is willing to make the loan to
Pledgor under the Loan Agreement, provided that, among other things, Pledgor
provides security therefor in accordance with the terms of this Agreement.
Pledgor is willing to provide such security.
In consideration of the premises and the mutual promises and undertakings set
forth or provided for herein, the parties hereto agree as follows:
1. Grant of Security Interest. To secure payment and other performance of the
Obligations (as hereinafter defined), Pledgor hereby pledges and
collaterally assigns to Pledgee and grants to Pledgee a security interest
in the following, wherever located (collectively, the "Collateral"): (a)
5,090 shares of the common stock, $0 par value per share, of City National
Bank of New Jersey, a national association (the "Bank"); (b) any and all
shares of capital stock of the Bank hereafter acquired by Pledgor as a
distribution with respect to the shares described in (a) above or in (b);
(c) all certificates now or at any time hereafter representing or
evidencing any of the shares described in (a) or (b) above; (d) executed
blank stock powers for the shares described in (a) above; (e) all
dividends and other distributions with respect to any of the shares
described in (a) or (b) above; and (f) all proceeds related to any of the
foregoing. The shares described in (a) and (b) above are collectively
referred to as the "Pledged Shares". Certificates representing or
evidencing the shares described in (a) above and the stock powers
described in (d) above are being delivered by Pledgor to Pledgee herewith.
2. Obligations. The Obligations secured by this Agreement and the security
interest granted hereunder (collectively, the "Obligations") are the
following:
(a) The indebtedness of Pledgor to Pledgee evidenced by a Secured
Promissory Note dated the date hereof made by Pledgor in the
principal amount of $1,000,000 and any and all extensions, renewals,
modifications or refinancings thereof, which Secured Promissory Note
(the "Note") has been delivered to Pledgee pursuant to the Loan
Agreement; and any and all indebtedness and other obligations of
Pledgor arising under the Loan Agreement or under any instrument or
agreement delivered pursuant thereto.
(b) All indebtedness and other obligations of Pledgor arising under this
Agreement.
(c) All reasonable expenses incurred by Pledgee with respect to any of
the Collateral, including without limitation any sums advanced by
Pledgee in order to preserve the Collateral.
(d) In the event of any proceeding to enforce the collection of the
Obligations, or any of them, after the occurrence of an Event of
Default (as hereinafter defined), the reasonable expenses of
collecting or enforcing payment of the Obligations or retaking,
holding, preparing for sale, selling or otherwise disposing of any
or all of the Collateral upon exercise by Pledgee of any of its
rights and remedies hereunder or under the Loan Agreement, including
without limitation reasonable attorneys' fees and costs of
litigation related to any of the foregoing.
3. Voting. Unless an Event of Default (as hereinafter defined) shall have
occurred, Pledgor shall be entitled to vote any and all of the Pledged
Shares and to give consents, waivers and ratifications in respect thereof,
provided that no vote shall be cast, no consent, waiver or ratification
shall be given and no action shall be taken by Pledgor which would violate
or be inconsistent with any of the terms of the Loan Agreement, the Note,
or this Agreement, or which would have the effect of impairing the
position or interests of Pledgee or any holder of the Note. All such
rights of the Pledgor to vote and to give consents, waivers and
ratifications shall cease upon the occurrence of an Event of Default.
4. Dividends. Unless an Event of Default shall have occurred, cash dividends
with respect to any of the Pledged Shares may
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be paid to and retained by Pledgor. Any other distribution with respect to
any of the Pledged Shares at any time and any cash dividend with respect
to any of the Pledged Shares paid after any Event of Default has occurred
shall be held in trust by Pledgor for the benefit of Pledgee as part of
the Collateral and shall be promptly paid or otherwise delivered by
Pledgor to Pledgee at the direction of Pledgee.
5. Registration. Pledgee may hold the Pledged Shares in the name of Pledgor
or may at any time or times cause all or any of the Pledged Shares to be
held in the name of Pledgee or any nominee or agent of Pledgee.
6. Covenants. Pledgor covenants with Pledgee as follows:
(a) Without the written consent of Pledgee, Pledgor will not hereafter
suffer or allow any lien, security interest, charge, encumbrance or
claim to arise against or with respect to any Collateral in favor of
any other person.
(b) Pledgor will take such action and execute such financing statements,
stock powers and other documents as Pledgee may from time to time
request to maintain a first, perfected security interest on the part
of the Pledgee in the Collateral (free of all other liens, security
interests, charges, encumbrances and claims whatsoever) to secure
payment and other performance of the Obligations and otherwise to
carry out the intent of this Agreement. Pledgor shall pay the cost
of filing such financing statements and other documents at such
locations as Pledgee deems appropriate. A carbon, photographic or
other reproduction of this Agreement or of a financing statement is
sufficient as a financing statement.
(c) Pledgor will pay any taxes or the fees or charges of any
governmental authority or agency related to this Agreement,
including without limitation any documentary, stamp or transfer
taxes owing in connection with the issuance, transfer or pledge of
any of the Pledged Shares.
(d) Pledgor agrees to deliver to Pledgee promptly upon Pledgor's receipt
any certificate representing or evidencing any Pledged Shares,
together with an executed blank stock power for such shares,
whenever received by Pledgor and if and to the extent not delivered
by
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Pledgor to Pledgee herewith. Any such certificate shall, in the
interim, be held in trust by Pledgor for the benefit of Pledgee as
part of the Collateral.
7. Preservation of Collateral and Rights in Collateral.
(a) Pledgee shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if it
takes such action for that purpose as Pledgor requests in writing,
but failure of Pledgee to comply with any such requests shall not
itself be deemed a failure to exercise reasonable care, and no
failure of Pledgee to preserve or protect any rights with respect to
such Collateral against prior parties, or to do any act with respect
to the preservation of such Collateral not so requested by Pledgor,
shall be deemed a failure to exercise reasonable care in the custody
or preservation of such Collateral.
(b) In the event Pledgor fails to make in full and when due any payment
to any third party which is required by this Agreement to be made by
Pledgor, Pledgee may, but shall not be obligated to, make such
payment. The amount of any such payment made by Pledgee shall be
payable by Pledgor to Pledgee on demand, and Pledgor's obligation to
pay Pledgee such amount shall be part of the Obligations. The making
of any such payment by Pledgee shall not satisfy Pledgor's
obligation to do so or cure any Event of Default arising as a result
of Pledgee's failure to make such payment in full and when due.
8. Events of Default. The occurrence of any one or more of the following
events shall constitute and shall be defined as an "Event of Default"
hereunder:
(a) Any failure by Pledgor (i) to pay in full any installment of
principal or interest due under the Note within ten (10) days after
the same becomes due and payable, or (ii) to observe or perform any
other covenant, agreement or condition under, contained in or
referred to in this Agreement in accordance with the terms hereof or
to pay in full any Obligations (other than principal or interest
under the Note) when due, and continuation of such failure for
thirty (30) days after the delivery of written notice to Pledgor by
Pledgee of such failure.
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(b) The occurrence of any Event of Default under the Loan Agreement or
the Note, as the term "Event of Default" is respectively defined or
used therein.
(c) Any levy, judicial seizure or attachment of or on any Collateral.
9. Rights of Parties Upon Default. Upon the occurrence of an Event of Default
hereunder, all Obligations shall, at the election of Pledgee, become
immediately due and payable, without notice to Pledgor, together with
interest thereon as provided in the instruments evidencing or representing
such Obligations or otherwise applicable thereto and, in addition to
having all other rights and remedies provided under other provisions
hereof or under the Loan Agreement or other document, or provided in any
applicable law, Pledgee shall have the following rights and remedies, any
of which Pledgee may, but shall not be obligated to, exercise:
(a) Transfer all or any part of the Pledged Shares into Pledgee's name
or the name of Pledgee's nominee or agent.
(b) After first obtaining all necessary regulatory approvals, vote all
or any part of the Pledged Shares and give all consents, waivers and
ratifications in respect of the Pledged Shares and otherwise act
with respect thereto as though it were the outright owner thereof.
(c) At any time and from time to time, sell, assign and deliver, or
grant options to purchase, all or any part of the Pledged Shares, or
any interest therein, at any public or private sale, without demand
of performance, advertisement or notice of intention to sell or of
the time or place of sale or adjournment thereof or to redeem or
otherwise (all of which are hereby waived by Pledgor), for cash, on
credit or for other property, for immediate or future delivery
without any assumption of credit risk and for such price or prices
and on such terms as Pledgee in its absolute discretion may
determine, provided that unless, in the sole discretion of Pledgee,
any of the Pledged Shares threaten to decline in value or are or
become a type sold on a recognized market, Pledgee will give Pledgor
reasonable notice of the time and place of any public sale thereof,
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or of the time after which any private sale or other intended
disposition is to be made. Any requirements of reasonable notice
shall be met if such notice is mailed to the Pledgor at least ten
(10) days before the time of the sale or disposition. Any sale of
any of the Pledged Shares conducted in conformity with customary
practices of banks, insurance companies or other financial
institutions disposing of property similar to the Pledged Shares
shall be deemed to be commercially reasonable. Any remaining Pledged
Shares shall remain subject to the terms of this Pledge Agreement.
(d) Collect any and all money due or to become due and enforce in
Pledgor's name all rights with respect to the Pledged Shares.
Unless prohibited by applicable law, subject to the provisions of Section 17 of
the Loan Agreement and other appropriate confidentiality agreements, the Pledgor
agrees, and agrees to cause the Bank, to give Pledgee, any prospective purchaser
of the Pledged Shares and their respective representatives, full access to
further information (including without limitation records, files,
correspondence, tax work papers and audit work papers) relating to or concerning
Pledgor or the Bank.
10. Notice. Any notice of any sale, disposition or other intended action by
Pledgee shall be deemed reasonable if it is in writing and deposited in
the United States mail ten (10) days in advance of the intended
disposition or other intended action, first class postage prepaid, and
addressed to Debtor at its notice address in the Loan Agreement.
11. Waiver. Waiver by Pledgee of any Event of Default shall not constitute a
waiver of any other Event of Default, nor of the same Event of Default on
a future occasion. No delay or omission on the part of Pledgee in the
exercise of any right or remedy hereunder shall operate as a waiver of
such right or remedy, nor shall the exercise of any right or remedy
preclude later or further exercise thereof. All rights or remedies of
Pledgee on account of the Collateral or on account of any of the
Obligations, whether arising under this Agreement or otherwise, shall be
cumulative and nonexclusive of each other, and may be exercised by Pledgee
at such times and in such order as Pledgee may determine. Pledgor hereby
waives presentment, demand, diligence, protest, notice of dishonor and any
other notice with respect to any and all of the Obligations and waives
acceptance of this Agreement by
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Pledgee, and consents to and agrees that the Obligations and Pledgee's
rights hereunder shall not be affected by one or more extensions or
renewals or modifications of any of the Obligations or the exercise of any
and all rights, powers, options, privileges and authorities granted to
Pledgee by law or by the terms of any instruments evidencing any
Obligations or otherwise or the release, substitution and resubstitution
of any Collateral for the payment of the Obligations. Pledgee may exercise
its rights with respect to any of the Collateral without resorting or
regard to any other Collateral or sources of payment of the Obligations.
No waiver or modification or amendment of the terms of this Agreement
shall be effective as against Pledgee unless the same is in writing and
signed by Pledgee.
12. Choice of Law. This Agreement shall be governed by and construed in
accordance with the internal laws (and not the conflict of laws
provisions) of Illinois.
13. Duration. This Agreement shall remain and continue in effect until all
Obligations have been fully paid or performed. At such time, Pledgee, at
the request and expense of Pledgor, will execute and deliver to Pledgor a
proper instrument acknowledging the termination of this Agreement, and
will duly assign, transfer and deliver to Pledgor such of the Collateral
as has not theretofore been sold or otherwise disposed of or otherwise
applied or released pursuant to this Agreement.
PLEDGOR:
CITY NATIONAL BANCSHARES CORPORATION
By:
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Its President
ATTEST
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Secretary
PLEDGEE:
NATIONAL COMMUNITY INVESTMENT FUND
By:
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Its Authorized Representative
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